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What If Hollywood Doesn’t Survive as a Global Player?

The social media model could be the savior of Hollywood

To paraphrase Nietzsche, the star is dead. By that I mean buried and decomposing, not temporary pay cuts.

The end of the star is mooted by every generation as its favorites are replaced, but this time the omens seem to be in alignment.

Technically Hollywood has always been at the top of the game, but when it comes to reality it tends to dawdle.

Like the Western economies in general, Hollywood is at a crossroads.

Back in 2006 I naively wrote a piece expecting the tech revolution to transform Hollywood quickly, shake the industry from its torpor.

Let’s get the bleak scenario out of the way first. What if Hollywood doesn’t survive as a global player?

"Avatar" showed the potential audience, in near absolute terms rather than typical, but if anything its success illustrates the numbers otherwise indifferent to the Hollywood product.

Forty years ago, give or take, Hollywood was transformed by Altman, Coppola, Polanski and others at their commercial and critical peak.

What is remarkable is that they were largely sustained by the domestic box office alone. Hollywood flourished with not much more than the ticket price (and TV rights). A few foreign markets contributed, but it was pennies compared to today, and the studios largely relied on international partners rather than wholly owned subsidiaries.

You could argue that there are more options now fighting for the leisure dollar, but Hollywood hasn’t done too badly. In fact, when one considers the revenue expansion since, say, 1970, the financial picture is astounding.

Hollywood’s coffers have been filled by a run of consumer booms. The global VHS explosion was quickly followed by pay and satellite TV, then DVD. Not all films have feasible ancillary options, but there must be a tidy sum in that pot, too.

Will 3D be the next cash cow? I have my doubts.

Hollywood has been on a 40-year roll. In almost every other industry, costs have been pruned mercilessly to maintain profit margins as the real consumer cost, adjusted for inflation, drops. (Pharmaceuticals, medicine and law are exceptions.) Despite gravity-defying budgets and hefty ticket price increases, $100 million has been the yardstick of B.O. success for decades. As other industries shrunk, Hollywood boomed.

So where has all the money gone? Profligacy gone mad is the probable answer.

How did Hollywood continue to prosper for so long with comparatively few revenue streams? The "creative bureaucracy" of filmmaking has swelled with squadrons of producers, executives, agents, managers, lawyers, PR handlers, etc.

The business can’t afford these people.

Although the executive suites of Hollywood are renewed with monotonous regularity, collectively the management class is as culpable as it is in Detroit or on Wall Street. The rewards for failure have been lavish.

The business will have to adopt a model where there are many fewer tiers of management/development.

If you still think Hollywood’s supremacy is a sure thing, consider sports, another branch of the leisure industry immersed in money. The World Series? Football, basketball, baseball, all wane beyond the U.S. So why assume Hollywood’s global reach is a given?

Movies (and TV) were essentially PR for the American dream and they thrived as we impoverished foreigners were dazzled by the American way of life: big houses on big lots, cars for every member of the family, routine transcontinental flights. How envious and awed we were as we waited for the bus.

While the U.S.’ decline can be exaggerated, its grip on the popular imagination has definitely waned. The American way as the definitive way is a dead idea, and that will hurt Hollywood.

In entertainment terms, music is an even more obvious comparison. Increasingly few acts are global as local markets exert their will. For the artist and music in general, that’s a good thing, but it creates rather messy corporate results.

Pardon the pun, but Hollywood will have to go back to the future: Unless a film is a chapter of a franchise it must be assumed that the domestic market is the only audience and any global gross is a bonus. That’s the way films are made elsewhere. If American audiences don’t want to watch Harrison Ford, why would foreigners?

On the positive side, Hollywood is everywhere, and with the right approach there is no reason it can’t flourish, domestically at least, simply because entertainment is vital to our lives.

I think the social network model could serve Hollywood well if implemented properly. Despite Facebook’s market penetration, there is no Facebook product; it depends on the input of its members. Hollywood, on the other hand, has an abundance of product.

Since moviegoing is largely a social activity, Hollywood should engage with its consumers. Compared to its vast and often fruitless advertising expenditure, the cost would be low.

Hollywood, in the collective entertainment sense, should have its own social network site where almost everything movie fans need can be found. Tell us what’s in development, who’s attached to script x, release schedules. Everything. Daily/weekly feed of screening times in our Zip code on each member page, movies on TV, best DVD prices.

In return, we tell Hollywood what we like, who we like, what we’re planning to see, what DVDs we will buy, what we will rent. Clusters formed by common tastes will show the industry where, say, Al Pacino fans are, how many, their age. Let us catalog our videos and DVDs — give us offers, preview screenings. The permutations are endless.

Rather than exploiting its information sensibly, Hollywood subsidizes TV and print media. In an era of cheap TV, those junket interviews are filling schedules rather than promoting a film.

Or take Vanity Fair. Do the performers featured in its Hollywood issue see a box office spike? Does the Hollywood issue attract the biggest and best advertisers? Does Vogue use celebrities on its covers as an act of charity? Vanity Fair and Vogue are not giving Hollywood publicity; rather, Hollywood is giving Vanity Fair and Vogue free content.

IMDb.com is another example. Why doesn’t Hollywood own that site? If there was no money in the concept, the site wouldn’t have been assembled and Amazon wouldn’t have purchased it. IMDb is essentially trade information being used to enrich people who have not contributed to the films.

The entertainment industry has accommodated the media by believing it needs the publicity, but Hollywood produces acres of free news, while it has to spend more every year to promote anything.

So why not charge them? Why should the fashion designer enjoy the benefits of Oscar night while the costume designers and costume makers are unemployed? This is abundantly wrong.

Yes, it may seem strange, even bizarre and preposterous but the conventions of the past are over.

The entertainment business, like any industry, has a supply chain and each link has to justify its existence.
 

Mark Lynch lives and works in London, where he writes an online novel, The Republic of Truth, about teen survivors of a climate disaster.