Product Description

In this unprecedented, all-encompassing, and thoroughly entertaining account of the movie business, acclaimed writer Edward Jay Epstein reveals the real magic behind moviemaking: how the studios make their money.
Epstein shows that in Hollywood, the only art that matters is the art of the deal: Major films turn huge profits not from the movies themselves but through myriad other enterprises, from video-game spin-offs and soundtracks to fast-food tie-ins, and even theme-park rides. The studios may compete for stars and Oscars, but their corporate parents view wth one another in less glamorous markets such as cable, home video, and pay-TV.
Money, though, is only a small part of the Hollywood story; the social and political milieus–power, prestige, and status–tell the rest. Alongside its remarkable financial revelations and incisive profiles of the pioneers who helped build Hollywood, The Big Picture is filled with eye-opening insider stories. If you are interested in Hollywood today and the complex and fascinating way it has evolved in order to survive, you haven’t seen the big picture until you’ve read The Big Picture.

Product Details

• Amazon Sales Rank: #217510 in Books
• Published on: 2006-01-10
• Released on: 2006-01-10
• Original language: English
• Number of items: 1
• Binding: Paperback
• 416 pages

Features

• ISBN13: 9780812973822
• Condition: NEW
• Notes: Brand New from Publisher. No Remainder Mark.
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From Publishers Weekly
Starred Review. To appear in 2003's Terminator 3, Arnold Schwarzenegger received a fixed fee of $29.25 million, a package of perks totaling $1.5 million and a guaranteed 20% of gross receipts from all sources of revenue worldwide. With that, writes Epstein (Inquest: The Warren Commission and the Establishment of Truth), no matter the film's box office results, "the star was assured of making more money than the studio itself." Such is the "new logic" Epstein explores in this engrossing book. Gone are the days of studio chiefs dominating their stars with punitive contracts and controlling product from script to big screen. Writers now sell their work to the highest bidder, stars have become one-person corporations who "rent" their services to individual productions, and the studios have morphed into what Epstein labels "clearing houses." These multinational corporations exist, in Epstein's description, to collect revenue from an ever-growing variety of sources—home video, overseas markets and product licensing, to name a few—and then disburse it to a fortunate minority at the top of Hollywood's food chain. Epstein explains the structure, personalities and behind-the-scenes interconnection of the "sexopoly" (the six huge media companies that control motion picture entertainment). In vivid detail, he describes the current process of how a film is made, from the initial pitch to last-minute digital editing. There's a refreshing absence of moral grandstanding in Epstein's work. With no apparent ax to grind, he simply and comprehensively presents the industry as it is: the nuts and bolts, the perks and pitfalls and the staggering fortunes that some in the business walk away with. This is the new indispensable text for anyone interested in how Hollywood works. Photos.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

From The Washington Post
Edward Jay Epstein is here to tell us that when it comes to Hollywood these days, we've got it all wrong. Each week the box-office grosses rung up by the big new movies are published, and each week it is near universally assumed, reflexively and reverentially, that they represent not merely an accurate ranking of current films but also an accurate record of how much they are making for the studios that produced them. Tommyrot, says Epstein. These seemingly huge earnings are wildly misleading, as the cost of making, distributing and showing new movies almost always far exceeds what they earn in theaters. Hollywood's highly imaginative accounting practices disguise this reality, but more to the point, theaters aren't where movies make money any more.

"The massive moviegoing audience that had nurtured the [old] studio system simply no longer exists," Epstein writes. "In contrast to the 4.7 billion movie tickets sold in America in 1947, there were only 1.57 billion tickets sold in 2003. So, even though the population had almost doubled, movie theaters sold 3.1 billion fewer tickets than they had in 1947." In the years immediately after World War II, theatrical releases accounted for 100 percent of the studios' worldwide revenues; in 2003 they accounted for a mere 18 percent. Where do the movie companies make their money now? From what lawyers call "intellectual properties" -- "licensing their filmed entertainment for home viewing" on DVDs, videotapes, broadcast and cable television programs, and selling spin-offs (dolls, games, books and the like) from movies aimed primarily at children, such as the Disney animated films and the "Lord of the Rings" trilogy.

Epstein argues, and most persuasively, that we persist in thinking about Hollywood in terms that no longer exist: the "dream factories" that were the old studios -- MGM, RKO, Paramount, Columbia, Fox, Universal and Warner Bros -- where movies were the only products, stars and lesser actors were bound to studios by rigid contracts, and theaters were owned by the studios that supplied them. Now, he says, the old Big Seven have been replaced by the new Big Six: Time Warner, Viacom, Fox, Sony, NBC Universal and Disney, "global entertainment companies . . . that collude and cooperate at different levels to dominate filmed entertainment." Movies earn a very small percentage of their total revenue, but are "their principal source of prestige and satisfaction in Hollywood."

The grasp of the Big Six is astonishing. They "own all six broadcast networks in America," as well as "64 cable networks whose reach accounts for most of the remainder of the prime-time television audience," a combination that enables them to "control over 96 percent of the programs that carry commercial advertising during prime time." They "control the television networks depended on by advertisers to reach children under 12 . . . and those designed for younger teens." They "dominate the worldwide distribution of movies, a studio business [the late] Steve Ross once described, with considerable justification, as a 'money machine,' " and they "control a large part of the entertainment media, including magazines . . . TV and radio interview shows . . . and cable channels that publicize movies." All of which is to say that they control "one of the largest consumer-based industries in America: home entertainment," and they bear only glancing resemblance to the studios of old:

"The main task of today's studio is to collect fees for the use of the intellectual properties they control in one form or another and then to allocate those fees among the parties -- including themselves -- who create, develop, and finance the properties. It is now essentially a service organization, a dream clearinghouse rather than a dream factory. As clearinghouses, they are very different creatures from their predecessors, and this difference is as apparent from looking at their financial reporting as it is from looking at their products."

At this point Epstein launches into a detailed examination of their accounting practices, the essence of which is that "what is central to the clearinghouse is not the art of the film but the art of the deal." Filmmaking now divides essentially into two broad categories: blockbusters (no, I didn't know that the word is "a term coined in the 1920s to denote a movie whose long line of customers could not be contained on a single city block") or would-be blockbusters, and more serious films made by "independent subsidiaries" to earn Big Six corporations and their ranking executives "the awards, media recognition, artistic bragging rights and other non-economic rewards they sought in Hollywood."

The blockbusters are aimed at children and teenagers and are scripted according to "the Midas formula," the ingredients of which include "a child or adolescent protagonist," a "fairy-tale plot in which a weak or ineffectual youth is transformed into a powerful and purposeful hero," "bizarre-looking and eccentric supporting characters that are appropriate for toy and game licensing," a happy ending "with the hero prevailing over powerful villains and supernatural forces" and "conventional or digital animation to artificially create action sequences, supernatural forces . . . and elaborate settings." In two words: "Harry Potter." In four: "Lord of the Rings."

The blockbusters do well enough in American theaters -- the first "Harry Potter" pulled in more than $317 million -- but ticket sales are a drop in the bucket: That film's total earnings as of last year were $1,249 billion, the biggest chunk of which ($436 million) came from worldwide DVD sales. In effect, as Epstein persistently argues, theatrical release now exists not to make money but to open the way for "intellectual property" income to be earned over the long term from other sources. As the "Midas formula" makes plain, these movies are strictly product; they may win the occasional award, since Hollywood reveres success, but they have little if anything to do with cinematic art.

Such art as does still emerge from Hollywood can be found in the comparatively modest productions from the "specialty film units -- Miramax Pictures, Sony Classics, Fox Searchlight, Paramount Classics and Warner Independent Pictures," which are a return "not so much to the studio system as to the art-house system, which had at one time coexisted alongside the Hollywood studios." These movies are modest only by Hollywood standards: Their average cost was "an astounding $61.6 million in 2003, nearly two thirds that of studio movies," and "since many of the more adult films produced by the independent subsidiaries did not appeal to the youth-oriented toy, game, and other ancillary markets, they often resulted in huge losses for the studios."

The Big Six swallow these losses not because they're suicidal but because "studio executives seek, along with strictly commercial projects, projects that are likely to attract the sort of actors, directors, awards and media response that will help them maintain both their standing in the community and their own morale." As Epstein says, "as persuasive as the [Midas] formula is from a moneymaking standpoint, it doesn't satisfy the community members' appetite for prestige, recognition, and creative expression. These are among the needs that drive the less visible but surprisingly powerful non-economic logic of Hollywood."

Epstein laments much of what comes out of Hollywood these days and fears for its future as computerized imaging assumes an ever more central role, but he does Hollywood the courtesy -- as too many of us here in the effete East do not -- of taking it seriously. He points out that the "celebritized star" whose face we see in the supermarket checkout line is likely to be a man or woman who rose from unprepossessing roots, worked hard to get to the top and works hard to stay there. To wit, "Reese Witherspoon, who began her acting career when she was 15, prided herself on arriving on the set of 'Legally Blonde' at 6 a.m. to give makeup crews two and a half hours to prepare her look and remaining, if necessary, late into the night."

As the phrase "celebritized star" suggests, Epstein isn't always the most felicitous of prose stylists, and at times reading The Big Picture can be a bit of a slog; it doesn't help that he seems to be almost completely humor-challenged. But he's a bulldog researcher, he's brought a great deal of interesting material together and he has interesting things to say about it. His account of the grueling, amazingly expensive and time-consuming process by which movies are now made is an eye-opener; for an actor, who has "a more distant relationship to his product than his counterpart on the stage," it can be "frustrating, unsatisfactory and exhausting." It is remarkable, in fact, that so many good performances get onto film -- I think, for example, of "Mystic River" and "Lost in Translation" -- in such circumstances.

How much longer this will last is in doubt. Epstein worries that "Hollywood's traditional culture will . . . find itself replaced by the computer culture," and he has good reason to. Much evidence suggests that the geeks are taking over. Whatever their considerable skills and expertise, they're technicians, not moviemakers. The respect of the Hollywood community almost certainly means nothing to them, and they almost certainly have little or no interest in serious filmmaking. No one who loves movies can regard the potential implications of this with pleasure.

Copyright 2005, The Washington Post Co. All Rights Reserved.

From Booklist
Hollywood no longer operates under the old studio system, as the digital age has revolutionized the way movies are made and distributed. New York writer Epstein peels away the Hollywood facade and gives a nuts-and-bolts view of how the six entertainment empires--Viacom, Fox, NBC/Universal, Time Warner, Sony, and Disney--create and distribute intellectual property today. Money flows through these clearinghouses in a complicated mix involving licensing deals, talent agencies, digital effects houses, film laboratories, and advertising firms. The accounting practices alone rival anything that ever came out of Enron. Epstein presents a fascinating look at the unbelievable efforts that must be coordinated to produce a film, including principal photography, computer graphics, sound effects, musical score and editing, not to mention final changes and approval by the studio heads. With all the complications that can arise, it is a wonder these things get made at all. Here is the stark economic logic of today's Hollywood: movies rarely break even through theater revenues anymore, and the only real money is in the rush to DVD and television releases. David Siegfried
Copyright © American Library Association. All rights reserved

Customer Reviews

Very insightful, informative, and entertaining.
This is a very detailed and insightful book on the movie entertainment business. Epstein researched an enormous amount of proprietary financial information from the Motion Picture Association All Media Revenue Report (MPA). This is a report disclosed only to the studios that details movie earnings. It is unclear how Epstein obtained access to this proprietary data. Epstein leveraged this proprietary data into an incredibly insightful analysis of the movie-entertainment industry. Thanks to Epstein lively writing style the book is a quick read despite the volume of information provided.

The movie business is not an economically viable stand-alone business. Indeed, over 95% of the movies loose a ton of money at the Box Office even if they often generate hundreds of millions in such Box Office revenues. Movies have become extremely expensive advertising for a very risky long-term investment in an "intellectual property" right. The pioneer of such a business model was Walt Disney who fully grasped the possibilities of the ancillary businesses more than half a century ago.

Related ancillary revenues generated by videos, Pay TV, and Networks dwarf the revenues at the Box Office. While the major studios derived 100% of their revenues from Box Office in 1948, this percentage has continuously dropped to only 18% in 2003. Additionally, these ancillary businesses are almost all profits. The vast majority of the production costs have already been absorbed within the Box Office business.

However, a majority of movies still loose money when you figure the full life cycle of its "intellectual property." Epstein details throughout the book such a cycle for "Gone In 60 Seconds" with Nicolas Cage. At first, the movie seems a roaring success as it grossed $242 million in worldwide Box Office. But, when you figure the whole cycle, as of 2003 the movie including the ancillary businesses was still $150 million in the tank.

The reason movies still get made is because there are so many willing equity partners absorbing the brunt of the losses in financing movies. The studios survive because they are supported by their strong parent holding companies whose businesses are diversified in technology, news, media, and consumer products. The directors and stars make a fortune. And, the equity partners are the ones loosing their shirts.

After reading this book, one assesses that movie stars are the most overpaid human beings on the planet. In one single movie, they often make more money than sports stars make over their entire career (tennis or golf comes to mind). Even though some stars do attract the public, the underlying economics of their movies over the full cycle is not attractive. If it were not for equity partners making irrational investment decisions, the castle of cards would crumble.

The book also breaks or confirms many interesting myths. For one, Tom Cruise does not do his own stunts despite what you see in DVD bonus features. This is because insurers cover the risk that Tom Cruise will not be able to complete the shooting of the movie. The face of an actor is now digitized on to the body of a stuntman. So, when you see a close up of Tom Cruise jumping off a cliff it really looks like him. Another interesting concept is that movie theatres make more money from selling popcorn and sodas than from showing the movie. It is true! The movie represents foot traffic. The popcorn and sodas represent the high profit margin business segment they don't share with the studios.

There are a zillion more interesting facts mentioned within the book embedded in a coherent and very entertaining history of the movie business from its inception to nowadays. Thus, I strongly recommend this book.

Interesting book, but a lot of redundant information
This is a good book about the evolution and the workings of the modern Hollywood system. (For summaries, see the other reviews.) I enjoyed the first third of the book a lot, but then it became more and more repetitive. A lot of the information contained in Part 4 ("The Economic Logic of Hollywood"), Part 5 ("Social Logic"), and Part 6 ("Political Logic") had been already presented in the preceeding parts. For example, I don't know how many times Epstein mentions the 29 million USD Arnold Schwarzenegger received for "Terminator 3" - it sure seems like a million times. In the end, you get the impression that the author had access to more detailed information about a limited number of movies (T3, Gone in 60 seconds) and then used them as examples for each and every point he is trying to make. All in all, some serios editing would have turned this really good book into an excellent one.

Hollywood in the spotlight
There's no business like show business, goes the old adage. But we now need a clarifier; which show business? The old show business of the 1940s-1950s of the big-budget epics starring the big name stars, or the new show business of DVD's, toys, stand-alone soundtracks, digital piracy, multi-national crews and casts and computer animation...

This book examines the evolution of the Hollywood business throughout the 20th century and into the early 21st century. Unlike other books of the same topic, this one looks at the major players, both individuals and companies, and covers a lot of the technological changes such as the advent of talkies, color movies, VHS, DVD, and the Internet. The book also deals with a lot of the legal / political issues, such as free-agency of actors and actresses, unions and guilds within the industry, copyright laws and intellectual property, and interconnected web that links TV, video, toy sales, franchise names, and company logos together.

The author shows how changes in technology and laws have changed the Hollywood business by changing relations between movie companies and their employees, between directors and the actors and actresses, and between moviegoers and moviemakers. The role of advertising is examined to see how it has changed over the decades from posters and previews of previous decades, to the TV spots, toys in food boxes, pre-screenings, and guest-show appearances of today. The book also shows how changes in Hollywood have affected the movie industry in other countries, and vice versa.

Overall, a well balanced and comprehensive book on the movie-making history.