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Review of The Big Picture, Money and Power in Hollywood, by Edward Jay Epstein
The Big Picture: Money and Power in Hollywood is billed as the story of “the real magic behind movie making: how the studios make their money”.
It mostly succeeds, but if fails by being in thrall to the movies themselves, rather than the studios and conglomerates that make them.
Good in parts
There are three core parts to the book:
- A fascinating insight into the power-structures, history and objectives of the six companies that dominate the movie business (described by Epstein as the Sexopoly) which demonstrates the myriad ways in which the movie studios ensure that they maximise their revenues at the expense of other partners.
- A description of the movie-making process from idea through greenlighting to pre-production, principal photography and post-production that covers the same ground as (but without the wit of) William Goldman’s seminal Adventures in the Screen Trade.
- A concluding section that analyses the non-financial drivers of the movie industry (politics, power, self-esteem) while simultaneously predicting the rapid decrease in importance of movies to the business of Hollywood.
I recommend this book highly for the Sexopoly, a biting analysis of the business of Disney, Paramount (Viacom), Warner Bros. (Time Warner), Fox (News Corporation), Sony and Universal (NBC Universal). Epstein is strong on the ways in which the opaque internal systems of the studios, referred by insiders as a “financial blackbox” and dubbed by Epstein “the clearing house”, exist to ensure that the studios retain the maximum amount of cash possible.
For example, for the movie Gone In 60 Seconds, star Nicolas Cage had a contract with Disney that entitled him to 10% of all video revenues. The distributor, Buena Vista, sold $198 million of videos and DVDs, suggesting that Cage was due $19.8 million. In fact, Disney was only paid the industry-standard video royalty of 20% from Buena Vista (despite Buena Vista being a 100%-owned subsidiary of Disney). According to Cage’s contract therefore, he was only due $3.9 million.
This idea – of internal transfers, black-box accounting and intentional opacity – is the clearinghouse, and it is the secret of the success of major studios. In a lesson that games development studios should take to heart, Epstein quotes a character from a David Mamet play summing up what he learnt about Hollywood: “there is no net”.
Or to put it another way, whoever pays the accountants, controls the net. Unless you pay the accountants, or are megastar-style powerful, you are likely to get the raw end of any deal.
If you are more interested in the making of movies, Adventures in the Screen Trade is better and the third section, while interesting, lacks the precision and analysis of Epstein’s unique insight into the financial makeup of the sexopoly.