Even with the Production Code in place, however, filmmaking has always remained a risky business, and in Wu’s fourth chapter on the film industry, titled “Mass Production of the Sprit,” he addresses Hollywood’s transformation from an entertainment industry to part of a series of diversified conglomerates. In search of the changing economic model of the film industry, Wu traces the history of two bombs, Michael Camino’s 1980 flop Heaven’s Gate and the 2007 Steve Carell vehicle Evan Almighty (pp 217–18, 236–37). Heaven’s Gate was the indulgent Gesamtkunstwerk that took down a studio, United Artists (p 218). Evan Almighty was merely a loss on a Universal Studios balance sheet (p 237). What happened between the two flops? Why did one have dire consequences while the other barely registered? What happened in the intervening twenty-seven years? According to Wu, it is the rise of the multinational, diversified conglomerate.
Starting in the late 1960s, all of the studios either became part of a conglomerate or they grew into multimedia communication companies on their own. Paramount was acquired by Gulf + Western ; Disney eventually acquired radio stations, comic book publishers, and a TV network. The effect of this conglomeration, Wu tells us, was to bring an end to “the second open age of film” (p 218). Wu does not explain what he means by the second open age of film, but we can assume that he is referring to the rise of independent and semi-independent companies in the 1960s and 1970s, companies like BBS Productions, which made Easy Rider and started the television rock group The Monkees.
As he does in earlier chapters, Wu tells this story through the lens of individuals. In this case he focuses primarily on executive Steve Ross. Ross took a family conglomerate that included parking garages and funeral homes and built a media empire around Warner Bros. Wu might have chosen other corporate titans through which to tell this story; Gulf + Western CEO Charles Bluhdorn, who took over Paramount in 1966, is a candidate who would have yielded a very different picture. Bluhdorn ruled Paramount from a distance, putting his trust in people who knew the industry like Bob Evans and Peter Bart. But Ross is a great example of the kind of business leader that interests Wu. A conglomerate, as Wu colorfully defines it, “is a hydra-headed creature whose operations and advantages have mystified lawyers and economists alike” (p 219). If conglomerates do not make rational sense, much of the motivation for amassing media empires can be attributed, Wu argues, to “purely personal motivations, indeed vanities” (p 225). Ross, for example, was known for bestowing lavish corporate gifts on his clients and throwing company funds at overindulged pet projects.
The takeover of Hollywood by conglomerates, however, did change the running of the industry. Wu describes Ross as “the first pure businessman” (p 222), as opposed to a theater owner or producer, who hit it big in Hollywood. (We might quibble and suggest that Joseph Kennedy held that title sixty years earlier.89) And as a result, Ross brought a new risk-management system to the industry. Wu lists two new practices in particular. First, under Ross and the conglomerates, Hollywood began to rely much more heavily on making films based on existing products, like successful books or cartoon characters. The film industry used to refer to these films as “presold.” Second, film studios focused more on distribution and less on production. They began to “mine festivals” (p 232–33) for talent and products, rather than having to take early risks on careers or ideas. By the time Universal made Evan Almighty, studio economics had changed. The days of the moguls making films gave way to businessmen offsetting risky endeavors with tested strategies. Through television and DVD sales, even flops like Evan Almighty could recover some of their losses.
This example looks very different from Wu’s other explorations of Hollywood history. When writing about the Edison Trust, block booking, and the Production Code, we get a picture of consolidation limiting access to the market. But conglomerates’ takeover of studios also leads to the industry’s absorption of the Independents who challenged it. Companies like BBS were acquired by the studios, as all successful independent production companies have been since. And the practice of acquiring and distributing festival films also introduced more diversity into the market. If anything, in Wu’s account, the introduction of conglomerates opened the system to include more voices rather than pushing them out.