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Can Capitalism Save Hollywood?

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eye on the news

Can Capitalism Save Hollywood?

The gulf between elites and audiences is eroding profits throughout entertainment and news media—but signs of correction are emerging. January 5, 2023
Arts and Culture
Economy, finance, and budgets

After a decade of rapid growth, the nation’s media and entertainment complex is facing retrenchment and, perhaps, a necessary reappraisal. Firms are consolidating. Workers are being laid off at Disney, Warner Brothers, Paramount, CBS, and other production houses. News media firms like CNN, Gannet, and Buzzfeed are planning similar actions. In 2022, stocks in media companies lost $500 billion in value, and stocks in tech firms, increasingly big players in entertainment and news, suffered a reversal of an astounding $4 trillion.

This decline reflects the growing gap between the legacy media and at least half their potential audience. According to Gallup, overall public trust in the media is lower than it’s ever been; barely one-third of poll respondents express confidence, half the percentage that felt that way in 1978. Hollywood, television, and radio register similarly low levels of support.

Meantime, much of the established media see their primary mission not as informing or entertaining but propagating ideologies. Yet this shift, executives know, is not sustainable according to the most critical metric—profits. “I think in the end no one much cares about politics but they do care about money,” one well-placed executive suggests. “People know that sex and violence sell better than political lectures. In the end, if you want to send a message, use Western Union.”

Hollywood and the American news media have been traditionally profit-hungry and market-oriented. Entertainment, in particular, started as primarily an outsider’s industry, forged largely by Jewish immigrants who had worked previously as upholsterers, butchers, furriers, and clothing merchants. Though nepotism kicked in early, many of the early stars were hardly theater aristocracy; early on, many were actually cowboys. The moguls, of course, were rarely on horseback, but they succeeded, as Neil Gabler notes, because they “marketed movies like clothing.”

By contrast, the European film industry has long been dominated by state enterprises and funding. It was seen as a national asset—a way of asserting cultural independence from what the French, for example, saw as cultural colonization from Hollywood. A similar pattern emerged in news media. But while the BBC may have been the most respected name in news, it was U.S. companies—all founded by entrepreneurs like CBS’s William Paley, RCA’s David Sarnoff, and CNN’s Ted Turner—that became the most influential global sources of information. In historic terms, the Russian, Chinese, and European news services never had a chance against their opportunistic American competitors determined to monetize audiences.

But even in the U.S., today’s news and entertainment business shows unmistakable signs of internal decay. The vast overproduction of arts majors has flooded the market and made access to jobs more dependent on personal connections. Costing an average of $100,000 each, MFAs may be overwhelmingly left-wing, but they are also poorly compensated, with salaries paying on average just $67,000 annually. This creeping credentialism presents a powerful barrier to working-class entrants, notes the Guardian. Today, unabashed “nepo babies” increasingly dominate, while opportunities shrink for those lacking the proper bloodlines or expensive credentials.

There’s long been concern that obsession with profit might lower cultural standards. Yet one could argue that U.S. media had its heyday back when culture was a competitive, capitalist industry. In mid-twentieth-century America, a literate culture was widely shared between the arbiters of taste and the middle class. Average Americans in the 1950s purchased large numbers of classical works and books by contemporary authors such as Ruth Benedict and Saul Bellow, as historian Fred Siegel has observed. Many enjoyed watching Shakespeare plays on television; one such program attracted a remarkable 50 million viewers.

In Hollywood, great films tended often to be popular ones as well. Critics praised, and moviegoers flocked to, films such as West Side Story, The Sound of Music, or even ones as recent as The Lord of the Rings trilogy. By contrast, today’s award-winning films seem largely chosen for their appeal to insiders and reflect ignorance of or contempt for much of their potential audience. Indeed, many movies considered Oscar material today have gross sales worth less than the cost of a “modest” Beverly Hills mansion.

Ironically, as the media gets more enlightened, the films that actually sell become coarser. Hollywood now makes most of its money from superhero movies well-suited to a postliterate audience (though the Marvel franchise may be losing steam). Meantime, tastemakers increasingly marginalize the great films of the past because of their lack of minority or female representation. Rio Bravo, Raging Bull, Nashville, and Lawrence of Arabia were recently flushed off a new British list of 100 top films. News media, too, follow increasingly strict ideological divides. As Cathy O’Neil, author of Weapons of Math Destruction, notes, the Internet has “reversed the equation” of common knowledge, making it more profitable to promote division.

Corporate America claims that wokeness is good for business, but there’s little evidence for that claim. As film critic Michael Medved has suggested, the media have been losing touch with much of America for at least three decades, but the problem seems to have reached a breaking point. Writing off huge audiences, like young white males or, more broadly, people with conservative values, turns out not to be the best way to grow your market.

The facts are devastating. Ratings for all the traditional networks have cratered, while many of Hollywood’s politically correct movies—particularly remakes—have done poorly, along with the overall box office, which has failed to recover ground lost in the pandemic. Another signal: the decline in viewers for award shows like the Oscars and the Grammys.

Even Disney has found that its dogmatic infatuations are incompatible with profits. The Magic Kingdom’s film studios have produced a caravan of flops, such as the Buzz Lightyear origin story, which showcased gay themes. Features with prominent themes of sexual or racial politics, like Strange World, have crashed without much notice (outside of Disney’s boardroom). Its embrace of woke themes and political conflict with Florida governor Ron DeSantis have driven Disney’s stock down. The company is experiencing job cuts, and its once sky-high public approval has fallen from 77 percent to 50 percent. Yet at least one top executive, Karey Burke, wants more, vowing last year that LGBTs or racial minorities would constitute half of its characters in new releases.

It all points to a hunger among Americans for a return to a shared culture and history—the same one that would-be cultural arbiters want to abandon. On the news side, CNN has been most emblematic of the cultural disconnect. As the network has pressed on with its Donald Trump obsession and political correctness well past 2020, its ratings have collapsed, forcing it to attempt a course correction by expelling progressive agitators like Brian Stelter and Jeff Zucker. Under new Warner Bros. Discovery chief executive David Zaslav, CNN and its parent company appear to be attempting to move toward the center, pulling the plug on the CNN+ news service and cancelling a politically correct Batgirl movie that bombed with test audiences.

The progressive retreat extends to late-night shows. Trevor Noah, the ultra-politically correct host of The Daily Show, which has enjoyed more media praise than good ratings, is out. Fox’s late-night host Greg Gutfeld often enjoys higher ratings than his more well-established network counterparts. Comedian Dave Chappelle gets rave notices from audiences, despite savage reviews from woke critics and the “new puritans” of the transgender lobby. As Netflix refreshingly warned employees, “If you’d find it hard to support our content breadth, Netflix may not be the best place for you.”

A cancellation wave is coming, but it is not a woke one. Netflix, which has lost roughly 1 million subscribers and made massive layoffs, recently cancelled Q Force, a gay-oriented, adult-animated comedy. It has also canceled a sizeable batch of shows, including the animated Wings of Fire and Anti-Racist Baby, written by “antiracist” guru Ibram X. Kendi, and terminated First Kill, a lesbian vampire series that never won much audience. “It’s kind of bad to spend $50 million on something that doesn’t sell,” suggests one long-time agent. This shift has upset observers at places like the New York Times, who fear that Hollywood is “regressing” from the progressive agenda and (gasp) once again embracing cop shows.

To grow and profit in the future, the media and entertainment industries need to win back at least part of the public that now disdains them at historic levels. One solution might be to produce different programming. Though it likely won’t win many Oscars, Tom Cruise’s unapologetically traditionalist Top Gun: Maverick—to the distress of publications like the Guardian—attracted massive audiences and racked up at least $1 billion in revenues worldwide last year.

Of course, such films offend progressive cultural arbiters. They were similarly triggered by the highly successful, pro-military Amazon Prime series, The Terminal List. The Daily Beast called the show’s first season an “unhinged right-wing revenge fantasy.” Another film unheralded by elites, Purple Hearts, a story about an unlikely romance between a conservative Marine and a progressive singer, also outperformed more heavily promoted Netflix products. The surprising interest and audience for the various Vikings series suggests a strong market for violence, brazen sexuality, and a serious lack of political correctness.

The root of change, however, will likely not be an explicitly political cultural counterpart, but the harnessing of a vaster power: that of the marketplace. There will not be, as some might hope, a return to the 1950s; the ascension of gays, minorities, and women to key media roles reflects fundamental changes in American society. But there are less divisive and more inspiring ways to present these new roles.

The coming media shift, despite its pecuniary motivations, is an important one for the nation’s future. To offer blanket condemnations of American culture and history is no healthier than to ignore, as was often the case in the past, their darker parts. Repeated accusations of male patriarchy, “systemic racism,” and evil oil companies do not accurately portray the totality of the American past or present.

The key point here is not that culture or media should be liberal, conservative, or fabulist, but expansive enough to include all three. Until those in Hollywood and Manhattan realize that their approach is alienating a huge segment of their audiences, their bottom lines will continue to suffer.

Photo: maksicfoto/iStock

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