{"product_id":"the-big-picture-isbn-9780812973822","title":"The Big Picture","description":"In this unprecedented, all-encompassing, and thoroughly entertaining account of the movie business, acclaimed writer Edward Jay Epstein reveals the real magic behind moviemaking: how the studios make their money.\u003cbr\u003e\u003cbr\u003eEpstein shows that in Hollywood, the only art that matters is the art of the deal: Major films turn huge profits not from the movies themselves but through myriad other enterprises, from video-game spin-offs and soundtracks to fast-food tie-ins, and even theme-park rides. The studios may compete for stars and Oscars, but their corporate parents view wth one another in less glamorous markets such as cable, home video, and pay-TV. \u003cbr\u003e\u003cbr\u003eMoney, though, is only a small part of the Hollywood story; the social and political milieus–power, prestige, and status–tell the rest. Alongside its remarkable financial revelations and incisive profiles of the pioneers who helped build Hollywood, \u003ci\u003eThe Big Picture\u003c\/i\u003e is filled with eye-opening insider stories. If you are interested in Hollywood today and the complex and fascinating way it has evolved in order to survive, you haven’ t seen the big picture until you’ve read \u003ci\u003eThe Big Picture\u003c\/i\u003e.“A rich adventure that will change the way you look at the movies.”\u003cbr\u003e–BusinessWeek\u003cbr\u003e\u003cbr\u003e“Edward Jay Epstein is here to tell us that when it comes to Hollywood these days, we’ve got it all wrong.”\u003cbr\u003e–The Washington Post Book World\u003cbr\u003e\u003cbr\u003e“One of the virtues of The Big Picture is Mr. Epstein’s astonishing access to numbers that the movie studios go to great lengths to keep secret. . . . A groundbreaking work that explains the inner workings of the game.”\u003cbr\u003e–The Wall Street Journal\u003cbr\u003e\u003cbr\u003e“Hollywood has needed one of these for a long time–a user’s manual. This one could not be more complete. . . . [Grade] A.” \u003cbr\u003e–Entertainment Weekly\u003cbr\u003e\u003cbr\u003e“Entertaining and enlightening.”\u003cbr\u003e–The New York SunEdward Jay Epstein is author of a number of books, including \u003ci\u003eInquest: The Warren Commission\u003c\/i\u003e, \u003ci\u003eNews from Nowhere: Television and the News\u003c\/i\u003e, \u003ci\u003eEstablishment of Truth\u003c\/i\u003e, \u003ci\u003eLegend: Lee Harvey Oswald\u003c\/i\u003e,\u003ci\u003e \u003c\/i\u003eand\u003ci\u003e Dossier: The Secret History of Armand Hammer\u003c\/i\u003e. He lives in New York City.Chapter 1\u003cbr\u003e\u003cbr\u003eThe Two Hollywoods\u003cbr\u003e\u003cbr\u003eThe Twilight of the Gods\u003cbr\u003e\u003cbr\u003eOn March 20, 1948, the elite of Hollywood, braving freezing  temperatures and gale-force winds, filed past the newsreel cameras into  the Shrine Auditorium in Los Angeles for the twentieth annual  presentation of the Academy Awards. Once inside, they discovered a  stage that had been transformed into a towering birthday cake, with  twenty giant Oscar statuettes in place of candles.\u003cbr\u003e\u003cbr\u003eThe studios had much to celebrate that night. Their movies, the most  democratic of all art forms, had become the principal mode of paid  entertainment for the vast majority of Americans. In an average week in  1947, 90 million Americans, out of a total population of only 151  million, went to a movie, paying on the average forty cents for a  ticket. Nor was this massive outpouring, about two thirds of the  ambulatory population, the product of expensive national marketing  campaigns. It was simply the result of regular moviegoers going to see  whatever was playing at their neighborhood theaters.\u003cbr\u003e\u003cbr\u003eMost of these moviegoers didn’t go to the theater to see a particular  film. They went to see a program that included a newsreel; a short  comedy film, such as the Three Stooges; a serial, such as Flash Gordon;  animated cartoons, such as Bugs Bunny; a B feature, such as a western;  and finally, the main attraction. In 1947 in America, movie houses were  more ubiquitous than banks. There were more than eighteen thousand  neighborhood theaters. Each had only one auditorium, one screen, one  speaker (located behind the screen), one projection booth, and one  marquee. Every week, usually on Thursday, a UPS truck picked up the  previous week’s reels and delivered the new ones. The new film’s title  on the marquee and the listings for it in the local newspapers  constituted all the advertising most movies got.\u003cbr\u003e\u003cbr\u003eVirtually all of these movies and shorts came from regional exchanges  owned and operated by seven distribution companies that were, in turn,  owned by seven Hollywood studios: Paramount, Universal, MGM, Twentieth  Century–Fox, Warner Bros., Columbia, and RKO. In little over a  generation, these studios had perfected a nearly omnipotent mechanism  for controlling what the American public saw and heard. It was known,  collectively, as the studio system.\u003cbr\u003e\u003cbr\u003eThese studios had their common origins in the arcades, nickelodeons,  and exhibition halls of the silent-film era. Their founders, self-made  and self-educated Jews, had been part of the late-nineteenth- and  early-twentieth-century wave of immigration from Eastern Europe. They  had worked at menial jobs as ragpickers, furriers, errand boys,  butchers, junk peddlers, and salesmen and then gone into the business  of showing movies. Here they found an enthusiastic audience, especially  among those not yet fully literate in English, and a great deal of  competition for it. To rise above their competitors, they instinctively  sought what later economists would call “economies of scale.” Louis B.  Mayer, the founder of MGM, borrowed money to expand from a single  theater in Haverhill, Massachusetts, to a small group of theaters that  he combined into a “circuit”—so called because the reels of a single  movie could be sent by bicycle from one theater to the next (with  showtimes cut so close that sometimes one theater was showing the first  reel of a film while another theater was showing the last), allowing  multiple screenings of—and multiple admissions for—the movies he rented  from film exchanges. As their circuits expanded, these entrepreneurs  began opening their own film exchanges and distributing movies to other  theater owners, but they still made most of their money from tickets  bought at their own box office—so called because the cash went into  locked boxes.\u003cbr\u003e\u003cbr\u003eWhen they found that they could not get enough movies on a regular  basis from independent moviemakers, these new distributors took the  next step and started making their own films. Initially, their studios  were in the East, but as their production expanded after the turn of  the century, they came under increased pressure from the Edison Trust,  the legal entity formed by Thomas A. Edison to control the basic  patents on movie cameras and projectors in America. The Trust filed a  constant stream of lawsuits against the nascent film companies, who  finally decided to relocate their studios a continent’s width away from  the reach of the Trust’s East Coast lawyers. They chose the newly  incorporated village of Hollywood, California—a place they could  control—for their new home.\u003cbr\u003e\u003cbr\u003eIn less than a generation, these entrepreneurs had literally gone from  rags (or furs) to riches. By the 1940s, the studio heads were among the  highest-paid executives in the world. Having come from poverty, they  reveled in this wealth and dubbed themselves moguls—an appellation  that, although perhaps not strictly appropriate since it originally  referred to absolute Moslem rulers, became part of their identity.  Louis B. Mayer, who had scavenged rags as a newly arrived immigrant and  at nineteen did not have, as his son-in-law David O. Selznick later put  it, “the price of a sandwich,” was in 1947 the highest-paid executive  in America, with an annual salary from MGM of $1.8 million.\u003cbr\u003e\u003cbr\u003eThe studios produced nearly five hundred films in 1947—features and B  movies. While marketing strategies varied slightly from studio to  studio, the movie business in 1947 was a relatively simple affair. The  studios did not license their films to television or other media or  license their characters for toys, games, T-shirts, or other  merchandise. Foreign markets provided some revenue, but that income was  mostly offset by high taxes—Britain had a 75 percent import tax, for  example—and most European and Asian countries had restrictions on  currency repatriation. As a result, profits from abroad were almost  impossible to retrieve.\u003cbr\u003e\u003cbr\u003eIn short, studios looked to a single source for virtually all their  money: the American box office. In 1947 the six major studios earned  over 95 percent of their revenue from their share of ticket sales  (called “rentals,” since it was technically the “rent” theaters paid  for films) at North American movie houses. This came to $1.1 billion,  which made movies, after grocery stores and automotive sales, America’s  third-largest retail business.\u003cbr\u003e\u003cbr\u003eThe studios were able to harvest this windfall extremely efficiently  because they controlled almost all the movie theaters. MGM, Warner  Bros., Paramount, Twentieth Century–Fox, and RKO had their own theater  chains, which produced about half of their total revenue, while  Columbia and Universal controlled chains of theaters less directly  through their distribution arms. Among the theaters under studio  control were most of the first-run houses in major cities in the United  States and Canada, where films had their premieres. During these first  runs, films got their reviews, garnered publicity, and generated the  word of mouth that served as the principal form of advertising. Thanks  to their direct ownership of the theaters, studios were able to  determine where, when, and for how long their films played in their  first run. Such engagements could extend for many months while studios  prepared the subsequent release to neighborhood theaters. For example,  in 1947, Samuel Goldwyn’s The Best Years of Our Lives was still playing  at New York’s Astor Theater, owned by MGM through its Loews subsidiary,  six months after its premiere.\u003cbr\u003e\u003cbr\u003eIn addition, the studios indirectly controlled almost all independently  owned theaters, which included most of the neighborhood and second-run  movie houses, through ironclad contracts that forced the theater owners  to commit to show a given number of films (usually ten) in a so-called  block. If they did not accept a block, they got no studio films at  all—which meant they did not have the star names to attract an  audience. Only a few dozen art theaters that showed foreign films could  afford to turn down this “blind-bidding” arrangement.\u003cbr\u003e\u003cbr\u003eNot only were the studios able to control the bookings of their films,  but they enjoyed a monopoly on the resulting revenue. Stars, directors,  writers, and other talent did not share in it. Neither did producers.  In rare cases these participants might receive a share of the eventual  profits, but never of the studio’s rentals.\u003cbr\u003e\u003cbr\u003eThe studios were further aided by low distribution and marketing costs.  Because films opened in only a handful of theaters in major cities  before moving on to other regions, the same prints and posters could be  used first in the Northeast and later on in the South and West.  Distribution costs therefore were low, averaging only about $60,000 a  film in 1947. Further, there were no national advertising campaigns,  and since theaters paid a good part of local advertising and stars  freely supplied the publicity on radio and in newsreels, the  advertising budgets averaged less than $30,000 a picture.\u003cbr\u003e\u003cbr\u003eWhat remained after these distribution and advertising costs were  deducted from the rental revenue were the studios’ net receipts. In  1947 these totaled approximately $950 million.\u003cbr\u003e\u003cbr\u003eTo ensure a profit, studios obviously had to produce their films for  less money than their net receipts totaled. To maximize their economies  of scale, each studio had organized what amounted to a film factory,  with staff and equipment that could operate around the clock. On their  soundstages, shadowless light was cast by vast arrays of arc lamps,  artificial weather was whipped up by wind, rain, and snow machines, and  seas were created in indoor pools. On their back lots, exotic locales  could be replicated and filled with extras dressed from the stocks of  costumes and other props stored in their warehouses. For example, in  1947, MGM shot the adventure movie The Three Musketeers, which was set  in seventeenth-century France, entirely on its soundstages and back  lots.\u003cbr\u003e\u003cbr\u003eThe studios’ technological apparatus included synchronous background  projection, which allowed them to seamlessly integrate actors in  current films with stock footage from their extensive film libraries  and with film shot elsewhere by second units. They also had animation  cameras to convert miniaturized models, puppets, and other replicas  into the illusion of full-scale phenomena. To do all this, a veritable  army of electricians, camera operators, seamstresses, makeup artists,  set dressers, sound engineers, and other technicians were paid weekly  wages. The MGM studio in Culver City, which in 1947 was the largest of  the studios, could churn out on its soundstages six different films at  the same time. With the aid of these assembly-line facilities, feature  films could be shot in less than a month, and some B films were shot in  a week.\u003cbr\u003e\u003cbr\u003eUnder this factory system, studios were also able to keep a tight rein  over their product. Frank Capra wrote in a letter to The New York Times  in 1939 that “about six producers today pass on about 90 percent of the  scripts and edit about 90 percent of the pictures.” These producers  reported to the studio chief, who was directly responsible to the  studio’s owners.\u003cbr\u003e\u003cbr\u003eThe studios also had locked up all the stars who attracted audiences to  movie theaters in a contractual arrangement called the star system. In  1947, 487 actors and actresses—including such marquee names as Bing  Crosby, Bob Hope, Betty Grable, Gary Cooper, Ingrid Bergman, Humphrey  Bogart, Clark Gable, John Wayne, Alan Ladd, and Gregory Peck—were under  such contracts. Since these contracts usually ran seven years,  precluded the actors from working elsewhere, and had renewal options,  the stars were, for that period at least, essentially the studios’  chattel. They had to play every part and perform every bit of publicity  assigned to them. If they balked, they could be suspended without pay,  as Lana Turner was in 1947 by MGM when she initially refused a part in  The Three Musketeers. With no further recourse and facing the prospect  of not being allowed to work at the height of her stardom, she finally  acceded to MGM’s casting and played the part.\u003cbr\u003e\u003cbr\u003eIn addition, studios could rent stars out to other studios for more  than their salaries and pocket the difference. Joan Crawford, under  contract to MGM, was loaned to Columbia for They All Kissed the Bride  in 1942; and Bette Davis, under contract to Warner Bros., was loaned to  RKO for The Little Foxes in 1941.\u003cbr\u003e\u003cbr\u003eThe contracts also usually gave the studios control of the stars’  public image to further their publicity campaigns for their movies.  This meant, in practice, that studios could script stars’ interviews  and dictate their public utterances, photographic poses, and  gossip-column items. They could order them to alter their facial  appearance, hair color, biographical details, and, as was commonly  done, their name. Issur Danielovitch, for example, had his name changed  to Kirk Douglas, Marion Morrison to John Wayne, and Emanuel Goldenberg  to Edward G. Robinson.\u003cbr\u003e\u003cbr\u003eIn return, the studios provided their contract actors with an annual  salary, roles in major films, and publicity in the media that they  owned or controlled, which included newsreels and fan magazines.  Whatever publicity benefits stars enjoyed by being contractually linked  to a studio, however, their salaries were relatively low compared with  the additional revenue they produced at the box office. In 1947 even  highly successful stars, such as Clark Gable, made on average less than  $100,000 a film. Until their contracts ran their course, stars could  not increase their fees as they became more popular with audiences and  more prominent in the entertainment media. The star system, in effect,  allowed the studios to brand their products via the personas they had  created—for example, a James Cagney gangster film, a Roy Rogers  western, a Clark Gable romance—and take the full profits from them.\u003cbr\u003e\u003cbr\u003eBy locking in actors’ salaries, Hollywood studios were able to control  the cost of manufacturing their products. Indeed, virtually all their  films made money. Since the average cost of producing a film in 1947,  including all studio overhead, was only $732,000, and the average net  receipts for a studio feature amounted to $1.6 million, filmmaking was  a lucrative enterprise for studios. Less successful films might eke out  a profit of only a few thousand dollars, but the hits that appealed to  a broad adult audience, like The Best Years of Our Lives, made profits  in excess of $5 million.\u003cbr\u003e\u003cbr\u003eBut the studio moguls wanted more from their invention than mere  profits. Not entirely secure with their rapid ascent to wealth, they  also wanted the kind of respect, admiration, and status that would  reinforce their position. This social part of the equation had been  formally recognized some twenty years earlier, in 1927, at a dinner at  the Ambassador Hotel, when Louis Mayer had proposed to thirty-five  other top studio executives that they institute a way to honor  Hollywood’s (i.e., their own) achievements. The result was the  establishment of the Academy of Motion Pictures Arts and Sciences and  its annual ritual of bestowing honors in the form of Academy Awards.[quote] --BusinessWeek","brand":"Random House Trade Paperbacks","offers":[{"title":"Default Title","offer_id":46302961991909,"sku":"NP9780812973822","price":21.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780812973822_c859a52e-9245-4585-a5df-719ae72332aa.jpg?v=1767738375","url":"https:\/\/k12savings.com\/es\/products\/the-big-picture-isbn-9780812973822","provider":"K12savings","version":"1.0","type":"link"}