Is movie sex an asset or a liability in
Hollywood's economy today?
In the early days of Hollywood, director Cecil
B. DeMille famously made bathing scenes an obligatory
ingredient of his biblical epics on the grounds that
nudity--or at least the illusion of it--was necessary
to the commercial success of movies. In those days,
almost two-thirds of the adult population went to the
movies weekly. But today's entertainment economy, dominated
by at-home younger viewers, is a very different animal.
The theatrical release of Hollywood movies today is
a mere sideshow in terms of earnings for the six major
studios. At best, a good run at the box office may help
to establish movies for licensing in the home-entertainment
market, where the real profits are. Last year (2003),
over 80 percent of the studios' worldwide revenue came
from selling their movies in the form of DVDs and to
television (see Table
minor share of revenue that still comes from the box
office--17.9 percent in 2003--provides little, if any,
profit. It cost more in 2003 just to get the average
movie and its audience into theaters (advertising and
print costs) than most movies ever earned back at the
Sex in movies, especially if it results in an "R"
or “NC-17" rating, is now a triple liability:
It hurts first at the theaters, then at the video store,
and finally on broadcast TV.
For the theatrical
release, the MPAA issues a rating that theaters must
abide by. While its “G” (“general
audiences”) and “PG” (“parental
guidance”) ratings permit anyone to buy a ticket,
its “R” (“restricted”) rating
excludes all children and younger teenagers who are
not accompanied by an adult, and its “NC-17”
(“no children”) rating excludes anyone under
the age of seventeen. In practice, this means that if
a theater books a movie with a restricted rating, some
of its employees, who might otherwise be selling popcorn,
are required to check the identity documents of the
teenage audience. To avoid this inconvenience, especially
during holiday periods when the teen audience is at
its peak, theater owners often resist booking such films–at
least in their larger auditoriums. In addition, children-oriented
cable networks, such as Nickelodeon, do not accept TV
ads for movies with restricted ratings. As a result,
the more restrictive the rating, the less money a film
makes in the theaters. Virtually every economic
analysis of box office earnings demonstrates that
G and PG earn more money in theaters than R and NC-17.
In the after-market
of home entertainment, where today's profits are almost
entirely made, nudity is even more of a liability. Consider
DVDs. In 2003, most DVDs were sold by mass merchandisers,
who frequently use them to build storewide traffic for
other products, such as plasma TVs, game consoles, and
toys. Most of these merchandisers restrict their more
prominent shelf space to DVDs that will not offend the
family-oriented consumers whose business they seek.
For example, Wal-Mart, by far the largest seller of
DVDs (and videos), reserves strategic shelf space for
DVDs that conform to its "decency" policy
on nudity. DVDs that do not hew to these guidelines
rarely, if ever, attain multimillion-copy sales. On
the other hand, DVDs that pass the Wal-Mart shelf test
can sell more than 10 million copies, as did, for example,
Shrek, Finding Nemo, and Harry Potter.
Movies with nudity are also a problem for the studios'
moneymaker: television. Because the FCC regulates broadcast
television (though not pay-TV or cable channels), television
stations cannot show movies that violate the FCC's standard
of "public decency," which prohibits salacious
We may live in an anything-goes age, but if a studio
wants to make money, it will think twice about how much
of “anything” it shows on the big screen.
So it is not surprising that in the last 5 years, the
number of R-rated films produced by Hollywood has dropped
from 212 to 147. Sex may still sell, but
not at Wal-Mart or the on networks.
Why did Warner Brothers spend half a million dollars
to digitally alter 8 seconds of Stanley Kubrick’s
film Eyes Wide Shut?