Hollywood Babble On & On #93: How Big is Too Big?

That's a question that should be asked of the major Hollywood studios and their large parent companies, especially after you read THIS ARTICLE.

Didya read it? Because it will be on the test.

Good.

Now, what is the main point of that article?

Hmmmm..... (taps desk)

Anyone?

Anyone?

Bueller?

Bueller?


Sorry, got into a bit of teacherly moment.

So I will just summarize it for you.

Okay, the main thrust of that article is that the big media companies are trying very hard to get out of financing their own movies.

Why?

Because making the movies have become so damn expensive.

Why are they so damn expensive?

Because the "screw everyone" business model that Hollywood's been using pretty much since its inception has stuck the entire industry with an inflation rate similar to Zimbabwe.

This is an issue that's a bit of a personal crusade for me, so to those of you who are new to this little rant-hut, I'll explain.

It all boils down to what I call the "Self-fulfilling Idiocy" that lies lodged in the arteries of the cold flint heart of Hollywood like a glob of atrophied cholesterol.

A self fulfilling idiocy is where narrow mindedness and greed cause someone to see a problem where there isn't one. That someone then comes up with what they think is a solution to that so-called problem, but it's so obvious that it will only make the problem worse, only a someone lacking any common sense, intelligence, and foresight would actually go through with it.

Which makes it a perfect way to describe how business is done in Hollywood.

The problem that existed in the heated imaginations of movie moguls was that they weren't making as much money as they wanted from the movies they were putting out.

They're solution was to screw everybody else who had a share of the films by claiming that there are no net profits and also claiming that films that sell millions in tickets actually lose money.

This, and the coming of some European tax shelters originally intended to promote local film productions, made the movie business very appealing to large media conglomerates looking for a place to hide their money. So they start buying up studios, networks, cable channels, and then start making more studios, networks, and especially cable channels.

Corporations get bigger and more convoluted. Simplicity and efficiency are frowned upon because it hinders the financial screwing that's become Hollywood's mission statement.

In response to this the major talent with the powerful agents start demanding more money up front, and back ends taken from the gross revenues, usually starting at the first dollar dropped at the box office. They don't feel any problem with their demands since the movie studios are just cogs in massive media corporate machines that have deeper pockets than most governments.

So the idea to save money ends up costing more and more money, and films that sell millions upon millions of tickets, really do end up losing money.

And the stuff that needs to be done to fix this problem doesn't get done because the studios have become huge bloated creatures that make Jabba the Hutt look slender and agile.

The inertia is just too powerful to overcome, it is just too damn hard to make a real and important decision in a modern media conglomerate. So most studios drop a lot of their mid-budget and low budget productions in favour of fewer big budget spectacle films cast with a handful of so-call "A-List" actors who get the big up-front money and sweetheart back-ends. All in the hope that they'll make the promised mega-bucks that rarely materialize.

And it's not just affecting the movie business.

It's also happening in publishing.

The big mega-publishers are all suffering shrinking sales, dwindling profits, and are having some major contractions, laying off staff and dropping their mid-list authors in favour of only a handful of top big money best-sellers. (Damn, that sounds like a familiar strategy)

Yet every year books sales keep going up, but not for them.

Smaller, independent publishers, taking advantage of the internet and other new technology, are starting to whittle at the big-boy's market share and make money doing it. Their smaller, more efficient organizations, mean that they don't need to have only big-blockbusters to do it.

Sadly, this is a lot harder to do with the movie business, due to the complete lock the major players have on distribution and the artificial inflation created in terms of hiring talent. But with the internet getting faster and more powerful each year, and new technology like HD video improving in both quality and price on a weekly basis, that might happen to movies too.

My advice. The original studios of the Golden Age of Hollywood were fairly lean efficient Mom & Pop organizations. So I say take all the companies that were absorbed into the corporate Borg collectives and set them free. Trim the executive fat and let them compete against each other, using efficiency, intelligence, and yes, even some integrity, to help bring costs into the realm of reality, and have this as their business plan: Make movies that make money.

Of course, that would be the sensible thing to do.

And the words sensible and Hollywood are very unlikely to meet.