Hollywood and the big bucks
The business of American film

by Udayan Gupta

from Jump Cut, no. 12/13, 1976, p. 67
copyright Jump Cut: A Review of Contemporary Media, 1976, 2004

The Movie Business, A. William Bluem and Jason E. Squire, ed. (Hastings House: New York, 1972). $7.50

The Film Industries, Michael Mayer, ed. (Hastings House: New York, 1973). $10.00

The International Film Industry, Thomas Guback (Indiana University Press: Bloomington, 1969). Out of print.

The analysis of film as art or entertainment has developed quite considerably since film became a popular and marketable medium. New theories have been developed, new analytical matrices have been worked out and criticism has become more methodical and rigorous. Yet, in the midst of all this, the analysis of film as business has generally been ignored. Only one book, Thomas H. Guback’s The International Film Industry, has gone into the economics of the film industry somewhat intensively. It analyzes the relationships between the U.S. and European film industries and studies the effect of the penetration of European markets by U.S. films. It also describes in detail the structure and policies evolved to “control, facilitate or stabilize interaction” between the U.S. and European industry. Unfortunately the book is somewhat dated (the most recent data pertains to 1966) and no other book has explored the subject any further.

Part of the reason has been the belief that the business of film is not quantifiable and that the success of a film is not so much due to a strategy or plan as it is due to a combination of chance and individual enterprise (e.g. the Hollywood moguls, Selznick, Warner, Sam Spiegel, Mayer and other autocratic luminaries).

In the last few years, however, the image of Hollywood has undergone a visible change. The big studios have been in trouble and the price of filmmaking is higher than it has ever been. Faced by this and by increased competition from the other media, much of the approach has changed. The arbitrary individual approach has been abandoned. Scientific management techniques and practices have been incorporated into the business of making film. Many of these practices and techniques have been documented in the two books that Hastings House has published in its series on “Studies in Media Management,” The Film Industries, edited by Michael Mayer, and The Movie Business, edited by William Bluem and Jason Squire. Both books are somewhat overpriced (Mayer’s book costs $10.00 while the text edition of Bluem and Squire is $7.50). It is obvious that the books are aimed at those who want to work within the industry. Consequently the approach of both books tends to be much more descriptive than analytical.

Michael Mayer’s The Film Industries provides an interesting but somewhat general account of the process of making feature films and details many of the procedures and problems faced in the process. Mayer, a regular contributor to Take One on the subject of film as business, is quite familiar with the material. He does a good job of acquainting the reader with the nuances of contracts and the condition of internal markets and markets abroad. He goes into great detail in discussing the complexities involved in the distribution and exhibition procedure.

One of the problems with Mayer’s book is that he never goes into any great detail with any of the other aspects of production and leaves many points unanalyzed. Mayer brings up the subject of conglomeration in the industry but does not present the major points in the debate. He concludes that conglomeration has helped the industry and that these positive results are often minimized. He feels that the large conglomerates (Transamerica, MCA, Gulf and Western, Kinney National) have provided a great deal of financial strength to the industry by virtue of their size and capital base. At the same time, they have considerable political power, and this has helped in providing favorable treatment of the film industry. Mayer’s assumption here is somewhat shaky. The fact that the studios face a financial crisis is detrimental to film, Mayer seems to say. He refuses to consider what might happen if Hollywood’s stranglehold over the production of features in the U.S. were loosened. What would it do to the price of filmmaking?

Mayer asserts that film is capital-intensive and that production has a built in capital bias. He points out that all contracts are biased and favor the stronger bargaining power. He fails to come up with suggestions that would make all contracts more equitable and less exploitative.

Probably the weakest point of Mayer’s book is when he tries to analyze the high grossing films and to come up with those elements that contribute to the success of these films. This attempt to isolate the various elements of success is quite a meaningless exercise and is quite removed from the conditions and environment that influences the viewing of a film. Mayer also ignores the impact of “sell” and the role that “stars” play in the success of many films.

The Movie Business, the other Hastings House publication, is a more comprehensive book, a collection of articles on film industry practice by people in the industry. Each aspect of filmmaking—from concept to finish—is explored in great detail. Screenwriters, literary agents, story writers, actors, directors and others examine their role within the industry. William Goldman, who scripted BUTCH CASSIDY and wrote THE MARATHON MAN, talks about the creative freedom a scriptwriter can have and concludes that this freedom is directly proportional to the writer’s importance. Normally a writer has little control over the final shooting script and often he or she does not really care. He or she has sold a script and that concludes his or her responsibility.

There is an extensive discussion of financing and budgeting. It becomes quite clear that the most important criteria influencing the making of a film is whether it will return its investment. This is not easy to predict, and what often helps decide this are the stars in a film and their respective bankability. The book also explores various aspects of management and operations, and several writers, including David Picker, President of United Artists in 1973, outline the ideology that is predominant in the business and that often decides the future of any one film. Contrary to the general belief of the financial instability of the big studios, Roger Mayer of MGM contends that the studio is going to become more important.

With the development of new technology and the expansion of video and cable TV and other home viewing devices, the big studios will be the only ones with the facilities to cater to such a market, and hopefully this will begin to be a period of boom for them. There is a detailed discussion of preliminary production and creative functions. Both Sydney Pollack and Stanley Kramer emphasize the point that economic constraints play a major role in the creative process, shaping and inhibiting the creativity of the director.

The Movie Business is a fascinating collection of articles, but it has some major problems. It fails to discuss several really important subjects—the industry’s control of content, the role that politics plays in shaping the film, and the role of the audience and critic in the business of film. The question of how much the industry regulates the content of its productions has always puzzled the outsider. However, it is also accepted that there is control. Eric Johnston, a late president of the MPAA, explained some of the mechanics of shaping film content before the Senate Committee on Foreign Relations:

A man by the name of Addison Durland in my office handles that in our production code administration in Hollywood. It is his job, every time a script comes up for approval by the production code, to read the script, determine if there is anything harmful to the country, or any country in which the picture is likely to be shown. If, in his estimation, there is anything harmful to the country involved... or some particular situation which might be harmful to that area or to us, he notes it, discusses it with the producer of the picture and requests that the scene be eliminated or modified.... (Durland) has specialized advice and in addition... he operates with a man in each one of his studios whose job it is also to do that....” (From Thomas H. Guback’s The International Film Industry, p. 11.)

What are the other ways that the industry goes about controlling or regulating content? How visible is this process, and how does it shape the final film? It seems that this kind of a regulatory process would act as a constraint on the creative process, but there is no indication of what happens because of this and the kinds of responses that writers have to this kind of regulation.

The Movie Business is reticent when it comes to politics and how this seems to have affected the business, how Hollywood itself has often “blacklisted” artists with “undesirable” political beliefs. It is not a secret that McCarthy and the HUAC persuaded Hollywood to blacklist various important artists, such as Dalton Trumbo, Abraham Polonsky, Ring Lardner, Jr., Edward Dmytryk, and John Howard Lawson. What has this kind of political interference done to the community and to the business? How could they justify not using these people years after the HUAC fanaticism? What was the overall effect of the fear of political censorship?

The Movie Business also ignores critics and audiences. How does the industry perceive the role of the critic in the success or the failure of a film. and what are the ways that it responds to criticism? Or, are they concerned only with positive, reinforcing feedback? Along with critics, audiences are another unexplored subject. It is obvious that strong citizen groups are important in persuading studios in certain decisions. One of the major forces in enforcing the HUAC blacklist was the threat of a boycott by the American Legion. What is not obvious is how Hollywood has been able to accommodate various kinds of audience needs and taste. There has been a decrease in film audiences and this has resulted in greater unpredictability for films. Films are either very successful or not at all; there are few cases in the middle. How has this affected planning and how is Hollywood coping with this? Are they trying to build audiences, trying to sell stories of a more representative nature? What has been the mechanism? These are the questions that The Movie Business does not deal with, questions whose answers would help us in our understanding of Hollywood and the business of film.

Even though our information about Hollywood is incomplete, we are beginning to understand Hollywood and the nature of the business of film better. We know now that the economic structure of Hollywood has undergone a remarkable change. In Hollywood and After, Jerzy Toeplitz points out that the Hollywood studios have lost their financial independence, becoming subsidiaries of gigantic multinational corporations: Paramount has become a part of Gulf & Western, Universal is a subsidiary of MCA, United Artists is a part of Transamerica, Warner has been taken over by Kinney National. Moviemaking is just one aspect of their total activities, and they have diversified into numerous related activities—musical scores from films, record albums, film archives, movies for the TV market. Not that filmmaking is ignored. Despite the uncertainties, the stakes are higher than ever. In the last two years, earnings from films in the U.S. alone have been well close to $2 billion.

As returns have gone up. investment has become more profitable but also somewhat more risky. The price of filmmaking has also spiraled and there is a determined move towards safe, much more formulaic filmmaking. Irwin Allen, one of Hollywood’s most prolific creators of blockbusters, remarks,

I believe in big-budget pictures. I believe fervently in the star-system. I believe in the Walter Mitty syndrome. And I believe in the all family picture... I include all elements so you can't keep anyone away who wants to come.” (Newsweek, 11/25/74).

In the process Hollywood has steered clear of controversy. Even “controversial” films such as ALICE DOESN'T LIVE HERE ANYMORE or A WOMAN UNDER THE INFLUENCE aren't very daring. They are films on unconventional subjects but with little deviation from Hollywood’s traditional norms. (Capitalizing on their “controversial” nature, ALICE returned $6,500,000 to its distributors from North American showings; WOMAN UNDER THE INFLUENCE, $6,117,812). THREE DAYS OF THE CONDOR, a film represented as a scathing condemnation of the CIA, is really a caper movie done well and in a very formulaic manner. Two other films that have broken some kind of Hollywood norms, CONVERSATION and BILLY JACK, have really been freak products. Coppola forced Paramount to distribute CONVERSATION between the success of the GODFATHER films. BILLY JACK was financed and released by Warners but withdrawn from exhibition early. It was only after its “four-walling” and eventual success that Warner decided to promote it extensively. Thus, in many cases, Hollywood has used a classic business strategy—allowing many risky and somewhat chancy ventures to be test-marketed by others before taking it on themselves. At the same time Hollywood has even assimilated many subjects and themes that it previously ignored or suppressed—race and sex.

Its approach to sex since the thirties had been both sexist and puritanical, and it refused to allow any scenes of nudity or explicit sexual acts. But in its attempt to boost box offices, this reluctance vanished. It embraced softcore porn, but only after directors such as Russ Meyer and Radley Metzger had demonstrated that they were financially viable propositions. Hollywood even recruited Russ Meyer and Metzger in the process.

Hollywood’s approach to race was just as backward and extremely demeaning to blacks. Apart from the traditional Steppin’ Fetchit types and the polite and less than militant Sydney Poitier, blacks seemed not to exist. Even the notion of a black audience was ignored by Hollywood. But this could not really continue, and Hollywood finally came to the conclusion that blacks as an audience group could really help box offices. Van Peebles’ SWEET SWEETBACK'S BAADASSSS SONG proved this beyond a doubt, and the era of black films for black audiences began. The black exploitation film became a standard item in Hollywood’s production repertory. But, with the exception of a few films such as SOUNDER, few attempted to explore ethnic heritage or bring up subjects for discussion and analysis.

Even though Hollywood has been forced by necessity to take up a wide range of subjects, it has not become more open to new and fresh material, and certainly not to material of greater social relevance and concern. Richard Lederer of Warner Bros. remarks in The Movie Business:

...While it should not detract from the expression of social concern or the aesthetic possibilities inherent in any film, major companies who have economic interest in the business must continue to regard movies primarily as an escape entertainment form. The management of such publicly-owned companies must show a responsibility to its shareholders and, consequently, to profit-and-loss statements...”

Indeed, successes such as JAWS are examples of Hollywood’s perfecting the idea of film as an escape entertainment form. Later on, Lederer reiterates,

Escapist entertainment is still the number one attraction around the world, and although the ’star system’ is supposed to be on the wane, many a picture is made only because a certain actor will commit to do it. The industry still goes to the bank on names of people....”

Lederer’s statement points out two very important things. One, despite the denial by many, the capital-intensiveness of cinema has forced a virtual takeover of Hollywood by the bankers. And two, because of the relative predictability of investment return of a film in which a “star” acts, Hollywood is setting up an elaborate mechanism to accommodate him/her. This has meant different contractual agreements, greater participation in decision making and profits for the stars, and various other similar arrangements. In today’s Hollywood a “bankable” star is more valuable than ever.

But while Hollywood’s relationship with the star has become different and closer, its relationship to the rest of its employees, including other actors and actresses remains unchanged. Visibly there are various unions that are supposed to protect and safeguard the interests of their members. But, in actual reality, the Unions and Guilds do little. They cannot guarantee jobs to their members, nor do they attempt to distribute the jobs that exist in any equitable manner. They deny access to non-members and help keep the price of filmmaking high, promoting and protecting the interests of a few. Even today, all of the Hollywood unions are blatantly racist and sexist, and there has been little militancy to try and change this. The beginning of the black exploitation films found employment for a few more blacks, and the discussion of opportunities for women brought about a slight change in attitudes towards them. But only minimally. Tokenism was the predominant practice, and Hollywood remains a bastion of racism and sexism. There is little indication that this situation will change in the near future.

All this time, Hollywood has maintained that it steers clear of politics, implying of course that it will not engage in any criticism of the established system. In practice, this has often meant elaborate support of U.S. policies and armed involvements abroad, starting with films supporting and encouraging involvement in the Second World War and the Korean War. The next stage saw its support of the Cold War and a large number of movies were made by the studios for consumption abroad, in areas where the Reds were “threatening.” Yet when Vietnam came, Hollywood’s war effort came more from what Julian Smith in Looking Away (Scribner’s, 1975) terms “looking away.” Apart from solitary films like THE GREEN BERETS, Hollywood generally ignored the war by not discussing it at all. Ernest Callenbach explains:

Alienation, as they say, is when your country is in a war and you hope the other side wins; and there can hardly be an American who aid not grasp, by about 1967, that something fishy was going on....Under such circumstances, filmmakers have only a couple of alternatives: they can pretend not to notice, like the Waynes; they can ‘displace’ the material, as the Freudians say, into other periods ... or they can avoid the subject entirely, which is the easiest of all....” (from Julian Smith’s Looking Away)

Not that people in the industry did not try, but most efforts, regardless of perspective, were dropped because of a general lack of interest or the failure to obtain financing. Hollywood was not interested in investing in movies about a divisive war when other subjects were more profitable and less threatening. Consequently, it even disapproved of those who attempted to film the war, people like Haskell Wexler and Peter Davis. (Wexler is unofficially “blacklisted,” and Davis’ HEARTS AND MINDS was not supported by Columbia Pictures even though they had initially backed the project.)

The history of Hollywood is not a simple one, and anyone trying to understand the business of film has to attempt to understand this. With time, Hollywood’s methods have gotten more sophisticated and even more scientific. It is at a point where we can study it systematically. But for a complete understanding, greater knowledge of Hollywood as a corporate structure is needed. We need to know more about the decision making process, and more about the politics behind those decisions. How do the decision makers perceive their role vis-à-vis the country? And how do they go about the task of “manipulating” the masses, presenting a false sense of reality, selling the United States to the world by “the graphic display of the American system and of the productivity of free, competitive enterprise”? Indeed, Hollywood has changed, but much more information about the process is needed, along with greater analysis. Only then can we recognize the real process of manipulation and come up with ways to make films in a more relevant and positive manner.