Valley of the duds; inside Hollywood's bad movie machine.

• Author: Noah, Timothy

VALLEY OF THE DUDS

Feeling blue about widening trade deficits? One way to cheer up is to consider the beating the Japanese are taking these days from the American movie industry. A recent edition of the Japanese Economic Journal carried movie listings for 50 theaters in Tokyo; 23 of the 50 were showing American films, compared to 20 showing Japanese films. MITI doesn't win every time.

Things look bright for Hollywood on the domestic front, too. Thanks mostly to the development of "multiplex' cinemas sprouting up in shopping malls across the country, the number of movie screens in America has increased in recent years. During the last five years, so has attendance. In 1984, nearly 1.2 billion tickets were sold in the U.S.--more than in any year since 1961. At the same time, there's a growing ancillary market for movies in the form of cable and other TV outlets, including the video cassette boutiques that have become a new fixture on Main Street.

So why, when everybody's hungry for success stories about American business (and when America is being led by a former movie star), do economists and newspaper columnists fail to celebrate Hollywood? One explanation is that, as major American industries go, the movie industry has little effect on the overall economy. It employs only about 200,000 people, from Sylvester Stallone to the high school student who tears your ticket at the door. By comparison, the automobile industry employs nearly three million.

But I suspect another reason: those economists and newspaper columnists have been to the movies lately. Movies these days really aren't very good. Most seem aimed cynically at a "target market' of adolescents whose tastes couldn't possibly be as predictable as the movie titles suggest. As I write, the local theaters are playing The Return of the Living Dead, Teen Wolf, Pee-Wee's Big Adventure, Summer Rental, The Bride (of Frankenstein), Fright Night, National Lampoon's European Vacation, and, of course, Rambo. Not having seen all these, I have to concede that some may be surprises. But even when movies like these are entertaining, they are basically more of the same. Moviemaking has gotten so formulaic that it is possible for there to be three comedies about teenage science nerds playing at the same time-- Weird Science, Real Genius, and My Science Project. The predominance of movie sequels (Rocky IV is due out soon) bears further testament to Hollywood's failure of imagination.

This past summer, however, audiences took some revenge on Hollywood's low estimation of public tastes: ticket sales dipped to $1.42 billion, compared to $1.58 billion in the summer of 1984. (The science project movies all bombed, suggesting that the Andy Hardy Gets Laid genre mercifully may have run out of steam.) Summer box office receipts are so important that it's possible that this year's total attendance will drop for the first time in five years. But even when attendance figures have climbed, that hasn't necessarily been a vote of confidence; audiences may just be showing what they'll put up with.

Why aren't movies better? Part of the reason is that the movie business is plagued by some of the same problems that plague other American industries. As in many aging industries, Hollywood's unions have driven wage rates up and insisted on a maze of work rules that undercut productivity. At the same time, Hollywood's managers have, like their counterparts elsewhere, fallen prey to "market-driven' strategies that undermine quality. They also put the unions to shame in their pursuit of cash and studio perks.

Ordinarily, it would seem that the proper solution would be to make the movie business more entrepreneurial. Just as America's mini-mills have proven more nimble than lumbering, oligopolistic companies like U.S. Steel, we'd expect a Hollywood dominated by small production companies to be less wasteful and more concerned about quality than a Hollywood dominated by a few big movie studios. Surprisingly, however, Hollywood is already very entrepreneurial. During the last 40 years, the oligopolistic old "studio system' has given way to the more frenzied and competitive world of independent producers. (Studios today are less manufacturers than service organizations that provide money to make films and operate the distribution networks that get them into theaters.) The actors, directors, and writers who work for these independent producers generally are no longer studio employees but free agents, who may sell their labor whenever or wherever they choose. It's useful to look at it this way: Hollywood is full of consultants and independent contractors.

The lesson Hollywood offers is actually the precise opposite of U.S. Steel's: even entrepreneurship has its excesses. And no place knows excess like Hollywood.

Col. Mustard has a grievance

What is most distinctive about Hollywood's unions is the sheer number of locals and, consequently, work rules. A visit to the set of Clue, a new movie being filmed on the Paramount lot, provided me with a useful lesson in taxonomy. Debra, Hill, the film's producer, showed me around. The film, she explained, is based on the Parker Brothers game of the same name; the set was a three-dimensional version of the familiar board. In the lounge, a publicist (Local 818 of IATSE, the International Alliance of Theatrical Stage Employees) and a production designer (Local 847) chatted with a reporter from the New York Daily News. In the study, two stagehands, or "grips' (Local 80), sat in overstuffed armchairs, engaged in conversation. The director (Directors' Guild) sat at a table in the dining room peering into a looseleaf book; meanwhile, a real fire roared in the make-believe fireplace. The fire was tended by one of two firemen assigned to the picture (American Federation of Guards, Local Number 1): one lit the fires, the other stood by in case any of a less benign variety needed putting out. In the billiard room, two drivers (Local 399, Teamsters) shot pool.

By the time we entered the library to watch the cameraman (IATSE Local 659), sound man (695), script supervisor (871), prop man (44) and actors (Screen Actors' Guild) shoot a scene, the jurisdictions seemed as tangled as the cables that lay at my feet like spaghetti. Observing my confusion, Hill helpfully provided me with a call sheet listing all the personnel that had been required on the set one day several weeks earlier in the shooting schedule. I counted 22 unions.

The proliferation of unions complicates work arrangements in two ways. The first is that each local demands minimum staffing levels. For example, Local 659, the cameramen's union, tells producers that they must hire for each film a director of photography, a camera operator, a first assistant photographer and a still photographer. (The presence of the latter is required for taking publicity shots, even though the studios use much fewer of these than they used to.) In a pinch, all of these functions can be performed by one person. In non-union features, they often are. But if a producer is to honor the IATSE agreement--and he must if he shoots at a major studio--then he must hire all four.

The second problem is that once all these people are present on the set, they must not be permitted to seem superfluous. Thus it is a violation of the IATSE agreement to allow, say, a production assistant to move a stool three feet; he instead must ask a grip to move it for him. The IATSE agreement also defends turf lines among various locals. A grip, for example, may not move a lamp used to light the set; that job is performed by the "gaffer,' the stagehand responsible for lighting. This past summer the producers negotiated an agreement to make these jurisdictional lines more flexible. As I write, the agreement has yet to be ratified by the locals, but it looks as though any easing of turf rules will be accompanied by stiffer minimum staffing requirements. In other words, the solution will likely be more people and less work for them to do.

Needless to say, this thick web of work rules drives up costs. So do various work rules that apply to all IATSE locals--for example, a provision that says all overseas air travel must be first class. Finally, there are the wage rates. These can be hard to estimate, owing to elaborate provisions for "overtime,' "night premiums,' and "golden time' (a special overtime rate for long workdays that can be up to five times the normal rate), but the average basic rate for blue-collar workers-- without any extras--is $16 an hour. An assistant property master hired on a weekly basis starts out with a guarantee of $1,050. In other words, the minimum wage rate, even before you figure in bonuses, comes out to the yearly equivalent of more than $54,000.

If the unions seem...