One of the most iconic moments in cinema occurs in 1950's Sunset Boulevard, when William Holden says, "Hey, you're Norma Desmond... you used to be big!" And Gloria Swanson replies, "I AM big -- it's the pictures that got small!"
Norma would be astonished at just how much smaller the pictures would become half a century later. Shortly after the 2006 Oscar Awards Ceremony, George Lucas, who produced six Star Wars movies, self-funding a large portion of their sequels' expensive budgets with his own money, said that he now believes the pendulum has swung towards movies far cheaper than the town's typical $100-million-plus movie budgets. In March, he said that the film industry should concentrate on movies in the $15 million range. More recently, in an October interview in Variety, Lucas revised that figure further downward:
[Lucas] gave $175 million -- $100 million for endowment and $75 million for buildings -- to his alma mater [USC]. But he said that kind of money is too much to put into a film.
Spending $100 million on production costs and another $100 million on [prints and advertising] makes no sense, he said.
"For that same $200 million I can make 50-60 two-hour movies. That's 120 hours as opposed to two hours. In the future market, that's where it's going to land, because it's going to be all pay-per-view and downloadable.
That's an average of $4 million per picture. If Lucas is serious, and representative of other Hollywood moguls (and Martin Scorsese at least sounds like he's in agreement), then The Era Of Big Cinema is over—or at least gone on life support.
Hollywood's Original Freefall
To understand why, it helps to look at another period in which movie going dropped precipitously, the late 1960s and 1970s. As a company town, Hollywood has always tilted to some extent or another to the left, but the studio heads who ran it from the 1930s through the 1950s understood that its product must resonate with the American public as a whole to make money, regardless of their filmmakers' personal politics. Or as Sam Goldwyn is frequently attributed as saying, "Pictures are for entertainment, messages should be delivered by Western Union".
For Hollywood, the late 1960s began to mark a retreat from that philosophy. In a Wall Street Journal piece a few years ago, Michael Medved used the mid-1960s transition from the Hays Office, which acted as an industry-wide censor, to the G/PG/R/X ratings system we now take for granted, as being, effectively, the end of the golden age of movies. And, as Medved notes, that change influenced not just Hollywood's content, but its box office returns as well. Medved writes that in 1965, "44 million Americans went out to the movies every week. A mere four years later, that number had collapsed to 17.5 million":
In 1966, Mr. Valenti's Motion Picture Association of America quietly dropped its enforcement of the restrictive old Production Code that Hollywood studios had imposed on themselves since 1930. Then, on Nov. 1, 1968, Mr. Valenti introduced the "voluntary rating system" that continues in force to this day. As he proudly declared in his farewell address to the industry on March 23 of this year: "The rating system freed the screen, allowing movie-makers to tell their stories as they choose to tell them." That new freedom allowed the profligate use of obscene language strictly banned under the Production Code, the inclusion of graphic sex scenes along with near total nudity and, more vivid, sadistic violence than previously permitted in Hollywood movies.
The resulting changes in the industry showed up with startling clarity at the Academy Awards. In 1965, with the Production Code still in force, "The Sound of Music" won Best Picture of the Year; in 1969, under the new rating system, an X-rated offering about a homeless male hustler, "Midnight Cowboy," earned the Oscar as the year's finest film. Most critics, then as now, welcomed the aesthetic shift and hailed the fresh latitude in cinematic expression, but the audience voted with its feet.
And while there were numerous films made in the 1970s that are now justifiably viewed as classics, for the most part, those films were nowhere near as profitable as the great movies of the past. To make money again, Hollywood needed two men named Spielberg and Lucas to return the industry to escapist, popcorn fare.
The result was a series of big budget, enjoyable, if often mindless, action-filled movies, typically released in the summer when kids were on vacation, which allowed Hollywood to stay profitable, beginning with Spielberg's Jaws in 1975, and Lucas's first Star Wars movie in 1977. That streak continued all the way through this year's Pirates of the Caribbean sequel, which Chris Anderson, the author of The Long Tail credits with single-handedly preventing yet another year of shrinking ticket sales.
But along the way, Hollywood's budgets began to snowball: Star Wars cost $9.5 million to produce, which was fairly typical for a big-budget 1970s film. By the 1990s, budgets grew as high as $200 million, beginning with Titanic. Lucas's own recent trilogy of Star Wars "prequels" each ran in the $125 million range, which is Hollywood's definition of cost-effective. Warner Brothers' Superman Returns cost a whopping $270 million, thus ensuring that its hefty $200 million domestic box office gross would become a studio loss.
Prior to the 1970s, Hollywood aimed its movies at a mass culture. But by the late 1970s, the first signs of political correctness began to increasingly separate movie makers from their audience, beginning perhaps most visibly with Warren Beatty's Reds in 1981. But even during that decade, Hollywood balanced films such as Platoon and Salvador with Rambo and Top Gun. And it was pretty clear that the characters played by Stallone, Schwarzenegger, Harrison Ford and Bruce Willis were on the side of Truth, Justice and The American Way.
Jump cut to this past summer, where that Superman movie that Warner Brothers was counting on to kick-start their perennial superhero franchise instead became infamous for having Perry White utter "truth, justice and all that other stuff", because the film's writers were ashamed of, well, the American way.
This wasn't all that new a development—even before 9/11, Michael Bay's Pearl Harbor was chided for its revisionist history and moral equivalence. But after 9/11, Hollywood's PC freefall merely accelerated, causing further alienation from the industry's domestic audience. The 2006 Academy Awards ceremony was something of a watershed. As blogger Charlie Richards noted this past February, "it's a big year for films nobody will see", to the point where March of the Penguins, which won for best documentary, made more money than any of the Best Picture Nominees. And as author and blogger John Scalzi wrote at the time, "When Hollywood's best films can't compete with chilled, aquatic birds, there's something going on."
Just Another Niche Market
What was going on was that Hollywood had alienated a wide swatch of its audience-perhaps to the point where relations are irreparable. Like television networks, the two mediums once shared a monopoly on viewers. But these days, technology such as videogames and DVDs, hundreds of channels of satellite TV, the "Long Tail" of the Internet, and the do-it-yourself "prosumer" movement have made Hollywood just another niche market that competes for audiences' eyeballs.
And the consumer electronics industry increasingly challenges the movie going experience as American middle class home contain technologies that make the den the equivalent of a 1930s private Hollywood screening room.
That's the environment that Hollywood must compete in. And increasingly, its movies just aren't up to the task.
Broadband speeds as currently projected by some to increase to increasing dramatically to multiple gigabits per second over the next 20 years. In contrast, like the audiences within them, movie theaters dramatically shrunk in size over the course of the 20th century. Samuel Rothafel's landmark Roxy Theater sat 6,200 in 1927, but the average individual theater inside today's multiplex seats about 225—and the bulk of those seats are usually unfilled. Forbes wrote in early 2001 that movie theaters nationwide are averaging 12% of daily capacity and 88% of its seats are empty.
So will the last moviegoer shut off the projector when he leaves the theater, please?
Ed Driscoll is a TCS Daily contributing writer.