Whither, Hollywood, Wither?

Last week I wrote about television; this week I've been thinking about Hollywood. Not least because a screenwriter with a pretty good track record recently attached himself to my squirrel book¹ and is hoping to adapt it into a big animated movie. But it often takes five years or more to go from script to screen, so I can't help wondering–will Hollywood as we know it still be around by then?

Internet hero Cory Doctorow doesn't think so. A few years ago he wrote an essay predicting the death of big-budget movies: "The specific, rarefied animal that is the gigantic film spectacle demands a technological reality that has ceased to exist: just enough technology to distribute the films everywhere, but not so much technology that the audience gets to overrule your distribution decisions."

So far, perhaps surprisingly, he's been dead wrong. Theater attendance is down 20% in the USA over the last decade, but actual box-office income is flat, thanks to higher ticket prices. Home-entertainment spending (DVDs, rentals, Netflix, etc) is overall down almost 30% in constant dollars since 2005, but that's counteracted by the huge rise in 'foreign' box office over the same period. Hollywood seems to be fighting the Internet to a standstill.

But does anyone out there really think that can last?

Music and books show that the Internet inevitably grinds ceaselessly and relentlessly away at entertainment prices. It's a death of a thousand cuts–or, more precisely, ten million BitTorrents and a free alternative around every corner. All the DRM in the world won't save Hollywood in the long run. They can't keep raising ticket prices forever, and they won't keep finding new revenue sources faster than the Internet devours them.

In the long run this is probably true of TV too, but there are some significant differences between the two. First, movies are crazy-expensive. Reality TV is insanely cheap; I've been behind the camera a time or two myself, helping to craft 30-minute travel shows filmed (on location) for a mere $50,000 plus post-production. Even HBO's big-budget spectacles like Game of Thrones cost a relatively frugal $5-6 million per episode. Movies routinely cost 20 times as much–plus marketing costs. For network TV, advertising is income; for Major Motion Pictures, it's a cost that can easily run into the tens of millions.

We're culturally programmed to Go See Movies, which is a huge Hollywood advantage, but that won't stick indefinitely. Rep and arthouse theaters are everywhere dying and struggling, respectively, and they're canaries in the coal mine. As Hollywood hikes ticket prices, and fewer and fewer people attend theaters every year, eventually they'll hit a point at which the cultural cachet and social buzz of going to see a movie seems less and less worthwhile to more and more people.

So it seems to me that the predatory price-gouging Internet is more dangerous to movies than television. Don't get me wrong, I love the Internet, but I love movies too, and I'm worried about them. Hollywood will have to start driving costs down. That can be done to some extent–see digital cameras, digital distribution, and the entire career of Robert Rodriguez–but big-budget movies are fundamentally extremely difficult and expensive things whose creation requires an army of talented people. Yes, technology will change that…but not as fast as it eats away at Hollywood's revenues.

So pity us poor underpaid novelists; Hollywood has been our lottery ticket for so long. At least animation is likely to get cheaper faster, meaning the odds of some day seeing my squirrel book on the big screen will actually probably increase with every passing year. A happy thought. But a much less happy one is that I can't help wondering how many big screens will be left by then.

¹No, really, I wrote a whole book about a squirrel. It won an award and everything.