Why Were There So Many Great Movies in 2013? An Economic Explanation

By Derek Thompson
Sony Pictures

How good was 2013 for movies? David Edelstein, the movie critic for New York, called it "miraculous." As our critic Chris Orr pointed out correctly, the best movie of the year doesn't even have a shot at winning best picture and didn't even get nominated for best director or lead actor. 2013 was just that good.

Maybe it's just one year. But Ben Fritz, a reporter for the Wall Street Journal, says something is fundamentally changing in Hollywood that could produce a lot more years like 2013. The economics of great films are getting easier thanks to higher contributions from independent producers and lower upfront wages:

The surfeit of high-quality choices is the result of two intersecting trends: more independent financiers willing to back mid-budget "prestige" dramas, and tightened purse strings throughout Hollywood. These budget constraints have made A-list actors and directors more willing to work on such movies for relatively small upfront paychecks.

In other words, the fact that (a) stars are willing to take less money before box office and (b) there is more outside support for prestigious films makes it cheaper—or, at least, less risky—for studios to produce these projects than in a time when stars demanded higher salaries to be paid from the studio's pockets. Fritz calls up the example of "American Hustle," leading the pack this year with 10 nominations. Sony Pictures brought in independent producer Megan Ellison's Annapurna Pictures to cover half the $44 million budget, and stars Christian Bale, Bradley Cooper, Amy Adams, and Jennifer Lawrence (all nominated for Academy Awards, by the way) agreed to lower fees.

"As we're all learning to work less expensively, it's easier to get a wider range of movies greenlit and you see a lot more really interesting work," Gary Ross, writer-director of "The Hunger Games" and an Oscars voter, told Fritz.

It's easy to forget that 2013 was shaping up to be The Year of Blockbuster Flops, before it unleashed a torrent of ingenious film-making in October through December. As I've explained about a million times, Hollywood's blockbuster strategy isn't going anywhere, no matter how much you hate Iron Man. The movie business is risky, and sequels and adaptations are less risky because you keep watching sequels and adaptations. But it's nice to know there is an undercurrent to the trend, where a confluence of declining star-wages and rising financial interest in prestige results in a bounty of excellent films. As far as studio investment is concerned: The Hits are getting bigger, and the Films are getting smaller, and maybe that's a good thing.

This article available online at:

http://www.theatlantic.com/business/archive/2014/01/why-were-there-so-many-great-movies-in-2013-an-economic-explanation/283170/