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Crunching Numbers In The 'Hollywood Economy'

The percentage of Americans who go to the movies on a regular basis has dropped drastically since the 1940s. A large studio may spend $50 million on a single ad campaign for a blockbuster film. And before a studio can take a profit, both the local theater and a regional or national distributor take their cuts of the box office.

So how does Hollywood still make money?

By resting on its laurels, at least in part. Investigative journalist Edward Jay Epstein reminds Fresh Air contributor Dave Davies that studios "have a library of movies, of thousands of titles."

"Those titles, they can sell over and over again to television stations, to cable networks, to pay television, to put them on DVD, [to] license them to games," Epstein says. "This brings in a steady and major flow of money, which pays for production."

Epstein is the author of the new book The Hollywood Economist, which looks into more than one Hollywood mystery — including what exactly is the difference, if any, between a studio and a distribution company.

"Studios are in two businesses," he explains. "One is making films; the other is distributing movies. For the large studios, when we're talking about studios and distributors, what we're actually talking about is the same."

Epstein is also the author of Inquest: The Warren Commission and the Establishment of Truth, Cartel and Dossier: The Secret History of Armand Hammer.

Interview Highlights

On how movie watching has changed since the '40s:

On film studios charging for digital reels:

On cup holders in theaters:

Copyright 2023 Fresh Air. To see more, visit Fresh Air.

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