Chapter 9

Bringing Hollywood into Focus

In This Chapter

Appreciating the studio system’s rise and fall

Explaining the continued success of Hollywood

Dissecting Hollywood’s varied output

What is ‘Hollywood’? Clearly, it’s not just a district of Los Angeles in Southern California. Hollywood is the American film industry, which for most of the 20th century was the largest and most influential in the world. Wherever Hollywood exported its movies, audiences adopted them as the bigger, brasher brothers of local films.

Hollywood has also come to stand for something even larger: its studios are now part of multinational corporations producing all kinds of films, TV shows, games and associated merchandising. Hollywood is entertainment made for audiences all over the globe.

Running the Dream Factory

The secret of Hollywood’s success is simple: it creates lots of movies that lots of people want to see. Of course this goal is much easier said than done. Hollywood is an efficient industrial system and a powerful creative force. Hollywood films have an apparently universal appeal, but they’re very carefully designed to be enjoyed by different audience sectors, and many millions of dollars are spent on marketing them, just to make sure. Hollywood’s product isn’t just the movies – it’s the American dream. This section dissects the economic processes that make this dream a rich reality.

Mass producing movies

Most written accounts of how Hollywood works (both in a popular and more academic styles) are about film production, which is perfectly understandable; everyone wants to know what happens behind the closed doors of the mysterious movie studios, including how stars cope with their latest roles, the clashes of creative egos and the on-set triumphs and disasters. But film production is only a small element of what makes Hollywood successful: all the money is located in film distribution and exhibition.

Movies were (and probably still are) the best incentives to sell cinema tickets, and so if you want to sell lots and lots of tickets, you need a constant supply of appealing films to get audiences out of their homes time and time again. Hollywood’s masterstroke was to make production as quick and efficient as possible, saving money through economies of scale while maintaining the aura of desirable expensiveness through high production values, big stars and so on.

For the most successful decades of the movie business, 1930 up until about 1950, this recipe was the basis of the studio system. In order to produce movies in house as quickly as possible, the studios needed permanent contracted staff at all levels. The Hollywood studio system included:

• Directors: Under the studio system directors rarely had influence on anything other than shooting scenes from a script, but they were required to co-ordinate technicians and coax good performances from actors.
• Producers: Each major studio had a head of production delegating to between five and ten producers, who were required to oversee at least three movies at a time, often specialising in particular genres.
• Stars: Studios often hired new actors on contract as bit-part players and then remodelled them (often physically) into glamorous movie stars. Stars’ unpredictable behaviour was a major problem for studio heads.
• Technicians: Art directors led pre-production and cinematographers were vital during shooting, but studios also employed carpenters, electricians and cleaners to keep production moving. (Chapter 2 digs deeper into the original and current roles of technicians.)
• Writers: Studios employed a bank of writers who often contributed specific elements to a range of scripts, including gags, romantic subplots and so on.

The way audiences consumed films in the cinema was extremely different during the heyday of the Hollywood studios. Instead of going to see a single feature film as you do today, audiences attended cinemas regularly and habitually, watching a mixed programme of films that ran continuously. This programme included newsreels, cartoons, serials and trailers as well as the longer feature presentations.

As a result, the studio system wasn’t just a single production line making feature films. It was a series of separate lines, each with its own calibre of staff members. The biggest stars and best technical staff worked on expensive A-pictures, which made up only a small proportion of the total output but were able to generate a large percentage of profits. At the other end of the scale were the cheap programmers, with no stars, shorter running times and much lower budgets. This group of films receives almost no critical attention, but it made up more than half of the films that Hollywood released in the 1930s.

Controlling the supply chain

For the companies that made up Hollywood’s studio system, film production was, in some ways, a necessary evil to ensure a constant supply of product in cinemas, because the major studios weren’t primarily production houses. They were distribution firms that also had significant interests in physical cinemas and theatres. The powerful structure of the studio system is known as vertical integration, because the studios controlled the supply chain from top (production) to bottom (exhibition), via distribution channels in the middle.

The embryonic entertainment empires grew into a set of companies known as ‘the big five’ major studios:

• MGM: Formed after Loew’s, a chain of upmarket movie theatres in New York, purchased Metro, Goldwyn and Mayer Pictures around 1920, bringing in Louis B Mayer to run the new company. Producer Irving Thalberg led the Hollywood production line, investing heavily in stars and literary properties to create quality pictures.
• Paramount: Resulted from New York entrepreneur Adolph Zukor setting up Famous Players to acquire films for his thriving nickelodeons (check out the nearby sidebar ‘The movies at 5 cents a pop’). He struck a deal to create the first national distribution company with Paramount and proceeded to acquire aggressively other producers, eventually taking over Paramount itself. In the 1920s Paramount acquired more than 1,000 cinemas in the US.
• RKO: Formed by the Radio Corporation of America in 1928 to create a market for its proprietary sound system. Buying up a production studio and distribution firm, the company began to produce sound films and built its name on glossy musicals in the 1930s. RKO is the only one of the majors that did not survive beyond the studio era, after Howard Hughes stripped its assets in the 1950s.
• Twentieth Century Fox: Began with a merger between small distribution and production businesses in New York. Fox also invested in sound technology but over-expanded the company with expensive real estate. It became a major when it merged with Twentieth Century Pictures in 1935.
• Warner Bros.: Originally a family business with interests in exhibition and production, and a late entry into the studio system. The company took a risk with recorded sound technology that paid off handsomely. When it acquired cinema chain First National in 1929, it joined MGM and Paramount as a vertically integrated major.

By 1930, the Hollywood industry was effectively locked down by the five vertically integrated majors. This structure of several large firms controlling a market is known as an oligopoly. Of course other firms existed during the studio era, notably the ‘little three’ Columbia, Universal and United Artists, and independents such as Disney, but these companies had no cinema chains and therefore were unable to match the majors’ power and influence.

Dominating international markets

Adolph Zukor led the way for the Hollywood studio system in the 1910s, but his Paramount wasn’t the first company to dominate the international film business. That particular honour goes to the French. As early as 1905, Pathé Frères was already churning out a new film every day. Within a few years, its global distribution wing dominated the emerging film markets in Europe and the colonies in Asia, South America and Africa. Even in the highly competitive US market, Pathé had a majority market share by 1906.

So why isn’t the centre of the international film business in Paris? The simple answer is political instability, and specifically two world wars. World War I destroyed the French economy and shut down all cinemas for a period of several years, by which time Pathé had lost its control over world markets. Zukor’s Paramount and others obligingly stepped in to fill the gap. By 1920, Paramount had offices not only in the Anglophone markets of Britain, Canada and Australia, but also across the world. New York became the international hub for film distribution, a position it occupies to this day.

Paramount and the other emerging majors consolidated their power within the US and internationally through the establishment of a trade body, the Motion Picture Producers and Distribution Association (MPPDA), in 1922. This body had several vital functions:

• To neutralise the increasing moral panic over the disreputable nature of the movies with a voluntary production code (you can read more in the following section).
• To encourage co-operation between the major studios, effectively barring entry to new competitors and restricting international access to the huge and profitable US market.
• To work with the US State Department to lobby overseas governments who threatened to introduce restrictions on Hollywood imports.

This three-pronged approach was hugely successful. The large size of the domestic American market also meant that studios were able to recoup their costs at home and then sell their films cheaper overseas. Despite external shocks, including the Great Depression and World War II, and the problematic introduction of sound, by the end of the 1940s over two-thirds of Hollywood’s revenue came from overseas and Hollywood films made up around half of the global film trade.

Appealing to everyone, offending no one

The biggest and most expensive films made by Hollywood past and present only make money by maintaining a wide audience appeal. As a result, blockbusters typically balance spectacular action against romantic subplots and often blend elements from different genres: comedy, sci-fi and so on.

The emphasis on action over dialogue and movement over stillness also enables many Hollywood films to travel well overseas. In all these ways, Hollywood can argue that its films succeed internationally because they have ‘universal appeal’ (not to mention the support of an aggressive and powerful trade body).

In the late 1920s, while the MPPDA was deftly spreading Hollywood films around the world, the trade body also had a significant problem at home to deal with. Movies were profitable and enormously popular, but they still weren’t respectable. Social and religious groups argued that the movies were degrading moral standards. A series of scandals that rocked Hollywood during the jazz era – most famously the trial of apparently cuddly comedy star Fatty Arbuckle for the rape and murder of a young starlet – only strengthened these complaints.

The more risqué stars and films, such as Josephine Baker’s saucy Parisian Pleasures (La Revue des Revues) (1927), had been attracting the attention of censors at a state-by-state level throughout the decade. Instead of letting the situation get to the level of national regulation, the MPPDA hired Will Hays to put in place a self-regulatory code of practice. The Motion Picture Production Code of 1930, known informally as the ‘Hays Code’, established a set of subjects that films simply couldn’t depict, alongside topics that films had to treat with extreme caution. It remained in place until the late 1960s. The most important taboos, naturally enough, were sex and criminal behaviour, as Table 9-1 details in the style of the Code itself:

Table 9-1 The Hays Code Regulates Sex and Criminality

Producers had to work with the Hays office from early drafts of their scripts in order to ensure that their films met the Code, which often required difficult negotiations or compromises. Many film historians have noted that the review process created a system of plausible deniability, in which adult content was still present but had to be alluded to in coded form.

For example, in Casablanca (1942), Humphrey Bogart’s Rick and Ingrid Bergman’s Ilsa get a second chance at love in the midst of wartime chaos. The moral problem? Ilsa thinks that her freedom fighter husband is dead but soon discovers that he’s very much alive. The scene when Ilsa threatens Rick with a gun before falling into his arms is therefore open to charges of portraying adultery, but the producers got round the Hays Code by dissolving from the couple’s embrace to an establishing shot and then back to Rick enjoying a cigarette. Was it postcoital? You decide… .

Re-viewing Hollywood History

Hollywood plays such an important role in cinema around the world that understanding the story of American film is essential for film studies. What happens in Southern California reverberates around the globe. The story features big money, along with all its associated glamour (and bad behaviour), and colourful characters on and off the screen.

Getting a grasp on how films used to be made and consumed gives you vital context for viewing the great classics, as well as a deeper understanding of how cinema arrived where it is today.

Laying foundations for the Golden Age

Although Hollywood isn’t just a suburb of Los Angeles, clearly it started out that way. Which begs the question: why here? What about this location led to the grouping and apparently unstoppable growth of some of the world’s most powerful companies? A few reasons why film-making went west include:

• To escape regulation: Thomas Edison held patents for camera equipment and tried for decades to enforce his claim. Films shot around New York without Edison’s approval sometimes had their equipment seized.
• To join the boom town: Between 1890 and 1915 the population of Los Angeles grew six-fold, aided by cheap rail travel and stories of unlimited opportunity.
• To enjoy the light, climate and landscape: Sunshine and warmth enabled year-round location shooting in California’s varied settings – coast, desert and valley.

All these factors combined to shift the film-making balance of power quickly from New York to Los Angeles. The first Hollywood studios were built in 1911, and just four years later the LA Chamber of Commerce claimed that 80 per cent of all American movies were being made in its city. However, that famous visual claim of ownership – the HOLLYWOODLAND sign – wasn’t built until 1923.

The growth of cinema-going in the US during the 1920s was remarkable, creating an enormous profit bubble for the new vertically integrated major studios (for an explanation of this term, flip to the earlier section ‘Controlling the supply chain’). In 1922, the year that the MPPDA was formed, the average weekly attendance in cinemas was estimated at 40 million. By 1930 that figure had doubled to 80 million, and interestingly the majority of this audience – around 75 per cent – was female. This statistic confirms that cinema-going was now considered a safe pastime for all members of society. It also helps to explain the handsome major stars of this period, including Douglas Fairbanks and Rudolph Valentino.

Just three years later, the situation was rather different. The Great Depression began to hit cinemas and attendances dropped back to 55 million a week. Paramount, Universal and RKO were so badly hit that they went into receivership for several years. The costs of converting cinemas to sound equipment were also a major burden at this point, although eventually the change enabled cinemas to reduce costs. (Sound systems were cheaper to run than orchestras or even single musicians.)

Audiences recovered during the late 1930s, and a series of mergers and takeovers rescued the studios. And then came 1939, Hollywood’s annus mirabilis (year of wonders):

• $187 million was spent on producing 388 pictures, providing work for more than 33,000 production staff.
• Average weekly attendance was 85 million and continued at this peak throughout World War II.
• Films released included Mr Smith Goes to Washington, Stagecoach and The Wizard of Oz. But even these films were dwarfed by the unprecedented (and never to be bettered) success of Gone with the Wind.

Breaking up the studio system: The United States versus Paramount Pictures

The power of the big five major studios (Paramount, MGM, Warner Bros. Fox and RKO) was due to their status as vertically integrated operations. As I discuss earlier in ‘Controlling the supply chain’, these entities owned every aspect of cinema from production through distribution to exhibition. But how did this structure work in practice and why was it such an advantage in the marketplace?

Some keys to the major studios’ success include:

• They had their own cinemas, which guaranteed a market for the majors’ films. Locked-in exhibition venues reduced the risk of sinking money into production, as well as restricting the space for independent producers to enter the market.
• They developed a clearance system, in which they classified each cinema as first-, second- or third-run. The biggest films were restricted to first-run cinemas for the first few weeks, and then second-run and so on. First-run cinemas charged more and were generally owned by the majors, keeping the lion’s share of box-office receipts within the studios.
• They practised block-booking, in which as distributors the studies only rented their movies in blocks of five or six (or sometimes as many as 50) at a time. Block-booking ensured that less attractive, low-budget films were still screened alongside the most desirable expensive features.

On the other hand, although these tactics were highly beneficial for the majors, they were seriously aggravating for the many small independent cinemas that still existed across the US. The independents weren’t allowed to book the biggest films in the first few weeks of their release, and they had to put up with renting films they didn’t want due to block-booking. Although this portion of the market only brought in around 20 per cent of the studios’ income, the local ‘Mom and Pop’ theatres were important for the industry’s image with the general public, and by extension with politicians.

Starting in the 1920s, the local cinemas rallied together to launch anti-trust legal challenges to the studios. By 1938 the studios were forced to concede that block-booking was unfair. But their business practices remained largely unchanged, and so complaints persisted. In 1944 the US Justice Department took action against the big five and the little three studios. Years of intense legal wrangling followed until the case reached the US Supreme Court in 1948. The studios lost and had to agree to sell off their cinema chains as a result.

This process of divorcement had a profound impact on Hollywood and was effectively the end of the old studio system. With no guaranteed market, film production became riskier. Studios produced fewer films, slashed payrolls of contracted staff and concentrated on distribution and leasing their valuable studio space to independent producers. All these changes, however, served to make the studios better suited to the new environment of falling audiences and competition from television. Ironically the small independent cinemas were the biggest losers, with many closing over the coming decades.

Rolling with the changes: New Hollywood

In the period following divorcement, fewer Hollywood films were released, but production costs grew higher and higher. Cinema-going habits changed rapidly too. Instead of going two or three times a week to see whatever film was showing, audiences now went less often to see the biggest event movies. Colour and widescreen technologies were used for blockbusters to reinforce the spectacle of cinema relative to TV screens at home (3D became briefly popular for similar reasons).

The big hits of this period were biblical epics such as The Ten Commandments (1956) and Ben-Hur (1959) or musicals such as West Side Story (1961), Mary Poppins (1964) and especially The Sound of Music (1965). All were family-friendly, good old-fashioned Hollywood entertainment. Most were roadshow releases, which meant that they were screened exclusively at the best cinemas charging higher ticket prices for pre-booked seats and a grander theatrical experience. Roadshow engagements often lasted for months or even years with the most popular blockbusters.

The roadshows made respectable money, but Hollywood faced a long-term problem: the most significant generational shift of the 20th century. Birth rates had fallen during World War II, but with post-war prosperity and suburban lifestyles in the 1950s came an unprecedented surge in the number of new babies. During the 1930s, around 2.5 million babies were born a year in the US. Between 1946 and 1964, this number was between 3 and 4 million a year. By 1964, 40 per cent of the US population was 18 or younger, and yet Hollywood was still being run by aging studio bosses making films for the baby-boomer generation’s parents.

In 1967, the baby boomers made their presence felt in cinemas. Over the next 10 years or so, the big hits of American cinema were of an altogether different flavour to The Sound of Music:

• Bonnie and Clyde (1967): A crime caper featuring sexy young stars Warren Beatty and Faye Dunaway and a harrowing violent ending.
• The Graduate (1967): A sex comedy with a young Jewish lead (Dustin Hoffman), a disaffected counter-culture tone and a folk-rock soundtrack.
• Easy Rider (1969): A low-budget rock-and-roll biker movie with several sequences of drug-fuelled psychedelic hallucinations.
• The Godfather (1972): A decidedly non-biblical epic, telling the bloody tale of an Italian-American crime syndicate through the generations.
• The Exorcist (1973): A nightmarish vision of demonic possession featuring a swearing, blaspheming and vomiting 12-year-old girl.

These films and their contemporaries became known as the New Hollywood. They smashed taboos around sex, drugs and violence and told largely contemporary stories about multicultural America. They showed clear stylistic influences from European art cinema, including experimental editing practices, narrative ambiguity and downbeat endings. They were made by a new generation of young, cine-literate directors who considered themselves auteurs in the European sense: radical, creative risk-takers (see Chapter 14).

For about a decade, many of these creative risks, surprisingly, paid off, not only with the new generation of film critics, but also with the American public. But uncontrolled creativity can also spell danger, as famously demonstrated by Michael Cimino’s financially disastrous Heaven’s Gate (1980), which nearly bankrupted its studio, United Artists. Clearly relying on maverick directors to produce surprise hits was too risky for studios. Seeking financial stability, the studios turned to the biggest hit of the 1970s, Jaws (1975) – check out the later section ‘Eating Hollywood: Jaws’.

Heading Back to the Future: Blockbusters, Franchises and Indiewood

Hollywood has always thought big. DW Griffith’s controversial Civil War epic The Birth of a Nation (1915) was the longest and most expensive film of its era, but it also happened to become an enormous hit; the same applies to Gone with the Wind (1939) and Titanic (1997).

However, the foundation of Hollywood’s power during the studio era was in producing a whole range of films, including cheap B-movies and shorts, and packaging them into mixed programmes of entertainment (see ‘Running the Dream Factory’ earlier in this chapter). When audiences fell and viewing patterns changed, family roadshows and then adult New Hollywood films came and went, but what Hollywood needed most was a new business model.

Eating Hollywood: Jaws

Arriving in summer 1975, Jaws certainly was a monster hit. According to film historians Sheldon Hall and Steve Neale, in its first two weeks of release in the US, the movie brought in $21 million in box-office receipts, topped $100 million after two months and after 5 months had taken $150 million. Not only were these record receipts, but also most importantly they were made in record time. For a little bit of context, the biggest hit of the 1960s, The Sound of Music (1965) took four years to make as much as Jaws took in four months.

But Jaws was no surprise hit: it was the result of a careful marketing and release strategy that was in the process of reinventing Hollywood. The key elements of the Jaws model are:

• Use of a well-known pre-sold property: The novel Jaws by Peter Benchley had been the publishing phenomenon of 1974, spending most of the year on the bestseller lists.
• Well-publicised production history: The making of Jaws became newsworthy in itself, building audience awareness and anticipation. Bad publicity? Pah.
• Heavy promotion on TV networks: Universal paid for 30-second spots in 23 primetime shows during the three days up until the film’s release, which was the biggest advertising campaign yet seen in Hollywood.
• Quick and wide release: Jaws opened on more than 400 screens across America in June 1975 and was showing on almost 1,000 a few months later. By contrast, the big hit of 1973, The Exorcist, opened on only 24 screens.

The producers of Jaws at Universal didn’t invent this strategy. Pre-sold properties had always been popular, and generating publicity during shooting was an old trick. Using TV for publicity had become commonplace as well, although Jaws took it to the next level. The release of Jaws was wide compared to earlier hits, but by the 1970s other studios were also experimenting with blanket releases, such as United Artists who put out the previous three Bond films on 600 screens.

Jaws is the first modern blockbuster not because it invented these strategies, but because it perfected them.

Of course Jaws benefitted greatly from its talented director, Steven Spielberg. But Spielberg wouldn’t have been in charge of Jaws had Lew Wasserman not been the head of Universal. Wasserman started out as an agent, and his company MCA profited from the end of the studios’ contracts. (He made James Stewart super-rich by negotiating profit share deals rather than upfront salary.) MCA moved into TV production first and then purchased Universal’s back catalogue and eventually its entire business.

Under Lew Wasserman, Universal became a horizontally integrated major studio. Horizontal integration differs from the vertical integration of the old studio system in important ways as Table 9-2 details.

Table 9-2 From Vertical to Horizontal Integration

Deciphering agent-speak: Packaging, high concept and synergy

Lew Wasserman, the man who taught Hollywood how to make money again, began his career as an agent (which is no coincidence). As the studio system broke down, turning everyone into freelancers, the agents found themselves holding the balance of power. As audiences declined and production costs rose, stars assumed new importance as a means of insuring against box-office failure. Agents were the ones who nurtured the talent and had the contacts needed to bring the best people together.

Under the studio system, production was financed internally, and the production heads assembled the basic elements of the feature-film project: the script, the director and the cast. By the 1970s and 80s, powerful agents were increasingly playing this role, and they gave it a new name: packaging. The goal of the package was to attract finance for the project, through a major distribution deal or via smaller independent companies. After the package was financed (either by the studio or by a combination of other sources, such as private financiers) and approved, the agents received their commission and went to work on the next big project.

The easiest types of films to finance in this way are ones that can be described quickly and grasped easily. Such films are sometimes called high concept, because they’re all about a strong and simple idea. Steven Spielberg famously aimed to describe his movies in 25 words or less, and so here are a few attempts to do it in 10:

• Beverly Hills Cop (1984): Street-smart Detroit cop transferred to wealthy white neighbourhood; stays sassy.
• Home Alone (1990): Noisy child accidentally left home for Christmas repels burglars. Violently.
• Speed (1994): Bomb on bus will explode if slows. Sandra drives quickly.
• Face/Off (1997): Cop and crook switch faces. Both annoyed. Lots of shooting.
• Snakes on a Plane (2006): Surely no explanation required.

Along with being useful for pitching your package, a high-concept idea is also perfect for marketing purposes. The horizontally integrated majors of the 1980s worked to sell a strong idea across several media formats, ideally each cross-promoting the other – bringing about another agent-speak word: synergy. For example, Purple Rain (1984) was carefully marketed to ensure that its star Prince’s singles were in heavy rotation on MTV, selling the soundtrack album and the film. The producers of both? Clever Warner Bros.

If you want to understand how Hollywood worked in the 1980s, you can do a lot worse than watch Robert Altman’s satire The Player (1992). Here the industry is run by slick but interchangeable entrepreneurs in suits, who pitch ridiculous high-concept ideas to each other, like ‘It’s Out of Africa meets Pretty Woman’. The film does have a murder plot, but the real fun is spotting the amazing array of cameo appearances and seeing the film-within-a-film Habeas Corpus change from a gritty, worthy legal drama to an action flick where Bruce Willis rescues Julia Roberts from the gas chamber with a shotgun.

Acting like kids: Family franchise fun

For most of its history, Hollywood was in the business of producing wholesome family entertainment. The restrictions placed on adult content under the Hays Code (see the ‘Appealing to everyone, offending no one’ section earlier in this chapter) ensured that the vast majority of films from the studio era were suitable for children to watch, even if the grown-ups understood that more was going on just off screen.

But then the old moguls of the studio system gave way to a new generation of film-makers, the baby boomers grew up and for a brief time adult films were Hollywood’s big hitters. Many of these films were certainly not kids’ stuff, most notably The Exorcist (1973).

Fast-forward just ten years from The Exorcist and you find that the biggest movie of 1983 was The Return of the Jedi. The year before that it was E.T. the Extra-Terrestrial (1982) and the year after Ghostbusters (1984). Clearly, the economics of the industry had shifted once more, away from an unusual run of adult-themed films and back towards family entertainment. But this was family entertainment of a different order to Gone with the Wind (1939) or The Sound of Music (1965). Instead of parents taking their children along to the movies, now the kids were dragging their parents in and demanding merchandise as well as popcorn.

Hollywood’s return to family entertainment in the 1980s has several explanations:

• As with New Hollywood, demographics played a part. In 1967 almost half of the US adult population was aged 16–24. Fifteen years later, the baby boomers were having kids of their own, the so-called echo boom phenomenon, and these youngsters loved the movies.
• The rapid growth of multiplex cinemas in the US during the late 1970s and 1980s meant that the viewing experience was now more comfortable and safer for families with young children.
• Although the US domestic market was relatively stable, the explosive growth of international markets during this period meant that, by 1994, Hollywood was bringing in more money from overseas than it made at home. And marketing E.T. internationally is much easier than The Exorcist.

But probably the most significant change during this period was the uptake of home entertainment technologies, particularly home video. After overcoming the format war between VHS and Betamax (see Chapter 16) and concerns over home taping of movies from television, the studios all entered the home video market in the early 1980s. Table 9-3 illustrates the rapid growth of Hollywood video revenues over the following decade.

The revenues that home video brought in were essentially pure profit for the studios, because they’d already recovered the cost of producing the film from the theatrical run. Family blockbusters also bring in additional revenue streams, such as merchandising. George Lucas made his billions not just from cinema box office, but from shrewdly retaining the rights to his Star Wars characters as toys. Further synergistic opportunities also open up through tie-in promotions with fast-food restaurants or product placement within the films themselves. Spielberg’s shot of the Jurassic Park (1993) toy stall in his 1993 film is partly a joke, but it certainly helped to sell sweatshirts and lunch boxes.

Film sequels and series have always played a part in Hollywood’s production slates, most notably with the James Bond films dating back to Dr No in 1962. But the economic importance of the franchise rose markedly throughout the 1980s and beyond. During that decade, three sequels were the top grossing films of their year (both Star Wars sequels plus Beverley Hills Cop II (1987)) and the top tens of the year are filled with more examples. By 2014, franchise films took up 15 of the top 20 highest grossing films of all time. Critics may complain about the lack of original scripts, but Hollywood is a business and you can’t argue with that kind of profit.

Behaving like grown-ups: Indiewood

Even though family franchise films dominate the blockbuster end of the market, Hollywood continues to produce a variety of films each year. For one thing, blockbusters are incredibly expensive to produce, and so studios have to offset profits against high production costs. And when blockbusters fail, they can be crippling for a studio’s balance sheet. So Hollywood studios also produce or distribute a range of lower budget genre films, such as comedies or horror movies, which entail less risk but still have the potential of becoming crossover hits (movies which make the leap from niche to mainstream audiences).

The low-budget end of the spectrum has always been the most accessible for independent production companies. Even during the peak of the Hollywood studio system, tiny ‘poverty row’ producers were churning out cheap B-movies. After World War II, independent producers such as Roger Corman made cheap but popular genre movies and provided a vital early training ground for major directors such as Francis Ford Coppola and Martin Scorsese (see Chapter 14). In the 1980s a few independent companies briefly achieved instant major status before over-spending themselves into oblivion (see the sidebar ‘For instant major just add cash’).

Independent cinema today isn’t just a reference to the size and status of production companies relative to the major conglomerates; it also means a style of film that’s unusual or risk-taking. Independent films are supposed to bring new aesthetic forms and styles into the mainstream and to provide opportunities for young up-and-coming film-makers. They seek and often receive positive critical attention and win awards, which makes them particularly attractive to film stars. They may not be hugely profitable, but they generate kudos and raise profiles.

This type of film-making has its origins in the American avant-garde film of the 1950s and 60s and is also often influenced by European art cinema. Some key examples to check out include:

• Shadows (1959): John Cassavetes used his acting salary to self-finance and produce his low-budget features, such as this one, which are loose-limbed and largely improvised.
• Badlands (1973): Terence Malick’s slow-paced and beautifully shot tale focuses on young killers on the run in South Dakota.
• Blood Simple (1984): Joel and Ethan Coen’s debut is a brutal, noir-ish thriller, which was a winner at one of the first Sundance Film Festivals.
• sex, lies, and videotape (1989): Steven Soderbergh’s film won the Palme d’Or at the Cannes Film Festival and put Miramax into the big league.
• Rushmore (1998): Wes Anderson’s debut set the stage for a series of comedic indie hits and re-launched the career of Bill Murray.

Even this short list indicates the importance of film festivals for American independent cinema. Especially vital is the Sundance Film Festival due to its patron Robert Redford’s passionate support for indie film-makers. The growth of this festival in the late 1980s and early 1990s provided a space for individual films to coalesce into movements, most notably New Queer Cinema, which kick-started the careers of Gus Van Sant, Todd Haynes and producer Christine Vachon. Sundance’s subsequent mainstream impact significantly blurs the boundaries between Hollywood and independent cinema.

The ‘independent’ status of these films in financial terms is also increasingly blurry. Miramax under Harvey Weinstein provides the perfect example. His strategy of combining US indie releases with international imports was extremely successful in the early 1990s. Along with sex, lies and videotape, Miramax also had hits with The Crying Game (1992), Clerks (1994) and Pulp Fiction (1994). A notoriously forceful personality, Weinstein also has a fantastic record of securing Oscar wins for his releases such as Shakespeare in Love (1998). The fact that the Disney company bought Miramax in 1993 makes the ‘independent’ status of these films problematic.

As Hollywood and the independent sector became increasingly intertwined, the term Indiewood was coined to describe this growth area of the modern movie industry. Its most obvious home is the studio-created subsidiaries of the majors, such as Sony Pictures Classics or Fox Searchlight, or in companies acquired by the majors such as Miramax. Being involved in Indiewood production brings the majors several advantages including building relationships with tomorrow’s major directors, providing unusual vehicles for stars and, of course, winning awards.