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The fall of Hollywood?
Marginal Revolution ^ | July 15, 2005 | Tyler Cowen

Posted on 07/18/2005 8:31:59 AM PDT by jb6

The fall of Hollywood? OK, Sith is now the tenth highest grossing film of all time, and probably headed toward number seven. But Wall Street is bearish on film stocks; on Monday Dreamworks shares fell more than 13%. The big fear is that DVD sales are falling, as Shrek 2 bombed in this market. Hollywood box office has been down for nineteen weeks out of twenty, and believe me Harry Potter won't do Johnny Depp and Tim Burton any favors. Daniel Gross opined that Hollywood is the next Detroit. Others see a big mystery in falling receipts. Yet others blame blue-state bigotry. I will offer a few more fundamental hypotheses:

1. Hollywood cannot control its marketing costs or star salaries. The growing importance of DVDs increases the "needle in the haystack" problem for any single film and thus locks studios into more marketing, creating a vicious spiral.

2. TV is now so much better, and offers artists greater creative freedom. Why watch movies?

3. The Internet is outcompeting cinema, whether at the multiplex or on DVD.

4. Big TV screens are keeping people at home, which lowers box office receipts. This also hurts the long-term prospects of many DVDs.

5. The demand for DVDs has fallen because movie lovers have completed their core collections, just as the demands for classical CDs have fallen.

5. The demand for DVDs was due to fall in any case. Forget the collectors, you buy DVDs to have a stock on hand so you don't have to run out to the video store on short notice. Now everyone has a stock. Stocks must be replenished every now and then, but there is no longer a large new cohort simultaneously building up a stock from scratch.

The bottom line: These trends do not appear reversible in the short run. It is not just that this year's movies mostly stink


TOPICS: Business/Economy
KEYWORDS: business; dvds; entertainment; follywood; hollyweird; hollywood; hollywoodleftists; movies; stocks
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1 posted on 07/18/2005 8:32:02 AM PDT by jb6
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To: jb6

6. Americans are tired of Hollywood "celebrities".

7. Reality shows have become an entertainment alternative.


2 posted on 07/18/2005 8:33:54 AM PDT by sarasota
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To: jb6

Hollywood box office has been down for nineteen weeks out of twenty

Music to my ears. I hope H'weird NEVER "gets it".


3 posted on 07/18/2005 8:35:09 AM PDT by cweese (Hook 'em Horns!!!)
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To: jb6

6. And how many movies can you do about Jesus Christ in a non PC way?


4 posted on 07/18/2005 8:35:36 AM PDT by 2banana (My common ground with terrorists - They want to die for Islam, and we want to kill them.)
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To: jb6
I just wish it was 'cause bookstores' were sellin' more books.

My wife and I went on a date Saturday. We ate a very nice meal, skipped the theater (everything showing was cr@p), and went to Barnes and Noble...
5 posted on 07/18/2005 8:35:39 AM PDT by Little Ray (I'm a reactionary, hirsute, gun-owning, knuckle dragging, Christian Neanderthal and proud of it!)
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To: sarasota

8. Movies, music and video games are three of the last profitable exports America produces, bringing in billions of dollars every year.

9. Movies are no longer written, directed or distributed for just American audiences. The global market is an increasingly large piece of the entertainment pie.


6 posted on 07/18/2005 8:36:03 AM PDT by durasell (Friends are so alarming, My lover's never charming...)
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To: jb6

I just watched the 1956 War and Peace with Audrey Hepburn & Henry Fonda on TCM. I hadn't planned to but it caught my interest & held it. That rarely happens with a new movie.


7 posted on 07/18/2005 8:37:22 AM PDT by Tribune7
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To: jb6

How about supply and demand? There is no demand for what they are wanting to supply.


8 posted on 07/18/2005 8:37:22 AM PDT by linear (Repeal the Second Law of Thermodynamics!!)
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To: durasell

And I must say, I enjoy watching the Hollywood elite hit the skids.


9 posted on 07/18/2005 8:37:57 AM PDT by sarasota
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To: jb6

The last line say it all. The last movie I saw was Titanic and the one before that was the first Speed movie. I'll be damned if I'm going to pay a premium price to see a movie full of bad language and sex. I'd rather read a good book.


10 posted on 07/18/2005 8:38:09 AM PDT by Sunshine Sister
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To: linear

And what about Oliver Stone's production plans for a movie about 9.11?


11 posted on 07/18/2005 8:38:51 AM PDT by sarasota
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To: Tribune7

TCM and AMC are what I usually watch when I want to watch movies. The theaters haven't got more than $20 out of me in the past 10 years (Saving Pvt. Ryan and The Passion).


12 posted on 07/18/2005 8:39:46 AM PDT by cweese (Hook 'em Horns!!!)
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To: jb6

6) I aint buyin' 99% of what they're sellin'.


13 posted on 07/18/2005 8:40:51 AM PDT by Liberty Valance ( Howdy!)
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To: jb6
He missed all my reasons for staying away from movies. They are:

Too expensive, tickets pushing $10 per person, then tack on snacks

Poor quality product...not just badly made films, but most are not suitable for family viewing. Hollywood never seems to learn from the fact that the highest grossing movies are family ones.

Offensive and arrogant actors. Movies require us to suspend disbelief or to enter into their world. When an actor has been spouting some idiotic Left wing politics or promoting their cult it impinges upon my ability to forget who the actor is and watch the movie. Additionally, I'd rather not put money into the pocket of people who clearly use it to work against what I see as good American values.

Movie topics. Personally, I'm not much interested in seeing movies with little to no plots. Blowing things up, stabbing/slashing/fill in gory method to murder someone, gratuitous sex scenes and outlandish ways to try to shock me do not substitute for plot.

14 posted on 07/18/2005 8:42:20 AM PDT by highlander_UW (I don't know what my future holds, but I know Who holds my future)
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To: jb6

I rather read the book than watch the movie.


15 posted on 07/18/2005 8:42:52 AM PDT by najida (The hardest person to forgive is yourself.)
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To: jb6
>> The fall of Hollywood?

Well cry me a river.

call a wambulance.
16 posted on 07/18/2005 8:43:06 AM PDT by mmercier (walk away and don't look back)
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To: sarasota
I can see an interest growing in older movies (b&w classics) being converted to DVD. I recently purchased 'The Philadelphia Story'... Hepburn, Grant, Stewart. The script and it's delivery is absolutely brilliant !

If hollywood ever remembers how to make movies that don't rely on huge explosions and carnage every 15 minutes then maybe the money trend will reverse. But all they seem capable of now is the same new garbage and remakes of past greats.

It's sad and funny at the same time, sad that the movies of yesterday are so much better than today, and funny that they just don't get it....

17 posted on 07/18/2005 8:43:57 AM PDT by BRITinUSA
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To: jb6

One more:

The speed and convenience of DVD services like NetFlix that allow you to see all the movies you want, when you want, without having to buy them.

When a new movie comes out now, the decision is whether it is interesting enough to be "must see now". If not, it can wait for home release.


18 posted on 07/18/2005 8:45:57 AM PDT by RobFromGa (Send Bolton to the UN!)
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To: All

They need to control the salaries. These people have very few real world skills. Top that off with a few duds like Alfie or Closure. DVD sales cool down when you had box office duds. It is the same think in music. Three dominate music types formula country, REM Grunge, and antisocial rap.


19 posted on 07/18/2005 8:46:11 AM PDT by texassizednightcrawler
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To: jb6
Help might be soon on the way for Hollywood: High Definition DVDs are on the way in a half-year to a year, depending on how long it takes to fight a format war between competing Blu-Ray and HD-DVD camps.

I know I'll be replacing about a third to half of my DVD library when that happens. It won't be a huge surge like the DVD introduction, but it will help.

20 posted on 07/18/2005 8:46:17 AM PDT by Yossarian (Remember: NOT ALL HEART ATTACKS HAVE TRADITIONAL SYMPTOMS)
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