Hooray for Hollywood

Hollywood’s Blockbuster Year

“Hooray for Hollywood”, said the 1937 lyric by Johnny Mercer, sung during the depths of the Great Depression.  It appears the one industry that’s recession proof has done it again.  While the world’s economy has gone into free fall, Hollywood is in a state of euphoria right now, buoyed by a box-office surge that has stumped even the experts.  Suddenly, everyone is going to the movies, with ticket sales spiking 17.5 percent, to $1.7 billion, according to Media by Numbers, a box-office tracking company.

“Star Trek,” director JJ Abrams’ take on sci-fi’s most enduring franchise, is the biggest hit this year with a total gross of $223 million (it remained in the Top 5 with $8.4 million last week).  Medium-budget films also performed well this year with “Taken”, starring Liam Neeson, bringing in more than $80 million, and “Gran Torino”, starring the 79-year-old Clint Eastwood, topping $130 million.  The appropriately titled “Up” may give Hollywood even more wind in its sails this summer.  The latest film from Pixar (a division of Apple, and easily Hollywood’s most consistent studio) brought in $44.2 million in its second week, with a 10-day take of $137.3 million.  An interesting counterpoint to this is that movie merchandising sales are down.  Thinkway Toys, whose range of products related to Pixar’s 2006 film “Cars” helped the film to a merchandise sales record of $5 billion, is not creating a single toy based on the new movie.  Disney stores will offer only limited merchandise to promote “Up.”

The conventional wisdom would say that all this is obvious since people seek out escapism during a recession, particularly the type that’s priced right.  However, Hollywood’s splendid performance is actually an anomaly and all the more remarkable when we consider history.  Contrary to popular mythology, the film industry was not “Depression-Proof” in the 1930s but suffered a steep decline: attendance soared after the 1927 introduction of “talkies” (Al Jolson’s “The Jazz Singer” was the first sound film).  But weekly viewership peaked at 90 million tickets in 1930, then declined by more than a third by 1933.  Part of the problem was sound: to equip their theaters and sound stages, the studios tripled their debts during the mid- and late-’20s to $410 million.  By 1933, attendance and revenues had fallen by forty percent.  To hold on, the studios cut salaries and costs, and closed a full third of the nation’s theaters.