Unexamined Premises

Greed, Hollywood-Style

The Thing That Ate Hollywood

The death of the motion-picture business as founded has been on the horizon since the Industry learned all the wrong lessons from the success of Steven Spielberg’s Jaws back in 1975. Whereas theaters had once touted air-conditioning as the prime means of putting fannies in the seats when the weather outside was steamy, the “summer blockbuster” now enticed them with chills and thrills. When Jaws begat Star Wars and the customers were shelling out record sums of money to watch what used to be called “B” movies, the moguls were quick to respond.

[A word to our younger readers: once upon a time in a galaxy not far away at all, there were “A” movies and “B” movies, so called because they were two halves of something called a “double bill,” on which for the price of a single ticket you got two movies: a big-budget picture (in color!) with famous stars, and a cheaper film, usually in black-and-white, plus a couple of short subjects and maybe a cartoon or two. Similarly, 78-rpm records had an “A” side — the song you wanted to hear — and a “B” side, which you got more or less for free. You could look it up.]

In due course, the summer blockbusters morphed into “tentpole” movies — mega-productions around which the studios would hang their entire yearly schedules, until at last the tentpoles became  the schedules, with a few voguish pictures chucked into theaters just before Christmas in order to qualify for “awards season” Oscars. Civil-rights dramas, coming-of-age movies (by which read: first sexual experience), and gay coming-of-age movies — this is how a movie that nobody you know actually saw, Moonlight, won Best Picture last year.

And so it has come to pass that, at what’s left of the multiplexes in what’s left of shopping malls, you can see just about any kind of movie you want as long as it’s a “franchise” movie — in other words, a sequel or a remake of something you’ve already seen — or a superhero movie — in other words, based on a comic book; you know, the kind of thing you gave up reading when you were 14 years old. Just about every other genre — westerns, dramas, thrillers, action-adventures, romantic comedies, slapstick comedies — has been subsumed into the maw of the Things That Ate Hollywood.

Don’t blame “Hollywood” for this state of affairs — mostly because there is no “Hollywood” and hasn’t been since the death of the studio system and the disappearance of the last of the independently owned studios themselves. The old moguls — whether semi-literate glove salesmen or fast-talking Sammy Glicks — at least knew which business they were in. They had come from the Jewish Rialto on Second Avenue in Manhattan, from the nickelodeons, and the schmatta trade: they knew that the customer was a) fickle and b) king. When they went to Hollywood, they understood instinctively they needed a wide array of wares, goods that appealed to as broad a clientele as possible, not a one-size-fits-all union suit.

But ever since the studios started disappearing into the bean-counting maws of Gulf & Western, funeral-parlor and parking-lot operators, cable companies, and Japanese electronics manufacturers, the show has gone out of show business. The rise of the Internet, and the advent of the streaming services provided by Netflix, Amazon and others — which are so rich and successful that they are now not only creating their own content but outbidding studios for it as well — has meant that the theaters will soon be out of the theater business.

Comes the news of Disney’s tender for some bleeding chunks of 21st Century Fox, one of Hollywood’s Big Six studios that used to be known as 20th Century Fox or, in the old movie-biz parlance, simply “Twentieth.”

In a move that will reverberate from Hollywood and Silicon Valley to TVs and smartphones around the world, the Walt Disney Company said Thursday that it had reached a deal to buy most of 21st Century Fox, the empire controlled by Rupert Murdoch, in an all-stock transaction valued at roughly $52.4 billion.

While the agreement is subject to the approval of antitrust regulators — and the Justice Department recently moved to block a big media company, AT&T, from becoming even bigger — Disney is acknowledging that the future of television and movie viewing is online. The acquisition, which would make Disney a colossus unlike anything Hollywood has ever seen, is the biggest counterattack from a traditional media company against the tech giants that have aggressively moved into the entertainment business.

Beyond the enrichment of Rupert Murdoch and his family, and a few Disney executives, this “merger” — which is really just Disney’s way of taking a competitor out of business — has absolutely nothing in its favor. It reduces the marketplace in which writers, directors, producers, actors, craft union members and everyone else who actually makes up that state-of-mind civilians call “Hollywood” offer our goods and services.  It will further reduce the number of movies that get made and exhibited on the big screen, thus impacting the theater chains and smaller operators.  And it will drive us all further out of the public square, to the indolent comfort of our living rooms, computers, iPads, Kindle Fires, and smart phones, thus impacting the bottom line for restaurateurs and barkeeps, to whose establishments we used to repair in order to make good our offers of dinner and a show to that special someone we wanted to impress with our own wit and wisdom.

As Richard Rushfield, who publishes an e-newsletter called “The Ankler,” notes:

Since there is no knowing what people will watch, we’ve had a basic formula of you make a bunch of stuff, spread yourself wide enough to hope some hits come out of the process, and the hits will pay for the flop.

For the monopoly-minded culture of today’s tech driven economy, however, that is a very unsatisfying answer. (It’s been an unsatisfying answer for other business-people who came to Hollywood before, which is why our ultimate failsafe has been other more glamorous, exciting incentives that make this a place where you just want to pour in your money.)

So for the first time in half a century, Hollywood is about to be minus one studio.

For Rupert, less enthralled with the glamour then with empire building, the big-spending insanity of the movie business has never been a happy place. These days, as the film game is markedly less secure than its normal rickety state, he’s presumably having that much less fun. Passing along this business to his still-finding-their-way offspring at a time when film and TV’s As We Know It’s long term survival is in question has got to have a man reaching for his secret Master of the Universe blend Mogul-strength Tums Ultra.

And just as he’s mulling where all this leaves his legacy, [Disney chief] Bob Iger comes along and offers him $50 billion, a giant premium on a company whose movie business struggles has made just over one billion this year. A titan’s kids could open a lot of wildlife retreats, or fund a new eco-colony on Mars with $50 billion. Legacy solved!

Well, it’s a free country, even for Australians seeking gainful employment for two otherwise unemployable scions. (If James Murdoch thinks he will get a meaningful position at Disney, he’s in for a rude awakening.) But it’s also the kind of thing that gives “capitalism” a bad name, although no doubt we will be hearing the pro-forma bleats from the usual suspects in the free-trade amen corner of the #neverTrumpumpkins. Consider this news item:

While it will take two years or less until Disney fully controls Fox, here’s a current statistic to give you a taste of their combined box office power during a blockbuster weekend, post merger news. Currently, total domestic ticket sales look to gross $280M this weekend per ComScore, and Disney and Fox films combined are generating 90% of that total or $252.1M.

Even though total weekend ticket sales are -11% from when Star Wars: The Force Awakens was in the marketplace two years ago spurring $313.2M, Disney-Fox’s combined marketshare this weekend is greater than in 2015 had they merged then (86% of the Force Awakens weekend or $269.2M) and last year’s Rogue One opening weekend (81% of a $211.6M overall weekend or $171.9M). Compared to last year when Rogue One debuted, the overall U.S./Canada weekend B.O. is +32%.

Where does this leave the competition? They don’t have any wide releases this weekend; Sony kicks off the Christmas flood on Wednesday with Jumanji: Welcome to the Jungle. However, the highest grossing non-Disney/Fox movie this weekend belongs to Lionsgate’s Wonder which is generating $5.4M in fourth place in its 5th weekend. We’ll have a better idea in the weekends ahead how much air the competition can inhale.

While the DOJ works on approving the Disney-Fox deal, both labels will operate separately with business as usual. Next year, both studios together count 26 titles across Marvel, Lucasfilm, Pixar, Disney animation, Blue Studios, 20th Century Fox, Fox 2000 and Fox Searchlight. Whether they maintain this consistent outflow in the years to come, and how they counterprogram their labels is the big question. Nonetheless, box office dominance is a guarantee.

Having had a front-row seat at the disastrous mergers of Time Inc. (where I worked for 16 years as classical music critic and a foreign correspondent for Time magazine) and Warner, and then with the colossal disaster of the Time-Warner/AOL nuptials, I can predict with a degree of high confidence that Fox will eventually wither and die, to become this century’s version of RKO, Republic Pictures or Lasky’s Famous Players. As a top Disney exec crowed shortly after the deal was announced, “We expect  to fully realize roughly $2 billion of cost synergies by 2021.”

“Synergy,” by the way, is corporate-speak for: get your resumes ready, kids. It’s also another word for “conflict of interest,” but that battle was lost in the Time-Warner merger. Which is why it’s good to see Congress bestirring itself to notice what’s going on:

Top Democrats on the Senate and House antitrust subcommittees are calling for hearings on the Walt Disney Co.’s proposed acquisition of a large portion of 21st Century Fox, including its film and TV studio, cable networks, and regional sports channels.

Sen. Amy Klobuchar (D-Minn.), the ranking member of the Senate Judiciary antitrustsubcommittee, said that the proposed transaction was “another industry-changing merger, which would have major implications in television, film, and media. I’m concerned about the impact of this transaction on American consumers,” she said. She said that she has asked Sen. Mike Lee (R-Utah), who chairs the subcommittee, and Sen. Chuck Grassley (R-Iowa), who chairs the Judiciary Committee, to schedule a hearing.

The companies expect the regulatory process to take about 12 to 18 months. The Justice Department is likely to review the transaction, but it does not require congressional approval. Still, past major media mergers have typically come before committees for public hearings.

You’d think Republicans would be especially interested in this. Although Fox News is not part of the proposed sale, Hollywood bears little to zero love for the GOP, and this deal would only only strengthen the Democrats’ domination of the picture business, especially as it synchronizes with the rapacious ethos and politics of Silicon Valley. One hopes that President Trump’s reaction was more pro forma moguling than anything else, and that Republicans members of Congress will join their Democrat colleagues in putting the brakes on this deal as quickly as possible.

It’s true that Hollywood no longer drives the culture, and is unlikely to in the future. The days when, in New York City parlance, you waited “on line” to see the latest hot picture show are long gone. Hollywood no longer exists to provoke thought, inspire discussion, or challenge preconceptions via the medium of narrative storytelling. Like journalism, it’s largely devolved into crude virtue-signalling; since telegrams from Western Union are dead as Dillinger, the entertainment industry has decided to flip Sam Goldwyn’s famous if apocryphal maxim on its head: if you want to send a message, watch The Handmaid’s Tale.

If not, you can always watch an old movie… until — as George Lucas did with the original Star Wars — the Thought Police get their hands on them and clean them up for proper citizen consumption, comrades. But how about we sit back, relax and enjoy the next reboot of Spider-Man, Iron Man VI and The Avengers: Nobody Left to Kill, coming to a couch near you, very soon?