The Torch Magazine

Myths About Movies

by

Mark Lore

    The Washington Post has a feature called "Myths about…" The subject might be North Korea, abortion, taxes, whatever.

    Let's steal the idea to consider three "Myths about Movies."

    Many of our conceptions about the film industry are outdated, reflecting a past when theaters were the way most people viewed movies and when commercial and "artistic" films were thought to occupy different spheres. Today, changing technologies and economics are enlarging consumer choice, options and access. The curious tension in the industry between art and commerce often means that one feeds on the other. New delivery technologies facilitate viewing at home or even on-the-go via the tiny screens of our portable platforms—albeit at the price of not only a lower-quality film experience, but also a decline in the communal experience of watching movies.

Myth #1: Movies Depend on Box Office Receipts

   On New Year's Day, 2012, my morning paper carried the headline, "Movie Crowds Drop to a 16-year Low as Apathy Continues." The article said that 2011 projected theater revenues of $10.2 billion were 3.5% less than in 2010. Since ticket prices were up, there was in fact a 4.4% decline in tickets sold (Germain 13). This meant the smallest theatrical movie audiences since 1995.

    Terrible news, right? Movies always seem to be dying. Just compare 2011 to 1947 when a much smaller American population bought almost five times more movie tickets. There were more than 18,000 neighborhood theaters in those days, compared to about 6,000 today. In 1947, Americans went every week to "the movies," whatever was playing. Today they are diverted by many alternatives—television, digital games, movies served up at home via cable, DVD or streaming, etc.

    The highly efficient studio system of that earlier day churned out about 500 films a year at an average cost of about $700,000 a film; today, there are only about 200 new American films a year at an average cost of $64 million each (Epstein, Big Picture 18). And that's average – blockbusters such as Titanic and Spiderman can cost $300 million or more. Lead actors and directors can now earn enormous sums; Tom Hanks raked in $30 million from theatrical distribution alone for his lead role in Saving Private Ryan (Epstein, Big Picture 121). By contrast, Clark Gable, perhaps the biggest star of his time, worked as a contract actor earning under $100,000 a film (Epstein 8). Some of the difference is inflation, true, but the steady decline in theater revenues and the soaring costs in production are largely due to fundamental business and technological changes in the industry. So, given that ticket sales are way down and production costs are way up, why isn't Hollywood losing its shirt?

    In a word: globalization. Foreign audiences now far outnumber our own. Foreign filmmakers create American-style action thrillers on location, financed in part by optioning the films up front to Hollywood for English-language remakes (examples include the recent Scandinavian films, Girl With The Dragon Tattoo and Headhunters). A Chinese business group owns AMC, the second largest theater chain in the U.S.

    In this environment, Hollywood looks to the traditional American movie theater primarily as a means to inflate the intellectual property value of its investment. Americans go to a theater—when they go—not as a habitual trip to the "movies," but rather to see a particular film. Unlike the old days, with the old built-in audience, the studios must create a new audience for every film. Creating this desire through massive marketing is what Hollywood is mostly about these days. It places great importance on the "buzz" around the race for top first-weekend box office receipts, the word-of-mouth excitement in following weeks, and the publicity that attends the awards season. This all feeds the earning potential of the eventual real profit centers—pay and free TV, licensing for home viewing, foreign distribution, and related product licensing (think McDonald's and Harry Potter). U.S. theatrical receipts themselves are of minor significance; they account for only around 20% of total major studio revenues (Epstein, Hollywood Economist 182) Their relative importance will continue to diminish.

    Rather, distributors seek the biggest "bang for the buck" in U.S. theaters, maximizing the public impact of new films to offset the cost of making copies and distributing them (although this cost is coming down; films now arrive at theaters mostly digitized on hard drives and streaming is probably not far behind). American marketing alone of a major production, almost always aimed at the young adult and teen market, is routinely budgeted at $30-40 million for initial distribution to over 2000 screens nationally (Epstein, Hollywood Economist 54); this is what is called "wide" distribution. By contrast, theaters often have only limited access to independent, "smaller" new films, usually aimed at older age groups; that distribution is based on population density within a three-mile radius of the theater—at least during the early weeks of these films' run, explaining the apparent randomness in the way such films appear in secondary markets (Nerangis).

    In other words, the studios, now giant corporate empires with many activities, view American theatrical business not as a profit center but rather as a marketing cost for much more important private home and foreign sales.   As for the theaters themselves, the movies are also usually a loss leader. The theaters typically only keep only one-third of ticket revenues during the first, most lucrative weeks of a new film. But films with "buzz" will bring in customers to buy popcorn, soft drinks and other concessions, the area where theaters make 40% or more of their profit (Menand 85).

    For the consumer, the decline of the traditional theater has been accompanied by an explosion of new choices. Only a few years ago, one had to live in a big city in order to see foreign language, documentary or classic films at the two or three local art houses. Today, at the relatively small cost of a DVD player or computer plus modest fees, one has ready access to collections that neither potentates nor heads of movie studios could have commanded in the old days. What is more, as suggested below, this multiplication of outlets has greatly encouraged the production of these niche films.

    Of course, change also implies loss. The new delivery technologies are eroding the communal experience of cinema. In theaters, the proliferation of home options encourages an environment where patrons may converse, text-message and sometimes order meals—the theater can become an extension of the living room. The effect is well described by sociologist Robert Putnam: "The rise of electronic communications and entertainment is one of the most powerful social trends of the 20th century. In important aspects this evolution has lightened our souls and enlightened our minds, but it has also rendered our leisure more private and passive" (245).

       Or in the words of the film critic, Anthony Lane:

There's only one problem with home cinema: it doesn't exist. […] one thing that has nourished the theatrical experience […] is the element of compulsion. Someone else decides when the show will start; we may decide whether to attend, but, once we take our seats, we join the ride and surrender our will. The same goes for the folks around us […] we are strangers in communion, and, once that pact of the intimate and the populous is snapped, the charm is gone. (91)

Myth #2: There are Commercial Movies and there are Art Movies

    As Martin Scorsese reminds us in Hugo, his salute to the birth of film in France, movies have always suffered from an identity crisis. Scorsese's film dramatizes the history of, first, the Lumière Brothers who conceived of film as the reproduction of reality (people going to work, trains arriving at the station) and then of George Méliès, a stage magician who "saw immediately film's ability to change reality – to produce striking fantasies" (Monaco 318). "Movies have the power to capture dreams," says Méliès in Hugo.

    We may not always perceive commercial films as "artistic," because they come not from a lone painter in a studio or author at a desk, but from large, complex organizations where no one person predominates. The high cost and large numbers of people required to make movies demand resources from investors and must therefore serve a demanding market. This was true back when the old studios exercised tight control over production and contracted talent to meet the bottom line, and is even more true now that the studios belong to vast, multifaceted entertainment industry "clearinghouses" (e.g., Disney, Time-Warner, Fox, NBC Universal, Viacom/Paramount, Sony) that package the concepts of individual filmmakers in terms of marketing, distribution, and licensing to make them commercially viable. "What is central to the clearinghouse concept," states Edward Jay Epstein "is not the art of the film but the art of the deal" (Big Picture 125).

    Nevertheless, out of this unpromising stew, the industry has over the years produced films universally regarded today as high art. From D.W. Griffith's Birth of a Nation (leaving aside its racist elements) to Charlie Chaplin to Gone With the Wind, Citizen Kane, Casablanca, the Godfather movies and some of the inspired computer-generated effects of today, the best moviemaking stems from often frankly commercial products that somehow transcend their origins. Directors such as Alfred Hitchcock often succeeded in making "exceptionally personal films working entirely within the genre factory system" (Monaco 348), films that moreover were resounding commercial successes.

    American films have also served as a public or communal art that defines and reflects back to us major changes in our society. Frank Capra's populist films and the dark, urban film noir movies of the 1930s and 40s depicted a nation coping with the Depression, war and social change. Bonnie and Clyde and Easy Rider mirrored the anti-authority spirit of the 1960s. Films such as the Robert de Niro-Dustin Hoffman caper movie, Wag the Dog, reflect today's political cynicism.

    So, how does commerce merge into social commentary and artistic expression? In their blending of image, shifting perspective, animation, music and dialogue, all films have at least some artistic content. The "art film" and the "popular film" are not separated by a sharp line, but rather lie on a continuum. The noted film critics Roger Ebert and Pauline Kael define whether a film is "good" as based on whether the viewer is changed by the experience of seeing it; Kael refers to the "crude vitality of American film" (Ebert 154). Critic David Thomson believes that film noir movies, studio products made quickly and relatively cheaply, nevertheless create "a lifelike dream world" that "throbs with inner life" (qtd. in Menand 84).

Myth #3: The Blockbuster is Ruining the Movies

    The modern blockbuster entered on the scene with Jaws and Star Wars in the 1970s. These big-budget productions now account for most industry profits. Large-scale action films saturate television advertising and weekly "top ten" lists of theatrical attendance. Their appeal is often limited to a young, even juvenile, audience. Emphasizing action, not dialogue or sophistication, they conquer overseas—American films now take two-thirds or more of the European and Japanese markets, compared to 30 percent in 1950 (Waterman; Waterman and Lee).

    We are clearly in the age of the blockbuster. But this has some positive aspects.

    First, the blockbuster is underpinned by Hollywood's intensive use of hugely sophisticated (and very expensive) computer-generated imagery (CGI). This technology can recreate ancient cities, provide armies or mobs without hiring an actor, and can even insert images of a leading player in action scenes or other spots where convenient (1). In fact, "action movies now often have more computer-animated scenes than live ones and, in many cases, a larger budget for CGI than for principal photography." (2). When used skillfully and imaginatively, CGI indeed produces the "striking fantasies" of which George Méliès dreamed. With 3D and other technical innovations, it exploits the big screen and encourages theater-going (Epstein, Big Picture 164).

    Second, Hollywood, while mercenary, is also conflicted. In the old days, studio heads did not hesitate to impose their dollar-driven judgment on the making of films and their content. Today, however, it is the fraternity of top directors, producers and actors that rules; they largely determine what projects are initiated and how they are made. And they honor two gods—first, money, but second, an ethos that measures true status and respect in the industry by the occasional production of quality films with literate screenplays, arresting cinematography and moving musical scores. In this process, resources from "big" movies can and do effectively underwrite smaller, independent films. It is not unusual for big-name stars such as Brad Pitt, Julia Roberts and Sean Penn to work near-scale for independent films, guaranteeing their financing. This tendency is also visible in the Oscars, where films nominated for "Best Picture" and for other leading awards are rarely those that have made the most money.

    Third, film's technological possibilities have always exceeded expectations, always proven capable of greater artistic potential than first foreseen. The Lumière brothers advised Georges Méliès, the showman, not to waste his time with their creation: "the cinématographe is an invention without a future," they said. But as Monaco writes, while books are audience-driven, i.e., require a literate audience, filmmaking and film audiences are technology-driven (253).

    Current business and technological developments in fact increase the industry's ability to produce, alongside the blockbusters, more human-sized dramas, comedies and documentaries. In the past, as Monaco observes, "because the channels of distribution have been limited and because costs have prohibited access to film production to all but the wealthiest, the medium has been subject to strict control" (291). Whatever "art" was produced in the movies—at least in those films which attracted an audience—has almost invariably been mainstream; it has tended to follow trends rather than set them. But this is changing.

    In recent years, the emergence of the light, cheap, digital camera has reduced dramatically the cost of making movies and therefore made them more accessible to niche viewership. Other new technologies go in the same direction—for example, in a day when every middle-schooler can assemble his or her own movies, sophisticated editing equipment is ever more available and affordable. Moreover, well-executed small movies can be very profitable. Examples in recent years are My Big Fat Greek Wedding, Borat, and Brokeback Mountain. Brokeback, to cite one case, cost only $14 million to make, but pulled in $180 million in theatrical receipts even before DVD sales (Denby 61). If there is money to be made from such films, we can assume that the big studios will take advantage of it, as in fact they have, witness new divisions created in recent years such as Sony Movie Classics, Fox Searchlight, etc.

    Finally, technology has created many new ways in which a filmmaker can bring work to the market. The old studio system was an absolute monopoly; studios both made the product and placed it in their own theaters. Even quite recently, distribution had to go through the six major studios. Today, videos, cable, DVDs, streaming, independent European and satellite systems all compete for content. This represents a significant democratization of distribution (Monaco 385). Independent American filmmakers as well as their counterparts from Europe, Asia, Latin America and Africa can finance their work internationally, permitting them both to serve growing local audiences and to send their films abroad; small filmmakers can now "export their own culture" (Monaco 385). Could the multiplex theaters now spreading throughout the U.S. and abroad eventually offer convenient platforms for more varied programming to serve such niche audiences?

Conclusion

In conclusion, these myths about movies share the quality of all myths—they reflect some truths but, being grounded in the past, are often outdated or incomplete. In fact, the film industry is a unique and constantly evolving blend of big money, cutting-edge technology and artistic expression. How one makes money today is not how one will make it tomorrow. Artistic achievement is at times the child of commercial necessity. And technology and globalization are taking us away from a world of shared viewing of movies to a much wider—though perhaps at times shallower—one, a world of private rather than communal enjoyment.

Footnotes

(1) In the movie Gladiator, for example, CGI inserted the image of the character Proximo into certain scenes after Oliver Reed, the actor who had been playing him, died during filming (Epstein, Big Picture 165).
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(2) Brooks Barnes, “Huge Summer for Hollywood,” New York Times, September 1, 2013. The article points to a 10.2% increase in theater revenues in the summer of 2013 due largely to increased saturation of the theaters with blockbusters during this period.
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Works Cited

Barnes, Brooks. "Huge Summer for Hollywood." New York Times, September 1, 2013.

Denby, David. "Big Pictures." The New Yorker, January 8, 2007.

Ebert, Roger. Life Itself. New York: Grand Central Publishing, 2011.

Epstein, Edward Jay. The Big Picture New York: Random House, 2005.

---. The Hollywood Economist. New York: Melville House, 2010.

Germain, David. "Crowds drop to a 10-year low as apathy continues," Washington Post, January 1, 2012.

Lane, Anthony. "The Current Cinema." The New Yorker, November 7, 2011.

Menand, Louis. "Gross Points." The New Yorker, February 7, 2005
Monaco, James. How to Read A Film. New York: Oxford University Press, 2009.

Nerangis. Stephen, Alamo Theater Executive. Author interview, May 7, 2012

Putnam, Robert D. Bowling Alone: The Collapse and Revival of American Community. New York: Simon & Schuster, 2000.

Waterman, David. "Technology and the U.S. Movie Industry." Presentation to Economics of Media and Content Industry conference, Sevilla, Spain, 2011.
<http://is.jrc.ec.europa.eu/pages/ISG/
documents/DavidWaterman_sevilla-movies-2011-final.pdf>

Waterman, David, and Sang-Woo Lee. "Theatrical Feature Film Trade in the U.S., Europe and Japan since the 1950s <http://www.indiana.edu/
~telecom/people/faculty/waterman/TFT_final_11_27_06.pdf>

Author's Biography

Mr. Lore was in the U.S. Foreign Service from 1965 to 1997. His overseas service was in South America, Africa and Europe. In 1979, Mr. Lore obtained an MA in Economics from the University of Wisconsin. He became Deputy Chief of Mission (DCM) in Embassy Brasilia in 1992, serving also at times as Chargé d’Affaires. Since retirement, he has been active in community affairs in Winchester including social action, downtown revitalization, and running a local film society. He has been a member of the Winchester Torch Club since 2000, served as club President in 2010-11 and was winner of the IATC Paxton Award in 2003 and the chapter’s President’s Best Paper Award in 2007.