Business in Tinseltown is as unpredictable as it was 30 years ago
“Hollywood is always in crisis,” jokes an unusually publicity-shy talent agent. Indeed, his office is in Century City, a district full of high-rises in Los Angeles that was once the backlot of 20th Century-Fox until it had to sell up because of the crippling cost of its 1963 epic, “Cleopatra”. Faced with bankruptcy 50 years ago, Fox might have been better off keeping the property and junking the film-making. The industry’s return on capital has been chronically anaemic. The media conglomerates that own the major studios grouse about the lousy economics of the business, particularly since DVD sales peaked in 2004 and then waned, with consumers shifting to lower-cost rentals and subscription services like Netflix. Technology should have helped Hollywood, by lowering the cost of distributing films, but it has also cost the industry dearly, as film-makers doll up their movies with expensive special effects, and negative social-media buzz kills films before they even open.
Today Hollywood tries to tailor its products to the tastes of film buffs in big emerging economies, especially China, which is now the world’s second-largest movie market. The farther a film can travel, the better, which means the studios are exporting films with fewer American elements. “Big Hollywood films have no national ideology attached to them today,” says Michael Lynton, the boss of Sony Pictures. Consider Fox’s four “Ice Age” cartoons, which together grossed around $800m. They are set in no identifiable time or place, and the characters can easily be dubbed into local languages.
The Writer Speaks - William Goldman
