The folks at Melville House Publishing in Brooklyn were nice enough this week to send me an early draft manuscript of a portion of Edward Jay Epstein’s forthcoming book, “The Hollywood Economist: The Hidden Financial Reality Behind the Movies” which will be on sale Feb. 23.
The book should be much discussed in the run up to the Oscar telecast on March 7.
A few years ago, Epstein wrote one of the best books on modern Hollywood, “The Big Picture,” in which he explored the industry’s financial challenges and transitions at the turn of the century, as the growing global marketplace and the rise of the DVD and Internet downloads of movies started to completely transform the business.
Epstein is a veteran investigative reporter whose work has included books about the JFK assassination and several different aspects of the U.S. intelligence community.
With “The Big Picture” he trained his coolly analytical mind on the money end of the movie business, demonstrating that in many ways that is the only end that matters to the people who manufacture and distribute mass entertainment.
In the new book, Epstein shows us why most modern movies are so childish and why there is virtually no way the major studios will distribute challenging, adult pictures to the nation’s multiplexes.
Back in the glory days of the movie business — roughly the period from the late 1920s to the late 1950s — the industry had a huge dependable weekly audience so it was able to take some chances. The average American could be counted on to visit a theater regularly so there was no need for hard sell TV campaigns.
In 1948, Epstein points out, 65 percent of the population went to the movies every week.
By the late 1980s, television and other home entertainment options had walloped the movie business.
“The studios, realizing that they could no longer count on habitual moviegoers to fill theaters, devised a new strategy: creating audiences…for each movie via paid advertising…Audience-creation is a very expensive enterprise — in 2007 the studios’ average cost for advertising a film was $36.9 million.”
Most of those ad dollars are aimed at the one market segment eager to go out to a movie: teen males.
“Teens have…great advantages over adults for movie studios. First, they tend to be predictably clustered around the same TV programs on cable networks, such as MTV, which make them much less costly to reach than moviegoing adults who, if they watch TV at all, tend to be scattered among the most expensive programming in prime time. Second, once in multiplexes, teens tend to consume prodigious quantities of popcorn and soda, which is a powerful attraction to the theater chains that book movies for a wide opening.”
“…by 2005, studios had become so proficient at finding, activating and driving the teen herd into multiplexes that over 70 percent of the audience that went to their wide released movies were under twenty-one-years-old.”
Epstein examines several other facets of Hollywood’s bottom line in his book, including the crucial role that being insurable plays in any major star’s career.
Nicole Kidman went through a very rough patch nine years ago when a knee injury during the filming of “Moulin Rouge” (above) forced her to quit “Panic Room,” triggering a $7 million insurance pay-out to hire her replacement Jodie Foster.
Since the star had already cost an insurance company $3 million for the time that “Moulin Rouge” was shut down, Kidman was considered uninsurable when she was hired for “Cold Mountain.” The actress had to put $1 million of her own salary in an escrow account to get the insurance she needed to work on the $100 million film.
“The Hollywood Economist” will also include sections on Tom Cruise’s phenomenal contracts for the “Mission:Impossible” series as well as a breakdown of Arnold Schwarzenegger’s close to $30 million deal to make the third “Terminator” movie.
I can’t wait to read the finished book in two months. Epstein’s approach to moviemaking is refreshingly down-to-earth and tells us so much more than we will ever get in a glossy magazine cover story on the latest would-be blockbuster.
