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Is Hollywood a Risky Business? A Political Economic Analysis of Risk and Creativity

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  • McMahon, James

Abstract

This paper seeks to explain why Hollywood’s dominant firms are narrowing the scope of creativity in the contemporary period (1980–2015). The largest distributors have sought to prevent the art of filmmaking and its related social relations from becoming financial risks in the pursuit of profit. Major filmed entertainment, my term for the six largest distributors, must discount expected future earnings to present prices with the forward-looking logic of capitalisation; and uncertainty about where creativity in cinema is going can produce financial uncertainty about the future earning potential of new film projects. Conversely, a degree of confidence in the expected future earnings of Hollywood cinema can increase when the art of filmmaking and broader social world of mass culture are ordered by capitalist power [Nitzan, J. and Bichler, S., 2009. Capital as power: a study of order and creorder. New York: Routledge]. For the period of 1980–2015, major filmed entertainment lowered its risk relative to the period before, 1960–79. This historical process of risk reduction is the effect of major filmed entertainment making the wide-release strategy (a.k.a., saturation booking) more predictable through an aggressive implementation of the blockbuster style and the high concept standard.

Suggested Citation

  • McMahon, James, 2018. "Is Hollywood a Risky Business? A Political Economic Analysis of Risk and Creativity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue Online Fi, pages 1-24.
    • Handle: RePEc:zbw:espost:182476
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    References listed on IDEAS

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    1. Nitzan, Jonathan, 2001. "Regimes of Differential Accumulation: Mergers, Stagflation and the Logic of Globalization," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 8(2), pages 226-274.
    2. Nitzan, Jonathan & Bichler, Shimshon, 2009. "Capital as Power. A Study of Order and Creorder," EconStor Books, ZBW - Leibniz Information Centre for Economics, number 157973.
    3. McMahon, James, 2013. "The Rise of a Confident Hollywood: Risk and the Capitalization of Cinema," EconStor Preprints 157854, ZBW - Leibniz Information Centre for Economics.
    4. Joseph Baines, 2014. "Food Price Inflation as Redistribution: Towards a New Analysis of Corporate Power in the World Food System," New Political Economy, Taylor & Francis Journals, vol. 19(1), pages 79-112, January.
    5. Francis, Joseph A., 2013. "The Buy-to-Build Indicator: New Estimates for Britain and the United States," Review of Capital as Power, Capital As Power - Toward a New Cosmology of Capitalism, vol. 1(1), pages 63-72.
    6. Brennan, Jordan, 2013. "The Power Underpinnings, and Some Distributional Consequences, of Trade and Investment Liberalisation in Canada (Preprint)," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 18(5), pages 715-747.
    7. Bichler, Shimshon & Nitzan, Jonathan, 2010. "Systemic Fear, Modern Finance and the Future of Capitalism," EconStor Preprints 157830, ZBW - Leibniz Information Centre for Economics.
    8. Baines, Joseph, 2014. "Food Price Inflation as Redistribution: Towards a New Analysis of Corporate Power in the World Food System (Preprint)," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 19(1), pages 79-112.
    9. McMahon, James, 2013. "The Rise of a Confident Hollywood: Risk and the Capitalization of Cinema," Review of Capital as Power, Capital As Power - Toward a New Cosmology of Capitalism, vol. 1(1), pages 23-40.
    10. McMahon, James, 2015. "Risk and Capitalist Power: Conceptual Tools for Studying the Political Economy of Hollywood," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 3(2), pages 28-54.
    11. Sandy Brian Hager, 2014. "What Happened to the Bondholding Class? Public Debt, Power and the Top One Per Cent," New Political Economy, Taylor & Francis Journals, vol. 19(2), pages 155-182, March.
    12. Park, Hyeng-Joon & Doucette, Jamie, 2016. "Financialization or Capitalization? Debating Capitalist Power in South Korea in the Context of Neoliberal Globalization," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 40(3), pages 533-554.
    13. Jordan Brennan, 2013. "The Power Underpinnings, and Some Distributional Consequences, of Trade and Investment Liberalisation in Canada," New Political Economy, Taylor & Francis Journals, vol. 18(5), pages 715-747, October.
    14. Hager, Sandy Brian, 2014. "What Happened to the Bondholding Class? Public Debt, Power and the Top One Per Cent (Preprint)," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 19(2), pages 155-182.
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    Cited by:

    1. Bichler, Shimshon & Nitzan, Jonathan, 2023. "The Capital As Power Approach. An Invited-then-Rejected Interview with Shimshon Bichler and Jonathan Nitzan," Review of Capital as Power, Capital As Power - Toward a New Cosmology of Capitalism, vol. 2(2), pages 96-174.
    2. Baines, Joseph & Hager, Sandy Brian, 2019. "Financial Crisis, Inequality, and Capitalist Diversity: A Critique of the Capital as Power Model of the Stock Market," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue Online Fi.
    3. Bichler, Shimshon & Nitzan, Jonathan, 2020. "Growing through Sabotage: Energizing Hierarchical Power," Review of Capital as Power, Capital As Power - Toward a New Cosmology of Capitalism, vol. 1(5), pages 1-78.

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    More about this item

    Keywords

    capitalisation; creativity; film distribution; Hollywood; risk;
    All these keywords.

    JEL classification:

    • Z1 - Other Special Topics - - Cultural Economics

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