Film Fund-amentals: Bursting Bubbles

We were so happy in the womb. Maybe that’s why so many people are happy to live in a bubble. That certainly appears to be the existential state of Hollywood as the system seems determined to maintain a steady march toward the abyss. In the real world, everything is flying apart like debris caught in a whirlwind. But in Hollyworld, the sun glints brightly through the contours of a pretty bubble and the future is so bright you have to wear shades.

Of course, these are the same folks who have insisted that the film industry is recession-proof and that 3D is the wave of the future while tent-pole movies make for a sound financial model. Likewise, social media sites are the spawn of Satan and net neutrality is a communist conspiracy against the American way of life (or is it the other way around?). At the same time, they are still hoping to use sites like Twitter to predict a movie’s box office success, but they really wish that the people on these sites would just shut up and watch the ads and not bug the big shots with their opinionated chatter.

Which means that Hollywood, like the country, is determined to steer straight into the wall at full speed. I’m writing this piece on election day and all signs indicate that a pack of politicians who have been, at best, inept in their handling of the current crisis will be replaced by a political pack that has sworn to be decisively destructive. Oh boy! It’s as if the incoming Congress will be a disaster movie produced by Irwin Allen (who shall survive in 2012?).

Since the film industry is not magically removed from current social and economic events (despite the bubble), they might want to learn a few things about the type of bricks in the wall they’re hurdling toward. For example, they can skip the recession-proof theory. The industry only had a decent track record in relation to a standard period of recession (roughly six months followed by a year of recovery time). In reality, the recession started in December of 2007. It is now nearly three years later. By the normal standards of traditional old-guard economic thinking, we are past the recession period. This is when you enter the depression cycle. For example, though the start of the Great Depression is usually given as October 1929, the actual harsh effects didn’t fully take place until the middle of 1931.

During the period 1931-1932, the box office took a steep nosedive. Prior to this plunge, Hollywood took the attitude that they were depression-proof and had initially maintained a steady increase in ticket sales. But like the rest of the country, they couldn’t escape the effects of economic collapse. This history is worth reviewing because much of the same pattern is taking place now. After a period of apparent increase in box office figures, the totals are now heading in a steady downward spiral (and this is a pattern that, I suspect, is just beginning).

Currently, the government has been incapable of easing the unemployment crisis (most likely the real unemployment figure is 22 per cent or higher), and every indication is that people who are currently unemployed will stay unemployed for another year. Oddly enough, this takes a huge chunk out of people’s discretionary spending, and show business is all about discretionary spending. I don’t care if you release Avator vs. Godzilla in 4D (optional time travel at selected theaters), many people will choose to buy food rather than movie tickets.

The incoming Congress will be no better than the outgoing Congress. So far, their only major idea for an economic stimulus plan is a weird combination of gutting unemployment benefits and starting a war with Iran (I know that David Broder is a crackpot, but he is not a lonely crackpot). At best, the economy will continue to be slowly ground to dust. At worse, it will be blown up in a final and disastrous act of mad dog hubris. Either way, the future prospect ain’t good.

The 3D revolution hasn’t exactly panned out as hoped, but it has pushed the system deeper into the digital revolution. By and large, that is a good thing. Despite its initial high cost of development, the digital revolution will eventually create a more level playing field between big budget productions and small indie movies. As the new technology continues its inevitable path toward complete interconnection of all forms, the cost of movie production will drop and the expense of distribution becomes minor. A filmmaker like Jim Jarmusch will be as capable of widely releasing his movies as someone like James Cameron. Audience taste and preference will become the sole determining factor (which, for better or worse, still gives Cameron the clear advantage).

Oops! Hollywood is spending all this money on the digital revolution just to lose their near exclusive control over the system? No wonder they hate the Internet so much. After all, the Internet has been the core connecting link in this development and will continue to be the common thread running through the digital process. That is a major reason why certain people (for example, someone whose initials are Rupert Murdoch) are so intent on finding a way of taking control of the Internet. The issue of net neutrality should not be an issue (just a simple good idea). But it is an issue, and most likely, the emerging political climate will be against it (despite public opposition).

Unfortunately, the best we can currently hope for from the new political culture is a congenial state of incompetency. But we appear to be heading toward political nihilism at an institutional level. The effect on the film industry will be profound. Ironically, the end results will still be in the direction of a widely divergent and extensively restructured film industry quite unlike anything that currently exists. This has to do with the concept of Historical Inevitability. Sure, it’s a slow train coming, but you can hear its distant rumble if you listen. Just ignore the loud popping noise from all those bursting bubbles.