A Titanic Tale
bA Titani

Business Week

March 28, 2005

Hollywood Confidential

The Good: Fascinatingly describes the evolution of the modern marketing- and brand-driven global media giants.
The Bad: Some of Hollywood's thorniest problems get scant discussion.
The Bottom Line: A rich adventure that will change the way you look at movies.

In 1937, Walt Disney Co. made history with the release of Snow White and the Seven Dwarfs . The first full-length animated film produced in the U.S., it was derided by many movie moguls as folly, since Disney had expended vast resources on a film catering largely to children. But time would demonstrate Disney's sagacity, which extended far beyond the question of audience. For Snow White was also the first movie to have tie-in merchandise and its own soundtrack album. In short, the movie was just one part of the enterprise.

The model first divined by Walt Disney 70 years ago is what now defines the entertainment business. Today's Hollywood is built around ancillaries, from video-game spin-offs to boxed DVD sets and theme songs offered as cell-phone ring tones. The evolution of the modern marketing- and brand-driven global media giants is meticulously documented by Edward Jay Epstein in The Big Picture: The New Logic of Money and Power in Hollywood .

Epstein captures the sweep of an industry over the past half-century by using a variety of devices, from historical profiles to anecdotes to financial tables on the players. In illustrating the industry's changes, he provides an enlightening tour of what he calls the "sexopoly" -- Viacom , Fox , NBC Universal, Time Warner, Sony, and Disney. The Big Picture lacks the magnetic narrative of other great Hollywood business books, such as David McClintick's Indecent Exposure . And in a volume that's rich on analysis of Tinseltown's bottom line, one might want a bit more on the thorniest issue facing studios now, digital piracy. Still, Epstein's taut chapters are absorbing.

The author is no novice in chronicling business. His 12 earlier books include Dossier: The Secret History of Armand Hammer and The Rise and Fall of Diamonds: The Shattering of a Brilliant Illusion . In The Big Picture , Epstein explains why so many studios -- seemingly aping Disney -- are channeling their resources into big, special-effects-driven fantasies with licensable characters and targeted at juvenile audiences. The Hollywood executives of the 1990s, Epstein writes, had good intentions, wanting "to help produce movies that would measure up to the ones they and those around them had admired -- such as classic films directed by Frank Capra, Howard Hawks, John Ford, and Alfred Hitchcock." Even now, many seek to maintain some level of prestige through smaller, much less profitable films that are developed by studios' independent arms. However, Epstein points out, the average cost of making these indie films has risen drastically, to $61.6 million apiece in 2003, adding to studio losses and giving executives pause. In the end, it's the kid flicks that win.

The costs and logistics of modern moviemaking provide Epstein with some of his richest material. For example, actor Russell Crowe's face was scanned into a computer and then digitally placed on the faces of several of the 79 stuntmen used in the movie Gladiator . It took eight months of expensive computer wizardry to make it appear to be Crowe in all the scenes. But under the terms of special insurance that banks and outside financiers demand to cover a film's "essential elements," stars are mostly not allowed to do their own stunts, lest an injury delay production. Indeed, insurers may shy away from some actors: After Nicole Kidman sustained a knee injury in 2000, the producers of Cold Mountain had trouble getting coverage for her. They succeeded only after she agreed to put $1 million of her own salary into an escrow account that would be forfeited if she failed to maintain the production schedule.

The author also digs deep into Hollywood financial schemes. For instance, Arnold Schwarzenegger "lent" his services to Terminator 3 . His pay of $29.25 million went instead to the actor's company, Oak Productions Inc., a maneuver that allowed Arnold to avoid certain tax liabilities.

The Big Picture takes the reader beyond the balance sheet with chapters on Hollywood's political and social influence. In one anecdote, Epstein recounts how, during the late 1990s, the White House Office of National Drug Policy Control worried that movies were having a harmful effect on public attitudes. So, the agency paid studios to insert antidrug themes into film scripts -- then reviewed them to make sure the message was coming through.

Such tidbits make Epstein's failures all the more striking. He notes that technology is transforming the way movies get delivered, but he never reflects on the dark side of tech -- the possibility of a sequel to the disaster that gutted music sales. Intellectual-property theft is clearly a front-burner issue for every studio: According to some industry estimates, as many as 600,000 copies of films are being downloaded illegally every day.

For anybody who is a film buff, The Big Picture will be a fine adventure. But once you learn what goes on behind the scenes, you may never again look at a movie the same way.

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