The Big Picture

by Edward Jay Epstein

I’ve been fascinated with the money side of Hollywood for many years, ever since finding out that art and money are the driving forces behind movies I’ve wondered how the dichotomous sides gelled together. The movie as art form has been discussed at length, books and books have been written about it, entire courses dedicated to it. Some parts of the money side have been exposed, but it’s generally limited to star’s salaries, budgets and box office. Then The Big Picture came along.

The sub-title of The New Logic of Money and Power in Hollywood is a little misleading, the book talks extensively about how the world’s richest film industry started out, how it developed and how it has been transformed by a few key players. It’s littered with insider information and quotes from stars, crew and studio insiders, which makes for compelling reading.

As you may or may not be aware, the Hollywood is owned and controlled by a handful of companies (Viacom, Time Warner, NBC Universal, Sony, Fox and Disney). These six media giants also own a large percentage of the TV, radio, print and advertising business within the US and around the world. They’re monsters, keen on global domination. In 1948, the old Hollywood was ripped apart by the US government because of its vertical integration (the movie studios owned all the cinemas and so controlled everything from production to exhibition and rarely let other people get a look in). Today, while not owning cinemas, still posess the means to make, market, distribute, exhibit and merchandise their films, but some of them also make the hardware to show them on.

This multi-facted approach, as Epstein explains, is behind a lot of what drives Hollywood. The box office, once the only means of making money from a film, now accounts for a relatively small percentage of the total (approximately 18% in 2003), as such, the industry’s focus has shifted. As the cost of making and marketing a film has spiralled, studios have had to find alternative ways to ensure they can reduce the risks of the $100+ million gamble they’re taking. To do this they have spent a lot of time refining techniques and expanding their empires and now they’re not in the business of making movies but creating Intellectual Property (IP). A movie can make money on numerous occasions: at the box office, through video rentals, on DVD, on TV, but to take it to the next level you need to create intellectual property that can be resold, licenced and reused over and over again. This is one of the reasons Hollywood is still insistent on making comic book franchises and why, after a decade of rest, the classic TV series (Charlie’s Angels, Mission: Impossible) or stalled franchises (Batman, Superman) are being pulled out, dusted off and reimagined for a new generation.

There have been some big successes for low budget, intimate films of late. Crash, Brokeback Mountain, Walk the Line, The Constant Gardner, films like these have garnered a lot of headlines. These cost a tiny amount of a film like The Island or King Kong, but studios still often lose money on them (although costing little to buy, advertising, overheads and other costs pushed the average price up to $61 million a film in 2003). They serve only to bring in prestige, Hollywood’s second commodity. The money is made from selling action movies to foreign markets and getting the media giant’s other arms into action to supply soundtracks, computer games, books, magazines, TV programmes, action figures, theme park rides and millions of other licenced products. They also allow tie-ins with fast food chains and other companies interested in their target market (teens) who supply vast sums of advertising to boost the films’ profile.

The last point sounds daft, but studios spent $3.4 billion dollars on TV advertising in the US alone in 2003, another good reason for them to own TV channels. The cost of advertising a film is now upwards of $30 million (in 2001 the average cost of producing a movie trailer alone was between $500,000 and $1.2 million!) in the US, less money is spent outside. Creating awareness of a film is extremely important for a studio.

That leads nicely into the target audience. Hollywood is after a target-rich age group that is the cheapest to advertise to, the easiest to get motivated to visit the cinema, who watches enough TV to get hit by their trailers and can be sold to the world over using easily repeatable plot formulas. That’s right, they target kids. Disney spotted this first, but kids are a goldmine when it comes to films. Parents spend a fortune on ancillary products for films they like, they visit theme parks, an adult can go to the cinema on their own, kids have to take a parent, so you almost double the admissions. It’s win-win all the way.

The book also talks about the role of stars in the new system too. One reason for star power is that they can help with overseas and domestic advertising, they get on TV shows, they fill column inches (and many of the studios produce the magazines that need the material the stars provide). One thing stars do not guarantee is hits. They raise a movie’s profile, they help provide free advertising, but having Julia Roberts in a film doesn’t mean it’ll be a success. The big stars all bring a professional work ethic though, and this means a lot to the studios. They’ll battle through anything, work longer hours, put up with awful conditions, sacrifice pay in the short term (defined as pragmatism) and are consitent in both performance and appearance (i.e. they turn up day-in, day-out). It’s a side of the stars you don’t really think about. Stars certainly do seem to be the top rung in the industry.

Bizarrely, the list of highest grossing films contains none that could easily be described as a star vehicle. In fact, as Epstein lists the formula of the ‘billion-dollar club’ (films that have earnt $1+ billion via the various revenue streams of box office, video/DVD sales, TV and other rights) they all share, he even adds a point about ‘non-ranking actors.’ I’ve put the full list below.

The billion-dollar club all share the following:

1. [they] are based on children’s stories, comic books, serials, cartoons, or, in the case of Pirates of the Caribbean, a theme-park ride
2. feature a child or adolescent protagonist
3. have a fairy-tale-like plot in which a weak or ineffectual youth is transformed into a powerful and purposeful hero
4. contain only chaste, if not strictly platonic, relationships between the sexes, with no suggestive nudity, sexual foreplay, provocative language, or even hints of consumated passion
5. feature bizarre-looking and eccentric supporting characters that are appropriate for toy and game licensing
6. depict conflict–though it may be dazzling, large-scale, and noisy–in ways that are sufficiently nonrealistic, and bloodless, for a rating no more restrictive than PG-13
7. end happily, with the hero prevailing over powerful villains and supernatural forces (most of which remain available for potential sequels)
8. use conventional or digital animation to artificially create action sequences, supernatural forces, and elaborate settings
9. cast actors who are not ranking stars–at least in the fact that they do not command gross-revenue shares [of the film's revenues]

Despite all this leaning toward making money, art is still considered to have a high place, for it brings prestige and, more importantly, awards. This is an industry that invented the largest awards ceremony in the world to honour itself. The reason Hollywood makes more interesting films, even though they invariably lose money, as one Disney executive explained, is because You can’t get directors of the caliber of Anthony Minghella, Martin Scorsese, and Quentin Tarantino to work on movies designed to get kids to buy toys and drag their parents to the parks.

Having bounded on about how good it is, the book does have its bad points. For instance, Epstein spends a lot of time detailing the lives of some of the key influences in Hollywood, from Walt Disney to Rupert Murdoch, Sumner Redstone to Akio Morita. Frankly, it’s boring, and much of it has little to do with the industry itself. There’s also numerous chapters dedicated to detailing the film production cycle from start to finish in exacting detail. Aside from being boring, it has little relevance to the book in that, while it accounts for a lot of the money spent, it has little to do with the how and why. It’s like detailing the manufacture of a car in a book about the business of the automobile industry. Anyone interested in the production of films will either already have learnt it from any number of other places and anyone who doesn’t know, simply isn’t interested.

The book really is a thorough look at what makes Hollywood tick, it lifts the lid and shines a light into the dark corners that are usually hidden from view and kept tucked away. I found it fascinating and anyone who loves movies, not just on the screen, should probably take a look at it too, but be warned, it can be fairly tough going sometimes.