No.

2014/01








Capitalist Power, Distribution and the Order
of Cinema

James McMahon

March 2014














http://www.capitalaspower.com/?p=1121

WORKING PAPERS ON
CAPITAL AS POWER
- 1 -
WC8klnC AL8 - March 2014
!"#$%"&$'% )*+,-. /$'%-$01%$*2 "23 %4, 5-3,- *6 !$2,7"
!ames McMahon
hu candldaLe, ?ork unlverslLy
[amesmcmahon30[gmall.com
www.caplLalaspower.com

1he caplLallsL sLrucLure of Pollywood mlghL noL exLlngulsh every flame of creaLlvlLy from
lLs fllm pro[ecLs, buL Lhe lnLeresLs of buslness leave scars and brulses on Lhe aesLheLlc
dlmenslon of Pollywood clnema. ConLemporary fllmmaklng ls organlzed ln such a way LhaL Lhe
ma[or flrms of Pollywood have a domlnanL poslLlon ln fllm dlsLrlbuLlon. 1hls poslLlon enables
Lhe blggesL fllm dlsLrlbuLors and Lhe oLher buslness lnLeresLs lnvolved, llke banks LhaL offer
flnanclng or flrms LhaL are looklng for llcenslng and merchandlslng opporLunlLles, Lo sLand
beLween fllm producLlon and Lhe markeL (Wasko 1982). As a consequence, some fllm pro[ecLs,
on accounL of Lhelr sub[ecL maLLer or sLyle, can be effecLlvely wlLhheld from Lhe markeL
because no ma[or flrm wlll purchase Lhe rlghLs Lo dlsLrlbuLe lL. A fllm pro[ecL can flnd flnanclng,
buL under a conLracL LhaL sLlpulaLes condlLlons abouL form, conLenL, budgeL, casL, crew, eLc. A
fllm can be produced, buL managemenL wlll have a role ln Lhe dlrecLlon and pace of creaLlon.
And lf buslness lnLeresLs are sLlll scepLlcal abouL Lhelr lnvesLmenL ln poLenLlally chaoLlc arLlsLlc
creaLlvlLy, Lhe rlghL of fllm ownershlp lncludes Lhe rlghL of flnal cuL," l.e., Lhe rlghL Lo modlfy a
fllm before lL ls released buL oftet Lhe dlrecLor presenLs hls or her flnal verslon (8ach 1983).
8uL musL Lhe domlnanL flrms of Pollywood purposefully sLand beLween Lhe professlonal
fllmmaker and Lhe movlegoer? 1o whaL degree should Lhe buslness of fllm dlsLrlbuLlon shape
and llmlL Lhe soclal creaLlvlLy of fllmmaklng? Why ls lL LhaL, long afLer Lhe collapse of Lhe sLudlo
sysLem ln 1948, vlslble boundarles Lo Lhe form and conLenL of Pollywood clnema conLlnue Lo
perslsL (8ordwell 2006, Langford 2010)?
ln Lhls paper, Lhe sLrucLure of Pollywood fllm dlsLrlbuLlon wlll be analyzed Lhrough Lhe
lens of rlsk. ln boLh lLs Lechnlcal and concepLual senses, rlsk ls relevanL Lo Lhe sLudy of
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 2 -
Pollywood's domlnanL flrms. ln Lhe lnLeresL of lowerlng rlsk, Lhe buslness lnLeresLs of
Pollywood look Lo predeLermlne how new fllms wlll funcLlon ln an already lnsLlLuLed order of
clnema, whlch lncludes Lhe creaLlvlLy of fllmmakers and Lhe hablLs of movlegoers. lor lnsLance,
lf a ma[or sLudlo ls Lrylng Lo deLermlne, wlLh some degree of cerLalnLy, Lhe poLenLlal LheaLrlcal
aLLendance for a new romanLlc comedy, Lhere ls a beneflL lf Lhe larger soclal relaLlons of
clnema-boLh Lhe creaLlon and consumpLlon of fllms-are deLermlnable because Lhey are
orderly. And lf Lhe soclal relaLlons of clnema are deLermlnable because Lhey are orderly,
Pollywood's blggesL dlsLrlbuLors can selecL fllm pro[ecLs wlLh a greaLer degree of confldence.
1he flrsL parL of Lhls paper wlll offer concepLual Lools Lo analyze Lhe conLemporary
Pollywood fllm buslness and lLs mechanlsms of dlsLrlbuLlon. ConcepLs from Lhe caplLal-as-
power approach wlll be used Lo sLudy Lhe ma[or Pollywood dlsLrlbuLors as a group, whlch l wlll
be calllng ma[or fllmed enLerLalnmenL." 1he concepLs of sLraLeglc saboLage, whlch was flrsL
developed by 1horsLeln veblen, and caplLallzaLlon are fundamenLal Lo Lhe caplLal-as-power
approach. 1hey wlll help us undersLand how ma[or fllmed enLerLalnmenL's conLrol of
dlsLrlbuLlon exLends lnLo Lhe creaLlvlLy of producLlon (whaL fllms are belng made?) and Lhe
soclal hablLs of consumpLlon (whaL fllms are belng waLched?).
1he second parL wlll focus on rlsk, whlch ls an lmporLanL componenL of Lhe loglc of
caplLallzaLlon. 1hls presenLaLlon of rlsk wlll explaln why, Lo ma[or fllmed enLerLalnmenL, Lhe
soclal world of clnema ls an losttomeotol otJet. Whlle rlsk ls speclflcally abouL Lhe slze and
paLLern of fuLure earnlngs, lL ls also an lndlrecL predlcLlon abouL Lhe sLablllLy of Lhe soclal
condlLlons LhaL would help LranslaLe poLenLlal earnlngs lnLo an acLual sLream. 1he soclal world
of clnema has a bearlng on ma[or fllmed enLerLalnmenL's degree of confldence, whlch refers Lo
Lhe ablllLy for caplLallsLs Lo make predlcLlons abouL fuLure earnlngs. Moreover, ma[or fllmed
enLerLalnmenL musL declde how lLs effecL on Lhe soclal creaLlvlLy of clnema wlll be sLraLeglc. lf lL
sLands beLween fllm producLlon and Lhe soclal world of clnema, ma[or fllmed enLerLalnmenL
musL conLrol Lhe pace and dlrecLlon of soclal creaLlvlLy buL wlLhouL suffocaLlng lL compleLely.
1he Lhlrd parL wlll argue LhaL Lhe repeLlLlve, hablLual quallLles of Pollywood clnema are a
defense agalnsL Lhe posslblllLy of aesLheLlc overproducLlon. lmporLanLly, Lhe Lerm
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 3 -
overproducLlon" ls belng used ln Lhe same way LhaL veblen uses lL. AesLheLlc overproducLlon ls
Lhe language of buslness, noL arL, lL occurs when aesLheLlc declslons undermlne Lhe prlce of a
fllm, regardless of how Lhey shlne ln Lhe llghL of aesLheLlc, culLural and pollLlcal [udgmenL.
1he fourLh parL of Lhls paper wlll offer an emplrlcal example of how rlsk percepLlons
would deLermlne Lhe sLraLegy of fllm dlsLrlbuLlon. ln a recenL dlspuLe over Lhe LheaLrlcal
revenues of ltoo Moo J we saw ulsney flghL Lo lncrease Lhe share of gross revenues LhaL goes Lo
Lhe ma[or fllm dlsLrlbuLor. 1he Llmlng of ulsney's sLraLegy Lo push for a greaLer share ls
conslsLenL wlLh Lhe hlsLorlcal developmenL of rlsk ln Pollywood fllm dlsLrlbuLlon.

!"#$%"&$'% )*+,-8 9%-"%,:$; 9"0*%":, "23 !"#$%"&$<"%$*2
1he cholce Lo sLudy Pollywood fllm dlsLrlbuLlon wlLh a concepL of rlsk derlves from my
general lnLeresL ln Lhe caplLal-as-power approach, whlch ls a larger Lheory abouL caplLallsm and
Lhe characLer of caplLal accumulaLlon. llrsL developed by nlLzan and 8lchler, Lhe caplLal-as-
power approach undersLands caplLallsm Lo be a mode of power, and noL a mode of producLlon
or consumpLlon. 1hus, Lhls approach challenges longsLandlng assumpLlons abouL Lhe naLure of
so-called economlc" value and Lhe measuremenL of caplLal. Accordlng Lo nlLzan and 8lchler,
Lhe LheoreLlcal lsolaLlon of an economlc sphere and Lhe prlvlleglng of maLerlal producLlvlLy,
uLlllLy or labour-Llme, produce loglcal and emplrlcal problems ln boLh neo-classlcal and MarxlsL
approaches. LssenLlally, when lL ls Llme Lo explaln wbot geLs accumulaLed, Lhe assumpLlon LhaL
caplLal ls an ob[ecLlve quanLlLy of maLerlal producLlon or consumpLlon leaves Lhe pollLlcal
economlsL wlLh Lhe lmposslble Lask of separaLlng real" value from nomlnal prlces:
uLlls [ln neo-classlcal economlcs] and absLracL labour [ln MarxlsL pollLlcal economy] do noL
have fundamenLal quanLlLles LhaL can be measured. 1hey Lherefore have Lo be derlved ln
reverse, [from nomlnal prlces,] Lhe very phenomena Lhey Lry Lo explaln. And even Lhls
lnverLed derlvaLlon falls aparL, because lL ls bullL on assumpLlons LhaL are paLenLly false lf
noL loglcally conLradlcLory (nlLzan & 8lchler 2009, p.144).
nlLzan and 8lchler, on Lhe oLher hand, clrcumvenL Lhe real"-nomlnal dlsLlncLlon because Lhey
re[ecL Lhe ldeas LhaL produce Lhls meLhodologlcal quagmlre ln Lhe flrsL place: LhaL pollLlcs and
economlcs are separaLe, and LhaL soclal power can only ever asslsL or dlsLurb caplLal
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 4 -
accumulaLlon, whlch ls, LheoreLlcally, a separaLe process. lnsLead, nlLzan and 8lchler puL power
aL Lhe hearL of caplLal. MaLerlal producLlon sLlll maLLers, buL a speclflc labour process or
producLlon funcLlon does noL lmbue an ob[ecL wlLh value. 8aLher, Lhe quanLlLles of caplLal are
symbollc reflecLlons of organlzed power ovet producLlvlLy and soclal creaLlvlLy.
1hls secLlon wlll only cover some of Lhe fundamenLal ldeas of Lhe caplLal-as-power
approach, [usL enough Lo provlde a LheoreLlcal backdrop for our analysls of rlsk and Lhe acLlvlLy
of ma[or fllmed enLerLalnmenL. 1hls LheoreLlcal backdrop ls lmporLanL for Lhree reasons. llrsL,
accordlng Lo nlLzan and 8lchler, rlsk ls an elemenLary parLlcle of Lhe caplLallsL mode of power
(nlLzan & 8lchler 2009, chap.11). Second, assumpLlons abouL economlcs belng power-free"
lead oLher analyses of rlsk Lo conclude LhaL, ulLlmaLely, ma[or fllmed enLerLalnmenL ls passlve
or lneffecLlve agalnsL a level of rlsk LhaL ls lnherenL" Lo Lhe producLlon, dlsLrlbuLlon and
exhlblLlon of fllms (LlLman 1983, ue vany 2004, nelson & CloLfelLy 2012, okorny 2003). A
power Lheory of rlsk, on Lhe oLher hand, ls free Lo lnvesLlgaLe Lhe hlsLorlcal developmenL of rlsk
ln Lhe Pollywood fllm buslness, such as Lhe efforLs of ma[or fllmed enLerLalnmenL Lo susLaln or
even sLrengLhen lLs domlnanL poslLlon ln Lhe world of clnema (McMahon 2013). 1hlrd, Lhe
caplLal-as-power approach resonaLes wlLh-lf only parLlally-oLher Lheorles of Pollywood LhaL
already undersLand ma[or fllmed enLerLalnmenL Lo possess dlsLrlbuLlonal power." lndeed, Lhls
paper ls enLerlng an lnLellecLual envlronmenL where oLher pollLlcal economlc Lheorles of culLure
ln general and Pollywood clnema ln parLlcular are addresslng Lhe role and effecL of lnsLlLuLlonal
power on Lhe creaLlon and dlsLrlbuLlon of mass culLure (Pozlc 2001, Leaver 2010, kunz 2007,
8abe 2009).
ln order Lo redeflne caplLal os power (noL caplLal ooJ power), nlLzan and 8lchler renovaLe
Lhe seL of concepLs LhaL ordlnarlly explaln Lhe mechanlsms of caplLallsL socleLy-e.g.,
commodlflcaLlon, producLlon, dlsLrlbuLlon, flnance and accumulaLlon. A ma[or sprlngboard for
nlLzan and 8lchler's Lheory of caplLallsL power ls 1horsLeln veblen's deflnlLlon of caplLal, whlch
ls bullL upon a concepLual dlsLlncLlon beLween buslness and lndusLry. lor veblen, caplLal
belongs Lo Lhe realm of buslness and noL Lhe realm of lndusLry. 1he ways and means of
lndusLrlal producLlon may or may noL be beneflclal, pleasurable or useful, buL whaL ls or ls noL
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 3 -
beneflclal, pleasurable or useful abouL maLerlal producLlon depends on whaL coltotol and
polltlcol ldeas hold courL aL a cerLaln momenL ln Llme (veblen 2006a).
!" $%& '$%&( %)"*+ $!" !"#!"#$ &'!() *+ #" #,,)- !"# %&''%( ') *) +&'! '!( ,"'(-&"%
!"#$%&'() +, -.+('/&%0%&12 3)!"#$% '()#$*+, '$ (-* *.% /+%"01 !""!#$! &' $()*+(,- . "+&$/ &'
!"#$%&'&()* ,%&-'".("* !" $%$"&' !"#! %&'()%* "+&,' (&- ."'/0)"1 !"# %"&'((')&*!( !"#"$%&' )*"
!"#$%"&'$(! !"#$%&' ")"*)+& #, ! -#"".$/'01 !"#$%"&! #$% &'()'*! !"# % &'()*"%+, (-*('&./ *-.
! #$%&'()(*+%!) ('$, ! %('%$-# (. /01+'$112 '(# (. +'301#456 !"#$%#& ())*$+ ,-./01! !"#$"% '( %)*
!"#$%#! #$% &'()*%'+%, -( #%+$'-)-!&+.) %((&+&%'+/ .'0 #$% ,1%.# -( ).2-*3 -' #$% ,*++%,, -(
!"#$%&##-!"#$$#% '()#*+,!)" !- . "$+$--.(/ +)"#!,!)"0 1*, +.'!,!"#$!%#&' #) '&% *+!),-#'. %/+
!"#$#"% !" $%&'(!)!*+ !, $'% %""-&-%(&+ !" $'% .,!/0&$-!( .,!&%112 -$ -1 3%!"#$%&' )*+ !,%-%). )/
!"#$ " &'()*+,
!" $%&'() ()* +%,-./0 )1&/2 !"#$"%&' )*'+*%,+*-% #"+.""% #/'*%"'' 0%) *%)/'+12 1"3"0$'
!"# !"#$%& ()* %(")#)+& *, ),- "%./%$- 0!",*1$-#2#-3 !%" &%45 61- 0-7% $,)-",/ ,. !",*1$-#2#-3 .,"
!"#$%"&$'% )*+', !"#$%&' ) *#+,-./ 01123 450067! !" $%&'(%)'*+, $-"(.-) %"/ &-!"# %&'() *+&%,)"
!"#$%&'( !"#$%&' ) *#+,-./ 01112 34567! !"#$%&## $# ()& !"#$% !" $%&'()* !+,*%-.&$ !'*% &,/0-)%12
!"# %&'#( )#(*+#, -' *'.%/# 0(%/ !"# %& !'& (')*( &")!+# +% #*,%+*)' "-./#+&01 +% 23''4 +!'
!"#$ "&' "( ')* )+,-. "( ')* !"#$/*, +,- ')* 0#"-&1' "&' "( ')* /+#$*'!!!"#$%#& ())*+ ,-../
!"#$ &# '()*+$&,$-./ !"#!" !"#$%& () *!"+,%- (./-!&$"* /--0 /(% 1- -2-!3"&-0 !"# %&'"(&)* (" '*
!""!#$%&!! #$%&' (&'')*+ ,+ '%) !"#$% !" $%&'()$ *+) !,$ !!"#"$% $' ()*+$ $(,-. /', 0'$ ()(,+"."01
!"#! %&'"!!!"#$%&' ) *#+,-./ 01123 450067! !" $%&'! #$% &'()#'*% )+ ,-./&#01 ,& !"#!$% !"#$"%&'(-
!"" $%!!$& '()"!(*& +(, )& -.'! (' /%'('!0".' 1"0 &(0,%,*' (' !"" 2.+3 '()"!(*&4 !"# !"#$
!"#$"%&' )*# +,!-.%!! -! "* /01!"#$ &'!( ('$ ("!))*+ &*,, -$!".! !"#$% '(()!"#$% '( )*+,*$-
!"#$%$&$' "# &)* "#* )+#,' %# $&"--%#. ,"/# -0",1!&%"# &" $1!) + 2"314* +$ /%33 50%#. &)*
!"#$%&' )%' #%'*#)& +) '%#,& -. /#+0%1 ")2 +) "!!-3+)$ &- ,*04 -. " !+5%!+4--2 '- '4% 3-#6+)$
!"#$% "! '%$()*$*+), +)- ."#/0%)1 ") '(% "'(%# (+)-1 +! #$%% $&'()* +,*- +. +(/& .(+ +,$!
!"#"$%& ()$*)$ !"#$%#& ())*+ ,-./0!

1hus, ln order Lo exlsL, a fllm bosloess musL be able Lo LhreaLen Lo wlLhhold Lhe producLs
of Lhe lndusLrlal processes lL conLrols. lree llmlLless producLlon ls noL sound buslness sLraLegy:
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 6 -
1he only way ... spendlng [on producLlve capaclLy] can become proflL-yleldlng lovestmeot ls lf
oLhers are prohlblLed from freely uLlllzlng lLs ouLcome. ln Lhls sense, caplLallsL lnvesLmenL-
regardless of how 'producLlve' lL may appear or how much growLh lL seems Lo 'generaLe'--remalns
whaL lL always was: an acL of llmlLaLlon (nlLzan & 8lchler 2009, p.233).
!"#$"%$#& ()$ *"++,-"". /0+1 23405$44 134( 6+4" .$70.$ )"- 0( -0++ 4(#6($8076++, 462"(68$ ()$
!"#$%& #()%*$+$*, "- -$&..%/$012 34%* #()%*$+) )05)%+"(! !4"6&5 $* !677"(*8 34$#4 -$&. 7("9)#*!
!"#$ &' ()*+,)--. )-$'('* !"#$%" '(") "*"% #+,- #!"#"$!"% '( )!*+(!,-+!'". /0!$0 '"1* *0'-2) ,1
!!"!#$!% !"#$%&'#!
!"#$ &'()*'+),* )$ -./01 !"#$ !!"#$ !&#$ !"# %&'# &() )*+#'!*,( ,- *()./!+0 !" !"##$!%$&
!" !"# !"##"$ &'(#) *$+ ),#-".) "/ #"+'($ /0$*$!'1 &2' /"(#*. .*$34*3' "/ -4)0$'))
!"#!$%$&'!( !"# %!"#$%&'!# !) *!$+,# )'#%#-+! #$$%&'()* +% ,(+-#) #)' .($/01&! !" $%& '()!* (+
!"#$%"&$'"%$()! #$%& '()%* %& +,-./%/-/%01 %. 2(34 -.5 !"#$%#&-!""#$%& !" $%!&"'('!$") !"#$%"&$'"%$()
!" $%& '!"()*+$!+, )- !"#!$%!& !"#"$% %'$()(*+ #, -$%+%(# -$).%+/
1

!"#$ &' !"#$%"&$'() $+ %,( -$.!/0(-!"#$%&' ")%" *! %""%+)$, "- %. -/0$+" ")#-12)
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!" $%& '()&*+'%$,) )-(.$./-!"#"!$%& "() *+ %,- ."%- *. !*-!""#$#!%& (" $)*#&)+#,)&#(% $-..!%&+/
!""#$%#& !% %(# %)*#+ !,& %(# -#".,& ./ %(#-# %0. /!"%.1- )- ),%)*!%#23 1#2!%#& %. %(# 1!%# ./
!"#$%&'( *&+"', -( (./ ("0/ !"#$%#& ())*+ ,-(./0!

!"#$% !"# %&!'()!# *+,*#-, !" $%& '()*$(+*,$ !" !" !"#$ "! !"#$!% '()*+#, !"#$%&'"()*$ $,#-)-.%/
!"# %&'( #)#" #*+#,-!-.%&/ !0%1- 21-1"# /-"#!3/ %2 .&,%3#4 561/7 ,!+.-!'./-/ !--#3+- -% !"
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!"#$ $&'(#)* #$ +&,*( () -#.& /$ ')*'&0($ (",( ',* ("&* 1& ,002#&34 #* +)5& 3&(,#24 () ("&
!"#$"%&'%! )* +$,)# *'-+%. %/"%#"$'/+%/"0 12% -)&'3 )* 3$4'"$-'5$"')/ $/. '"! '/!"'"6"')/$-

1
lor a conclse anLhropology of caplLallzaLlon, see (nlLzan & 8lchler 2009, pp.147-166).
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 7 -
!"#$%&'("$) '+, &-(.('/ !"0 -#1($,11 ($',0,1'1 '" 1&-"'&2, ($%#1'0/) 3(.. !0&4, "#0 &$&./1(1 "! 0(15
!"#$"!%&'() +(, %-" )'$&+. #".+%&'() '/ $&("0+1

=$'> "23 %4, 5-3,- *6 !$2,7"
Ma[or fllmed enLerLalnmenL, as a caplLallsL lnsLlLuLlon, ls forward-looklng. lLs flnanclal
expecLaLlons concern Lhe fotote of Pollywood clnema and mass culLure ln general. 8uL lf Lhls ls
Lhe case, how can we undersLand Lhe role of rlsk ln Lhe caplLallzaLlon of clnema?
!"#$%"&$'"%$()* ,$%'") ")- .$/0&12 /&"2$34* $5 )(% " /245%"& !"## %&"% '"( )** +(%, %&* -.%./*0
!"#$%& (")*#"+*,"#*-. */ " &*#0"+1 -.% #$"# */ "##%2)#*.3 #- %/#*2"#% $-4 " /#&%"2 -5 *.(-2% ".6
!"# %&'&##()* #+'!(, '+%-!"!+%# .!,, '())* !%"+ "/& 01"1)&2 3/& -!00&)&%'& 4&".&&% 5)+5/&'* (%-
!"#$%&#$'( $" "$*($+$,&(#- .!"#$!%#&$ &()#*$+, -#$. #& /+0#!1 (2 34!%#$#*&, )!5 (5%+ )!00+ #5$( $.*
!"#"$% #'$(")' #'% *+#,-,#,%. */0 1%2,%!. (! 3%(32%4 5# ,. *2.( 3(..,12% !($ .(+,*2 1%'*-,($ #(
!"#$%&' )*+&,-+&) -$ .#/) ,"#, !#0-,#1-),) !*213 $&4&5 &60&!,7 82, ."&,"&5 ,"& !"#$"%&'&!" !"
!"#$%"&$'% ')!$*%+ "##*",' %) -* .,)/*0 ), $0 .&123 %4* .1%1,* *2#*!%"%$)0' ). -1'$0*'' *0%*,#,$'*
!"# #%&%' !"#$ &# '()*"+,$,&# -."#/ /*&/ "0 !"#$%&' !) $!*%'#+ !, $-)' ),!. #/' 0%1&$ !) /%$#!,+2
!"#$%&'%#()*+ -.$/ 0%-1%0(."#$ 2-% 2# %)%3%#(!"# %!"&!"#$ &' "()!*(#!+(*!&,-
!"#$ "# & '&()*+ #,-./0)"1/ 2&0)3( )4&) #4&'/# )4/ 5&+ & 0*&"6 37 2,),(/ /&(7"78# "#
!""#""#$% '( )!*+,!-+.!,+/0 $+")/10," ,2# "+.# !0$ *!,,#30 /( ! (1,13# ",3#!4 /( #!30+05"6 !"#$ "#
!"# #%&'#(()*+ *, !"# -!"#$"" &' (&)'*!")(" (+,!"#$!%"% '#() !* "')!+ ,-* .+)/!0"!,*%1!!"#$%&' !
!"#$%&' )**+, -.)*/0 !"#$%& %&( )"*+,-. %./0- #+%# #+"1 (-/.-- 23 *2&3"(-&*- %44-%.1 "& #+-
!"#$%"&$'"%$() +,-!"#$% !' ! (#') *$+,,#*#+%" !"#$ !"#$" !& $'( !)#*& #( +#,-.#/#&0 /1), !"#$ &'(
!"!#$% '# ()# *+$")*$+ ,-.# /012 ',*3, *4 *$ %,# $5!#)(%")1!
!
!
!
!!
! ! !
!

!"#$%"&$'"%$() "% ")+ ,$-.) %$/. 0!
!
! #$ %&'() *+ *,% -#$.+'/*%- 0()'% +1 %23%.*%- 1'!"#$ $&#'(')*
!!!). LxpecLed fuLure earnlngs are dlscounLed by Lwo varlables: a raLe of reLurn LhaL caplLallsLs
!""# %&"' ()* (+*!,-"*%#' ."% /!
!
! #$% &'( )*+, -.(//*-*($& !"#$ ! #$%&&'( ! !"#!$%&'( % *+'%&'+
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

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!"#$"" &' (&)'*!")(" +)! + ,+$#"$ (+-*.+,*/+.*&!" $!% &'() &)*+$ ,-)! ! !" $%&'(&) *+, +-& !."/%.0(,
!"#$# &' ($)*&+( ,+-#$!.&+!/ .0),! !"# '&1# .+2 3.!!#$+ )4 . 4,!,$# '!$#.5 )4 #.$+&+('6 ! !"##
!"#$%&'% &") *+% &''%* !" ,-%'*!." /!00 1% )!'#.-"*%) *. & 0./%$ 2$%'%"* 2$!#%3
2

!"#$ "# !"#$ !" $%&'()!") *!($!+,- $" !"#$%& %&( )"*+,-./0 !"#!$%&'()*+(&*"# "- !"#$%& ()*
!"#$%&'( *#+,-. -./ 0#12&$" 3./$"4+-./ 567$" -4 816.%#/$.1$ #. 6!$/#$.1$9 #+ "$5"$4$.+4 +2$
!"#$%&'$( *+ $," #-."#/ &' !"! #$%&'##'(!)!## *+ ,-! .$/!0!!"#$%&' ) *#+,-./ !""#$ &'(#)*! !"#$% '(
!" !"$" %& %$'()*'%" ! !"#$ #&' ()"*+)*' $, -$.'/0 /!12 !1 )3$+# #&' -/$3)3!(!#4 #&)# ,+#+/' 1$5!)(
!"#$%&'( *&++ !" #","('-'.'/01 2","('-'.3 04"$50 ,' ,#" 6/($,&'- $-6 0,("-7,# '8 '!"6&"-9"1
!"# %&'()&*+, -+(+#"&"./ *)& +0%'( 1-+& %&2%3%24)5' %!"#$!%&'(# "*# +,%&- ,. % $#/$#--'0# -,1'#"23
!"#$ &"# '#()*)&#$+# ,- -#.(/ 0*,1#$+# .$2 ',0#(&3 .+&4.113 "#1') !"#$%& !"#$% !"#$%&' !)
!"#$%&'()*+, .,&/%(!!"#$%&'(#)($ +,,-. /0+1,2! !"#$ &'(")"* +#*',-$ . +#.#" '/ &"#"*','01 2+
!"#!$% '()*!'*+*, -$ '(* ./%%0-0"0'$ '(!" $%&$'$&(!) !("*%*+, -$)) ./0(.1!2/ $% "3/ 1("(./4 5'/%
!"# %&'(#)! #*+,'#) -' !"# *-)! '#+'#)),.# +-%,!,/&% '#(,*#) !#&/" 0) !"&! !"# +'#)#1! ,) 1#.#'
!" !$%&'()* +(!,!")** )-!) &$*./*"0* 1/'' 0!,,2 &" /".*3/"/)*'24 !"#$#%&$#' $!"# !" %&' ()*+,-% *.
!"#!"#$%& !()*!+!#$ #, -.++$ "/#!01)#" #2" 1,#"(#!)+ -,0 !(3!4!3.)+ ).#,(,5$ #, 0"&.0-)6" !( #2"
!"#"$%&
3

WlLh respecL Lo Lhe Pollywood fllm buslness, rlsk percepLlons accounL for Lhe posslblllLy
LhaL Lhe fuLure of culLure wlll be radlcally dlfferenL from whaL caplLallsLs expecL lL Lo be. 1hls
loglc of caplLallsL accounLlng, whlle quanLlLaLlve ln expresslon (prlces, lncome, volaLlllLy, eLc.), ls
soclal ln essence. ln facL, Lhe rlsk percepLlons of ma[or fllmed enLerLalnmenL cannoL overlook
any soclal dlmenslon of clnema, be lL aesLheLlc, pollLlcal or culLural. 1he eye of caplLallzaLlon
searches for any soclal condlLlon LhaL could have an lmpacL on Lhe level and paLLern of
caplLallsL earnlngs"(nlLzan & 8lchler 2009, p.166).

2
lor an expanded verslon of Lhls explanaLlon, see (McMahon 2013).
3
Whlle he was noL uslng Lhe same Lerms, we can flnd Lhe germ of Lhls ldea ln Splnoza's 1beoloqlcol-lolltlcol
1teotlse: A person's [udgmenL, admlLLedly, may be sub[ecLed Lo anoLher's ln many dlfferenL and someLlmes
almosL unbellevable ways Lo such an exLenL LhaL, even Lhough he may noL be dlrecLly under Lhe oLher person's
command, he may be so dependenL on hlm LhaL he may properly be sald Lo be under hls auLhorlLy Lo LhaL exLenL.
?eL however much sklllful meLhods may accompllsh ln Lhls respecL, Lhese have never succeeded ln alLogeLher
suppresslng men's awareness LhaL Lhey have a good deal of sense of Lhelr own and LhaL Lhelr mlnds dlffer no less
Lhan do Lhelr palaLes" (Splnoza 2007, chap.20, 2).

WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

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As 8lll CranLham noLes, Lhls Lhorough evaluaLlon of rlsk ls evldenL aL Lhe level of pro[ecL
flnanclng: fllm rlsk ls varlable and Lhe degree of rlsk ls sub[ecL Lo sLrucLural conslderaLlons as
well as Lhe greaLer or lesser degree of 'rlsklness' lnherenL ln any pro[ecL's sub[ecL maLLer, or
assoclaLed wlLh lLs wrlLer, dlrecLor, sLars, and so on"(CranLham 2012, p.200). 8ased on whaL
was sald above, CranLham's use of Lhe Lerm lnherenL" can now be seen as mlsleadlng.
8lsklness," as lL ls belng used here, ls a Lerm of buslness, noL arL. We may be LempLed Lo label
a fllm rlsky" lf lL challenges soclal Laboos, or lf lL, llke ChyLllov's uolsles, uses Lhe clnemaLlc
medlum Lo crlLlque pollLlcal reglmes. A fllmmaker can also be sald Lo be Laklng an aesLheLlc
rlsk," such as when he or she develops an unLesLed clnemaLlc sLyle. Powever, lndeLermlnaLe
creaLlvlLy ln Lhe realm of aesLheLlcs or Lhe developmenL of pollLlcal clnema can boLh exlsL
separaLely from Lhe loglc of caplLal. ln facL, lL ls veblen's polnL LhaL pecunlary value ls noL slmply
reflecLlng pollLlcal, culLural or aesLheLlc quallLy. 8aLher, Lhe vesLed lnLeresLs of Pollywood fllp
Lhe deflnlLlon of value. under Lhe loglc of caplLal Lhe poLenLlals of creaLlvlLy, boLh
anLhropologlcal and Lechnologlcal, are [udged on Lhe Lerms of caplLallsL lnvesLmenL. We mlghL
always have poorly made fllms, buL under caplLallsm, a bad movle ls one LhaL falls well below lLs
flnanclal expecLaLlons.
4

LeL us now begln Lo explore how, wlLh one eye on fllm pro[ecLs Lhemselves and Lhe
oLher on Lhe soclal world of clnema and culLure aL large, ma[or fllmed enLerLalnmenL uses lLs
ollgopollsLlc conLrol of dlsLrlbuLlon Lo creaLe an otJet of cloemo. 1hls secLlon wlll deflne, ln
more concreLe Lerms, whaL an order of clnema ls and how lLs soclal characLer ls relevanL Lo rlsk
percepLlons. 1he nexL secLlon wlll explore why ma[or fllmed enLerLalnmenL has an lncenLlve Lo
creaLe a deLermlnable order of clnema Lhrough saboLage.
1he creaLlon of order does noL ellmlnaLe rlsk enLlrely. 8aLher, from Lhe perspecLlve of
ma[or fllmed enLerLalnmenL, Lhe lndusLrlal arL of fllmmaklng and Lhe soclal world of mass
culLure should be orderly enough for each new fllm pro[ecL Lo be welghable and calculable,

4
Accordlng Lo !onaLhan 8osenbaum, fllm [ournallsm helps perpeLuaLe Lhe ldea LhaL a movle's quallLy ls slgnlfled ln
lLs flnanclal success. Cf concern ls a recenL Lrend where Lwo fllm buslness Lerms-Lurkeys" (bad movles) and
bombs" (flnanclal dlsasLers)-are conflaLed ln fllm [ournallsm. 1hls conflaLlon perpeLuaLes a sorL of shorLhand for
Lhe general audlence, where a fllm musL be a Lurkey because flnanclal daLa ln Pollywood Lell us lL was a bomb
(8osenbaum 1997).
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where esLlmaLlons abouL a fllm's soclal slgnlflcance can be, wlLh a degree of confldence,
LranslaLed lnLo expecLaLlons abouL fuLure sLreams of lncome. 1hls degree of confldence ls
creaLed and susLalned Lhrough lnsLlLuLlonal power. 1he varlous buslness sLraLegles of ma[or
fllmed enLerLalnmenL affecL rlsk percepLlons [usL as much as Lhey affecL earnlngs: Lhe repeLlLlon
of genres, sequels, remakes, Lhe culL of movle sLars, Lhe lnsLlLuLlon of false needs and wanLs
Lhrough Lhe sales efforLs of buslness, and Lhe dual ablllLy Lo make movles resonaLe wlLh
estobllsbeJ deslres and Lo ready Lhe lndusLry of fllmmaklng for poLenLlal changes ln soclal
deslre. 1hese Lechnlques schemaLlze Lhe soclal relaLlons of clnema (Adorno 2004). Soclal hablLs,
aLLlLudes and values, ln Lhls envlronmenL, become Lhlngs LhaL can flL lnLo a knowable"
dlsLrlbuLlon, whlch Lhen can be quanLlfled as rlsk."
A fllm's relaLlonshlp Lo oLher fllms and Lhe soclal hablLs of consumers, who waLch some
fllms aL Lhe expense of oLhers, arranges Lhe soclal world of clnema lnLo an order. lurLhermore,
Lhe composlLlon of Lhe clnemaLlc world has, under caplLallsm, a unlversal language: prlce.
When a fllm ls glven an expecLed LheaLrlcal revenues plaLeau (e.g., $20 mllllon, $70 mllllon,
$300 mllllon), Lhe Pollywood fllm buslness ls maklng an esLlmaLe abouL Lhe fuLure popularlLy of
Lhe fllm (LlLman 1998, p.44). 1hls flnanclal esLlmaLe auLomaLlcally poslLlons a fllm among oLher
fllms. lor lnsLance, an expecLaLlon of $200 mllllon ln LheaLrlcal revenues means someLhlng ln
relaLlon Lo how oLher conLemporary fllms are caplLallzed. uependlng on how oLher fllms are
caplLallzed, caplLallsLs could expecL LhaL $200 mllllon ln box-offlce revenues would make Lhls
fllm one of Lhe Lop grosslng fllms of lLs year of release (McMahon 2013).
Cn Lhe quesLlon of how Lhe soclal dlmenslons of fllm affecL rlsk percepLlons of ma[or
fllmed enLerLalnmenL, Lhere are plenLy of examples. Some are found ln Lhe annual reporLs of
Lhe relevanL flrms. 1lme Warner, Lhe owner of Warner 8roLhers SLudlos, llsLs rlsk facLors
relaLlng Lo fllmed enLerLalnmenL and lelsure Llme:
[1lme Warner] musL respond Lo recenL and fuLure changes ln Lechnology and consumer
behavlor Lo remaln compeLlLlve and conLlnue Lo lncrease lLs revenues.. [1lme Warner] faces
rlsks relaLlng Lo lncreaslng compeLlLlon for Lhe lelsure and enLerLalnmenL Llme and
dlscreLlonary spendlng of consumers, whlch has lnLenslfled ln parL due Lo Lechnologlcal
developmenLs and changes ln consumer behavlor.. 1he popularlLy of [1lme Warner's]
conLenL ls dlfflculL Lo predlcL, can change rapldly and could lead Lo flucLuaLlons ln Lhe
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

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Company's revenues, and low publlc accepLance of Lhe Company's conLenL may adversely
affecL lLs resulLs of operaLlons (1lme Warner 2011, p.13).

1hls publlc accepLance of conLenL" ls lmporLanL. lf a fllm properLy ls Lo be valued as an osset,
lLs form and conLenL musL be evaluaLed-even before Lhe fllm ls made-ln Lhe llghL of soclal
meanlng (vogel 2011, pp.99-106). lor example, on accounL of lLs sLyle and sub[ecL maLLer, fllm
properLy may lose lLs relevance (l.e. pecunlary value as properLy) as soclal meanlng changes
wlLh Lhe passage of hlsLorlcal Llme:
.war eplcs, for lnsLance, mlghL be very popular wlLh Lhe publlc durlng cerLaln perlods buL very
unpopular durlng oLhers. Some humor ln fllms ls Llmeless, some ls so Lerrlbly Loplcal LhaL wlLhln a
few years audlences may noL undersLand lL. ln addlLlon, because everyLhlng from halr and
cloLhlng sLyles Lo cars Lo moral aLLlLudes changes gradually over Llme, Lhe cumulaLlve effecLs of
Lhese changes can make movles from only Lwo decades ago seem raLher qualnL (vogel 2011,
p.101).

Cn Lhe problem of LreaLlng a fllm as a long-llved asseL, SLephen rlnce ls correcL Lo argue LhaL
parL of Lhe uncerLalnLy relaLes Lo Lhe Lechnologlcal changes ln dlsLrlbuLlon (LheaLer, vPS, uvu,
eLc.). ueLermlnlng Lhe proflLablllLy of a glven fllm," wrlLes rlnce, can be an eluslve
underLaklng because so many revenue sources flgure lnLo Lhls deLermlnaLlon."(rlnce 2000,
p.xx). Powever, parL of Lhe reason why so few fllms are released lnLo Lhe publlc domaln,
regardless of Lechnologlcal changes, ls because every slgnlflcanL shlfL ln soclal-hlsLorlcal
relevance glves ma[or fllmed enLerLalnmenL anoLher opporLunlLy Lo re-caplLallze lLs old fllm
properLy.
1he Lraglc deaLh of an acLor can make Lhelr fllmography popular agaln, a new channel of
dlsLrlbuLlon, llke 1urner Classlc Movles, can open fuLure lncome sLreams for fllms LhaL have noL
been dlsLrlbuLed ln decades, or, genres, llke sclence flcLlon and muslcals, can suddenly rebound
ln slgnlflcance. 1hese examples conLexLuallze Lhe valuaLlon of fllm llbrarles, whlch are ofLen key
asseLs ln Lhe mergers and acqulslLlons of medla conglomeraLes (vogel 2011, kunz 2007).
lndeed, cosoblooco ls sLlll an asseL (for 1lme Warner), and would expecLaLlons abouL lLs fuLure
earnlngs noL lncorporaLe lLs myLhologlcal poslLlon ln popular hlsLorles of clnema? Pow would
one re-caplLallze cosoblooco lf Lhe Amerlcan lllm lnsLlLuLe, ln lLs nexL round of publlshlng llsLs
of greaL Amerlcan fllms, knocked Lhls fllm down ln ranklngs, or removed lL from All's 100
?ears.100 Movles"?
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AlLhough lL occurs lnfrequenLly, changes Lo Lhe soclal order of clnema can be so abrupL
LhaL greaL uncerLalnLy surrounds Lhe caplLallzaLlon of fllm properLy. Cne such abrupL change
was Lhe LranslLlon from sllenL fllm Lo sound ln Lhe laLe 1920s. lor example, Lhe uncerLalnLy of
wheLher sllenL fllms would sLlll have a place alongslde Lalkles" forced AlbaLross, a medlum-
slzed lrench company, Lo Lemporarlly sLop all fllm producLlon, as Lhey were unable Lo prlce
Lhelr own properLy:
We have noL been able Lo do lL [assess Lhe book value of compleLed fllms], because Lhe
sudden shock LhaL shudders Lhrough Lhe moLlon plcLure markeLs because of Lhe apparlLlon
of sound fllm, makes every esLlmaLe, even approxlmaLely, lmposslble, especlally for Lhe
older fllms. AL presenL, mosL forelgn counLrles have sLopped nearly compleLely Lo buy
Lhem. We musL puL on hold all fllm producLlon unLll Lhe slLuaLlon becomes clear.(Consell
d'AdmlnlsLraLlon , Aprll 23, 1929, quoLed ln 8akker 2004, p.64)
AlLhough less severe Lhan lLs affecL on AlbaLross, Lhe beglnnlngs of a sound clnema even
creaLed uncerLalnLy for Lhe sLudlos LhaL were acLlvely developlng sound Lechnology.
3
8ecause
Lhe aesLheLlcs of sound clnema were sLlll Loo open-ended durlng Lhls nascenL perlod, Lhe ma[or
sLudlos agreed Lo place a Lemporary moraLorlum on Lhelr own research and developmenL. 1o
really pursue sound clnema as a buslness enLerprlse, Pollywood sLudlos flrsL needed Lo declde lf
Lhey were golng Lo exporL Amerlcan Lalkles" ln Lngllsh, or wheLher Lhey would be more
accommodaLlng Lo Lhe languages of oLher counLrles.
6
!usL as slgnlflcanLly, Lhey dld noL yeL know
whaL a sound fllm should even look llke (Panssen 2003, p.102). Muslc and sound effecLs could
be reLro-flLLed onLo fllms LhaL were orlglnally sllenL, a fllm could be released ln Lwo verslons,
one sllenL and anoLher ln sound, or, a fllm could be sllenL for Lhe ma[orlLy of lLs runnlng Llme,
excepL for a few scenes LhaL have dlalogue or slnglng (e.g., 1be Iozz 5loqet).
CerLaln [ournallsLs have been forLunaLe enough Lo wlLness how Lhls problem of soclal
slgnlflcance manlfesLs on a fllm seL or Lhe sLudlo loL, when sLudlo execuLlves, producers and
dlrecLors argue over Lhe form and conLenL of fllm pro[ecLs. ln Lllllan 8oss' llctote, a book LhaL
was a producL of her reporLlng on Lhe fllmlng of 1be keJ 8oJqe of cootoqe, we flnd a recurrlng

3
ln a parLnershlp wlLh WesLern LlecLrlc, Warner 8roLhers was developlng a sound-on-a-dlsc" sysLem ln 1926. 1he
lox lllm CorporaLlon, whlch was Lo merge wlLh 1wenLleLh CenLury lcLures ln Lhe 1933, was Lhe flrsL Lo develop a
means of puLLlng sound on fllm sLock (Panssen 2003, p.90).
6
As krlsLln 1hompson noLes, ln early 1928, Louls 8. Mayer declared LhaL he was noL worrled [abouL Lhe language
problem], he assumed LhaL Lhe popularlLy of Amerlcan fllms would lead Lo Lhe use of Lngllsh as a unlversal
language" (1hompson 1983, p.138).
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

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Lheme of creaLlvlLy and rlsk. Many of Lhe dally sLruggles over how Lhe fllm was Lo be fllmed
were Lhe consequences of MCM's managemenL and Lhelr uncerLalnLy abouL wheLher
Amerlcans ln 1931 were even lnLeresLed ln seelng a fllm verslon of an 1893 book abouL Lhe Clvll
War (8oss 2002). !ohn Cregory uunne spenL one year lnvesLlgaLlng Lhe worklngs of 1wenLleLh
CenLury-lox ln 1967. Cne of uunne's sLorles ls crass yeL lllusLraLlve of how Lhe quallLles of
clnema can become elemenLs of rlsk percepLlons. uunne descrlbes a meeLlng where 1wenLleLh
CenLury execuLlves were Lalklng abouL Lhe sLudlo's plan Lo dlsLrlbuLe 1ooy kome ln lsrael. 1he
fllm, whlch ls a deLecLlve sLory and sLars lrank SlnaLra, ls heavy on Amerlcan slang. 1wo people
ln Lhe meeLlng, Parry Sokolov and SLanley Pough, were concerned LhaL much of Lhe dlalogue
would noL resonaLe wlLh an lsraell audlence. 8lchard Zanuck, who aL Lhe Llme was execuLlve
vlce presldenL ln charge of worldwlde producLlon, was noL as worrled, as lL was always posslble
Lo dub lL ln local slang." As uunne Lhen noLes, Cwen McLean, Lhe head of casLlng, sLlll worrled
abouL one scene ln parLlcular, whlch he feared may be unLranslaLable: Lhere was a scene ln Lhe
plcLure based on Lhe Jooble-eoteoJte of an old woman calllng her caL a 'pussy.'"(uunne 1998,
p.134)
uncerLalnLy abouL Lhe effecLlveness of a Jooble-eoteoJte ls noL an lnslgnlflcanL concern.
ln facL, a rlcewaLerhouseCoopers reporL can glve us a sense of how a shlfL ln whaL ls
consldered funny or enLerLalnlng can creaLe real flnanclal problems for Lhose LhaL are on Lhe
hook for Lhe cosLs of a fllm. A change ln Lhe world of clnema can cause a pre-release" wrlLe-
down, whlch happens when Lhe cosLs of Lhe fllm become larger Lhan lLs fuLure expecLed
earnlngs. As Lhe reporL sLaLes, pre-release wrlLe-downs generally occur when Lhere ls an
adverse change ln Lhe expecLed performance of a lm prlor Lo release." Cf Lhe flve examples
abouL whaL can adversely change Lhe fuLure expecLaLlons of an lndlvldual fllm, four of Lhem
relaLe Lo Lhe soclal relaLlons of clnema:
MarkeL condlLlons for Lhe lm LhaL have changed slgnlcanLly due Lo Llmlng or oLher
economlc condlLlons,"
Screenlng, markeLlng, or oLher slmllar acLlvlLles LhaL suggesL Lhe performance of Lhe
lm wlll be slgnlcanLly dlfferenL from prevlous expecLaLlons,"
A slgnlcanL change Lo Lhe lm's release plan and sLraLegy," and,
CLher observable markeL condlLlons, such as Lhose assoclaLed wlLh recenL performance
of slmllar lms."(Anon 2009, p.26)
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 14 -

lL may also be posslble Lo see how quanLlLaLlve changes Lo Lhe order of clnema have
boLh quanLlLaLlve and quallLaLlve bearlngs on rlsk percepLlons. llgure 1, for example, compares
Lhe ouLpuL of ma[or sLudlo fllm dlsLrlbuLlon ln Lhe unlLed SLaLes wlLh lndependenL u.S.
dlsLrlbuLlon from 1933 Lo 1986. 1he Lwo boLLom serles are raLes of changes from 3-year Lralllng
averages. WhaL we see ls a noLlceable change Lo Lhe paLLern of lndependenL fllm dlsLrlbuLlon
from Lhe laLe 1930s onwards.


Cn lLs own, llgure 1 cannoL Lell us how rlsk percepLlons changed ln Lhls era, lL can,
however, help us vlsuallze how Lhe composlLlon of Amerlcan fllm dlsLrlbuLlon can change over
-100
-30
0
30
100
130
200
230
1
10
100
1000
1930 1933 1940 1943 1930 1933 1960 1963 1970 1973 1980 1983 1990
number of lms released raLe of change
percenL
?"@*- 9%13$*' (le)
A23,#,23,2% (le)
?"@*- 9%13$*' (rlghL)
A23,#,23,2% (rlghL)
!"#$%& ( 1he Shape of Amerlcan lllm ulsLrlbuuon, 1933 - 1986

Source: !oel W. llnler, 1be nollywooJ 5toty, 3rd ed. (new ?ork: Wallower ress, 2003)
376-377, for lndependenL releases and MAA releases from 1933-1986.
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 13 -
Llme, whlch ls relevanL Lo rlsk percepLlons. lor one Lhlng, Lhe new slze and paLLern of
lndependenL fllm dlsLrlbuLlon from 1960 Lo 1986 ls a slgn of Lhe changed relaLlonshlp beLween
ma[or fllmed enLerLalnmenL and lndependenL fllmmakers, whlch ls summarlzed by 1om SchaLz:
AdopLlng and modlfylng Lhe uA model, Lhe sLudlos concenLraLed on flnanclng and dlsLrlbuLlon
raLher Lhan producLlon. Lacklng Lhe flnanclal resources and conLracL LalenL Lo mass-produce
movles for a decllnlng markeL Lhey no longer conLrolled, Lhe sLudlos now relled on lndependenL
producers Lo supply "packaged" pro[ecLs LhaL Lhe sLudlos would "green llghL" for producLlon,
puLLlng up some porLlon of Lhe budgeL ln exchange for Lhe dlsLrlbuLlon rlghLs, and ofLen leaslng
ouL Lhelr producLlon faclllLles as well. 1hls meanL cedlng creaLlve conLrol Lo lndependenL
producers and freelance dlrecLors, and also Lo Lop sLars whose "marquee value" gave Lhem
Lremendous leverage and a share of Lhe proflLs (SchaLz 2008, p.16).
1he paLLern of lndependenL fllm producLlon ls slgnlflcanL because, from Lhe 1930s onwards,
ma[or fllmed enLerLalnmenL ls noL slmply dlsLrlbuLlng fllms LhaL are produced and flnanced ln
house."
All of Lhese examples help explaln whaL ls lncluded ln Lhe rlsk percepLlons of ma[or
fllmed enLerLalnmenL. So how lmporLanL ls Lhe role of rlsk ln Lhe caplLallzaLlon of clnema?
llgure 2 suggesLs LhaL a hlgh degree of confldence abouL Lhe soclal world of clnema ls of greaL
lmporLance Lo ma[or fllmed enLerLalnmenL. 1he upward Lrendlng serles sLands as a slmple
measure of cholce" LhaL ls avallable Lo an Amerlcan movlegoer. lL measures Lhe raLlo of Lhe
number of fllms released ln Lhe unlLed SLaLes Lo u.S. aLLendance per caplLa-ln oLher words,
how many movles are Lechnlcally ouL Lhere and how many Llmes does Lhe average Amerlcan
venLure lnLo Lhe world of (LheaLrlcal) clnema? Lven Lhls slmple serles Lells us LhaL ma[or fllmed
enLerLalnmenL has llLLle lnLeresL Lo leL Lhe soclal world of clnema ouL of lLs purvlew. lf Lhe world
of clnema was flaL, and lf power was noL used Lo shape soclal creaLlvlLy and Lhe hablLs of
movlegoers, Lhe serles Cholce" would presenL a buslness envlronmenL where Loo many movles
are avallable and where rlsk may be lncreaslng-as Lhe raLlo lncreases, Lhe probablllLy LhaL a
free, soverelgn movlegoer chooses one parLlcular fllm from a large array decreases. 1hus, Lhe
dlfference beLween whaL ls Lechnlcally avallable and Lhe llmlLed, conLrolled world of
malnsLream Pollywood clnema helps explaln why rlsk ls so lmporLanL Lo Lhe power of ma[or
fllmed enLerLalnmenL.

WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 16 -

0
20
40
60
80
100
120
140
160
180
1933 1943 1933 1963 1973 1983 1993 2003 2013
B!4*$;,B
8auo:
# of LheaLrlcal realeases ln Lhe unlLed SLaLes /
u.S. LheaLrlcal auendance per caplLa
!"#$%& ) Cholce," lf Lhe World of Clnema Was llaL

noLe: lor 1943-1939, auendance per caplLa = (LoLal box-omce recelpLs/average uckeL
prlce)/u.S. populauon.

Sources: !oel W. llnler, 1be nollywooJ 5toty, 3rd ed. (new ?ork: Wallower ress, 2003)
376-377, for LoLal releases and MAA releases from 1933-2002, MAA 1heaLrlcal MarkeL
SLausucs for LoLal releases and MAA releases from 2003-2012. !oel llnler, !oel W. llnler,
1be nollywooJ 5toty, 3rd ed. (new ?ork: Wallower ress, 2003) 376-377, for box-omce
recelpLs from 1943-1939, 8radley Schauer and uavld 8ordwell, Appendlx: A Pollywood
1lmellne, 1960-2004," ln 1be woy nollywooJ 1ells lt. 5toty ooJ 5tyle lo MoJeto
Movles (8erkeley: unlverslLy of Callfornla ress, 2006), 191-242, for LoLal auendance
1960-2004, hup://naLoonllne.org/daLa/admlsslons/ for auendance 2003-2012. Clobal
lnslghL for LoLal unlLed SLaLes populauon.

WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 17 -
llgure 3 supporLs Lhls argumenL. lL measures u.S. aLLendance per caplLa. AfLer a sharp
decllne LhaL ls mosL llkely caused by Lhe advenL of Lelevlslon, u.S. aLLendance per caplLa has
sLayed aL roughly Lhe same level slnce Lhe 1960s. 8lsk mlghL be a Lop prlorlLy lf more and more
movles are tecbolcolly avallable, buL Lhe average Amerlcan ls only seelng abouL flve fllms per
year. WlLh an ablllLy Lo creaLe a deLermlnable order of clnema LhaL keeps Lhe spoLllghL dlrecLly
on lLs own fllms, Lhe goal of ma[or fllmed enLerLalnmenL mlghL be Lo deLermlne wblcb flve fllms
Lhe average movlegoer sees. Pollywood may cerLalnly Lry Lo push for people Lo see more fllms
ln LheaLres. Powever, wlLh hlsLorlcal evldence LhaL u.S. aLLendance per caplLa has remalned
consLanL for over flfLy years, Lhe alLernaLlve sLraLegy ls for ma[or fllmed enLerLalnmenL Lo know
LhaL movlegoers wlll, for example, only see Lhelr blg blockbusLers (Cucco 2009).

0
3
10
13
20
23
30
33
40
1933 1943 1933 1963 1973 1983 1993 2003 2013
!"#$%& * u.S. 1heaLrlcal Auendance per caplLa

noLe: lor 1943-1939, auendance per caplLa = (LoLal box-omce recelpLs/average uckeL
prlce)/u.S. populauon.

Sources: !oel llnler, !oel W. llnler, 1be nollywooJ 5toty, 3rd ed. (new ?ork: Wallower
ress, 2003) 376-377, for box-omce recelpLs from 1943-1939, 8radley Schauer and uavld
8ordwell, Appendlx: A Pollywood 1lmellne, 1960-2004," ln 1be woy nollywooJ 1ells lt.
5toty ooJ 5tyle lo MoJeto Movles (8erkeley: unlverslLy of Callfornla ress, 2006), 191-242,
for LoLal auendance 1960-2004, hup://naLoonllne.org/daLa/admlsslons/ for auendance
2003-2012. Clobal lnslghL for LoLal unlLed SLaLes populauon.

WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 18 -
ulglLal Lechnology and Lhe lnLerneL are belng lncorporaLed lnLo Lhe parLlcular sLraLegy of
Lrylng Lo shape an order of clnema wlLhouL necessarlly belng able Lo geL people Lo see more
fllms per year. AL Lpagoglx, a consulLlng flrm of sorLs, a daLabase has been creaLed Lo quanLlfy
Lhe smallesL deLalls of a poLenLlal fllm pro[ecL. AfLer havlng broken down a cllenL's scrlpL lnLo
separaLe elemenLs, Lhe daLabase produces values" for each elemenL, as lf Lhe fllm was one blg
producLlon funcLlon. Malcolm Cladwell wlLnessed Lpagoglx's process ln 2006:
[Copaken, Lhe co-founder of Lpagoglx,] sLarLed wlLh Lhe flrsL fllm and had Lhe neural neLwork
make a guess: maybe lL sald LhaL Lhe hero's moral crlsls ln acL one, whlch raLed a 7 on Lhe 10-polnL
moral-crlsls scale, was worLh $7 mllllon, and havlng a gorgeous red-headed elghLeen-year-old
female lead whose characLerlzaLlon came ln aL 6.3 was worLh $3 mllllon and a 9-polnL bondlng
momenL beLween Lhe male lead and a four-year-old boy ln acL Lhree was worLh $2 mllllon, and so
on.(Cladwell 2006, p.143).
1be New otk 1lmes recenLly covered a company slmllar Lo Lpagoglx, one named World Wlde
MoLlon lcLure Croup (8arnes 2013). 8y runnlng Lhelr own daLabase and surveylng Lhe LasLes of
movlegoers, World Wlde offers advlce abouL Lhe flnal consLrucLlon of a Pollywood fllm. lor
example, World Wlde argues LhaL lL ls rlsky for any fllm Lo have a bowllng scene. Cr, lf you make
a superhero movle, lL ls beLLer, wlLh respecL Lo flnanclal performance, when Lhe proLagonlsL ls a
guardlan superhero" and noL a cursed superhero."
Coogle ls dolng someLhlng slmllar. locuslng on Lhe lnLerneL use of poLenLlal movlegoers,
Coogle argues LhaL rlsk ls a Lop prlorlLy ln Lhe caplLallzaLlon of clnema. lor example, a 2013
Coogle WhlLepaper beglns wlLh a problem scenarlo:
lL's lrlday nlghL and you're Lhlnklng abouL seelng a movle. ?our LhoughL process mlghL sound a
llLLle llke Lhls: WhaL's ln LheaLers rlghL now? WhaL's LhaL new movle my frlend was [usL Lalklng
abouL a couple days ago? 1haL Lraller l saw for anoLher fllm a few weeks ago looked lnLeresLlng.
AnoLher movle revlew l read sounded promlslng...whaL should l see? (Coogle 2013, p.1).
1he problem" ls LhaL lelsure-Llme ls Loo open-ended. 1he soluLlon, however, ls more for Lhe
caplLallsL Lhan Lhe movlegoer LhaL ls uslng Lhe lnLerneL Lo make a declslon on lrlday nlghL. 1o
help quanLlfy movle maglc, Coogle Lracks searches, ?ou1ube vlews and adverLlsemenL cllcks. lL
keeps daLa on searches for speclflc LlLles, especlally blg names llke 1be uotk kolqbt or 1be
Aveoqets. Coogle also analyzes how Lhe lnLerneL hablLs of poLenLlal movlegoers become less
speclflc and more generlc ln slow perlods beLween blockbusLer fllms.
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 19 -
Coogle clalms LhaL all of Lhls daLa lends confldence Lo Pollywood's expecLaLlons abouL
Lhe fuLure performance of clnema ln Lwo ways. llrsL, Lhe daLa provlded by Coogle can Lell
markeLlng Leams how Lo ad[usL markeLlng sLraLegles Lo elLher capLure Lhe aLLenLlon of Lhe
'curlous' movlegoer, or deepen audlence engagemenL wlLh a blockbusLer LlLle"(Coogle 2013,
p.3). Second, and more slgnlflcanLly, Coogle sLaLes LhaL lnLerneL daLa can help Pollywood
predlcL fuLure movle sales. lor lnsLance, ln Lhe seven day wlndow prlor Lo a fllm's release daLe,
lf one fllm has 230,000 more search querles Lhan a slmllar fllm, Lhe fllm wlLh more querles ls
llkely Lo perform up Lo $4.3M beLLer durlng openlng weekend. When looklng aL search ad cllck
volume, lf a fllm has 20,000 more pald cllcks Lhan a slmllar fllm, lL ls expecLed Lo brlng ln up Lo
$7.3M more durlng openlng weekend"(Coogle 2013, p.3).

C4, C4-,"% *6 D,'%4,%$; 5E,-#-*31;%$*2
lf order ls deslrable for Lhe caplLallzaLlon of clnema, we begln Lo see why ma[or fllmed
enLerLalnmenL's conLrol of dlsLrlbuLlon ls so slgnlflcanL. ConLrol of dlsLrlbuLlon ls noL slmply
abouL Lhe level of fuLure earnlngs. lf ma[or fllmed enLerLalnmenL ls unable Lo sLand beLween
Lhe fllmmaker ooJ Lhe consumer, an admlnlsLered relaLlonshlp beLween Lhe aesLheLlc
dlmenslon of clnema and esLabllshed soclal meanlng breaks down. ConfldenL rlsk percepLlons
derlve from ma[or fllmed enLerLalnmenL's ablllLy Lo be Lhe ulLlmaLe arblLer abouL Lhe fuLure of
clnema. 1o be sure, Lhls power ls cerLalnly noL LoLal. neverLheless, caplLallzaLlon and rlsk help
explaln why an orderly, predlcLable world of clnema ls of lnLeresL Lo ma[or fllmed
enLerLalnmenL. lL also seems LhaL Lhe formulalc and repeLlLlve Lendencles of Pollywood may
noL be accldenLal, lf Lhey were, so Lhe argumenL would go, sLudlos would slmply need Lo aLLracL
more creaLlve" people. 8aLher, Lhe repeLlLlve, even cauLlous, quallLy of Pollywood's
lmaglnaLlon lndlcaLes LhaL Lhe fllm bosloess alms Lo keep creaLlvlLy ln Lhe fllm lndusLry wlLhln
consLrucLed llmlLs.
LeL us now move from Lhe order of clnema Lo Lhe mechanlsm of sLraLeglc saboLage. 8lsk
percepLlons permeaLe Lhe sLraLeglc saboLage of clnema because, all along Lhe llne, a calculaLlon
abouL Lhe expecLed earnlngs of clnema musL work wlLh, and someLlmes ln splLe of, anoLher
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 20 -
language: Lhe language of arL. More speclflcally, Lhe Pollywood fllm buslness musL deLermlne
how lL wlll sttoteqlcolly saboLage Lhe creaLlvlLy of Lhose who Lhlnk clnema ls prlmarlly an arL
form. Such a characLerlzaLlon of soclal creaLlvlLy ls noL meanL Lo suggesL LhaL every arLlsL or
movlegoer parLlclpaLlng ln Pollywood clnema ls crlLlcal of Lhe creaLlve llmlLs lmposed by
buslness. lnsLead, Lhe lndusLrlal arL of fllmmaklng, wlLh all of lLs aesLheLlc quallLles, puLs Lhe
Pollywood fllm buslness ln a parLlcular buslness-lndusLry relaLlonshlp, whlch cannoL be lgnored.
1he deLalls, Lhe speclflc ways and means of a parLlcular buslness-lndusLry relaLlonshlp, depend
on Lhe types of lndusLry belng conLrolled by buslness.
1he capaclLy for soclal creaLlvlLy Lo go ln dlfferenL and unforeseen dlrecLlons ls always a
poLenLlal LhreaL Lo Lhe alms of ma[or fllmed enLerLalnmenL. CreaLlvlLy ls a wlld anlmal and
ma[or fllmed enLerLalnmenL wanLs Lo harness lL Lo develop, flnance, produce and dlsLrlbuLe Lhe
rlghL" seL of fllms. ln Lhls sense, boLh rlghL" and wrong" refer noL Lo aesLheLlc sLandards buL
Lo earnlngs. lundamenLal Lo caplLallsL lnvesLmenL ls confldence LhaL, lf needed, flrms are able
Lo sLeer soclal creaLlvlLy ln new dlrecLlons bot wltboot losloq coottol.
ln lLs own way, a 2003 arLlcle ln 1be cooomlst recognlzed LhaL Lhe conLrol of creaLlvlLy
was cause for concern ln Lhe Pollywood fllm buslness. 1he arLlcle characLerlzed Lhe buslness-
lndusLry sLruggle ln Pollywood as LhaL beLween sulLs" (buslness) and ponyLalls" (lndusLry):
1haL Lhe [fllm] lndusLry Lends over Llme Lo swlng Loo far ln favour of Lhe ponyLalls, only Lo
swerve back Loo far ln favour of Lhe sulLs, shows how hard lL ls Lo flnd a mlddle way. uevlslng
a hablLaL ln whlch creaLlvlLy can flourlsh, yeL wlLhln LlghL operaLlonal consLralnLs: Lhere lles a
sequel for Lhe enLerLalnmenL lndusLry worLhy of a Pollywood blockbusLer (Anon 2003).
Cf course, Lhere are hlsLorlcal examples of buslness dlcLaLlng LhaL creaLlvlLy Lravel ln one
dlrecLlon when lL should" Lake anoLher paLh. lor lnsLance, Lhe popularlLy of 1be 5oooJ of
Moslc (1963) was mlsLakenly Laken as a slgn LhaL Lhe ma[or sLudlos should say, ?es" Lo more
muslcals aL a Llme when Lhe pollLlcal values and culLural aLLlLudes ln Amerlca were radlcally
changlng. 1o be sure, Pollywood would evenLually embrace Lhe 1960s sLudenL, clvll rlghLs and
anLl-vleLnam War movemenLs wlLh enLhuslasm,
7
buL noL before releaslng a long sLrlng of
unpopular muslcals: comelot (1967), uoctot uollttle (1967), cbltty cbltty 8ooq 8ooq (1968),

7
lor a Lhorough and sLlmulaLlng examlnaLlon of Lhe decade when Pollywood embraced new Wave Clnema and
Lhe pollLlcal ldeals LhaL lnsplred lL, see (klrshner 2012).
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 21 -
nello, uolly (1969), lolot oot woqoo (1969), 5tot! (1968), 5weet cbotlty (1969) and uotlloq llll
(1970). 1he flnanclal fallure of uotlloq llll was parLlcularly blLLer: ln an expllclL aLLempL Lo re-
explolL 1be 5oooJ of Moslc, uotlloq llll sLars !ulle Andrews, who plays a slnglng spy ln World
War l (Cook 2000, p.12).
1herefore, declslons abouL Lhe form and conLenL of Pollywood fllms are haunLed by Lhe
specLer of aesLheLlc overproducLlon." 1wo Lhlngs abouL Lhe concepL of aesLheLlc
overproducLlon should be lmmedlaLely noLed. llrsL, Lhe Lerm aesLheLlc overproducLlon" ls my
own Lallorlng of veblen's generlc concepL of overproducLlon." CverproducLlon, for veblen, has
a speclflc meanlng, buL only lf we undersLand LhaL Lhls concepL applles noL Lo Lhe maLerlal,
mechanlcal bearlng of Lhe slLuaLlon, buL Lo lLs pecunlary bearlng" (veblen 2006c, p.213).
CverproducLlon does noL mean LhaL Lhe maLerlal and lnLellecLual capaclLles of a workforce are
overLaxed, nor does lL mean LhaL a communlLy ls physlcally or menLally unable Lo consume
whaL ls ln supply. CverproducLlon ls a quesLlon of prlces and earnlngs," lL refers Lo a level or
Lype of producLlon LhaL ls lnexpedlenL potely on pecunlary grounds." AesLheLlc overproducLlon
ls lLself a consequence of how Lhe accounLs of modern buslness enLerprlse are kepL ln Lerms of
Lhe money unlL, noL ln Lerms of llvellhood, nor ln Lerms of Lhe servlceablllLy of Lhe goods, nor ln
Lerms of Lhe mechanlcal efflclency of Lhe lndusLrlal or commerclal planL." 1hus, regardless of
whaL a fllm pro[ecL could mean ln pollLlcal Lerms, or regardless of Lhe poLenLlal for clnema Lo be
a domaln for crlLlcal reason, fllm pro[ecLs are caplLallzed on Lhe basls of Lhelr proflL yleldlng
capaclLy" (veblen 2006c, p.83).
Second, aesLheLlc overproducLlon ls only undersLood when fllm producLlon ls embedded
ln Lhe larger clrculL of fllm producLlon, dlsLrlbuLlon and exhlblLlon. lndeed, Lhe buslness
lnLeresLs of Pollywood mlghL gllmpse Lhe specLre of aesLheLlc overproducLlon well before a fllm
ls compleLed and Lhen dlsLrlbuLed. lor lnsLance, Lhe brevlLy of Pollywood plLch" meeLlngs,
whlch deLermlne wheLher a fllm pro[ecL wlll even geL funds for producLlon, ls a pre-dlsLrlbuLlon
barrler Lo any fllm pro[ecL LhaL cannoL be sold ln Lhe hlgh concepL sLyle (Llsbach & kramer 2003,
WyaLL 1994). SLlll, Lhe confllcL beLween buslness and arL ln Lhe plLch meeLlng, or even on seL,
gesLures Lo Lhe poLenLlal uncerLalnLy of fllm dlsLrlbuLlon. ln a sense, Lhe flnanclal fallures of
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 22 -
dlsLrlbuLlon go back up Lhe llne and deflne aesLheLlc overproducLlon. lL ls Lhe flnanclal fallures
of a dlsLrlbuLed fllm LhaL Lell Lhe Pollywood fllm buslness whlch aesLheLlc ldeas are bad for
earnlngs.
8ecause of Lhe specLer of aesLheLlc overproducLlon, ma[or fllmed enLerLalnmenL has a
real lncenLlve Lo susLaln a form of clnema LhaL ls conservaLlve because lL ls repeLlLlve and
formulalc. Lven lf Lhere ls a Lechnologlcal/anLhropologlcal capaclLy for Lhe arL of fllmmaklng Lo
go well beyond Lhe llmlLs" LhaL are lmposed ln Pollywood clnema, guldeposLs llke Lhe sLar
sysLem and fllm genre help keep everybody lnvolved from veerlng Loo far off Lhe well-beaLen
paLh. 1o be sure, Lhese guldeposLs are noL meanL Lo suffocaLe all forms of arLlsLlc lnnovaLlon.
8aLher, genre and Lhe sLar sysLem save" fllmmakers Lhe Lrouble of yearnlng for, and Lhen
abandonlng, unconvenLlonal fllmmaklng Lechnlques LhaL could [eopardlze dlsLrlbuLlon wlLh one
of Pollywood's domlnanL flrms (8osenbaum 2000).
Moreover, Lhe repeLlLlve naLure of mass culLure, of whlch Pollywood ls a cenLral parL, ls
abouL more Lhan ldeology. 8lsk percepLlons parLly deLermlne Lhe level of caplLallzaLlon, and
would confldence abouL Lhe slze and paLLern of expecLed earnlngs noL lncrease lf movlegoers
had a predllecLlon for only a narrow range of fllm Lypes? 1he LhreaL of aesLheLlc overproducLlon
ls a sLrong reason why Lhere ls, wlLhln Lhe Pollywood buslness, a vesLed lnLeresL Lo pre-sell" lLs
fllms, Lo hablLuaLe movlegoers Lo wanL new fllms Lo have a famlllar, pre-dlgesLed quallLy
(MalLby 2003). lL mlghL also explaln why lndependenL fllmmakers seem Lo Lake an opposlLlonal
sLance agalnsL Lhe senslblllLles of Lhe average audlence. lor an lndependenL fllmmaker Lo clalm
Lhey make fllms for only Lhemselves" or for nobody" could very well be symbollc reslsLance Lo
all LhaL ls lmplled when Pollywood says lL makes fllms Lo please an audlence"(CrLner 2013,
pp.31-33).

A2%-"F;"#$%"&$'% 9%-1::&,8 ?"@*- G$&7,3 H2%,-%"$27,2% E,-'1' C4,"%,- 5+2,-'
1he concepLs found ln Lhls paper can frame our emplrlcal research on Lhe Pollywood
fllm buslness. 8ecause our presenL concern ls Lhe characLer of fllm dlsLrlbuLlon ln Pollywood, leL
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

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us use Lhe concepLs of rlsk and sLraLeglc saboLage Lo conLexLuallze recenL news of an lnLra-
caplLallsL dlspuLe over Lhe dlsLrlbuLlon and LheaLrlcal exhlblLlon of a Pollywood blockbusLer.
ln 2013 Lhe los Aoqeles 1lmes reporLed a dlspuLe beLween ulsney and Lwo ma[or
LheaLre owners, AMC LnLerLalnmenL and 8egal LnLerLalnmenL. 1he dlspuLe was over Lhe
LheaLrlcal release of ltoo Moo J and how lLs LheaLrlcal revenues were golng Lo be spllL beLween
ulsney, lLs dlsLrlbuLor, and LheaLer owners. Accordlng Lo Lhe los Aoqeles 1lmes, sLudlos
Lyplcally collecL 30 Lo 33 of LlckeL sales, dependlng on Lhe movle." AMC and 8egal were
challenglng ulsney because, for ltoo Moo J, ulsney was seeklng an excesslvely large Lake of
Lhe box-offlce revenue-up Lo 63" (verrler 2013).
Pow mlghL we undersLand Lhls dlspuLe? Pavlng recenLly acqulred Marvel SLudlos and
Lucasfllm, ulsney ls ln a poslLlon Lo beneflL from Lhe fotote of blockbusLer clnema, should lL
conLlnue as Llme goes on. ulsney's boldness abouL Lhe dlsLrlbuLlon of ltoo Moo J mlghL also
porLend someLhlng more general: lLs degree of confldence abouL Lhe fuLure earnlngs of Lhe
Marvel superhero unlverse and lLs oLher franchlses. 8ecause Lhe order of clnema ls currenLly
sLrucLured Lo glve Lhe Lop Ller of fllms Lhe ma[orlLy of LheaLrlcal revenues (McMahon 2013,
WelnsLeln 2003), Lhe LhreaL Lo wlLhhold anLlclpaLed blockbusLers from Lhe communlLy aL large
ls a blg one.
1he power underplnnlngs of Lhls dlspuLe can also be seen lf we Lake a hlsLorlcal vlew of
Lhe sLruggle beLween dlsLrlbuLlon and exhlblLlon ln conLemporary Pollywood. llgure 4
compares Lwo Llme serles. 1he Lhlck llne measures Lhe number of ma[or fllmed enLerLalnmenL
releases from 1973 Lo 2012. lL ls expressed as a percenLage of Lhe LoLal number of fllms
released ln Lhe unlLed SLaLes per year. 1he doLLed serles measures, from 1973 Lo 2007, ma[or
fllmed enLerLalnmenL's share of all u.S. box-offlce revenues per year. 1hls serles ls an lndlrecL
measure of Lhe sLruggle beLween ma[or fllmed enLerLalnmenL and LheaLer owners-Lhere ls a
cerLaln amounL of LheaLrlcal revenues each year and lL ls by means of conLracL negoLlaLlon LhaL
a cerLaln share goes Lo Lhe domlnanL fllm dlsLrlbuLors of Pollywood.
2007 ls Lhe lasL year daLa ls avallable for ma[or fllmed enLerLalnmenL's box-offlce share.
We can creaLe a hypoLheLlcal exLenslon of Lhe serles wlLh Lhe deLalls of Lhe ltoo Moo J conLracL
WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

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dlspuLe. 2013 on Lhe doLLed serles ls an 18 lncrease from Lhe hlsLorlcal average of ma[or
fllmed enLerLalnmenL's share of box-offlce revenues beLween 1973 and 2007. 18 ls, accordlng
Lo whaL Lhe los Aoqeles 1lmes reporLed, Lhe low esLlmaLe of whaL ulsney was aLLempLlng Lo
lncrease lLs share by (from 33 Lo 63).

1he perlod from 2007 Lo 2013 ls lllumlnaLlng. 8ecause of how ma[or fllmed
enLerLalnmenL's share of LheaLrlcal revenues ls llkely lncreaslng as lLs share of all fllm releases ls
decreaslng, Lhe rules of Lhe game mlghL be changlng. lor mosL of Lhe Llme span ln llgure 4,
0
10
20
30
40
30
60
1973 1980 1983 1990 1993 2000 2003 2010
percenL
2013 = 18
Share of 1oLal lllms 8eleased ln Lhe unlLed SLaLes, per year
Share of u.S. 1heaLrlcal 8evenues
!"#$%& + Ma[or lllmed LnLerLalnmenL's lllm 8eleases and 1heaLrlcal 8evenues

noLe: 8oLh serles are 3-year movlng averages.

Sources: !oel W. llnler, 1be nollywooJ 5toty, 3rd ed. (new ?ork: Wallower ress, 2003)
376-377, for LoLal releases and MAA releases from 1973-2002, MAA 1heaLrlcal MarkeL
SLausucs for LoLal releases and MAA releases from 2003-2012. vogel, otettolomeot loJostty
cooomlcs, 88-89, for MAA u.S. renLals of box-omce from 1973-2007.

WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

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from 1977 Lo 2006, Lhere ls a poslLlve correlaLlon (0.72) beLween ma[or fllmed
enLerLalnmenL's share of LoLal releases and lLs share of all LheaLrlcal revenues. 1hls LhlrLy-year
span corroboraLes Lhe research of 8oberL W. Crandall, who looked aL Lhe sLrucLure of
Pollywood fllm dlsLrlbuLlon from 1948 Lo 1967. AbouL Lhls nlneLeen year perlod, whlch
lmmedlaLely followed Lhe concluslon of Lhe anLlLrusL case agalnsL aramounL and Lhe oLher
ma[or sLudlos, Crandall recognlzed LhaL Lhe means of sLraLeglc saboLage aL Lhe dlsLrlbuLors'
dlsposal" were sLlll Lhere and, ln facL, were qulLe sLralghLforward-Lhe conLrol over Lhe
number of fllm releases per year" (Crandall 1973, p.62). 8y conLrolllng Lhe only
nonsubsLlLuLable lnpuL ln LheaLrlcal exhlblLlon-Lhe fllm lLself-Lhe dlsLrlbuLors conLlnued Lo
exerclse markeL power" over LheaLrlcal exhlblLlon (Crandall 1973, p.62).
Ma[or fllmed enLerLalnmenL's share of all fllms released ln Lhe unlLed SLaLes ls now
decllnlng Lo a level noL seen slnce Lhe laLe 1980s. Powever, unllke Lhe 1980s, lLs share of all
LheaLrlcal revenues mlghL be approachlng a hlsLorlcal hlgh. 1hus, ln recenL years, ma[or fllmed
enLerLalnmenL's share of LheaLrlcal revenues ls no longer dependenL on wheLher lL domlnaLes
ln quanLlLaLlve Lerms, as a share of all fllm releases ln Lhe unlLed SLaLes. lnsLead, Lhe sLable
popularlLy of superhero franchlses and oLher blockbusLers mlghL have creaLed a slLuaLlon
where ma[or fllmed enLerLalnmenL ls free Lo worry less abouL Lhe number of fllms LhaL could
posslbly compeLe wlLh malnsLream Pollywood clnema. Whlle few ln number, Lhe mosL popular
blockbusLer fllms lend Lhelr dlsLrlbuLors a hlgh degree of confldence abouL Lhe soclal world of
clnema. As Lhe ltoo Moo J dlspuLe revealed, superhero franchlses are of sLraLeglc lmporLance,
Lhe soclal relaLlons of Pollywood clnema currenLly orblL around Lhe average movlegoer's love of
a blg franchlse fllm. ln oLher words, ma[or fllmed enLerLalnmenL's sLraLegy of conLrolllng soclal
creaLlvlLy ln fllmmaklng ls currenLly produclng Lhe rlghL" seL of fllms-rlghL" wlLh respecL Lo
buslness, noL arL.

WC8klnC AL8 - CaplLallsL ower, ulsLrlbuLlon and Lhe Crder of Clnema - !ames McMahon

- 26 -
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