This story published in Forbes Magazine (www.forbes.com) on April 19, 1999.
Watch your bottom line, Hollywood
By Father Robert A. Sirico, president of the Acton Institute for the Study of Religion and Liberty in Grand Rapids, Mich.
IN A FREE MARKET, financial success more than anything else inspires imitators. But we now know that Hollywood's moviemakers are a conspicuous exception to this rule, repeatedly acting against their own financial interests. Most people assume that the constant stream of unimaginative, violence- and sex-filled movies, like the current "8mm" and "The Rage: Carrie 2," springs from the desire to earn as much money as possible. This unpopular high school girl, see, goes bonkers and has telekinetic powers and there's booze, sex and profanity and people get burned alive and get their heads chopped off. It can't lose!
But it can lose. A recent, extensive study of movie profitability shows that movies without graphic violence and sex make the most money. This bears repeating: Family movies are the biggest moneymakers.
The study was commissioned by The Dove Foundation of Grand Rapids, Mich., a nonprofit group, and was conducted by Paul Kagan & Associates. It looks at the 2,400 rated feature-length films made from 1988 to 1997 and shown in theaters. In absolute terms, G-rated films yielded the highest gross profit$94 million on averagewhile R-rated films earned $11 million on average. The gross profit I'm talking about is the excess of income from theatrical release and the first two years of video sales over the direct cost of the movieproduction, prints, advertising.
Take a look at percentage returns, too. G-rated films' average gross profit was 66%. That is, these inoffensive scripts generate revenues equal to 166% of production and distribution costs. Now start adding violence, sex and profanity and see what happens to profitability: PG-rated films returned an average gross of 52% over costs; PG-13 films, 50%; R-rated films, 37%; and NC-17 films (formerly called X-rated), 27%.
Why does Hollywood turn out violent crud when family films make more money?
So what kinds of films get madethe most profitable kind? No. Only 3% of the decade's films were rated G, 22% were rated PG or PG-13, and 55% were rated R.
In the early 1990s another Kagan study, cited in a book by film critic Michael Medved, showed that a PG-rated film, on average, was three times as likely as an R-rated film to earn at least $100 million in ticket sales. So the results of the latest study aren't startling. What continues to amaze, though, is Hollywood's persistence in turning out violent, sex-drenched crud even though the record clearly shows that wholesome, family movies are better moneymakers. The Lion King (1994) and Toy Story (1995) were fabulously profitable. And it doesn't take an R-rated movie to entertain adults. Field of Dreams (1989), The Fugitive (1993), Babe (1995) and As Good as It Gets (1997) each beat the investment return of the average R-rated film.
Why, then, are so few of these movies made? Maybe movie executives and stars still think violence and sex sell the most tickets. Or maybe (as movie execs often protest) they are determined to pursue art first and profit second, and art simply demands that lots of characters have sex on screen and make wisecracks while killing other people. Let's concede a point: Saving Private Ryan, Schindler's List, Devil's Advocate and The Godfather are art, are filled with violence or sex, are unsuitable for children and are credits to their makers. But most R-rated movies are embarrassments.
There is progress. Last year saw the unprecedented release of five highly profitable G-rated films by major studiosA Bug's Life, Antz, Prince of Egypt, Mulan and The Rugrats Moviealthough there were very few good nonkiddie PG or PG-13 films along the lines of The Truman Show, Life is Beautiful (from Italy) and Waking Ned Devine (from Ireland). Walt Disney, which has been making four times as many R-rated films as family films, says it plans to even the ratio. And Sony Pictures is atoning for its Terminator shoot-'em-ups by starting a children's division.
Real artistic integrity and profits need not be at odds; to say otherwise is to insult the public. Maybe most producers and directors just aren't smart or creative enough to make good family films. Others, though, are selling themselves short. Roll up your sleeves, Hollywood. The path of least resistance is costing you money.
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