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The Monster That Ate Hollywood
Program #2007
Original Airdate: November 22, 2001

 

NARRATOR: It's another opening of another show in Hollywood, a science fiction comedy called Evolution. It has a famous star, David Duchovny of The X-Files.

    INTERVIEWER: So what- what should we look for in the movie?

    DAVID DUCHOVNY: Well, that it's very funny, I think is one. And my ass, for another.

    INTERVIEWER: We get a chance to see your ass?

NARRATOR: There's a famous director, Ivan Reitman of Ghostbusters.

    INTERVIEWER: How excited are you about this movie?

    IVAN REITMAN: I'm very excited. I'm proud of it. I think, you know, good work was done, and I think- I'm really looking forward to see how the audience, you know, across America and the world responds to it.

NARRATOR: A big studio, Dreamworks, is bankrolling the film with nearly $100 million. A major chunk of that money will be spent on marketing.

    IVAN REITMAN: It's always a tense time, you know, because there's always lots of competition and things like that. But I think- I think it'll be fine.

NARRATOR: "Fine" means it'll make lots of money. All it has to do is stay in the theaters for at least two weeks.

    1st MOVIEGOER: I rarely go to movies anymore.

    2nd MOVIEGOER: Big production house movies are getting worse.

    3rd MOVIEGOER: You've got these blockbuster films coming out, $100 million films, and yet you don't see the quality.

    4th MOVIEGOER: A lot of them are over-hyped.

    5th MOVIEGOER: They're more repetitive now. Like, it's pretty much the same plot.

    6th MOVIEGOER: I wish they wouldn't recycle old themes. You know, if a movie's been done- you don't need Dennis the Menace Take Three.

    7th MOVIEGOER: They have, like, no plots, and they're really not funny. It's basically toilet humor.

    8th MOVIEGOER: It seems like movies just play to what they can sell.

RICHARD NATALE, Entertainment Journalist: What's interesting about the business is that it's no longer the movie business. People don't make movies anymore, they make spectaculars.

    ["Casablanca"]

    HUMPHREY BOGART: Of all the gin joints in all the towns in all the world, she walks into mine.

NARRATOR: Richard Natale grew up watching the movies. Today he writes about them for papers like The Los Angeles Times.

RICHARD NATALE: The reason that we went to see movies, the reason we went to see Casablanca, was because the story was really fascinating. The characters were compelling. We sat and ate our popcorn. We sat on the edge of our seats. We cried. We tore our hair out. We laughed hysterically. We don't do that anymore at movies. It happens less and less.

PETER GUBER, Chairman, Mandalay Pictures: There's something in the magic of the lights that is inextricably true for all human beings- the shaman, the storyteller in front of the flickering images of the campfire that forever in our species have wowed us, I mean, from the very, very beginning.

    ["Casablanca"]

    INGRID BERGMAN: If you knew how much I loved you, how much I still love you.

PETER GUBER: It was a cottage industry. It really was. When I came to Columbia, Warner Brothers was a $400 million company. That was the cost of Titanic with some prints and advertising worldwide. The whole company was $400 million. And films were the business of the business. There wasn't really much of a television business. Yes, there was some series business.

There was nowhere else that the features went after their theatrical run, a little bit with network television and some syndication packages. And international was called "foreign" then. It was foreign to most of the people in this business, and it was that place across the ocean where the films played after nobody here was really interested in it.

NARRATOR: If anybody knows what happened to the movies, it's probably Peter Guber. Listen to this story: Once he made good, profitable low-budget movies.

    ["Midnight Express" trailer]

    ANNOUNCER: He was a 20-year old American boy up against a system he didn't understand, spoken in a language he couldn't speak. Midnight Express.

NARRATOR: Then one day he made Batman. It cost a fortune, and it made a fortune. They said he had a Midas touch, so they gave him a studio, Columbia. And then a big Japanese company, Sony, wanted to be in the movie business. So they bought Columbia and paid Guber many, many millions of dollars.

    ["Batman"]

    JACK NICHOLSON: Nice outfit.

NARRATOR: And then Guber made a lot of flops. That's Hollywood.

    ["Tango and Cash"]

    SYLVESTER STALLONE: Glad you could drop in.

NARRATOR: But something had changed.

PETER GUBER: The whole business went through this incredible transition, and suddenly the world changed in an instant.

PETER BART, Editor-in-Chief, "Variety": It's become a corporate town, a very corporate town. It was a not a corporate town 10, 15 years ago.

NARRATOR: Peter Bart saw the change in Hollywood. As a studio executive at Paramount, Bart backed what many considered one of the last great Hollywood movies, Chinatown. But then, after he went to work at Variety, Hollywood's hometown paper, he watched an invasion of Hollywood.

PETER BART: There are tensions growing from the fact that you're dealing with these immense and very hard to define companies which have mind-bending resources. I mean, they're not even companies, they're sort of nation states. AOL/Time Warner is a nation state. So is Vivendi.

And these companies are so new that they haven't even really come together yet.

    [newsreel]

    ANNOUNCER: For this is fabulous Hollywood-

NARRATOR: Once Hollywood liked to think of itself as just another small-time American city.

    ANNOUNCER: With its grandiose Graumann's Chinese Theater-

LIONEL CHETWYND, Screenwriter/Director: It used to be that the people we worked for, we knew. We were all in the same boat together. It was a huge business, but a pretty small community. We all ate pretty much in the same restaurants, and we all lived together in the same mix.

    ANNOUNCER: Colorful, exotic playtime nightclubs of the stars-

LIONEL CHETWYND: And so in a curious way, we were all interdependent.

    ANNOUNCER: World-famous motion picture studios-

LIONEL CHETWYND: Our fates were all intertwined.

    ANNOUNCER: Beautiful, glamorous femininity-

LIONEL CHETWYND: We had a common destiny, whether we wanted it or not. Now, what's changed with the concentration of ownership is, is that these guys, who are at the head of the studios, are basically divisional managers in huge conglomerates. Sometimes that's only a middle-management position. They're not in the same business we are.

PETER GUBER, Chairman, Mandalay Pictures: What is the attraction to a French water company to buying a movie studio in Hollywood? What is the attraction of a multi-national consumer electronics company - two of them, Panasonic and Sony - to buying companies in Hollywood? What is the attraction of a Canadian spirits company, Seagrams, to buying a company in Hollywood?

There's something that is so powerful in that medium that I think companies see that as an enduring legacy of the human race. So to own a piece of that territory is a very compelling element. Now, when it's also economically sound - and it can be - it becomes a very powerful magnet for these companies.

NARRATOR: And what drew those companies to this business was what happened back 25 years ago, when Hollywood created its very own monster.

    ["Jaws" trailer]

    ANNOUNCER: It will attack and devour anything. It is as if God created the devil and gave him jaws.

ROBERT LEVIN, Pres., MGM Worldwide Mrkt. & Distr.: The movie that everyone always references as the big change in how movies were distributed and marketed was Jaws.

    ["Jaws"]

    ACTOR: You yell "Barracuda!" everybody says, "Huh? What?" You yell "Shark!" we've got a panic on our hands on the 4th of July.

NARRATOR: Bob Levin knows how to get people into a theater, and he learned how to do it from the way Jaws was sold- wide.

ROBERT LEVIN: Jaws was, like, the first thousand-screen release, a big release using media to really support it.

    ["Jaws" trailer]

    ANNOUNCER: None of man's fantasies of evil can compare with the reality of Jaws.

ROBERT LEVIN: Instead of going out in a few number of theaters in a city and then expanding more and more and more, that with- if you went and advertised a movie on network television and successfully interest an audience in that movie, you could open everywhere at the same time.

PETER GUBER, Chairman, Mandalay Pictures: Jaws was significant as a watershed film, and it's almost ironical. The four words that start the book, "And so it began," are the same four words that you could use for the business, the change in the business. And so it began, these wide releases.

    ["Jaws 2" trailer]

    ANNOUNCER: When the movie Jaws first opened, it created a sensation.

PETER GUBER: They would create this enormous swell of momentum-

    ["Jaws 2" trailer]

    ANNOUNCER: -and shark sightings increased by the thousands.

PETER GUBER: -that would create gargantuan box office from the beginning.

    ["Jaws 2" trailer]

    ANNOUNCER: How could there have been only one?

NARRATOR: And so Hollywood's own monster, the movie as spectacle, began to consume the business itself.

    ["Jaws 2" trailer]

    ANNOUNCER: See it before you go back in the water.

NARRATOR: Two years after Jaws, Luke Skywalker and Darth Vader created white-hot box office, and something new: ancillary profits, toys and dolls and other doo-dads. By then the monster was out of control.

    ["The Empire Strikes Back"]

    JAMES EARL JONES: You are beaten. It is useless to resist! Don't let yourself be destroyed, as Obi Wan did!

NARRATOR: The sequel was born. Yoda and Jabba the Hut. Rocky lost-

    ["Rocky"]

    ACTOR: You'll go back to being a two-bit nothing!

NARRATOR: -and then he won. And then there were three more Rockys. A guy with a chainsaw killed people, and then he killed more people. The money was unbelievable.

MICHAEL CIEPLY, Film Journalist: Beginning in about 1978, the movie industry went through a 21-year period when it showed compound annual revenue growth of 12.5 percent. Now, that's almost unheard of. I mean, that's a level of growth year after year, compound in double digits, very serious double digits, that really supported kind of a gold rush mentality.

    ["Rambo II" trailer]

    ANNOUNCER: Rambo. What most people call hell, he called home.

NARRATOR: Michael Ciepley says that once Hollywood created the blockbusters-

    ["Rambo II" trailer]

    ANNOUNCER: Rambo, First Blood: Part II.

NARRATOR: -the blockbusters then created, well, Blockbusters, the video chain. Now, with the invention of VCRs, the movies could go home. And did they ever.

MICHAEL CIEPLY: Very rich guys, very big bankers, suddenly realized that there was enormous value in the libraries that'd been created. So what was a very tiny business was now a business that they could fund. They could loan money against it because they could project out the impact of cable and video and say, "Hey, we can resell every movie that's ever been made." So there's huge hidden value here.

    ["Wall Street"]

    MICHAEL DOUGLAS: Greed is good. Greed works.

NARRATOR: Hollywood has always had a weakness for greedy villains. They're good box office. And sometimes they're also good business partners.

    ["Wall Street"]

    MICHAEL DOUGLAS: The richest 1 percent of our country owns half our country's wealth, $5 trillion.

MICHAEL CIEPLY: Money flowed like a tidal wave into this business. That's when the takeover wave hit. That tidal wave of money completely transformed what the movie industry is.

    ["Jerry Maguire"]

    TOM CRUISE: Show me the money.

    CUBA GOODING, Jr.: Yes! Louder!

    TOM CRUISE: Show me the money!

    CUBA GOODING, Jr.: That's it, brother! But you got to yell!

NARRATOR: As the movies prospered, mocking the '90s lust for money-

    ["Jerry Maguire"]

    CUBA GOODING, Jr.: I need to hear you, Jerry!

    TOM CRUISE: Show me the money!

NARRATOR: -voracious multi-national companies were licking their chops. Hollywood companies were ripe and devoured. They quickly organized their movie business to look a lot like all their other businesses.

    ["Jerry Maguire"]

    CUBA GOODING, Jr.: I love black people!

    TOM CRUISE: I love black people!

    CUBA GOODING, Jr.: What're you going to do, Jerry?

    TOM CRUISE: Show me the money!

    CUBA GOODING, Jr.: Congratulations. You're still my agent.

LARRY GERBRANDT, COO & Sr. Analyst, Kagan World Media: The goal is to cut out as many of the middlemen as possible and maximize the revenue of the film. Viacom is as good an example as any of vertical integration. Paramount produces the movie. They also own Blockbuster. It then goes to Showtime, its pay window. The next window after that is a network window. And then it could go into syndication.

So in theory, a hit Paramount film can actually play on virtually every one of its windows on a Viacom property.

[www.pbs.org: More on the new business model]

ELVIS MITCHELL, Film Critic, "New York Times" and NPR: Newscorp- they've got a studio. They've got a network, the Fox Network. They've got two cable outlets. So you know, they've got all these different arms to sell this stuff. Then they've got Sky Channel and they've got a satellite overseas and they own TV Guide.

I mean, vertical integration is now- it's like Doctor Evil from the Austin Powers movies. You know, it's these tentacles that encircle the world.

NARRATOR: Elvis Mitchell is a movie critic for The New York Times and National Public Radio. His devastating review of The Replacements certainly stung the producer, the director and the actors. But it didn't hurt the box office. AOL owns the studio, Warner Brothers. It also owns a number of outlets that helped sell the movie.

ELVIS MITCHELL: When you've got Time Warner/AOL, Entertainment Weekly and CNN and Time Magazine and People and In Style, they get to flog movies in five or six different ways before the picture even comes out. And they're often pictures made by companies that they're in business with.

NARRATOR: That's show business today, and there are those who see an even more profitable future.

HOWARD STRINGER, Chairman & CEO, Sony Corp. USA: You could make the case that the movie is the most fundamentally symbolic piece of content that any media company develops. It drives all your content. It's the most visible. It's the most conspicuous. It's the most dangerous. It's the most exciting.

As the world becomes ever more aware of content, movies will go wider and wider. When the digital world is really here, movies can be disseminated from satellite direct to homes and direct to small theaters in Mongolia and northern Russia and obscure places that the market for movies is going to grow and grow and grow. And it's really the flagship of your content.

    ["Lost World"]

    JEFF GOLDBLUM: Let's get this movable feast underway.

    PETE POSTLETHWAITE: Don't move!

HOWARD STRINGER: It drives everything else that you do.

    ["Lost World"]

    JULIANNE MOORE: What is it?

    JEFF GOLDBLUM: Mommy's very angry.

HOWARD STRINGER: And it lives forever.

RICHARD NATALE, Entertainment Journalist: They can create everything from soundtracks to theme park attractions.

    [Universal Studios promotional video]

    ANNOUNCER: This phenomenal interactive adventure thrusts guests into the living, breathing, three-dimensional world of Jurassic Park.

    STEVEN SPIELBERG: This really is a chance to, you know, three-dimensionally live the movie and ride the movie.

RICHARD NATALE: It can be never-ending. It's what's called a franchise. And studios are very eager to be in the franchise business, and they are always looking to try to create a new franchise and to create an entire business around a single movie.

LARRY GERBRANDT, COO & Sr. Analyst, Kagan World Media: The exciting thing about the movie business is the same thing that's exciting about investing in Broadway plays. You never know when you're going to invest in the next Titanic or the next Cats. And you know, the rewards on those are so extraordinary. I mean, it's like- it's like- it's better than hitting the Powerball lottery.

NARRATOR: If there's story Hollywood loves to tell, it's the big gamble, from Cagney to Casino, and maybe that's because that's the kind of business they're in.

    ["Indecent Proposal"]

    WOODY HARRELSON: Oh, yeah!

    DEMI MOORE: Oh, my god!

    WOODY HARRELSON: Oh, honey! That's the spirit! [inaudible] $50,000! That's what we want! we're winners!

PETER GUBER, Chairman, Mandalay Pictures: The importance of marketing, in terms of the success of a film, is like air to all of us. It is a crucial resource, and you must be breathing from the beginning. The minute you start the process of deciding to make a film and you're communicating that vision to anyone, you're in the process of selling. If you don't understand that, you're not in show business. You're just not.

HOWARD STRINGER, Chairman & CEO, Sony Corp. USA: If you don't spend a lot of money on marketing, you don't generate big box office, which is translated in so many eyes as one of the criteria of hits. So that if- if I was to- if I had a $100 million picture and I spent- only spent $10 million marketing it, for instance, I haven't really saved $10 million because people will start saying, "Well if you didn't have a big opening weekend, you weren't a success."

And if I'm not a success, I can't sell it to television or cable, and I threaten my video sales and DVD sales, and so forth and so on. So there is a- there is a sort of spiral of pressure.

    ["Charlie's Angels"]

    ACTOR: Good morning, Angels.

    ACTRESSES: Good morning, Charlie!

LARRY GERBRANDT: The studios have gotten so sophisticated, so good at cutting the trailers, marketing the films, creating that buzz - it's not word of mouth, but it's buzz, it's that "want to see" buzz - that they can- they can put butts in seats on that opening weekend.

ROBERT LEVIN, Pres., MGM Worldwide Mrkt. & Distr.: All of the studios get reports that start three weeks out that tell them how their movie and all the other movies that are releasing into the same timeframe are doing in consumer awareness, moviegoer awareness, how well do people know about it, and it's across all segments. It's broken down in total and against young, old, small town, big town, regular moviegoers, non-moviegoers, lots of banner points across the top. How aware are they of it? How interested are they? Compared to the other movies, where does this exist in choice?

So for the last three weeks, you're playing sort of this open poker hand, where I know everything, they know everything, and it starts to leave this intensity of "Maybe we got to spend more." You know, "We're falling a little bit behind. Maybe we got to spend more. Maybe we got to step it up." So it's hyper- I would say hyper-competitive.

PETER GUBER: And when these companies all put out $70 million, $80 million, $90 million, $100 million films, they have to support them. They have to open them.

A picture we recently made, they spent $40 million just marketing the picture in North America alone- not the cost of the picture, not international,

just U.S., North America, Canada alone, $40 million in prints, advertising, releasing costs, costs through the first two weeks. So if that film doesn't work on Friday night, every executive in the business in that company gets sphincter arrest because there's nowhere to go.

NARRATOR: And that brings us back to Evolution, that David Duchovny/Ivan Reitman science fiction comedy. In order to make it look like the movie - which critics say was lousy, by the way - was a huge box office success, Dreamworks opened it on as many screens as possible- 2,600.

RICHARD NATALE, Entertainment Journalist: If you're opening a movie, you have to spend a great deal of money to make sure that you fill those theaters because you have to- because there's another movie coming up right behind you. And if you don't fill those theaters, you're going to start to lose screens, like that, and your movie- you know, your movie's dead in the water. So you have to open very big.

LUCY FISHER, Red Wagon Entertainment: The pressure of opening weekend is so strong now that by Friday night at midnight, you already know whether the two years or the five years that you spent working on a movie were basically for naught.

    ["Men in Black" trailer]

    ANNOUNCER: We are the men In black.

    WILL SMITH: Know what the difference is between you and me? I make this look good.

NARRATOR: When Men in Black hit the screen, Lucy Fisher probably knew by Friday night that her studio had a hit.

    ["Men in Black"]

    TOMMY LEE JONES: I'm going to count to three.

    WILL SMITH: He'll do it, Jeeves.

    TOMMY LEE JONES: One-

    WILL SMITH: I'm telling you, that man does not look stable.

    TOMMY LEE JONES: -two-

    ACTOR: He's always crazy. Why don't you get a massage and think of- do you have any idea how much that stings?

NARRATOR: But in her time, she's seen some movies die, and she knows how studios can beat the odds.

    ["Men in Black"]

    WILL SMITH: You know how to use these things?

    TOMMY LEE JONES: No idea whatsoever.

LUCY FISHER: If you have a hit in America, even though if it's a pre-bought hit - i.e., you spent so much money that you've got the people to come the first weekend, even though they, they didn't like it and they won't tell their friends - if it's opening in a bunch of other territories very soon afterwards, you'll get a little buzz from the fact that it had big numbers in America, and the exhibitors in the other countries will respect that. So it- that opening weekend now has a ridiculous amount of authority over the fate of a movie.

NARRATOR: And Evolution opened a disappointing fourth. The box office dropped 75 percent over the next two weeks. This is the worst thing a multi-national media conglomerate can see in a movie theater.

MICHAEL CIEPLY, Film Journalist: What corporations need to do is sell predictability. I mean, their greatest fear is an unpredictable cycle. You know, the ideal life cycle for a corporate entity is 15 percent profit increase every year. You know, they love earnings management. They love to know where they're going. And in the movie business, the only way you can begin to manage earnings that way is to trade on what's already worked.

    ["Armageddon" trailer]

    BRUCE WILLIS: The United States government has just asked us to save the world.

    1st ACTOR: We're talking about space, right, outer space?

    2nd ACTOR: This is like deep, blue hero stuff.

    3rd ACTOR: I'm there.

    4th ACTOR: I'm with you.

    5th ACTOR: Beam me up, Scotty.

PETER BART, Editor-in-Chief, "Variety": What big corporations want most is risk-averse pictures. So you have corporate suits trying to make projects that don't entail risk. You can see why the manpower turnover is very high in the upper reaches of the studios now.

    ["The Player" trailer]

    ANNOUNCER: From director Robert Altman comes a story of Hollywood.

    1st ACTOR: I got a writer in here who's got a pitch I think you ought to hear. I think it's hot.

    2nd ACTOR: We open outside San Quentin.

    3rd ACTOR: The Graduate, Part II, and Mrs. Robinson had a stroke, so she can't talk.

    TIM ROBBINS: This is going to be funny?

    3rd ACTOR: Yeah, it'll be funny.

NARRATOR: In L.A., where the traffic jam is a way of life, approving a movie project is called the"green light."

PETER BART: A "green light meeting" is when the decision is made, finally, whether or not to make a given picture. Now, the green light meeting, when I first started at Paramount, would consist of maybe three or four of us in a room. Perhaps two or three of us would have read the script under discussion. And people said stupid things like, "I kind of like this movie" or "I'd look forward to seeing this movie," inane things like that.

The green light decision process today consists maybe of 30 or 40 people. There's one group there to discuss the marketing tie-ins. How much will McDonald's or Burger King put up? And there's somebody else there to discuss merchandising, toy companies, and so forth. Someone else is there to discuss what the foreign co-financiers might be willing to put up.

So everyone is discussing the business aspects of this film, and it's sometimes unusual for someone actually to circle back and talk about the script, the cast, the package, whether the whole damn thing makes any sense to begin with.

[www.pbs.org: Read the extended interview]

HOWARD STRINGER, Chairman & CEO, Sony Corp. USA: Well, I think if you gamble on the expensive movie, and once you get into the $100 million category, you do start hedging your bets. You're going to rely on sound and spectacle, whether it's- whether it's digital effects, computer graphics or whatever, in order to embrace a bigger and bigger audience and to go after kids that are the core of your audience. And you can't afford to do many of those because the risks are fairly substantial.

But they also tend to be the movies that, because they don't have as much dialogue as you might imagine, they're easily translatable to foreign countries and foreign languages.

RICHARD NATALE, Entertainment Journalist: What most people forget is that movies are no longer made just for the U.S. It's important that a movie be a success in the U.S. because it helps it become a success overseas. But the number of theaters is shrinking in the U.S., and the amount of overall business that a movie does in the U.S. versus the rest of the world is shrinking.

A big action movie like Armageddon can do almost twice as much overseas as it did in the U.S. And that's going to continue to grow. So more and more, movies are made to satisfy a foreign audience, which doesn't understand English. So if you don't really understand it, it doesn't really make much difference because it delivers on a certain action level. And even if the plot doesn't make a great deal of sense because people are watching it in subtitles or dubbed, they don't really care.

PETER GUBER, Chairman, Mandalay Pictures: There's 300 million people in the United States, and there's 5.7 billion people in the rest of the world! It doesn't take an Einstein to figure out if you can tap into that market, there's a lot of money to be made and a lot of eyes to be attended to.

    ["Die Hard 2"]

    ACTOR: You're the wrong guy in the wrong place at the wrong time!

NARRATOR: So that's why, with lots of action and no dialogue, there's got to be one other ingredient. The whole world loves a movie star.

    ["Die Hard 2"]

    BRUCE WILLIS: This is just the beginning.

MICHAEL CIEPLY, Film Journalist: The great lie of the movie business, and one that you'll hear all the time, is "the material is everything." The material is actually nothing, OK? The material doesn't matter. You can- you can show up with the greatest script on Earth and flop it down in front of a studio executive, and they can come back with the greatest reasons on Earth not to become involved with it. And you realize that what really drives the entire business is attachment, star power.

    ["What Lies Beneath"]

    HARRISON FORD: You're not yourself today, are you.

MICHAEL CIEPLY: In order to pre-sell a movie-

    ["What Lies Beneath"]

    MICHELLE PFEIFFER: No, I'm not.

MICHAEL CIEPLY: -in order to convince somebody in Germany that they should put enormous amounts of money on the line to bet on a script, they could bet on a star.

    ["What Lies Beneath"]

    MICHELLE PFEIFFER: I think she's starting to suspect something.

    HARRISON FORD: Who?

    MICHELLE PFEIFFER: Your wife.

RICHARD NATALE: A bad movie with Bruce Willis will make more money than a bad movie without Bruce Willis. And a good movie with Bruce Willis will make a lot more money than a good movie without Bruce Willis.

    ["Armageddon"]

    BRUCE WILLIS: They'll do it. They've made a few requests, though.

    BILLY BOB THORNTON: Such as?

    BRUCE WILLIS: Oscar here has got some outstanding parking tickets. Max would like you to bring back eight-track tapes. Not sure if that's going to work. Yeah, one more thing. None of them want to pay taxes again. Ever.

RICHARD NATALE: As part of creating an event, you want to anchor that around a large personality. And those personalities are few - as always, are few and far between. Even back in the old studio days, there were basically 5 to 10 stars who were very big. And so everybody wants those very big stars.

    ["Mission: Impossible 2"]

    ACTOR: Good morning, Mr. Hunt. Sorry I barged in on your vacation. This is your mission, should you choose to accept it.

ELVIS MITCHELL, Film Critic, "New York Times" and NPR: There's so much about the business that's ruled by fear. What they seem to want is to be relieved of the necessity of making a decision, which goes like this: If Tom Cruise is in the movie, well, it's going to be a hit. And if it's not a hit with Tom Cruise, well, it's not our fault because the last five Tom Cruise pictures were hits.

    ["Mission: Impossible 2"]

    TOM CRUISE: You got to be kidding me!

ROGER EBERT, Film Critic, "Chicago Sun Times": What the studios are doing is they're throwing out the adult audience. I mean, if you're an intelligent adult and you don't live in a big city that has an art cinema or a selection of films, there's often no movie for you to go to see that weekend at the theater.

NARRATOR: Roger Ebert's thumb is arguably the most important piece of any movie critic's anatomy, and lately it's been pointing down more often than not.

ROGER EBERT: Let's say you're 30 years old, you're a college graduate, and you're fairly literate. Are you going to go see The Mummy Returns? Are you going to go see Gone in 60 Seconds? Are you going to go see Coyote Ugly? Are you going to go see Evolution? Are you going to go see all these movies with Pauly and Adam and all the other goofball dumb comedians? No. Those movies are made for 13-year-old boys, they're not made for you.

ELVIS MITCHELL: The target is becoming more and more specific. What used to be thought of as being the target audience from 12 to 24 is now a target audience from 12 to 19. The audience that repeats, that- you know, for them, a movie experience is like watching a movie on videotape, where you just want to see the stuff you like over and over and over again.

    ["Big Daddy"]

    ANNOUNCER: This summer-

    ADAM SANDLER: Do that thing I taught you the other day.

ELVIS MITCHELL: Now what multiplexes have become is sort of like "The Night of the Living Dumb." They kind of march from one movie to the next to the next, week after week after week.

PETER GUBER: What was the design going in? Were you aiming at that lowest common denominator, that cheapest possible audience, that basest possible value? Is that the target of choice? And that's a very honest question and it deserves an honest answer, and I think the answer is yes. If they believe they can make more money at that, that's where they'll aim, in the main, because they're, after all, public companies. The shareholders don't want to know what the product was, they want to know what the profits are.

[www.pbs.org: Read the extended interview]

NARRATOR: Then came the summer of 2001, the first signs that the monster, the spectacular, the sequel and the spinoff, that marketing-driven strategy was weakening.

HOWARD STRINGER, Chairman & CEO, Sony Corp. USA: Something is happening this year which I find slightly troubling, and that is that we used to say that your ultimate box office was probably three-and-a-half times your opening weekend. And it seems to have dropped to two-and-a-half.

    ["Pearl Harbor" trailer]

    Pres. FRANKLIN D. ROOSEVELT: December 7th, 1941, a date which will live in infamy.

HOWARD STRINGER: And you've seen how these big-budget pictures open quite wide and drop quite suddenly, losing half their audience by the following weekend. And one doesn't really know whether that's because there are too many pictures and therefore the theaters are crowded, with movies stacked up like planes over an airport, or because there's too high a level of expectations for the movies that we're marketing.

LARRY GERBRANDT, COO & Sr. Analyst, Kagan World Media: You can market a bad film. You can drag people, virtually, into the theater in that opening weekend. You can't make them go back and tell their friends to go see a bad film, no matter how well you market it. That's what's led to all this pressure on the opening weekend.

LUCY FISHER, Red Wagon Entertainment: People sort of almost can smell a stinker before it comes out, before the reviews come out. They just know. And they might go opening weekend because they got sold it and they like the premise, but then they won't- which is what happened this summer a lot. There was a lot of movies that people had high expectations for because the idea sounded good. And then they weren't as happy with the actual movie.

ELVIS MITCHELL: If the formula still is that a movie has to make twice what it costs to break even because of marketing and stuff, that means on the average, every other movie this summer needs to make $200 million to break even. And that doesn't happen too often. I don't care how big the grosses are, and that this is a record year, as compared to last year, which is also a record year. You know, movies kind of stall out about $90 million or so, which still sounds like a lot of money to me. It's still a lot of people, but it's just not the kind of big hit people are looking for anymore.

BILL MECHANIC, Pandemonium Pictures: And if you're being honest about it, you'd say, "I'm in a lousy business. I'm making no money. I don't know why I'm doing what I'm doing. I have to change it. I have to fundamentally start to say one word - no." And nobody will do that.

NARRATOR: Bill Mechanic used to run Fox. He green-lighted Braveheart and Titanic.

    ["Titanic"]

    LEONARDO DiCAPRIO: I'm the king of the world!

NARRATOR: And still they got rid of him. Now he's off the lot, an independent producer.

BILL MECHANIC: Everything you do that makes your job safer makes it less profitable. It's just a one-for-one kind of thing that happens. So now you're making movies that can gross- you know, like, the biggest-grossing movie last year probably didn't make any money for the studio, so now your hit doesn't pay for your losses.

RICHARD NATALE, Entertainment Journalist: The big financial stories are the fact that movies are not that profitable, ultimately, that the amount of expenditure that goes into them does not make a movie very profitable anymore.

And if you look at a movie like Pearl Harbor, they spent a $140 million to make it. They spent another $100 million to market it. And they will come away with probably $400 million to $500 million at the box office, half of which is returned to the studio.

So what's left to them is going to really carry them for a great deal of - you know, a great deal of time. And the reason to create a movie like that is that it's going to take you through some lean months.

LUCY FISHER, Red Wagon Entertainment: You have to have other things besides the ability to make just the movies in order for it to work. You have to have some of the other ancillary things, or there is no way.

    [video commercial]

    ANNOUNCER: If you want action, we got it! Last Action Hero. Now, the year's most action-packed movie is today's hottest video game for your Super Nintendo and Sega Genesis systems. And it's available only at your video store. So when you're returning this cassette, pick up the game and live the action!

LUCY FISHER: The same thing that you paid for once, you can sell a whole bunch of different ways. That's crucial. Just selling it through a movie theater is not ever going to be a viable way to make money back on a movie anymore. Unfortunately, boo-hoo, but it's not- it's going to be a bigger business from now on.

NARRATOR: But what about people who just want to make movies, movies like Sex, Lies and Videotape? In the '80s and '90s, they were called "independents," and movies like this could live on the fringes of the multiplex. Now they're- well, they have a hard time getting in anywhere.

ROGER EBERT, Film Critic, "Chicago Sun Times": There's an enormous dynamic going on in the American independent film community right now. Good films are being made, and when you go to Sundance, you see them. But the problem is, they're not being distributed because the distributors have been totally overcome by the Friday night "Who's going to win the weekend" syndrome.

    ["Sex, Lies and Videotape"]

    ACTOR: How are things with John?

    ANDIE McDOWELL: Oh, they're fine. I mean, they're fine. Except for I'm kind of going through this thing where I don't want him to touch me.

NARRATOR: No one wanted to touch Sex, Lies and Videotape when it first came out.

    ["Sex, Lies and Videotape"]

    PETER GALLAGHER: In fact, I'm going to tell you a little secret. As soon as you've got a ring on your finger, you start getting the most spectacular attention from the opposite gender.

NARRATOR: But it got some buzz. And in those days, it could also find some screens.

ROGER EBERT: And unless we find a way to distribute films without feeling that they have to have this enormous push behind them and this expensive advertising campaign, we'll never be able to appreciate this generation of filmmakers.

ALLISON ANDERS, Film Director: Used to be that a critic would write something wonderful about your movie. That would get people out to the movie theaters to see your film. And the movie theaters themselves were not so corporately owned that they- they had to- you know, they could let you have time.

NARRATOR: Allison Anders directed Gas, Food, Lodging. She says movies like this are no longer given a chance.

ALLISON ANDERS: You know, once they stopped letting us have the screens to build word of mouth, we were really sunk because most films that make you think about anything are going to take people a while to get to see them. It used to be that our little successes were just fine.

    ["Gas, Food, Lodging"]

    1st ACTRESS: Don't worry about it. Soon as I'm out of here, you can do whatever you want.

    2nd ACTRESS: Oooh! Promises, promises!

    3rd ACTRESS: Hello, girls.

ALLISON ANDERS: I've never not made my money back for distributors. So you know, they made their money back, and that was fine. They made back what they put in, and maybe a little bit more. They were happy with that. But I don't think they're- they're obviously not happy with that anymore.

NARRATOR: There used to be a company that was a sort of sugar daddy to independents, Miramax.

    ["Clerks"]

    1st ACTOR: You should hear the barrage of stupid questions I get.

    2nd ACTOR: What do you mean there's no ice? You mean I got to drink this coffee hot?

    3rd ACTOR: You'd feel a hell of a lot better if you'd just rip into the occasional customer.

NARRATOR: Cool, rough-around-the-edges movies got shown, thanks to them.

    ["Clerks" trailer]

    4th ACTOR: Hey, you open?

    5th ACTOR: No!

    ANNOUNCER: Clerks: Just because they serve you doesn't mean they like you.

    2nd ACTOR: You hate people!

    1st ACTOR: But I love gatherings. Isn't it ironic?

NARRATOR: Then even Miramax decided to go for the brass ring.

    ["Shakespeare In Love" trailer]

    ANNOUNCER: Miramax Films and Universal Pictures present a truly romantic comedy of errors.

    ACTOR: That woman is a woman!

NARRATOR: They bankrolled Shakespeare in Love.

    ["Shakespeare In Love" trailer]

    GWYNETH PALTROW: This is a new world.

    ANNOUNCER: Shakespeare in Love.

NARRATOR: They won some Oscars. And of course, they were making a lot of money. So the next thing you know, Miramax is a division of the Walt Disney Company.

    ["Shakespeare In Love"]

    ACTOR: Romeo and Juliet- just a suggestion.

    JOSEPH FIENNES: Good title.

ELVIS MITCHELL, Film Critic, "New York Times" and NPR: Miramax put themselves in the position where they were thought of as being the alternative. But now they're as much a studio as New Line, which started off as kind of a mini-major, too, or any of these other places.

It's almost like now Miramax needs to have a Miramax Classics Division, where they make the kind of movies we think as being Miramax pictures because, you know, when you think of a picture like Shakespeare in Love, that's a pretty expensive movie. That's not an art house movie or what we think of as being art house pictures now. What Miramax does really are mainstream movies with big movie stars in them.

[www.pbs.org: More on the state of indie film]

LARRY GERBRANDT, COO & Sr. Analyst, Kagan World Media: The problem is, in success, you want to keep reaching for a higher brass ring, so the budgets start going up. You actually start making safer bets, and- or at least what you think are safer bets, because the budgets are higher. You may take fewer shots and the- you actually begin to look very much like a major studio. And finding those little gems and taking those chances, which is really where they made their bones, doesn't look like as good a business.

ELVIS MITCHELL: Miramax is to, you know, independent film as Godiva is to, you know, designer chocolate. It's owned by Campbell's. You know, it doesn't mean anything anymore.

LARRY GERBRANDT: Once you're part of a major studio, there's the pressure to constantly generate profits, and that's tough to do as an indie. And you know, that's sort of the history of Miramax.

    ["Big Night"]

    ACTRESS: Is this what I ordered?

    STANLEY TUCCI: Yes, that is a risotto.

NARRATOR: Then there's the story of Big Night. It's a story that might appeal to any independent producer.

    ["Big Night"]

    STANLEY TUCCI: She likes starch. I don't know. Come on!

    ACTRESS: There are no meatballs with the spaghetti?

DAVID KIRKPATRICK, Original Voices Productions: About five years ago, there was still a feeling in the air that you could go and make a small little gem of a movie and feel comfortable that you might be able to make a few ducats off of it and sleep well at home at night.

    ["Big Night" trailer]

    ACTOR: To eat good food is to be close to God.

    ANNOUNCER: It's a story about people who love what they do and just want to share it.

    STANLEY TUCCI: No, wait! Cut it at the table.

    ANNOUNCER: Now, all they need-

    ACTOR: If you give people time, they learn.

    STANLEY TUCCI: This is a restaurant, not a cooking school.

    ANNOUNCER: -is a recipe for success.

    ACTOR: If we don't receive your payment by the end of the month, we will foreclose.

    STANLEY TUCCI: What do you mean?

DAVID KIRKPATRICK: For a movie that we made for under $4 million- and in the sweep of things today, when pictures open to $50 million or $60 million, but for us to make a picture at $4 million and do just in North America $12 million was a very significant number because it drove all our other ancillaries up to a significant level.

    ["Big Night" trailer]

    ANNOUNCER: Their only chance-

    STANLEY TUCCI: How much does that leave?

    ACTRESS: Sixty-two dollars and forty-seven cents.

    ANNOUNCER: -is a feast.

    ACTRESS: Say "formaggio!"

DAVID KIRKPATRICK: I think our cable number was about $2 million dollars, our free television window was $3 million. Our airline deal was about $1.5 million. We did a Big Night cookbook, which brought us in close to a million dollars. So all these other ancillary trickles, you know, were really helpful in terms of making the picture profitable.

    ["Big Night" trailer]

    ANNOUNCER: Your table is waiting.

    STANLEY TUCCI: Let's eat!

DAVID KIRKPATRICK: I think it's a terrible thing for me to say, but I think it's virtually impossible to make Big Night today.

MICHAEL DOUGLAS: If you like to make quirky pictures or, you know, a little off center, like I do, there is no time for an audience to find a movie.

    ["One Flew Over the Cuckoo's Nest]

    JACK NICHOLSON: Wake up, boys. Wake up. It's medication time.

NARRATOR: Before Michael Douglas was a movie star, he was an independent producer. He made a classic, One Flew Over the Cuckoo's Nest.

    ["One Flew Over the Cuckoo's Nest]

    ACTRESS: -gently down the stream. Merrily, merrily, merrily, merrily, life is but a dream.

MICHAEL DOUGLAS: A picture like Cuckoo's Nest, which could play for week after week with only maybe a 7 percent drop, as opposed to some of the dramatic drops that are now- there's no time now for a movie to breathe because by the next weekend, there's three, four, five other pictures coming in, each maybe who's spent an average of maybe $25 million for their marketing alone. So you don't have a chance to- to find your legs.

    ["Bonnie and Clyde"]

    FAYE DUNAWAY: Hey, what's your name anyhow?

    WARREN BEATTY: Clyde Barrow.

    FAYE DUNAWAY: Hi. I'm Bonnie Parker. Pleased to meet you.

ELVIS MITCHELL, Film Critic, "New York Times" and NPR: I think of the example of Bonnie and Clyde which, when it came out in 1967, was a failure, was a flop. People didn't go. And what Warren Beatty did was he persisted. He cajoled. He begged. "Well, let's re-release this. Let's put these newspaper ads up. Let's keep buying time." And by the end of the year, Bonnie and Clyde was a big hit, and people wanted to go.

That didn't happen over the first weekend, and it took time to build that audience up. And because it played for six months, it became a big Oscar contender. Doesn't happen anymore. You know, a movie comes out now, if it isn't a big hit in its first weekend, then it's finished.

NARRATOR: So all of that's why some people say movies are, well, disappointing. But movies, even documentaries about movies, are supposed to have happy endings. So we'll try.

PETER GUBER, Chairman, Mandalay Pictures: One thing that I think has the greatest advantage to both change the financial underpinnings of the business and create a wider circle or a wider orbit of audience, and a differentiated audience, and a wider orbit of talent that can feed that audience is World Wide Web broadband. The idea that it'll collapse the distance between the "Eureka" of the artists and the "Wow" of the audience, collapse it all and get them much closer together and allow those two forces to come together with a greater frequency and greater selectivity, to my mind has enormous potential.

PETER BART, Editor-in-Chief, "Variety": When you consider the fact that the basic process of shooting a movie was exactly the same between 1920 and 1998, you know, that nothing changed, then all of a sudden, everything is changed- I mean, that is, in many ways, the biggest story. Now, in Hollywood, change for the better? Who knows. That remains to be seen. But it could change a lot for the better. It could- it could- the changes in technology could loosen the chokehold of the major companies on the pop culture. That's what could happen.

ELVIS MITCHELL: Because what it's saying is there's a new technology that is making this democratic. I mean, in the end, it's still the same thing. You've got to go to a studio to get the picture released. But if you make a movie like that, you can get it on the broadband, you don't need the studio anymore. If you make a movie for $200 - and eventually you'll be able to do that - the technology that bankrupted Francis Ford Coppola with One From the Heart everybody has access to now.

HOWARD STRINGER, Chairman & CEO, Sony Corp. USA: The more bandwidth there is, the more you can disseminate movies. If you're carrying a tiny PDA, the first thing you can do with it after you've got sports scores, if you're a kid, is watch a movie on a bus or a train or, hopefully, in the back of a car, not the front, if your computer screen will be able to show movies. You'll be able to show on the back of a wristwatch.

I imagine wireless-based products will mean that you can sit almost anywhere, in the garden or in an airplane or in a train, as I say, anywhere you go and watch something or play something, play with a video game. And the movie is- the movie is fundamentally at the heart of all that because the movie brings- it still brings everybody together.

LARRY GERBRANDT, COO & Sr. Analyst, Kagan World Media: There was a time when I thought that some of the new technologies might actually take something away from the theatrical experience. And I think I've now come to realize that we're going to have theaters. Now, in the future, it may be digital theaters, or the- instead of the film prints, it'll be electronic prints. But I think we're going to have theaters for a very long time because it's the key.

How that movie performs on that opening weekend very often determines how successful it is for the rest of its economic life. And there's a magic that occurs in that exhibition environment that you could not create any other way.

PETER GUBER: Whether we call it cinema in the future or digitized or if it's played, you know, on your eyeballs injected with electrodes into your head, whatever the means are, we're going to start with somebody wanting to tell a story to somebody else, a lot of somebody elses. I don't think there's anything in the technology or the financing that can screw that up.

The question becomes, can they maximize its value? Can they make stories and compelling dramas that are entertaining, charming, inventive, romantic, funny, that somehow move forward the human spirit and support the best of who and what we are as individuals?

Can we do that and still have it be a good business? That's the real challenge and the question.

The Monster That Ate Hollywood

WRITTEN BY
Alan Smithee

PRODUCED BY
Vince DiPersio
Adam Bardach

CO-PRODUCED BY
Susan Smiley

SENIOR PRODUCER
Michael Kirk

EDITED BY
Michael Bloecher
Steve Audette
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ASSOCIATE PRODUCER
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Tony Kahn

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William Hooke

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PRODUCTION ASSOCIATE
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ARCHIVAL MATERIALS
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THE WPA Film Library
Universal Studios, Hollywood

SPECIAL THANKS
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HollywoodOnSet.com
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FOR FRONTLINE

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A FRONTLINE coproduction with Riot Pictures, Inc.

© 2001
WGBH EDUCATIONAL FOUNDATION
ALL RIGHTS RESERVED

FRONTLINE is a production of WGBH Boston, which is solely responsible for its content.

ANNOUNCER: This report continues on FRONTLINE's Web site with a closer look at the business of Hollywood blockbusters, more on how digital technology is transforming the film industry, the extended interviews with studio executives, producers, filmmakers and critics, an insider's report on the state of independent film, and more. Then join the discussion at PBS on line at pbs.org or write an email to frontline@pbs.org or write to this address. [Dear FRONTLINE, 125 Western Ave., Boston, MA 02134]

Next time on FRONTLINE: They invade our computers.

    ROBERT STEELE, Security Expert, Former CIA Agent: Hackers are a force to be reckoned with.

ANNOUNCER: They have shown us just how vulnerable we really are.

    UNIVERSITY STUDENT: We are at war, and we don't know who we're at war with yet.

ANNOUNCER: Are hackers the problem, or could they be the solution?

    EXPERT: They are seeing the dangers. They are seeing the vulnerabilities. And everyone wants to shoot the messenger.

ANNOUNCER: Hackers.

The Monster That Ate Hollywood" is available from PBS Home Video by calling 1-800-PLAY-PBS. [$29.98 plus ST]

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