Sleepless in Hollywood

Posted on by Laurie Garrett



People living in Greater Los Angeles are genuinely different from all of the rest of us. They are so fixated on milieu of movies that it’s impossible to get through a dinner or cocktail party anywhere from Pomona to the Pacific without talking about scripts, directors, movies-in-production and an aging starlet’s bad botox work. I can say this because I am a fifth generation Los Angelena, I grew up in LA and those movie-laced conversations pushed me to the East Coast, fleeing the plastic-fantastic Lotus Land. Despite the area’s vast expanse and gigantic, highly diverse population there is no doubt in any resident’s mind what is meant by the phrase “The Industry.”

It means Hollywood.

Anywhere else in the world the world “industry” is likely associated with manufacturing, blue collar employment and physically tangible products. But in LA the image of peak industriousness is a guy sucking back Red Bulls in a windowless room, huddled over computers that meld special effects and images of human actors leaping about in green rooms. Or it’s a spike-haired parking valet that leaves copies of his latest script in the BMWs of famous producers. Or it’s a tanned, Brioni-clad man wearing Armani sunglasses while shouting deal terms into one of his eight iPhones: That’s “The Industry.”

For most sentient beings living and working well outside of The Industry all that matters are the films and TV shows that Hollywood generates. And unless they’re 16-year old boys addicted to comic book superheroes, movie-goers have noted a striking deterioration in the films’ qualities, amid something of a Golden Age for adult-oriented television. Outsiders may not understand why the crap playing at the local Cineplex is so dreadful, even as they sit at home devouring “Mad Men,” “Homeland,” “Breaking Bad” or downloaded episodes of “The Wire.” One keeps getting worse, and the other, better.

The “worse” versus “better” dichotomy is felt inside Industry corporations, as the profit ratios have flipped from giant revenue dominance by movies vs. TV in the 1990s to a startling, log-scale reversal. In 2012, for example, the Disney Corporation made a $618 million profit off movies, according to, compared to an astounding $6.15 billion from TV shows. Viacom: $341 million off movies versus $3.85 billion off TV.

What the heck happened?

Hollywood producer Lynda Obst’s book Sleepless in Hollywood: Tales from the NEW ABNORMAL in the Movie Business [Simon & Schuster] explains The Industry’s transformation and crises in a typically LA writing style that reads like a gab fest. I’m no fan of her style, but Obst’s analysis of an American business sector that is struggling to adapt to globalization and the internet is a cautionary tale for every creative industry. Part memoir, part business explication, Sleepless unfolds chronologically from the early 1980s to 2012 spanning an arc from soaring cinema and blockbuster budgets to shrinking studios and fading stars. Obst’s own career punctuated this arc, as she has produced 16 major movies including “Sleepless in Seattle,” “The Fisher King,” and “Contact.”

In a Hollywoodesque riff on dialectical materialism and the 19th Century German philosopher Frederich Hegel Obst presents her analysis:

Thesis A: The DVD market collapses due to piracy, and our profit cushion collapses. In reaction, there is Antithesis B: We pursue international markets and revenue with mad vigor, making bigger and bigger movies…driving up costs beyond reason and squeezing other domestically oriented and original movies out of the market, creating occasional hits but many more expensive flops and movies that barely break even because of the costs of production and marketing. Then synthesis of A and B occurs, equaling C: The failures create more careful discernment as to what should and should not be made; a new fiscal model is born that may allow for more originals; new ideas about what works in both domestic and international markets emerge.

Hollywood imagined at the dawn of the 21st Century that it could forever grow fat off DVD sales of its movies, even as music, newspapers and magazines hit the skids over global piracy of their products and internet free distribution of their work. Long before The Industry deployed armies of lawyers throughout the DVD worldwide black market and talked the FBI into stamping threats on the first frame of every film, the music biz had already failed to protect its CD market from the same incursions. And newspapers had long since seen their ad markets evaporate as internet classifieds like Craig’s List devoured their profits. Yet Hollywood thought it could defeat the pirates.

Writers, actors, directors, producers, studios – all demanded guaranteed percentages of these imagined, continual DVD profits, and the writers’ union went on strike. Barely had Hollywood recovered from a bruising round of labor actions when the 2008 financial crisis hit, driving patrons away from shopping mall-based theaters, and investors away from high risk movie projects.

When the dust settled Hollywood discovered that the youth market – its magic ticket target – was evaporating as college students gathered around their laptops to watch an average of 22 hours/week/student of movies and TV courtesy of Netflix, YouTube, Amazon-Plus or online pirates, Obst says. The Industry reacted in three ways: First, it went international, making movies that could be comprehensible to non-American audiences, especially in Asia. This meant competing directly against Bollywood and the growing Chinese film studios with action superhero movies that throw special effects and plot twists at dizzying pace, comprehensible without dialogue. The globalized marketing also forced Hollywood to submit to Chinese censors and Indian standards.

The second strategy for The Industry involved redefining the “youth market” to teens and tweens, eliminating all adult sensibility to make movies laced with fart jokes, barfing cheerleaders and terrifying killers lurking in Spring break swimming pools.

And the third, and apparently only successful strategy was to go-TV, appealing to college students and intelligent adults with remarkable serialized productions that would be devoured over broadcast television, download services or online distribution. By 2009, Obst argues, all of the best writers, producers, directors and actors were forsaking films for TV – including herself.

By 2012, Obst says, The Industry was transformed into The New Abnormal. At its dizzying 1990s profit heights participants in the Hollywood scene were, Obst writes, “caught up in a struggle to succeed in a town built on overnight success and daily doom, we didn’t realize we were essentially living in Miami in the middle of the housing boom…We were all in this disaster together, and when the bell rang, there was, unbelievably, no more credit available to our formerly sacrosanct studios…It was worse than anything we could have dreamed up in our horror-filled imaginations.

“Could we have dreamed that the music would stop,” Obst asks.

Well, yes, they could have if the agents, producers and stars of Hollywood had deigned to pay attention to what was happening to other creative industries. But Hollywood has always thought incredibly highly of itself, imagining it possessed tremendous power to influence world politics thru “messages” buried in film themes, boundless customer loyalty and no end to magnetic power of Big Stars to draw audiences to theaters. The Industry would be different. The Industry would be the exception.

Like Hollywood as a whole, Obst is unfortunately unable to see very far beyond herself, so her imaginings of the New Abnormal, as she has dubbed it, do not embrace possible good news on the globalization front. Perhaps the worldwide entertainment market will discover there are more great Chinese directors than Ang Lee, more Indian tales to tell than “Slumdog Millionaire,” and great micro-studios ready to feed exciting cinematic art to culture-hungry kids in both Omsk and Omaha. Hollywood may struggle, but just as television is tipping the American balance sheets in unexpected directions, so the center of the cinematic universe may shift from LA to – who knows? Rio? Lagos? Jakarta?

Maybe I’ve been living in New York for too long, but I don’t really care whether Los Angeles remains the primary font of The Industry’s products. Obst’s book is a great look at the follies of arrogance and hubris, but the story isn’t over yet, and there are no guarantees it will evolve as a Hollywood, or even American, saga.