In the blockbuster movie “the Avengers” a group of Marvel superheroes teams up to save the world. Iron Man, Captain America, Thor, and the Incredible Hulk (with support from Black Widow and Hawkeye and Nick Fury) stop the evil Norse God Loki and Aliens from destroying Manhattan and the world. In reality, though, Hollywood faces its own crisis. Hollywood depends on money from TV operations to fund what amounts to giant, two-hour plus commercials for toys, games, and theme park rides (i.e. the stuff that really makes money). Both are being called into question as Hollywood faces its own existential crisis: it does not know how to make movies and television shows that appeal to masses of viewers.
USA Today reports that the CW is in trouble. That netlet, formed from the wreckage of WB and UPN, both of which aimed at tween girls, can’t get enough viewers. DC’s Green Arrow will appear as “Arrow” but without fan fave Justin Hartley who played Green Arrow for years on WB/CW’s “Smallville” or apparently, the DC Universe. There will be a series based on a young Carrie from “Sex and the City” [High School the Herpes Years?] and another one based upon Beauty and the Beast (the late 1980s CBS version with Ron Perlman and Linda Hamilton). Gone are “Ringer” and “the Secret Circle.” “One Tree Hill” finished its run, and “Gossip Girl” will return next year with only ten final episodes.
A joint venture of CBS and Warner Bros. that stemmed from the 2006 combination of UPN and WB, CW is perhaps more vulnerable than other broadcast networks to changing viewing habits; it targets women ages 18 to 34, a more technologically minded audience that’s more likely to view shows online or on other platforms.
Thanks to a lucrative deal with Netflix for streaming rights to old episodes, CW has more breathing room, financially speaking. But it still needs to find larger audiences on TV to fill that pipeline and satisfy the local stations that carry its programs. Vampire Diaries averaged just 2.8 million viewers this season, even with seven-day DVR playback factored in.
Of all the networks, only CBS manages year in and out, to pull in a profit, and provide the most viewers. [The two, despite advertisers hunger for younger viewers, related.] America is an older nation, when Whites only are considered. The younger population is mostly Black and Latino, and they are remarkably poorer, as the Pew Hispanic Trust report at the prior link shows. White MEDIAN family net worth is $113K, for Hispanics it is $6K and for Blacks it is $5K. At a minimum, buying expensive cars, clothes, or anything else but the bargain basement requires advertising to an older, White audience. There may be a lot of young Black and Hispanic (more the latter than the former) consumers. But they don’t have any money. And what little they possess depends on unsustainable wealth transfers from a mostly older White middle/working class to a permanent, and hostile non-White underclass incapable of doing much of anything productive. About 47% of Detroit’s adults cannot read. How lucrative is that group for TV advertisers.
CBS has many problems, including terminal PC-disease, but at least it has figured out the demographic basics, and retains the more broadly popular scripted shows. Even they have a problem, as I showed in 2010 in “When Did TV Get Girly?”, TV has been female dominated since 1979, with a few brief peaks in 1985-86 (Miami Vice and the A-Team), with a wide and ever increasing gap opening up since the early 1990′s. Out of all of CBS’s shows, only “Person of Interest” is a mostly male oriented show. Which makes CBS just as dependent on White women as CW, it is just that CBS draws upon women older than 18-34, and that there are a lot MORE White women who are older than the 18-34 demo. The birth dearth has a cost.
Most of the remaining broadcast networks are more on the CW side (2.8 million viewers is a “hit”) than say, CBS (where say 20 million viewers can define a “hit.”) Fox is probably next best off, with ABC and then bottom-dwelling NBC making up the rest. Cable is only appreciably better, still deriving a massive amount of revenue from likely unsustainable carriage fees paid by cable and satellite operators. Which are passed onto price-sensitive consumers who can and will find alternatives.
All of this matters, because TV forms the backbone of daily income for media companies. So far, no studio has been able to tap into China’s film and tv revenues. Who knew, that China’s authorities would only let a few foreign films and television shows inside the country? And that furthermore, they’d take the lion’s share of the revenue? This simply astonishes me, who could have ever predicted that outcome? Most of the production studios at say, Warner’s, are devoted to television, not movie production.
The Financial Times Lex column (sorry, they don’t put it online) from Monday, May 14, 2012, had a story on how the movie business is basically just giant commercials for a few hit characters. Disney’s “John Carter” lost over $200 million. “The Avengers” is minting money, $207 million in box office revenues opening week-end, with lower than expected drop-offs for weeks after. Since 2006, Disney Studio entertainment business has had an average operating margin of 11%, while its TV business generates 31%. BUT, Disney’s resorts (average margin mid-teens) and consumer products (nearly as profitable as TV) feed off the characters in the movies. Follow-on business from Disney’s new games division promises even more money.
This is why Disney sold Miramax for $530 million in 2010, and bought Marvel for $4 billion. As the Lex Column notes, there is no appetite for “There Will Be Blood … the ride” at Disney. Or among the public. Films generate on average a return of 10% on tangible assets. That return is stable, as the Lex notes, in 2009 with a recession, and no hit films, profits at the studio crashing by four-fifths as DVD sales also crumbled, total return on assets was still a respectable 8%. As the Lex concludes, it is a mystery why other media companies do not also simply make films that are two hour plus commercials for toys and rides and merchandise.
And here is the answer. Because they can’t.
Joss Whedon is one of the more talented writer-directors around. His script for “the Avengers” was quite good (though it could have been cut down some, and the initial squabbling reduced some). Anything on his own, however, has produced at best, cult-only popularity. The Financial Times savaged “Cabin in the Woods” which has not done well at the box office:
If you have no faith or confidence in the story itself, then the first recourse of the filmmaker is always the “reveal” – of which this film has several. If you haven’t anything to say, at a key moment you just have to demonstrate that it’s all taking place on Mars/been orchestrated to placate the gods/or all the other types of reveals that the director here was already well versed in when he wrote for the television series Lost – another story about people finding themselves “horribly manipulated by unnamed Higher Powers”. The only comedy-horror that ever worked was An American Werewolf in London – and it worked because it was about character. It had a mood of its own. It was not run entirely by its genre.
The film has done to date, about $40 million in box office. That might cover the marketing campaign, and the catering budget.
So why is it, that a man with obvious talent like Joss Whedon, can’t make anything popular on his own, and has to have the studio with their hands on his shoulders to satisfy the audience? Whedon has said he wants to do a sequel, to the Avengers, darker, more intimate, with each of the Avengers suffering a shattering personal loss. Because that’s what will pack them into the theaters and make little boys and girls pester their parents for Thor and Iron Man and Hulk and Captain America toys and sheets and pajamas.
The first reason a guy with talent like Joss Whedon (or as Steve Sailer has noted, “Inside Man” director/writer Spike Lee) can’t do anything popular and good without the heavy hand of studio execs is compensation. Blogger “Furious D” has noted the self-fulfilling idiocy of Hollywood consistently cheating people out of their revenues, save a few favored stars like Tom Cruise. Peter Jackson and his cast were famously denied their royalties for the Lord of the Rings trilogies by New Line, and Babylon 5 creator J. Michael Straczynski has reportedly not received a dime from his series.
This creates a direct incentive by Hollywood’s writers and directors and producers to look for their next job, instead of maximizing revenue for the current one. Simply put, Hollywood’s talent has to please the various gate-keepers looking for “edgy” stuff that meets their approval, and signals distance from those icky people who show up and buy tickets, or watch TV shows, instead of sharing in the wealth.
My own take is that this cheating of revenues, reflects a diseased and poorly concealed, Olympus Camera type situation of sustained losses only kept “washed” by systemic cheating. Denial of fair-share of revenues is a symptom of a declining industry. Google, Linked In, and other successful companies did not quibble about compensation in stock for key employees, indeed Google buys companies often just to acquire-hire key people. Who are richly compensated — Google aims to keep growing.
Nevertheless, Hollywood has a pay structure that creates every incentive to make edgy-hip stuff no one wants to watch, and almost none at all save heavy studio hands which ultimately are counter-productive (because most execs have no idea of what people want, unlike the Hollywood Golden Age guys), to create anything people want to see.
The second reason is that Hollywood is nepotistic, and that is fatal among writers and producers and directors who must have some idea of what ordinary people will pay to see. If Hollywood could charge Bill Gates and Mark Zuckerberg a cool $100 million each to see a movie, that would be one thing. Instead, they are not in the business of say, luxury watches or Ferraris. Instead they are in the business of making Casios or Toyotas. Mass appeal is the rule of the day. And mass appeal requires some closeness, at least shouting distance, to ordinary people. A son or grandson and son of Hollywood royalty, however minor, will never find that closeness. JJ Abrams, and Josh Whedon, are immensely talented. They would have no more idea of what the average person living in say, Pittsburgh PA, would like to see than a Mongolian tribesman or Congolese Pygmy.
Hollywood is different than say, engineering firms (father and son, Marc Isambard Brunel, Isambard Kingdom Brunel; or the father/son team of John and Washington Roebling). Engineering matters in things working, and being built on time and on budget, and not falling down. Social nearness and distance are trifles. Not so for Hollywood, which has depended on turn-over in writing and directing and producing, to create films and TV shows ordinary people want to see. No amount of technical skill, or market research, can compensate for the experience of living as an ordinary person, and understanding from the ground up what made things special, and magical, and what brought people down, in a depressive mood.
Particularly now, with nothing but bad and worse news on the horizon, Americans demand happy, upbeat stuff, not edgy-hipness designed to show how much cooler you are than the paying customers. That’s what sells toys and lunchboxes and amusement park rides.
Third of course, is the inability of today’s in-bred creators to write anything new and original that appeals to a mass audience. This is why Hollywood is raiding board games, and old comic books, and old TV shows, for movies and television shows. Hollywood execs know that today’s writers simply cannot create a “Raiders of the Lost Ark,” or “Star Wars” and that not even Steven Spielberg cannot do it, witness “Crystal Skull.” Which gave us “nuke the fridge.”
People have tried. Mark Millar with “Kick-Ass” did some interesting things. People just were not interested in seeing the movie. “Cowboys and Aliens” flopped because it was all about concept, not character. As talented as Joss Whedon is, he’s relying on work done by Stan Lee, Jack Kirby, Larry Lieber, among others, more than fifty years ago in some cases. The characters, storylines, and situations, were all created by others.
A great deal of this failure is the part of PC and “diversity” handcuffs. Only Sascha Baron Cohen (and even he treads lightly) has made really funny movies. The rest have been fenced off by PC. DC Comics is a good example, killing off favorite old superheroes so the White guys can be replaced by lesbians of color, Hispanics, Blacks, etc. To a matching decline in sales. The old creators of comic books, movies, TV shows, and the like were not hand-cuffed intellectually by PC and thought-crime fears. Donald E. Westlake’s “Dancing Aztecs” has a hilarious bit between two dumb as rocks Harlem dwellers peripherally involved in a chase for a stolen idol, with un-PC dictums to never be in Harlem after dark by White crooks, which could never be said today.
TV and movies mine old stuff constantly, because everyone knows today’s creators are handcuffed by PC and Diversity demands to the degree that they cannot create anything interesting that people will want to see.
That in a nutshell signifies Hollywood: Cultural Collapse.
The collapse has come because incentives, Hollywood’s nepotism, and PC/Diversity handcuffs and fear of thought-crime has made Hollywood incapable of doing much of anything but recycle old stuff. This is roughly the case for Classical Music in the West, save a few John Williams soundtracks, and to an extent, Jazz. Certainly rock and roll has reached this stage.
The implications for this are profound. Hollywood like it or not, shapes perception of reality by the masses. It has largely replaced Christianity and the churches as the basis for morality, thought, and pretty much everything else. Hollywood is the glue, sadly, that holds America and the larger West together. [Itself a stunning statement on the decline of the West's internal strength.]
Hollywood now depends on sitcoms and a few dramas appealing to older White women, and recycling old Comic book heroes into commercials for toys, rides, and the like.
Hollywood is not going to become less liberal. But they will be forced by economic necessity to recycle the older, far more culturally conservative characters, storylines, and situations that long-dead comic book writers created decades ago. No one is going to buy toys based on “Captain America loses everything” no matter how much Joss Whedon wants an angst-fest to prove to his peers he’s still one of them despite making billions for Disney. Disney even tossed openly gay Rich Ross as President, for failing with John Carter. Not even the power of gayness and the gay mafia could save him. From a $200 million and (possibly more) tide of red ink. Ross was after all, the guy who gave the House of Mouse, all those Tweener Pop stars (who go on to become train wrecks and most likely, lawsuits in waiting). But that aside, the Tweener Pop stars have been big revenue sources.
Little boys, however, are unlikely to pester their parents to buy the Demi Lovato cutting action set, or Eating Disorder lunchbox. THAT sort of money requires male-oriented action heroes, of which only long-dead comic book writers scrapping for success could create.
All this reminds me of something. Detroit’s 1990′s era dependency on trucks and SUVs for profitability. Well, that ended well. I’m sure the super-geniuses at the Hollywood studios have a plan.