The Two Hollywoods

 

 

 

 

  PROLOGUE
 
THE BIG PICTURE

Part of what makes the shift to the home-entertainment market so
significant is the shift in audiences that goes along with it. By far the
most important segment of the studios’ home-entertainment audience in
2003 was children and teens, who use television sets for hours on end, either
to watch programs on cable channels and networks or to play movie
videos, music videos, and games. These younger consumers, prized by advertisers since they heavily influence their parents’ purchases, also buy
many of the toys and much of the clothing and other paraphernalia licensed
by the studios.


The six entertainment companies’ sway over—and interest in—this
young audience goes beyond the home-television market. They publish
most of the books read by children, they record most of the music listened
to by children—Disney alone accounting for 60 percent—they
own most of the theme parks visited by children on their vacations, and
they license most of the characters whose images appear in the toys,
clothes, and games consumed by children. To capture this valuable audience,
studios no longer focus on making films that appeal mainly to
grown-ups, as their predecessors from the studio-system days did.

By 2003, all six Hollywood studios had adopted the strategy first foreshadowed by Walt Disney sixty-six years earlier, when Snow White and the Seven Dwarfs appeared—making films specifically aimed at youth.
While Disney’s animation process cleared the first path to this young
audience, the digital revolution of the new millennium has widened
that path to a thoroughfare. The new elite of computer-graphic establishments
includes Industrial Light & Magic (the postproduction house
owned by George Lucas, director-producer of the Star Wars movies),
Lightstorm Entertainment (the company owned by James Cameron, director
of Titanic), and Pixar Animation Studios (led by Steve Jobs,
founder of Apple Computer). With its proprietary computer programs
and loose networks of computer wonks, this new generation of technology
consumes an increasingly large share of the studios’ budgets. Beyond
the financial implications, the new division of labor between the camera
and the computer is also changing, for better or worse, the aesthetics of
movies themselves.

Consider the movie that won eleven Oscars that night in 2004, including
the one for the Best Motion Picture of 2003: The Lord of the Rings: The
Return of the King. The celebration that the studios had invented for their
own validation was now dominated by a children’s fantasy movie. Time
Warner’s wholly owned subsidiary, New Line Cinema, had produced it
not as a single entity but as part of a franchise, a trilogy with The Lord of
the Rings: The Two Towers
and The Lord of the Rings: The Fellowship of
the Ring
, all of which had been shot simultaneously in New Zealand in
late 1999 and early 2000 and then released separately in 2001, 2002, and
2003. The triple production cost $281 million. Unlike Gentleman’s Agreement, which, like almost all other films in the studio system, was created by camera operators photographing actors, The Lord of the Rings: The Return of the King was created mainly by computer animators. More
than one thousand separate shots in the film—over 70 percent of the
total number of shots—were not filmed by a camera at all. These parts of
the movie were created by digital technicians working for autonomous
computer-graphics houses in far-flung parts of the world. Some shots
were created from scratch, while others combined live acting with digitally
created layers. Unlike the single crew—thirty-nine technicians in
all—who filmed the actors in Gentleman’s Agreement in close enough
proximity to see and hear them on the set, most of the digital compositors,
inferno artists, rotoscope artists, digital modelers, digital wranglers,
software developers, and motion-capture coordinators working on The
Lord of the Rings: The Return of the King were separated in both time
and space from the action on the set and had virtually no personal contact
with the actors, director, production staff, or even one another. While the
process in this case yielded stunning results—attested to by those eleven
Oscars—it also augured a future for Hollywood that would be much more
dependent on the manipulations of the computer than on those of the
camera.


This shift has not gone unnoticed by outside critics, who berate the
studios for wasting money on lavish productions and extravagant advertising
campaigns, suggesting that Hollywood’s studios fail to appreciate
the “logic” of their own industry. But the studios may understand more
than their critics give them credit for. Even though they lost more than
$11 billion in 2003 on movies shown in theaters, they more than made up
that deficit from licensing products from those movies to the global
home-entertainment market. They have now all come to realize—as Disney
did a half century earlier—that the value they create lies not in the
tickets they sell at the box office but in the licensable products they create
for future generations of consumers.


F. Scott Fitzgerald noted, in his final, unfinished novel, The Last Tycoon,
that most people in Hollywood had at best only a fragmentary understanding
of the movie business; “not a half dozen men,” he wrote,
“have been able to keep the whole equation of pictures in their heads.”

By the dawning of the third millennium, the “whole equation” of what
had replaced the studio system had become even more complex. At the
heart of it is a sexopoly: six global entertainment companies—Time
Warner, Viacom, Fox, Sony, NBC Universal, and Disney—that collude
and cooperate at different levels to dominate filmed entertainment. It is
these six companies that choose the images that constitute a large part of
the world’s popular culture, and it is these six companies that will continue
to shape the imagination of a universe of youth for generations to
come. Nostalgia for the old studios notwithstanding, their Hollywood is
the new Hollywood.


Not surprisingly, the decisions of these six companies about the
movies they make—the logic of the new Hollywood—is largely driven
by money. But economic considerations are not the whole story. Social
and political logics—involving status, honor, solidarity with stars, and
other, less tangible, considerations—also form a critical part of the equation.
If the big picture continues to remain elusive to the outside world,
shrouded in self-generated myths and misplaced nostalgia, that is not accidental.


The major studios, for example, go to considerable lengths to
conceal the revenues from their moviemaking enterprise from investors,
financial analysts, and journalists—even though they make this data
available to one another through their trade organization, the MPA (on
condition that the MPA keep it secret from the public). They manage this
concealment, even in their own financial reporting, by combining their
movie earnings with those of unrelated businesses, such as licensing television
programs (or even, in the case of Paramount, theme parks). The
rationale given by one savvy top studio executive for this “blurring” is “to
avoid showing Wall Street how volatile the movie business is and how
tricky are its profit margins.” Studios are willing to camouflage shortterm
losses on their movies because movies, not television sales or theme
park operations, are their principal source of prestige and satisfaction in
Hollywood. In more ways than one, today’s movie business works to keep
its audience—and, to some extent, its own players—in the dark.


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