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Galloping inflation has robbed some glamour from the phrase "alltime box-office champ"—in real dollars, Gone With the Wind is still No. 1—but even these days, a projected worldwide gross of $400 million is decent money. So why the boom in so many movies? And why now? Spielberg, the 34-year-old boy who wove the magic carpet of E. T. (as well as Jaws, Close Encounters of the Third Kind and Raiders of the Lost Ark, all among the ten top grossers in movie history), sees a simple explanation: "A good film is kidnaped by its audience. And this summer the industry is giving people the movies they want to see. It is bringing entertainment to the country at a time when we really need it." Others point to the supposed boom in cheap entertainment during a recession. But the current recession was in full stagnation last Christmas, when a flock of expensive dramas flopped.
Some of the rug merchants who control Hollywood are cautiously thanking Allah while waiting for the next plague of locusts. They point to numbers that have obtained for the past decade: each year, give or take 10%, the industry sells about 1 billion tickets in the U.S.; some 20% of the population buys 80% of those tickets; this core audience tends to be in the 12-to-24 age group; the young attend more movies in the months between Memorial Day and Labor Day, and so Hollywood serves up its big youth-oriented movies in that period. Says Frank Price, president of Columbia Pictures: "Kid pictures always do well in the summer. By fall everyone will wonder, 'What happened to the boom?'' Even in the box-office heat wave, Price must be wondering; his studio's Annie, released May 21, keeps waiting for tomorrow (and tomorrow and tomorrow) to recoup its $50 million investment.
For most studios, though, the financial news is so good that movie executives can dismiss the challenges from upstart competition for the American consumer's entertainment dollar. They argue that cable lures more viewers away from the networks than from the moviehouses, and that video games cannot compete with the movies' sophisticated special effects. They can also point to a recent Variety story showing that the average cost of making a Hollywood movie, which had doubled since 1977, actually declined this year (from $9.6 million to $9.4 million). Of the early summer hits, none ran up a tab of more than $20 million. Star Trek II, which has matched its predecessor's early torrid pace, was made for $11 million, one-fourth the cost of the original; the sequel returned its production cost to Paramount within ten days of release.
Hit or flop, the news travels fast these days. "With most Hollywood movies opening in 500 to 1,500 theaters," notes Industry Analyst Lee Beaupre, "their commercial fates are generally determined in the first week." Art Murphy, Variety's box-office expert, explains: "Because it costs so much to advertise in the newspapers and on television—and because of sky-high interest rates—an expensive picture has to strike big and fast. A movie in 1,500 theaters will make its money quickly and then drop off. Even a hit can use up its audience in 25 days. These movies are flashes, but they are megaflashes."