Steve Allen, Entertainer, Author, Composer

In 1997 Ken Auletta, a member of the of the New Yorker magazine’s editorial board, wrote a highly significant report summarizing the answers, from the film industry’s leading executives, to the simple question as to whether they would want their own children to see some of the pictures they had commissioned. Most of those reading Auletta’s feature would have assumed that it dealt simply with that ancient moral question concerning what should be done when one’s sincerely-held moral principles come into sharp, abrasive contact with one’s assignment as an officer of a profit-making enterprise.

But it now turns out, thanks to an astonishing new market survey, that it is perfectly possible for studio executives to gratify their stockholders while at the same time not further contaminating the marketplace with schlock-and-shock fare.

Economists at the Seidman School of Business at Grand Valley State University in Grand Rapids Michigan have carefully studied bottom-line statistics provided by Kagan Media Appraisals, Inc. The study encompassed well over two thousand theatrical films released from January 1, 1988 through December 21, 1997. It clearly established that G-rated movies showed the highest total profit per film. According to the study, pictures rated PG and PG-13 also made good economic sense.

Perhaps the most significant finding is that per-film earnings for G-rated films far outweigh those in the R-rated category. The study itself was commissioned by The Dove Foundation, a profamily media advocacy organization based in Grand Rapids, Michigan.

The need for such a comprehensive analysis grew out of the disturbing fact that a disproportionate share of the total number of pictures produced featured sex and violence. At the same time, a relatively limited number of motion pictures of the family-friendly sort were being produced.

All these and other such happy facts are fully documented in the study itself. But now, of course, the moral question takes a new form. It has been generally assumed for quite some time that even the most unedifying tastes of American filmgoers must be catered to if studios are to show a profit. This provided at least the economic "excuse" for marketing films that even many of their creators would not want their own children to see. But in an otherwise gloomy cultural landscape there is suddenly a brilliant ray of light cast by The Dove Foundation study. Will Hollywood’s movers and shakers take advantage of the consequent opportunity to produce more wholesome films?

It may be counter-argued that there is justification for producing pictures that, while definitely not suitable for children and the tender-hearted, are nevertheless of high quality. This is indeed the case, as the Godfather trilogy, Schindler’s List and Saving Private Ryan clearly demonstrate. But for every such true work of art and social documentation there are dozens of pictures that have no such esthetic excuse. In other words, certain moral and ethical questions remain. It will be fascinating to see how the industry responds to them. But in the meantime — applause, applause! — there is this happy news that virtue is, if all too rarely, rewarded.

Michael Medved, Film Critic, Radio Talk Show Host, Author

In 1998, the movie business witnessed the unprecedented success of a dazzling array of animated films. "Mulan," "The Rugrats Movie," "Antz," "A Bug’s Life," and "The Prince of Egypt." All performed strongly at the box office, with domestic earnings (or projected earnings) in excess of $70 million each. This record shatters an unwritten rule of Hollywood, which had previously suggested that each year only one G-rated cartoon, invariably produced by Disney studios, could draw substantial audiences to the theatres. The enthusiastic reception for each of the animated Big Five (with three of them non-Disney titles) demonstrated that the demand for this sort of entertainment is deeper, and broader, than previously assumed.

Some observers may insist that the popularity of these films represents a sudden fascination with new developments in animation, but on a more significant level it reflects the profound, passionate hunger for G and PG-rated family entertainment. A significant, persuasive and most welcome new study from The Dove Foundation proves that the only surprising aspect of this development is that anyone at all should be surprised by it.

For nearly a decade, a few lonely voices in the entertainment industry have questioned the conventional wisdom that declared that movies with the "R" rating would generally fare best at the box office. In my own controversial 1992 bestseller "Hollywood Vs. America" I provided detailed analysis suggesting that the industry’s insistence on releasing most movies with an "R" rating, year after year, represented an illogical and self-destructive tendency. My numbers of domestic box office gross showed incontestably that R-rated movies on average drew far smaller audiences than films with any other rating.

Now, the invaluable Dove Foundation numbers should settle, once and for all, the argument that’s been raging for the last seven years. These figures include not only raw income, but profitability— figured as a return on investment. They also include all important data on the video sales and rental markets. Defenders of the tired, dysfunctional Hollywood status quo can no longer manipulate figures, or plead ignorance, to justify the misguided emphasis on entertainment drenched with violence, graphic sex, and foul language.

The distinct disadvantage for R-rated material demonstrated by these figures should not be difficult to understand and explain. Why would anyone expect that material which is narrowly aimed at a smaller potential audience (generally excluding those below 17) would perform as well as material which reaches out to a broader collection of movie-goers? While it’s true that underage patrons can sometimes sneak into R-rated material, why would any sane producer go out of his way to create obstacles to potential customers?

Of course, some stories by their very nature will require an R-rating ("Schindler’s List" and "Saving Private Ryan" stand as two prominent examples), but savvy studio heads will always try to strike a balance between such efforts and family fare targeted at general audiences. Hollywood’s record of featuring more "adult" R-rated movies than releases in all other categories (G, PG, PG-13, and NC-17) makes no economic sense whatever. Studio executives can explain this history with reference to the tendency of "mature" material to win major awards, critical praise, and peer respect, but they cannot justify the continuation of the trend in terms of economic self interest.

The Dove Foundation report should put an end forever to the argument that the forces of the market place require film makers to exploit violence, sex or harsh language in the never-ending search for a box-office "edge." This fascinating study proves that the real edge in Hollywood goes to competently crafted family entertainment.

Father Robert A. Sirico, President, Acton Institute for the Study of Religion and Liberty

In the market economy, successful producers tend to attract close competitors into their genres of production. McDonald’s led to Burger King which led to Wendy’s. The Gap clothing maker has close rivals always nipping at its heels. Home Depot’s profits have attracted others trying their hands at creating a large, friendly hardware supply store.

The reason is obvious: profitability serves to signal producers about the public’s tastes. When profits are high, this conveys crucial information about gaps in the market that need to be filled by other producers. Generally, this is precisely how the profit and loss system works to insure production serves the consumers better than central planning ever can.

Hollywood, however, seems to be a conspicuous exception to the rule about market economics. In the last decade, the thematic material in movies seems to have grown increasingly oriented toward sex and violence, and yet it is the movies in which those themes are minimized that tend to be the most profitable.

This isn’t just speculation. A new study by The Dove Foundation of Grand Rapids, Michigan, looked at films made from 1988 to 1997, found that the majority (55 percent) were rated R, while only 3 percent qualified for a G rating. And yet during this same period, moves with a G rating report the highest total profit per film for every year except one (1997). Even when including theater and video profits, G ratings still win hands down. On average, G rated films were 8 times more profitable than R rated films.

How, then, can we account for the fact that so few G rated films are made? Surely Hollywood can’t plead that it is not interested in maximizing profits. We must conclude that Hollywood’s learning curve is slow. Movie executives are under the impression that only sex and violence draws people into theaters, and have not examined the reality carefully enough.

Perhaps this very detailed and systematic statistical survey will cause film executives to undertake a paradigmatic shift and pay closer attention to the clear-cut signals that the bottom line is sending. Ironically, if Hollywood paid closer attention to its pocketbook, it might work to do more to lift up instead of drag down the culture it does so much to influence.

Robert Peters, President, Morality in Media

I am both heartened and saddened by the findings of The Dove Foundation’s Film Profitability Study. I am heartened because per film profits for films rated G, PG and PG-13 are higher than per-film profits for films rated R and NC-17. This should encourage production of far more films intended and presumably suitable for families with children and early teens. I am saddened, however, because more R-rated films have been produced (55%) than all G, PG and PG-13 rated films combined (44%).

There is no one explanation for why Hollywood continues to churn out so many R-rated films, despite the fact that such films on the average make less money.

Part of the problem is that in the 1960’s Hollywood abandoned its Production Code, which for decades served to restrain those all too ready to exploit every human weakness for a buck. Part of the problem is that many films are little more than a reflection of the lifestyles and values of the morally challenged individuals who write, produce and direct them. Part of the problem is that films exploiting sex and violence usually do not require much talent to make and tend to be easier to market internationally.

Another big part of the problem is that films rated G or PG are perceived as intended primarily for younger children; while films rated PG-13 are often perceived as intended primarily for younger teens. Consequently, if a film is intended primarily for adults, many producers and directors believe it must include enough sex, vulgarity or violence to earn an R rating, even if that means many adults, like myself, will not go because we do not enjoy viewing gratuitous sex, vulgarity and violence.

Hollywood’s finest hour — both in terms of producing truly great films and of enjoying widespread respect and appreciation -was from the 1930s through the 1950s. To my knowledge, most films during that era were intended primarily for an adult audience, but almost all films back then would be rated G or PG today. They would be rated G and PG, not because they failed to address real life problems in a mature manner, but because the film industry then respected community standards of decency and civility.

Choosing to no longer respect those standards has not made Hollywood a more noble, mature and creative community. Rather, it has made much of Hollywood lewd, vulgar, irreligious, violent, sadistic and reckless — hardly anything to be proud of.

If Hollywood wants to make more money, it should produce more films intended for families with children and younger teens. But, if Hollywood really wants to see profits skyrocket, it should also get back in the business of producing films intended for adults, but which get a G or PG rating. Generally speaking, in G or PG pictures, private parts are kept covered, mouths are free of language that once prompted mothers to get a bar of soap, and hands steer clear of erogenous zones and gratuitous deadly violence.

Producing more films that Americans of all ages can enjoy will also help restore the respect and appreciation that most Americans once had for Hollywood. Many in other nations might also come to view Hollywood as lighting candles in dark places, instead of igniting and fueling a moral breakdown that is engulfing the world.

Bio: John H. Evans has a bachelor’s degree in economics from the University of Oklahoma and a master’s degree in mineral economics from Pennsylvania State University. Prior to establishing Preview Family Movie Review, he was employed for 18 years as a Research Economist by the Mobil (Oil) Research and Development Corp.. He also was employed as the Director of Market Research for a subsidiary of Texas Instruments, Inc, and was associated with a consulting firm where he specialized in the economic feasibility analysis of new business ventures.

MPAA ratings provide only a general indication of the content of films, and the MPAA guidelines appear to have changed over the past several years. They seem to have become more lenient and liberal.

There are some G and many PG rated films Preview Family Movie Review considers as having significant offensive elements in them. Therefore, these types of films would not be recommended by our organization.

I feel it would be ideal to analyze films based on our own acceptability ratings, but I realize this would require another exhaustive study. So, I have based my comments on The Dove Foundation study.

Profitability of an investment in a film should be defined as its net profit divided by its cost. Even this is a simplification because it does not take into consideration the time value of money. The most accurate way of calculating ROI is to use the Discounted Cash Flow Analysis method. This takes into account the timing of the revenue flow back from an investment. This is important when the revenue from an investment comes back over a number of years. It is also significant when comparing the profitability of one investment whose revenues come back much faster or slower that those from an investment it is being compared to.

If film investments receive most of their film and video revenue in a short period of time, apparently from one to two years, then the lack of using the Discounted Cash Flow analysis method should not greatly distort film profitability calculations.

Considering both the social responsibility and the profitability of "kinder, gentler" films, I recommend that the movie industry shift their emphasis away from R and PG-13 films to more morally responsible films. These could be G and PG films if they are morally responsible as our organization defines moral responsibility. This should result in greater profitability for the industry and reduce the moral pollution of our culture.

I can visualize that if the industry shifts very heavily to G rated films this could over saturate the market with films that appeal to the whole family. There should also be decent films produced for teenagers and adults that may not appeal to young children. EVER AFTER: A CINDERELLA STORY and STAR TREK: INSURRECTION are two such examples.

The Dove Foundation’s data show that the cost of providing G-rated films to a combined theatrical and video market is higher than with PG, PG-13 or R-rated films. This means that the financial risk of bringing G rated films to the market is somewhat greater than films in other categories. But, the profits generally seem to outweigh the risk.

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