Lectures 5 and 6 Hollywood in the post-war period - audiences, blockbusters, stars and genres Introduction • Halberstam has written, the immediate post-war period the United States “…was one of the great sellers’ markets of all time. There was a desperate hunger for products after the long drought of fifteen years caused by the Depression and then World War Two”. • The key symbolic products of the late 1940s and 1950s were cars, suburban (Levitt) homes - full of consumer durables, including televisions, bought at suburban (Korvettes) discount stores - fast foods (McDonald’s) and advertising. • To these should be added a whole range of outdoor recreation products including tourism, golf, gardening, participatory sports and fishing. • But not, the cinema. SELECTED U.S. POPULATION STATISTICS, 1946-1970 SELECTED PERSONAL CONSUMPTION STATISTICS, 1946-1970 (All money values in U.S. $millions, 1958 prices) THE DATA • In 1946 the weekly trade journal Variety published in either its first or second issue in January of each year an annual list of the most popular films released onto the American market, together with the rental incomes they generated for their distributors. • The data set of 1820 films, with not less than 61 and not more than 130 top ranking films recorded in each of years of the study, provides a unique empirical source from which to study Hollywood during this time of declining theatrical audiences. BOX-OFFICE REVENUES OF ‘TOP GROSSING FILMS, 1946-1956 (All money values in US.$millions, 1958 prices) Unequal decline • From Table 3 it is clear that whilst the total box-office revenues of theatrical releases declined to about a third of their starting value over the period, the rental income accruing to the distributors of those films found in the Variety lists experienced a much smaller decline. Growing market share of top ranking films • In Table 3, it is apparent that the market share of Variety listed films increases dramatically over the period. If the conservative assumption is made that rental incomes were half the annual box-office revenue, the top films increased their share from 26 per cent in 1946 to 84 per cent by 1965. PROPORTIONAL DISTRIBUTION OF RENTAL INCOME OF ANNUAL TOP 60 FILMS, 1946-65 (Column 1 in US.$millions, 1958 prices) Growing inequality • Column 4 of Table 4 shows that the top 10 films significantly increased their share of the rental incomes generated by the top 60 films. This rose from approximately a quarter during the immediate post war years to above 30 per cent during the much of the 1950s, climbing to over 40 per cent for most of the years from 1957 onwards and peaking at 51 per cent in 1965. • Further, the actual revenues that accrued to these films also rose in real terms, trending upwards from post-war low levels of less than $50 million in 1949 and 1951, to aggregate rental incomes of above $100 million in 1957, 1958, 1960, 1963 and 1965. • The peaks were generated by the extraordinary success of a small number of films. These films were: • 1957, the Ten Commandments ($34.2 million) and Around the World in 80 Days ($22 million); • 1958, South Pacific ($17.5 million) and Bridge on the River Kwai ($17.2 million); • 1960, Ben Hur ($38 million); • 1962 West Side Story ($22 million); • 1963 Cleopatra ($23.5 million) and How the West Was Won ($23million); • 1965, The Sound of Music ($42.5 million), Mary Poppins ($31 million), My Fair Lady ($30 million), and Goldfinger ($22 million). • The growth in the market share of the annual Top 10 films over the period of this investigation was of course at the expense of the shares taken by the other categories. • In 1946 the share of the top 10 films was a little over twice that of those ranked between 51st and 60th. By the 1960s the difference had increased to multiples of seven and above. The end of the classical portfolio • During the two decades prior to the Paramount decree, Hollywood’s principal studios had pursued a portfolio approach to risk management through the production of a range of films in which the higher risks associated with big budget production were offset by a greater number of middle and low budget films for which revenues were less variable and more evenly spread. • The increasing skew of rental income, manifest in the dramatic decline in the real earnings of sub-top 20 films, made portfolio production less tenable as the 1950s wore on, leading to the increase in independent production which Bordwell, Staiger and Thompson have termed the ‘package-unit’ system. ‘Package-unit’ system. • “Rather than an individual company containing the source of the labour and materials, the entire industry became the pool for these…This system of production was intimately tied to the post-war industrial shift: instead of the mass production of many films by a few manufacturing firms, now there was the specialised production of a few films by many independents. The majors acted as financiers and distributors.” THE ‘MAJOR’ STUDIOS’ CONTROL OF COPYRIGHT PRODUCT DIFFERENTIATION • In the theory of consumption developed earlier, novelty is depicted as an irreducible characteristic of film as a commodity. From this it follows that, ex ante, consumers do not know fully what they want. • “Film audiences make hits or flops and they do it, not by revealing preferences they already have, but by discovering what they like.” De Vany and Walls (1996) • Furthermore, audiences cannot evaluate a particular film fully until they have experienced it. • Hence, the role of the film producer can be conceived of as an image entrepreneur, a person who is engaged in bringing to audiences pleasures that they could not fully imagine. • As a rule Hollywood used stars, genres, directors, styles, storyline, story situation and ethos, together with enthralling technologies, in efforts to attract audiences by offering them strong novel pleasures whilst at the same time attenuating the risk associated with surprise. Distinction between Vertical and Horizontal Product Differentiation • If we consider a class of goods as being typified by a set of (desirable) characteristics, then two varieties are vertically differentiated when the first contains more of some or all characteristics than the second, so that all rational consumers given a free choice would opt for the first. • They are horizontally differentiated when one contains more of some but fewer of other characteristics, so that two consumers exhibiting different tastes offered a free choice would not unambiguously plump for the same one Horizontal Product Differentiation • Genre, in the words of Izod (1988), enables “…the uniqueness of the product to be strikingly de-emphasized”. Films in a genre thus share particular characteristics. • Classical Hollywood thus recognised a number of quite clearly differentiated groups of viewers and organised its output to provide a range of products that would appeal to different fractions of the audience. Movies were assembled to contain ingredients appealing to different generically defined areas of the audience, so that their marketing and exploitation could position each picture in relation to one or more of those ‘taste’ publics. (Maltby, 1999) • Genre classification is not an exact science. Various agencies – audiences, the film trade, film critics, academics – have evolved distinctive genre systems for their own particular purposes. • For my purpose, I have used the Motion Picture Guide’s genre classification for the 1820 films in the Variety dataset. • The 1820 films in the sample are differentiated under no less than 170 distinct genre categories, most of which are hybrid. • e.g. two films are classified as ‘Adventure History Dramas’, three films as ‘Drama History Epics’ and three as ‘History Drama Adventures.’ • By taking the first named genre in each hybridisation, the 170 categories reduce to 23. FIGURE 1 THE DISTRIBUTION OF ‘TOP GROSSING’ FILMS WITHIN GENRE CLUSTERS FIGURE 3 THE DISTRIBUTION OF TOP 10 FILMS IN GENRE CLUSTERS Top grossing films in 1965, by genre Stars as tools of differentiation • Albert (2005) argues that the previous successful performances of stars serve as markers for potential audiences, maintaining that ‘…stars are important because they are the least noisy and most consistent marker for successful film types.’ • The stochastic model he adopts predicts that ‘the likelihood of a film of a particular type succeeding is proportional to all films of a similar type that have produced similar levels of success.’ The model predicts that half the stars will have only a single success, one sixth will have two successes, one twelfth will have three successes, and so on. • The probability of a star appearing in i successful films is according to the model: TABLE 8 DISTRIBUTION OF STARS BY THE NUMBER OF TOP 10, TOP 20 AND TOP 60 FILMS THEY APPEAR IN The model • However, the model is unsatisfactory because it greatly over-predicts the number of stars with high levels of success. • An allowance for the limited life and output of stars, made by assuming that they are subject to exponential decay, can remedy this fault so that the model predicts fewer stars with great success. It also improves the correspondence for stars with few successes so that there is sound ground to proceed with the analysis. TOP RANKING STARS, 1946-65 Conclusion • Hollywood in the post-war period changed dramatically in organisational form. • The ‘studio system’ was based on the in-house co-ordination of resources and full exposure to the risk entailed in production budgets. • The growth of independent production, albeit closely associated with the ‘major’ studios as distributors, reduced the studios’ exposure to risk. • The divestiture of cinemas forced on the ‘majors’ by the Paramount decree of 1948, would have happened anyway, as a result of the dramatic decline in cinemagoing. • During the period 1946-65 the market for middle budget films collapsed. • However, the market for films as major attractions maintained itself. This was the period in which the blockbuster appeared. Scatter of Box-Office Revenues against Film Costs, 1987 Prices, 1988 to 1999 • The major studios increasingly competed to produce films that were vertically differentiated – that through a combination of talent, genre and story, were perceived by audiences widely as qualitatively superior to other products currently on the market. • As we know, they didn’t always succeed.