Hollywood Goes Bankrupt


hgbLynda Obst, producer of blockbusters including Sleepless in Seattle and The Fisher King, says Hollywood is in serious trouble. In her new book, Sleepless in Hollywood, Obst says that thanks to the crash and burn of the DVD industry, the entire Hollywood profit model is at risk. She says an industry leader told her, “The DVD business represented fifty percent of their profits … Fifty percent. The decline of that business means their entire profit could come down between forty and fifty percent for new movies.”

Major actors and actresses are seeing their pay slashed. Directors and writers are watching jobs go down the tubes. One studio head told Obst about “famous players who regularly came to [a studio head] begging for favors – a picture, a handout, anything.” According to the studio head, these stars

“have extremely high overheads … They have multiple houses, wives, and families to support. They’ve made movies for years, they were on top of the world and had no reason to think it would end. And then suddenly it did. They’ve gone through whatever savings they had. They can’t sell their real estate … It’s a tragedy.”

Meanwhile, it is more and more difficult to get film financing. Years ago, Hollywood could finance its films through foreign presales – foreign distribution companies paying early for the right to distribute, providing the cash flow necessary to finance film. Now, with foreign economies in the tank, that funding has dried up. One of the only countries that continues to pour money into films is communist China, which is why so many of today’s films take a soft approach to the repressive state.

Because the business model of film is changing, the only way to make money is to cash in theatrically. That’s why we’ve seen an uptick in the number of 3D movies, no matter how poorly made – they allow theaters to charge in excess of $15 per ticket in major metropolitan areas. That’s why we’ve seen a huge number of high price blockbusters hitting the theaters – why bother spending $50 million on a mid-price flick that could clock in anywhere from $30 million to $70 million in box office, rather than going for broke with a $100 million special effects-laden extravaganza? It’s why dramas are now budgeted lower and cheapie horror flicks are budgeted slightly higher.

Everyone in Hollywood is liberal, until it comes time for them to work without pay. Then they’re downright Reaganesque. As less and less pictures get made, and more and more talented people go without work, the pool of labor gets ever larger. That means that actors who used to cost $500,000 per pictures will work for one tenth that. It means that writers with Oscars on their resumes can be had for a song. And it means that the liberal monopoly that controls Hollywood may be crashing down.

There is only one element of Hollywood that prevents this collapse: a monopoly on distribution. The distribution system in Hollywood is still upside-down, with distributors acting as gatekeepers for films. Most of these distributors are liberally-inclined politically, which means that they have no interest in conservative films. They’re profit-drive, sure, but they’re also used to working with a select clique of producers and directors and studios. They aren’t willing to take a risk.

But they can be paid to take a risk. And that’s where conservatives come in. With the means of production becoming ever-cheaper – it’s possible to make a movie that looks like a million bucks for about $100,000 – conservatives don’t have to expend tons of cash to get active in the artistic space. What’s more, they don’t have to build ground up – they can hire the same writers and directors who have been so successful in leveraging liberalism into great films.

Now is a horrible time to be the head of a movie studio. But it’s a great time to be a conservative looking to enter the movie market. All it requires for conservatives to make a serious play for the culture is a level of seriousness about the culture. Rather than sitting on the sidelines condemning the new flicks, it’s important to get involved in making flicks of our own – good movies, rather than politically-driven biopics. The market is shifting. And if conservatives have shown they are good at one thing, it’s taking advantage of market inefficiencies.

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  • OfficialPro

    It’s about time Hollyweird collapsed in on itself. Its implosion is looooong overdue.

    • Seek

      It’s about time people like you actually saw movies instead of denounced them.

      • gray_man

        If he goes to the movies or not is irrelevant, the comment was true.

        • OfficialPro

          why yes, and I DO go to the movies. But I only watch good movies not trash :)

          • Colininla

            “Good” is what YOU like? Yes, you’re right if you mean that applies only to you. Your opinion of quality is not a universal.

      • OfficialPro

        Are you “special”? In that handicapped sort of way? I see lots of movies. I am not denouncing the movies, per say. I am denouncing the idiot liberals running the joint.

      • Rocky Mountain

        But seeing movies is exactly why this beast has been created. I like (some) movies as much as the next person but believe me I know I could go for the rest of my life without seeing another one and I don’t think the quality of that short time will be in anyway impinged upon.

  • Demetrius Minneapolis

    Was about to type a long and loud “HAHAHAHAHA!” but than reflected on the spin-off employment that emanates from the entertainment business in the area. Have little sympathy for the multiple mansion owning, liberal know-it-alls, but it will hit some people rather hard down the food chain.

    • gray_man

      You mean like the rest of the United States? Cry me a river.
      These people “down the food chain” voted in California and destroyed the fourth largest economy in the world. They deserve what they get. Wake-up time, actions have consequences.

    • ShellyB

      the multiple mansion owning, liberal know it alls should buck up and subsidize the incomes of the people down the food chain. Pay their “fair share”. Why should they get to keep all that money they earned…playing pretend? (insert sarcasm wherever)

      • Caley McGuire

        Against capitalism, are you?

  • Jeff Dunning

    Ben, You’re the best! Go get em!
    Jeff D.

  • The Dead Critic

    “have extremely high overheads … They have multiple houses, wives, and families to support. They’ve made movies for years, they were on top of the world and had no reason to think it would end. And then suddenly it did. They’ve gone through whatever savings they had. They can’t sell their real estate … It’s a tragedy.”

    WTH? A tragedy? I have no sympathy for OVER PAID elitists doing a job ANYONE in this country could do for practically nothing. Acting is a farce, and to get paid hundreds of thousands or millions for is the REAL tragedy or joke. No crying by me for these narcissists at all.

    • Bamaguje

      Totally agree!!
      Overrated celebrities overpaid to mouth lines penned by writers, and make facies as instructed by directors… that’s hardly work.
      Any serious physical activity is done by stuntsmen and women.

      So-called reality TV is even worse. ‘Never understood the hype about the do-nothing Kardasians.

      There are much more deserving occupations in society.

      • Rocky Mountain

        Everybody needs to remember that this product is at the mercy of the market. Even if they were all conservatives they might still be all filthy rich because we decide this is how we want to spend out money.

    • asa2222

      To be fair, I think “tragedy” was used in the more old fashioned dramatic sense of someone who is brought down by weakness, as in “Shakespearean tragedy.”

      • Tish Morgna

        They weren’t brought down by weakness, they were brought down by hubris. They spent like kings and ignored the warnings we conservatives were giving them. They made their beds, let em lie in em.

        • peg_c

          Not only that, Tish. While spending like kings and living like emperors, they lectured US, their middle-class customers, on OUR greed and selfishness. Payback’s a bitch!

          • Rocky Mountain

            But when you think about it the American public and Hollywood have been in bed together for a long time. It is us, the movie going public, that have enabled them.

        • Rocky Mountain

          Too much money in anybody’s hands – liberal or conservative – can easily lead to bad endings.

          • Caley McGuire

            Nice platitude, but what does that actually mean? Just who should be the judge as to how much someone should be allowed to earn or what amount is ‘too much?’

    • peg_c

      I couldn’t agree more! This piece has given me great schadenfreude ;-) Can’t think of a more deserving bunch for this misery.

      • Maus Mann

        How long until Obama signs an Executive Order declaring the film industry to be “an industry essential for our national defense” and getting them a special tax break or an outright infusion of cash?

        You can’t say it won’t happen, can you? Not this guy. He might even try to suspend the law of gravity.

        • Caley McGuire

          Millions of years of evolution and the stupid
          gene is still replicating like a champ.

    • Colininla

      You have no idea about what it takes to build a career and succeed as an actor. In terms of pay, it’s always been a matter of supply and demand. If your name and reputation puts paying people in theater seats, you deserve what can be negotiated. It’s a business, just like any other.

      • The Dead Critic

        I know everything about making a career of acting. I looked it up a few months ago researching it. Thanx for letting everyone know you just go about ASSUMING everything about people in general without any facts. THIS was an OPINION piece NOTHING more. I just emphasized they are OVERPAID at the higher levels.

        • Colininla

          Oh, you looked it up. Well, excuse me, then; you’re obviously now an expert. The most successful actors are only overpaid if their projects lose money. If a movie makes a hundred or even hundreds of millions because of their ability to get people into theaters then they are not overpaid, but instead sharing in the profits. Obviously ‘anyone in the country’ CAN’T do it. The average “narcissist’ and ‘elitist’ SAG member makes very little money each year. Do some more research.

          • Rocky Mountain

            And as I understand it very few in SAG really make very much money; its only the famous ones and if you count them up probably not more than a couple of hundred in the real $$$ (actors only).

    • Rocky Mountain

      That’s the voice of a Hollywood insider speaking and, of course, its probably a tragedy for him or her as well because he/she depends to a certain extent on the former sea of money to keep them all afloat.

    • Hammerstrike

      http://www.youtube.com/watch?v=MQ46N3UqgaY

      What Hollwyood is producing is blande garbage on purpose, to keep the public as dumb and manipulable as possible, which in turn means they don´t need to put that much intellectual effort in their production.
      Its malicious, destructive and parasitic influence on western cultures deserves to be brought to an end.
      How? Bankrupt them, support and contribute to piratebay and so on, if
      you have the time, put their bland garbage for free on dem intrenets so people does not need to pay for their garbage.

  • Jerry G

    What a wonderful law. The law of unintended consequences. Who could have forseen that the demise of the compact disc would contribute to the demise of that hellhole of perversity and anti-Americanism, Hollywood. If Hollywood goes completely down the toilet it will be a boon to America.

    • Rocky Mountain

      While I have very deep misgivings about the movie industry and its products it is still a very large industry. Best think about the economic impact of such a crash.

    • Caley McGuire

      Completely disassociated from reality, but rants like this are so adorably facile.

  • Steeloak

    Lots of great movies will still be made – just not in Hollywood. Lots of great movies will be watched by millions too – just not in theaters and not on DVD’s – they will be watched at home and streamed off the internet.

    • Iamdestiny

      Documentaries, such as, “One Nation Under Fraud The Documentary”

  • dizzyizzy

    I hadn’t thought of super-popular The Sopranos as a horror movie, but the widespread sobbing over the death of actor James Gandolfini suggests that Netflix at least, ain’t dead yet. See http://clarespark.com/2013/06/20/james-gandolfini-as-tony-soprano/. This series was definitely written from the depressed, gangster-loving Left, and the output of horror movies with low paid actors will surely increase. As for the superwealthy liberals who support POTUS goes, my heart is not breaking.”James Gandolfini as Tony Soprano.”

  • Texas Patriot

    As Mark Twain would probably say, “The rumors of Hollywood’s death are greatly exaggerated.” Cinema is here to stay, and we are probably only beginning to scratch the potential of this medium to entertain and inspire. On the other hand, like any new medium, cinema has always grown in fits and starts. Starts are followed by fits, and vice versa. At this point in time it is entirely possible that we may be more in the fit stage than the start stage, but there is still some great work being done. ;-)

    • asa2222

      I think the article was about Hollywood and its associated business model and political preoccupations, not cinema itself.

      • Texas Patriot

        I agree with that. But because cinema is such a weirdly collaborative art, it has always been associated with people and places, and Hollywood has always been at the heart of it. The great thing about Hollywood is its ability to morph, and I am expecting some serious morphing in the years ahead. As the article suggests, the digital revolution is decentralizing and democratizing cinema like nothing before. Great things are possible in this environment.

  • darkknight91

    This story may hold some truth, but I don’t believe it’s on a wide scale….yet. I’m not seeing too many celebrities on skid row. Quite the opposite. I see talentless rubes like the Kardashians raking in money in buckets and troubled stars like Lindsey Lohan seem to be doing ok, even without any product out there. These people have been overpaid for so long, many of them have a nice nest egg and when the bottom falls out, they’ll still be fine. The 2nd and 3rd tier actors may start feeling the pain, but I just don’t believe it’s happening much. The ones that are on skid row are usually ones with drug problems and they’ve blown through their savings with no work in sight. Tom Cruise has nothing to worry about with Netflix. Get back with me on this in 10 or 15 years. Then we may have something to talk about.

    • ShellyB

      right…but that’s good marketing and TV. The Kardashians didn’t get $20-30 million upfront like Roberts or Clooney and then pass that cost down to us…while preaching “fair share” and mocking our values…we have a platform now. They hear it. They will feel it. Even if not financially, their egos will. And they have BIG egos that are easily hurt. Time will tell….as in World War Z, White House Down, etc.

  • http://smu.gs/L1p7XU winston

    Puhleeze, with all the real problems in the world, who cares about this nonsense? It is not even accurate/ The reality is that the advent of video tape and then DVD;s and now BluRay, have given films a second and third life/ There are many films (like Office Space comes to mind) that did poorly in the theater and very well in subsequent DVD sales. Even with the losses attributed to p2p, they are still way ahead of the game when compared to where they were before 1980, let’s say. If the people who issue this content do not wish to have it shared, then issue it in a secure, copy-proof format. Otherwise it is you who have failed to keep up with rapidly changing technology. The very same technologies your respective (film, music, print) industries took advantage of and made huge increases in profits before file-sharing became popular. I dont recall any of them complaining then. Copies for personal use have always fallen under Fair Usage. So there is but one fair solution: secure your content.

  • mikegiles

    The DVD industry collapsed because the stopped making movies anyone was interested in owning. Did they really believe that some one was going to purchase their latest anti American piece of garbage, when no one would go see it in theaters?

    • defcon 4

      I haven’t gone to a movie theater for 5 years and I see no reason to start going now. I can’t even be bothered to watch movies on cable. They’re just not worth my time.

      • peg_c

        We refuse to pay extra for any movie packages with cable. Utter waste of our hard-earned cash.

        • Maus Mann

          Download films… hit ‘em where they hurt!!!

          • Aizino Smith

            I would not pirate.

            Read reviews more. Learn how to be a literary critic and only watch a few films. Less is more. Less dross More enjoyment. in the meantime they are like the the dragons in Reign of Fire starring Matthew McConaughey.after the dragons ate everything they turned on each other.
            This is going to get good!

            Break out the popcorn

          • Colininla

            Yes, advocating stealing is always a good idea. Mom must be proud.

    • Colininla

      Can you say “Netflix?” C’mon, give it a try.

  • David Parker

    The key here “Good Movie.” Most of the stuff my fellow conservatives make it rubbish and too on point. LIke a Christian Song or Christian movie — most are preaching to the choir and are about as deep and metaphorical as the creek in my backyard. That’s not saying much. Conservatives need to be filmmakers first and conservative second. Meaning… I would rather be a filmmaker who is conservative, than a conservative filmmaker. We will get our message out better if we focus on entertaining, rather than preaching.

    I went to an event recently where there was this group of conservatives meeting with some congress critters and trying to help the “Repubs” on messaging and pop culture. Instead of helping the congress critters, these supposed hollywood influencers just railed on them, and preached at them. I left there with an awful taste in my mouth, as I am sure the congress critters did.

    Hollywood conservatives need to do better, much better.

    DP

    Love Trey Goudy, but damn he needs a makeover and someone needs to pat him down before he goes on camera. Shiny, Shiny, Shiny.

  • http://www.facebook.com/sharon.knapik Sharon Knapik

    They’ve reaped what they’ve sown. Another commenter noted that folks aren’t willing to go to anti-American films, much less buy the DVD. The few ‘conservative’ [read normal] films made have done quite well…. even w/ the critics panning them. HW will either wake up…. or find a ‘conservative’ equivalent springing up in a less leftist state…

  • James Vallo

    Good for us inde filmmakers all of my films are in distribution with no end in sight. Money on the other hand doesnt exsist but our films are being seen, James Vallo

  • Jack Deth

    Geeeeeee….

    The film industry is based on CAPITALISM?!!!… Who knew???

    • ShellyB

      SSShhhh…don’t let their minions know they’re hypocrites….

  • Arf

    I want to see Steven Spielberg filing for bankruptcy and working a register at WalMart. Same with David Geffen.

    • ShellyB

      and Harvey Weinstein

    • jguy1957

      Steven Spielberg, that great American is going to use India to make films.

    • Rocky Mountain

      I try not to allow myself the luxury of schadenfreude but your scenario might make me suspend my principals for a while.

  • Douglas Mayfield

    Someone said that a message without entertainment is propaganda and entertainment without a message is television. I think that’s a bit harsh to TV.

    As DP points the key is ‘good movie’. Jumping in with messages without good story telling will simply result in investors losing buckets of money.

    It starts with the script of which in my view there are damned few good ones.

    As for distribution, there are more channels now than ever before, but you do have to work at it.. And most important of all is both to be fierce in making your movie for the lowest budget possible and to protect your investors when the film starts to sell.
    That’s how you have a career in film.

    Doug Mayfield

  • CurmudgyOne

    Wouldn’t bother me if Hollywood went completely broke. We don’t need movies. Not really.

  • MburuChege

    hollywood going down is great news! it has been pumping tonnes of moral garbage meant to seduce innocent gentiles into moral vices !

  • Seek

    Message to Ben: Wishful thinking is not real thinking. Aside from the fact that there are at least a couple dozen great — not simply good, but great — movies that come out each year — Ben’s sources are less than sound. Fact: The year 2012 produced the highest domestic box office in history at $10.8 billion. And the trend line for over 20 years has been upward.

    Now go see the new “Superman” movie, and leave us all alone with your reckless mindless politicizing of cinema.

    • ShellyB

      how much is that figure “inflated”, though? Highest domestic box office in history based on $10/movie tickets? Is it that high if other “big years” back in the day are adjusted for inflation? This is a serious question. I do wonder about this since EVERY summer is the ‘biggest summer ever”…sure…if ticket prices go up and the same or slightly less amount of people go to see them.

    • RB

      But the other half of the film watching experience, home watching, has dramatically changed. I know I haven’t bought a DVD in years. If you get amazon streaming and netflix and hulu and of course youtube you can pretty much pay only twenty bucks a month plus a buck or two here and there to redbox and cut your home viewing expense to under thirty bucks a month where before you would spend a hundred on cable then five bucks a movie at blockbuster, as as DVDs die and cable gives way to streaming on demand at lower rates a big chunk of hollywoods’ revenue source is going bye bye and boxoffice sales would have to almost double to make up for it, which they won’t.

  • HenDanK

    These Hollywood celebrities should take heart: Thanks to their sucking up,
    we have Obamacare now and that should take care of everything. (sarc)

  • Roger_the_Shrubber

    I’d rather read a book than watch a movie.

    • Caley McGuire

      I’d rather stub my big toe than watch a football game. Okay, your turn.

  • offset81

    My heart breaks for them. Let them crash and burn. Haven’t been to a movie in years. Nothing worth seeing plus I’d rather watch a good college basketball game for 2hours than waste my time watching the mind rot these people put out.

    • Caley McGuire

      Yes, when ideas are presented I have to think about them that scares me. I’d rather watch someone bounce a ball.

  • 57nomad

    For those of you mocking Ben, think again because he’s right. But don’t take Ben’s word for it and don’t take nomad’s but you might be inclined to take Steven Spielberg’s. Check this out from the Hollywood Reporter just a few days ago:

    “Steven Spielberg on Wednesday predicted an “implosion”
    in the film industry is inevitable, whereby a half dozen or so $250
    million movies flop at the box office and alter the industry forever.
    What comes next — or even before then — will be price variances at
    movie theaters, where “you’re gonna have to pay $25 for the next Iron Man, you’re probably only going to have to pay $7 to see Lincoln.” He also said that Lincoln came “this close” to being an HBO movie instead of a theatrical release.”

    Hollywood is the most depraved place on the earth. That these decadent, licentious people with an avarice that would make Caesar blush seek to lecture we normal Americans is repulsive beyond belief. What ever bad happens to them, they’ve got it coming.

  • ladychurchillusa

    This is a true tragedy, poor, poor little rich people having to live like the rest of us. OMG what is the world coming to? Perhaps Obama can give them a free phone to call their agents. Perhaps they will see that capitalism isn’t such a bad thing after all, who knows maybe they will begin to produce pics that someone actually wants to watch, oh wait, not possible with their mentality of liberalism above all else. Well, let’s see if it trumps the need to eat on a daily basis.

    • OfficialPro

      they can hawk on the sidewalk like Obamaphone lady.

  • peg_c

    Has anyone else noticed that “Man of Steel” is being promoted to and in churches and congregations are contributing to its big box office? And “Left Behind” is being remade with a big budget, something that was lacking with the 3 LB movies made last decade. Hollywood has lost the Christians and finally seems to be waking up to the fact that they deliberately dissed a huge market. HW has pissed so many of us off for so long that we’ve all found better ways to spend our time and $$. Hollywood is solely to blame for its miseries.

  • ShellyB

    “Everyone in Hollywood is liberal, until it comes time for them to work without pay.” Ain’t that the truth…”fair share” hypocrites.

    • Mister Lackey

      They’re really only liberal with other people’s money. Nevermind they have — in the past — enjoyed the ability to finance unselfish philanthropy; they’re always on a tear to force the proletariat, the common folk to pay for everything.

  • Maus Mann

    Free Kim DotCom!!!!!!!11

  • Arnoldr

    If a conservative knows of a script that could be a good movie, what is the first step to take?

  • Dee Win

    couldn’t happen to a more deserving crowd. For years I have boycotted the “talent” that demeans my nation and conservative values. I’m sure I’m not the only one.

    I love the smell of schadenfreude in the morning.

  • Mark Miller

    Ben, Ben! Get someone to edit your writing! So many typos, grammar errors, and usage errors.

  • MarilynA

    It is obvious that Hollywood has finally run out of gross activities to push their filthy, perverted trash on the American public. I stopped watching todays trashy films because I don’s want to see people’s brains splash onto the wall or their guts fall out, or watch people going to the bathroom, puking or screwing in my living room. There is nothing enlightening or entertaining in watching someone sitting on a commode, taking a leak. throwing up, or screwing. In addition every film and TV program has to have a gay and mixed race couple interacting with normal people as if they are acceptable to everyone. And Hollywood’s idea that women think about sex the same way men do, and presenting women as sex maniacs who run and jump on men and wrap their legs around their waists in public, rip their clothes off and jump into bed after one kiss, and otherwise act like nymphomaniacs is ridiculous. The latest gimmick to sell their trash is to show full frontal nudity and let everything hang out.. Anyone who has ever cared for a baby knows what body parts look like. Pushing pornography on TV and in the movies, and that is exactly what is going on, turns off more people than it turns on. I personally don’t want to see it and I definitely don’t’ want it in my home. Hollywood can’t go broke soon enough to suit me.

  • jguy1957

    I have no problem with their plight. I gave up all my cable TV because I was sick of the COMCAST owners views and I rarely go to the movies. When I go to the Movies it is a rape of my wallet that doesn’t make it worth while. Increasingly TV is bad and the movies are usually a big budget blowout formula story. There is little with Hollywood’s liberal slant the is good for America and they better remember who they work for before its to late.

  • Rocky Mountain

    “it’s important to get involved in making flicks of our own ” Wow, if it were only that simple! Lights, Camera, Action!!!!

  • Big Ed

    There is a production company, Pure Flix, making pretty high quality films with a Christian theme. I got a few of the DVDs from Redbox, and although I am not practicing Christian, I was happy to see that this movie was not only a good action packed movie, but it stuck it’s finger in the eye of the Hollywood elite.
    I decided that I would ONLY support Hollywood films that either had a conservative theme or politically neutral.

    I was so happy to see some of Matt Damon’s left wing crap movies do poorly.. I will not spend a DIME to support liberal Hollywood ever again.
    I do like watching Hollywood films on those Chinese websites that show first run movies for free… I get a kick out of taking money out of those Liberal Elitists pockets like they try to do to middle class America every day.
    I quit paying for cable TV years ago and don’t miss it.. I find every thing I like to watch on the internet for free…

  • Hammerstrike

    http://www.youtube.com/watch?v=MQ46N3UqgaY

    Hollywood´s hold on western culture needs to be smashed, not physically but you know how mad they are about copyrights, right?
    All Hollywoods production needs to be put for free on the internets, support and contribute to piratebay and so on whever possible, mak sure Hollywood follows the way of the Titanic.