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Monday, July 11, 2005

Is Hollywood Becoming 'Detroit West'?

Daniel Gross made a fascinating comparison, in yesterday's NY Times: how Hollywood's problems are similar to those of the auto industry. Here's the gist:

    Consumers today face an unprecedented array of choices for how to spend their transportation and entertainment dollars. And with each passing year, they seem less likely to choose to spend them on the stuff cranked out of Detroit and Hollywood assembly lines. In the postwar decade, the height of the American century, both rode high. The Big Three - General Motors, Ford and Chrysler - held down an astonishing 95 percent of the United States car market in 1955. In 1948, writes Edward Jay Epstein, author of "The Big Picture: The New Logic of Money and Power in Hollywood," some 90 million Americans, or 65 percent of the nation's population, went to a movie each week. That year, with TV in its infancy and the only real competition radio, Americans bought a whopping 4.6 billion tickets.

    But decades of competition from upstarts - Japanese and Korean automakers for Detroit, television, video games and the Internet for Hollywood - have killed these two incumbents by a thousand cuts. In June, the no-longer-so-Big Three controlled just 58.3 percent of the United States market. Last year, according to the Motion Picture Association of America, only about 10 percent of the population managed to make it to the multiplex each week, and the number of tickets sold slumped 2.4 percent to a little more than 1.5 billion. So far this year, according to Exhibitor Relations, attendance is down another 7.8 percent.

Gross goes on to observe that one big problem for both industries is unappealing products. (Copycat SUVs for Detroit, and for Hollywood, retreads and TV transplants like "Herbie: Fully Loaded," "Dukes of Hazzard," and "Bewitched.") Another problem is continually rising production costs. After all, no consumer is willing to pay $25 for a movie ticket just because the budget ballooned beyond initial projections.

Those are great points, but Gross' piece ends in a weird place, suggesting that growth in the international market will save the movie industry. ("Last year, while United States box office revenues stagnated, box office revenues outside the United States surged 47 percent in dollar terms.")

That doesn't sound like a solution to me. Yes, there is a growing middle class audience outside of North America. (But many of those countries are making mighty efforts to develop more sophisticated movie businesses of their own, like Great Britain's Digital Screen Network.) What about a renewed focus on original products and quality - developing new writers, directors, stars, and stories? What about new approaches and technologies to allow studios to make more films for less money? What about marketing strategies that didn't treat every film like a new product launch, and instead thought about cultivating loyalty over time (for instance, there's no easy way for Warner Brothers to communicate with fans of prior Batman movies every time it releases a new one)?

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