Hollywood’s Revenue "Problem"

There is the bad “Hollywood’s revenue is declining because…” argument, perfected by Michael Medved. The argument is that Hollywood is going broke because actors were too active in the 2004 elections and the movies are too liberal. In addition to being a classic post hoc ergo propter hoc fallacy, it faces an additional problem when you wrote a book in 1993 claiming that Hollywood’s box office revenues would collapse because actors are too politically active and the movies are too liberal, and yet before 2005 revenues went up every single year. (This reminds me; this weekend may see the debut of my long-unawaited “Medved v. Bork: can you tell the difference?” quiz.)

Then there’s the good argument, which you can see at Shakes’ Sis. Her post has a lot of interesting things to say, doesn’t try to claim that “Middle America” uniformly shares her politics, and also has a link to her excellent post about the degradation of the filmgoing experience. (I identify with a lot of that, and much of my moviegoing consists of matinees at arthouses; I virtually never see big new releases on Friday or Saturday nights anymore.) Still, I think she errs in simply assuming that Hollywood is suffering financially. As this NYT article points out, Hollywood isn’t losing money; the one-year decline in domestic box office revenues is being more than made up for from other sources. As James Surowiecki recently pointed out, it doesn’t make any difference to Hollywood whether a couple pays 20 bucks to see a movie in the theater or pays 20 bucks to buy the DVD. So the Medved/Apuzzo/Reynolds thesis lacks correlation, let alone causation. (And, of course, the tendency of such people to project their own political agenda onto the film audience faces additional problems, such as the dismal box office performance of such NRO cause celebres as Cinderella Man (#38 on the box office list as of this writing) and The Great Raid (#125.) And Brokeback Mountain, playing for a week and a half in 3 cities, has already tripled the take of America’s Heart and Soul.)

Not that I think, of course, the fact that Hollywood is making more money suggests anything about the political content of films. Since I don’t own shares in a Hollywood studio and rarely watch expensive Hollywood product, I could care less whether studios are making money, and trying to derive political points from fluctuations in Hollywood revenue is a game for hacks and idiots. But as far as the alleged crisis in Hollywood’s finances, it simply doesn’t exist.