Edward Jay Epstein's new book, The Big Picture, uncovers Hollywood's dirtiest secret: the real economics of moviemaking.
11:00 PM, Feb 22, 2005 • By JONATHAN V. LAST
Indeed, one of the key components of the clearinghouse system--boosting studio revenue enormously--is hiding income from a movie's (seeming) profit-participants. There is nothing illegal about it, although the effect is a nasty little game of hide and seek. One of the virtues of The Big Picture is Epstein's astonishing access to numbers that the movie studios go to great lengths to keep secret, so as not to offend people like Cage.
In coming years, Disney can expect a steady, if diminished, stream of income from these Gone home-video sales. But there is more. HBO paid Disney $18.2 million for the rights to air the movie (of which only $2.7 million was exposed to parties entitled to residuals). Once HBO's deal expired, it migrated onto cable's TNT network for another payout. Disney will continue to collect money from Gone whenever domestic cable or network television shows it. In a few years, local TV stations will fork over to Disney still more millions when their window finally opens on purchase rights. Still later there will be cash from foreign TV markets. And let's not forget income from product licensing and soundtrack sales.
The truth is that, even with terrible movies, the studios have to try hard not to make money. In this way, today's Hollywood is very much like the studio system of old. The two business models are so favorable that the quality of the product is beside the point. The difference, of course, is that the movies from the studio era were often quite good.
If The Big Picture has a flaw, it is that Epstein does not explore the question of why one era produced better movies than the other. Part of the answer revolves around the popcorn economy that Epstein details so authoritatively. Once the studios divested themselves of their theaters, theater-owners needed a way to make their businesses solvent, and concessions were the solution. Today popcorn sales keep movie theaters afloat. Adolescents are the primary popcorn consumers and the group most likely to see a film in its first week of release. These two facts create pressure for teen-friendly films with intentionally short shelf-lives. A recipe for junk.
Occasionally Epstein gets a detail wrong. He reports, for instance, that the term "blockbuster" comes from lines forming around the block when in fact Variety coined it in 1951, likening the box-office success of Quo Vadis? to a World War II aerial bomb. Elsewhere he overestimates the cost of making theatrical trailers. Some may approach a million dollars, but the average is about $300,000.
But such minor matters do not obscure Epstein's impressive achievement. He has produced an insightful work of forensic accounting and a keen industry analysis, full of surprising numbers and vivid examples. His candid insider sources perhaps reveal more than they intended. All the stars in the Hollywood firmament should read The Big Picture before they negotiate their next contract.
Jonathan V. Last is the film critic for The Daily Standard and a contributor to the blog Galley Slaves.