 Hollywood Faces Disaster
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The Sound of Music
Many producers blamed The Sound of Music (1965) for nearly destroying Hollywood in the mid-1960s.
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By 1960 television had “liberated” cinema by taking over its function as mass entertainment. Without a clear idea of what its post-television role should be or how to satisfy its increasingly disparate audience, Hollywood was in limbo for much of the next decade. The old studio moguls were either dead, in retirement, or battling to maintain a tenuous control over their companies. With them had gone confidence about production.
The strategy of high-budget costume epics that had sustained Hollywood through the 1950s came crashing down with the extravagant failure of Cleopatra (1963), at $40 million the most expensive film ever made. The film's colossal losses nearly bankrupted Twentieth Century-Fox; the lesson both it and the rest of the industry chose to learn came from the movie that restored the studio's fortunes, The Sound of Music (1965). Made for $8 million, it grossed $78 million in the United States and Canada alone.
The industry was lured by the prospect of such returns into ever greater recklessness, spending extravagantly on visible production values in the hope that the “Money on the screen” would draw in audiences. Sometimes it worked spectacularly well. Together with the re-release of Gone with the Wind, Doctor Zhivago (1965) kept MGM solvent for the second half of the decade. But in 1969 only one film in ten showed a profit. In the second half of the 1960s the studios resembled gambling addicts in the terminal stages of their illness, locked into a pattern of borrowing heavily from banks to finance another blockbuster that they hoped would defy the rules of movie profitability and solve the company's financial problems at a stroke. With the successive failures of lavish musicals such as Star!, Hello Dolly and Dr. Doolittle, Fox lost $78 million in 1970, and nearly bankrupted itself again.
Hollywood now derived more than half its income from abroad, with the European market supplying 80 percent of that total. Economically dependent on their international appeal, American films became more cosmopolitan, or mid-Atlantic, in their appearance. Thrillers developed convoluted plots that toured the landmarks of European capitals and pushed aging American male leads - Gregory Peck, Cary Grant - into affairs with younger European women such as Sophia Loren. “Runaway”productions made in Europe had the advantages of government subsidies and lower production costs. Epics such as David Lean's Lawrance of Arabia (1962) were given international casts to enhance their appeal to European distributors.
These meanderings were signs of Hollywood's uncertainty. The industry's lack of financial self confidence led to the studios being bought by major American conglomerates for well under their market value. Universal was bought by MCA, a former talent agency, Paramount by Gulf and Western (steel, mining, plastics), United Artists by Transamerica Inc. (insurance), Warners by the Kinney Corporation (car rentals, building maintenance, funeral parlors), and MGM by Kirk Kerkorian, a Las Vegas hotel magnate. Bought for their real estate and undervalued film libraries, and for the possibility of windfall profits in good years, the companies became small elements in much larger corporations. In 1974 Paramount's film rentals amounted to only 3.5 percent of Gulf and Western's revenues.
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