From: William Benzon (firstname.lastname@example.org)
Date: Fri 12 Aug 2005 - 17:15:37 GMT
A review of
Arthur De Vany, Hollywood Economics, Routledge, 2004.
De Vany presents a profound and imaginative treatment of the economics of
the movie business, one that has implications, not only for similar
businesses, such as publishing and music, but for our understanding of the
dynamics of culture. When Richard Dawkins coined the term "meme" he
unwittingly paved the way for tons and tons of sexy but shallow commentary
on human culture. Though that is not what he set out to do "meme" never
shows up in the book De Vany has given mathematical form to the behavior
of movie memes and has demonstrated that it is the people who are in change,
not the memes.
In the words of screen writer William Goldman, "nobody knows anything" about
what happens to movies once they are released to the theatres. Most movies
don't even break even, much less make a profit not in theatrical release,
which is what De Vany investigates. [These days, movies make money on DVDs
and TV, but that's another story, told by Jay Epstein.] That's no way to run
a business, but the problems are inherent in the nature of movies as a
business venture. The deep and ineradicable condition of the business is
that there is no reliable way to find out whether or not your movie has a
market other than putting it on screens across the country and seeing if
people come to watch.
Does having "bankable" names of the marquee guarantee that the movie will
make bank? No. Does opening big on thousands of screens with PR from here
to the moon guarantee that the movie will make bank? No. Does a small
opening mean the film is doomed? No. Hence Goldman's remark.
But all is not chaos. Or rather it is, but chaos of the mathematical kind.
De Vany shows that about 3 or 4 weeks into circulation movie dynamics (that
is, the dynamics of people coming to theatres to watch a movie) hit a
bifurcation. Most movies enter a trajectory that leads to diminishing
attendance and no profits. But a few enter a trajectory that leads to
continuing attendance and, eventually, a profit. Among these, a very few
become block busters.
And those few come to dominate the statistics of movie economics. From the
point of view of statistics based on the normal distribution those few are
movies outliers and should be discounted. De Vany develops a statistical
framework he calls is the stable Paretian model that gives proper
attention to those block busters. The model is stable in the sense that it
exhibits the same structure at all scales.
* * * * *
De Vany devotes particular attention to the structure of the movie business.
During its glory years the industry was organized by the studio system. The
studios owned both the means of production and the means of distribution.
Stars, directors, writers, and craftspeople, all were on staff at the
studios. When it came time to release films, the studio's distribution
system went to work and the films went out to theaters owned by the studios
and to independent theaters with long-term booking arrangement. The system
But in the 1950s an anti-trust action was brought against the studios and
they were ordered to divest themselves of their theaters and stop the cozy
booking arrangements. The result of that was that was that they lost the
stars, directors, writers, and producers who became independent
contractors and the costs of production went up. And those increased costs
were passed on to the movie-goer.
De Vany argues, convincingly, that the studios were not a cartel that drove
up prices for their own benefit. Rather, their arrangements, their ownership
of theaters, helped them cope with the extreme uncertainty of the business.
They had just enough direct control over exhibition practices to stabilize
their income so that they could afford to keep the talent on staff. Once
that stability was taken from them, they had to let the talent go. And
that, in turn, meant that, each time a film was to be made, someone had to
go out into the marketplace and put the team together, thus incurring
transaction costs that didn't exist in the studio system.
* * * * *
An excellent book. Note that it's thick with mathmatics. But it also has
lots of charts. You can read those even if you can't make sense of the
* * * * *
De Vany's blog:
The following paper is chapter 4 in the book:
Arthur De Vany and W. David Walls. "Uncertainty in the movie industry: Does
star power reduce the terror of the box office?" This paper appears in
Journal of Cultural Economics, 1999.
-- William L. Benzon 708 Jersey Avenue, Apt. 2A Jersey City, NJ 07302 201 217-1010 "You won't get a wild heroic ride to heaven on pretty little sounds."--George Ives Mind-Culture Coevolution: http://asweknowit.ca/evcult/ =============================================================== This was distributed via the memetics list associated with the Journal of Memetics - Evolutionary Models of Information Transmission For information about the journal and the list (e.g. unsubscribing) see: http://www.cpm.mmu.ac.uk/jom-emit
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