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Making $ense of Hollywood

Making $ense of Hollywood

Theatrical releases of movies as haute couture fashion shows?

That’s what Edward Jay Epstein calls it in his new book The Big Picture: The New Logic of Money and Power in Hollywood. A article by Epstein this week tipped me off to the book in which he begins by exploring how “theatrical releases now serve essentially as launching platforms for licensing rights”. Ok, not a surprising conclusion, but I’m only on page 28 and the foundation for his analysis offers some intriguing ideas that I look forward to reading more about as I get into the book…

Given the relatively small amount of movies made by the big six studios, Epstein explains, it is the push to increase revenues from retail outlets — and ‘throw weight’ on store racks inside places like Wal-Mart — that was the motivating factor behind the creation of the Indiewood divisions he writes.

But DVD money is nothing compared to the revenues that are generated from the licensing of movies to the cable and TV networks that are owned by the studio, as Epstein elaborates in the article this week.

The best-kept secret in Hollywood, especially from Wall Street, is that the movie studios’ biggest profit center is not theatrical movies, or even DVD sales; it is TV licensing. If the details of the profits remain clouded to outsiders, it is no accident. The studios purposely blur together their three principal revenue sources

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