You want to understand how bad things are in Hollywood right now—how stifling and airless and cautious the atmosphere is, how little nourishment or encouragement a good new idea receives, and how devoid of ambition the horizon currently appears—it helps to start with a success story.

Consider: Years ago, an ace filmmaker, the man who happened to direct the third-highest-grossing movie in U.S. history, The Dark Knight, came up with an idea for a big summer movie. It’s a story he loved—in fact, he wrote it himself—and it belonged to a genre, the sci-fi action thriller, that zipped right down the center lane of American popular taste. He cast as his leading man a handsome actor, Leonardo DiCaprio, who happened to star in the second-highest-grossing movie in history. Finally, to cover his bet even more, he hired half a dozen Oscar nominees and winners for supporting roles.

Sounds like a sure thing, right? Exactly the kind of movie that a studio would die to have and an audience would kill to see? Well, it was. That film, Christopher Nolan’s Inception, received admiring reviews, became last summer’s most discussed movie, and has grossed, as of this writing, more than three-quarters of a billion dollars worldwide.

And now the twist: The studios are trying very hard not to notice its success, or to care. Before anybody saw the movie, the buzz within the industry was: It’s just a favor Warner Bros. is doing for Nolan because the studio needs him to make Batman 3. After it started to screen, the party line changed: It’s too smart for the room, too smart for the summer, too smart for the audience. Just before it opened, it shifted again: Nolan is only a brand-name director to Web geeks, and his drawing power is being wildly overestimated. After it grossed $62 million on its first weekend, the word was: Yeah, that’s pretty good, but it just means all the Nolan groupies came out early—now watch it drop like a stone.

And here was the buzz three months later, after Inception became the only release of 2010 to log eleven consecutive weeks in the top ten: Huh. Well, you never know.

«Huh. Well, you never know» is an admission that, put simply, things have never been worse.

It has always been disheartening when good movies flop; it gives endless comfort to those who would rather not have to try to make them and can happily take cover behind a shield labeled «The people have spoken.» But it’s really bad news when the industry essentially rejects a success, when a movie that should have spawned two dozen taste-based gambles on passion projects is instead greeted as an unanswerable anomaly. That kind of thinking is why Hollywood studio filmmaking, as 2010 came to its end, was at an all-time low—by which I don’t mean that there are fewer really good movies than ever before (last year had its share, and so will 2011) but that it has never been harder for an intelligent, moderately budgeted, original movie aimed at adults to get onto movie screens nationwide. «It’s true at every studio,» says producer Dan Jinks, whose credits include the Oscar winners American Beauty and Milk. «Everyone has cut back on not just ‘Oscar-worthy’ movies, but on dramas, period. Caution has made them pull away. It’s infected the entire business.»

For the studios, a good new idea has become just too scary a road to travel. Inception, they will tell you, is an exceptional movie. And movies that need to be exceptional to succeed are bad business. «The scab you’re picking at is called execution,» says legendary producer Scott Rudin (The Social Network, True Grit). «Studios are hardwired not to bet on execution, and the terrible thing is, they’re right. Because in terms of execution, most movies disappoint.»

With that in mind, let’s look ahead to what’s on the menu for this year: four adaptations of comic books. One prequel to an adaptation of a comic book. One sequel to a sequel to a movie based on a toy. One sequel to a sequel to a sequel to a movie based on an amusement-park ride. One prequel to a remake. Two sequels to cartoons. One sequel to a comedy. An adaptation of a children’s book. An adaptation of a Saturday-morning cartoon. One sequel with a 4 in the title. Two sequels with a 5 in the title. One sequel that, if it were inclined to use numbers, would have to have a 7 1/2 in the title.1

And no Inception. Now, to be fair, in modern Hollywood, it usually takes two years, not one, for an idea to make its way through the alimentary canal of the system and onto multiplex screens, so we should really be looking at summer 2012 to see the fruit of Nolan’s success. So here’s what’s on tap two summers from now: an adaptation of a comic book. A reboot of an adaptation of a comic book. A sequel to a sequel to an adaptation of a comic book. A sequel to a reboot of an adaptation of a TV show. A sequel to a sequel to a reboot of an adaptation of a comic book. A sequel to a cartoon. A sequel to a sequel to a cartoon. A sequel to a sequel to a sequel to a cartoon. A sequel to a sequel to a sequel to a sequel to a movie based on a young-adult novel.2 And soon after: Stretch Armstrong. You remember Stretch Armstrong, right? That rubberized doll you could stretch and then stretch again, at least until the sludge inside the doll would dry up and he would become Osteoporosis Armstrong? A toy that offered less narrative interest than bingo?

Let me stipulate that we will probably come out of three or four of the movies categorized above saying «That rocked!» (One of them is even being directed by Nolan.) And yes, it is technically possible that some years hence, a magazine article will begin with the sentence, «Stretch Armstrong‘s surprising journey to a Best Picture nomination began when…» But for now, let’s just admit it: Hollywood has become an institution that is more interested in launching the next rubberized action figure than in making the next interesting movie.

At this moment of awards-giving and back-patting, however, we can all agree to love movies again, for a little while, because we’re living within a mirage that exists for only about six or eight weeks around the end of each year. Right now, we can argue that any system that allows David Fincher to plumb the invention of Facebook and the Coen brothers to visit the old West, that lets us spend the holidays gorging on new work by Darren Aronofsky and David O. Russell, has got to mean that American filmmaking is in reasonably good health. But the truth is that we’ll be back to summer—which seems to come sooner every year—in a heartbeat. And it’s hard to hold out much hope when you hear the words that one studio executive, who could have been speaking for all her kin, is ready to chisel onto Hollywood’s tombstone: «We don’t tell stories anymore.»

1. Captain America, Cowboys & Aliens, Green Lantern, and Thor; X-Men: First Class; Transformers 3; Pirates of the Caribbean: On Stranger Tides; Rise of the Apes; Cars 2 and Kung Fu Panda 2; The Hangover Part II; Winnie the Pooh; The Smurfs in 3D; Spy Kids 4; Fast Five and Final Destination 5; Harry Potter and the Deathly Hallows Part 2.

2. The Avengers; Spider-Man (3D); Men in Black 3 (3D); Star Trek untitled; Batman 3; Monsters, Inc. 2; Madagascar 3; Ice Age: Continental Drift in 3D; The Twilight Saga: Breaking Dawn, Part 2.

 

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How did hollywood get here? There’s no overarching theory, no readily identifiable villain, no single moment to which the current combination of caution, despair, and underachievement that defines studio thinking can be traced. But let’s pick one anyway: Top Gun.

It’s now a movie-history commonplace that the late-’60s-to-mid-’70s creative resurgence of American moviemaking—the Coppola-Altman-Penn-Nichols-Bogdanovich-Ashby decade—was cut short by two movies, Jaws in 1975 and Star Wars in 1977, that lit the fuse for the summer-blockbuster era. But good summer blockbusters never hurt anyone, and in the decade that followed, the notion of «summer movie season» entered the pop-culture lexicon, but the definition of «summer movie» was far more diverse than it is today. The label could encompass a science fiction film as hushed and somber as Alien, a two-and-a-half-hour horror movie like The Shining, a directorial vision as singular as Blade Runner, an adult film noir like Body Heat, a small-scale (yes, it was) movie like E.T. The Extra-Terrestrial, a frankly erotic romantic drama like An Officer and a Gentleman. Sex was okay—so was an R rating. Adults were treated as adults rather than as overgrown children hell-bent on enshrining their own arrested development.

Then came Top Gun. The man calling the shots may have been Tony Scott, but the film’s real auteurs were producers Don Simpson and Jerry Bruckheimer, two men who pioneered the «high-concept» blockbuster—films for which the trailer or even the tagline told the story instantly. At their most basic, their movies weren’t movies; they were pure product—stitched-together amalgams of amphetamine action beats, star casting, music videos, and a diamond-hard laminate of technological adrenaline all designed to distract you from their lack of internal coherence, narrative credibility, or recognizable human qualities. They were rails of celluloid cocaine with only one goal: the transient heightening of sensation.

Top Gun landed directly in the cortexes of a generation of young moviegoers whose attention spans and narrative tastes were already being recalibrated by MTV and video games. That generation of 16-to-24-year-olds—the guys who felt the rush of Top Gun because it was custom-built to excite them—is now in its forties, exactly the age of many mid- and upper-midrange studio executives. And increasingly, it is their taste, their appetite, and the aesthetic of their late-’80s postadolescence that is shaping moviemaking. Which may be a brutally unfair generalization, but also leads to a legitimate question: Who would you rather have in charge—someone whose definition of a classic is Jaws or someone whose definition of a classic is Top Gun?

The Top Gun era sent the ambitions of those who wanted to break into the biz spiraling in a new direction. Fifteen years earlier, scores of young people headed to film schools to become directors. With the advent of the Reagan years, a more bottom-line-oriented cadre of would-be studio players was born, with an MBA as the new Hollywood calling card. The Top Gun era shifted that paradigm again—this time toward marketing. Which was only natural: If movies were now seen as packages, then the new kings of the business would be marketers, who could make the wrapping on that package look spectacular even if the contents were deficient.

In some ways, the ascent of the marketer was inevitable: Now that would-be blockbusters often open on more than 4,000 screens, the cost of selling a movie has skyrocketed toward—and sometimes past—$40 million to $50 million per film, which is often more than the movie itself cost to make. According to the Los Angeles Times, the studios spent $1 billion just to market the movies that were released in the summer of 2009. «Opening a movie everywhere at once is a very, very expensive proposition,» says Jinks, who points out that ten years ago American Beauty could open slowly and become «ridiculously profitable without ever being the number one movie. But today, if you’re opening, you’re inevitably going to overspend in order to try to buy that first-place finish.»

With so much money at stake, the marketer’s voice at the studio table is now pivotal from the day a studio decides whether to make a movie—and usually what that voice expresses is trepidation. Their first question is not «Will the movie be good?» but «Can it be sold?» And by «sold,» what they mean is «sold on the first weekend.» Good movies aimed at adults tend to make their money more slowly than kid stuff, and they’re helped by good reviews and word of mouth, which, from a marketing standpoint, are impossible to engineer. That’s one reason studios would rather spend $100 million on a franchise film than a fraction of that on an original idea. When Rudin first got hold of The Social Network, he says, «I would get calls from people at other studios saying, ‘Is that movie going? We’d love to do it. How much do you need to make it?’ And I’d say, ‘Somewhere between $35 and $40 million.’ And they’d say, ‘Oh, well, we were thinking $15.’ The days of having five companies chase you for a movie that needs to be good in order to work are over.»

«Fear has descended,» says James Schamus, the screenwriter-producer who also heads the profitable indie company Focus Features, «and nobody in Hollywood wants to be the person who green-lit a movie that not only crashes but about which you can’t protect yourself by saying, ‘But at least it was based on a comic book!’ «

 

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Such an unrelenting focus on the sell rather than the goods may be why so many of the dispiritingly awful movies that studios throw at us look as if they were planned from the poster backward rather than from the good idea forward. Marketers revere the idea of brands, because a brand means that somebody, somewhere, once bought the thing they’re now trying to sell. The Magic 8 Ball (tragically, yes, there is going to be a Magic 8 Ball movie) is a brand because it was a toy. Pirates of the Caribbean is a brand because it was a ride. Harry Potter is a brand because it was a series of books. Jonah Hex is a brand because it was a comic book. (Here lies one fallacy of putting marketers in charge of everything: Sometimes they forget to ask if it’s a good brand.) Sequels are brands. Remakes are brands. For a good long stretch, movie stars were considered brands; this was the era in which magazines like Premiere attempted to quantify the waxing or waning clout of actors and actresses from year to year because, to the industry, having the right star seemed to be the ultimate hedge against failure.

But after three or four hundred cases in which that didn’t prove out, Hollywood’s obsession with star power has started to erode. In the last several years, a new rule of operation has taken over: The movie itself has to be the brand. And because a brand is, by definition, familiar, a brand is also, by definition, not original. The fear of nonbranded movies can occasionally approach the ridiculous, as it did in 2006 when Martin Scorsese’s The Departed was widely viewed within the industry as a «surprise» hit, primarily because of its R rating and unfamiliar source material. It may not have been a brand, but, says its producer Graham King, «Risky? With the guy I think is the greatest living director and Nicholson, Matt Damon, Wahlberg, and Leo? If you’re at a studio and you can’t market that movie, then you shouldn’t be in business.»

Inception was not a brand, which is why nobody with a marketing background is too eager to go find the next Inception—although ironically, any studio in town would eagerly green-light Inception 2. On the other hand, as you read this, the person who gave the go-ahead to Fast Five, the (I hate to prejudge, but…) utterly unnecessary fifth installment in the Vin Diesel–Paul Walker epic The Fast and the Furious, is sleeping soundly right now, possibly even at his desk. On June 10, 2011, he will bestow on several thousand screens a product that people have already purchased four times before. How can it miss?

Of course, it can miss; can’t-miss movies miss all the time. But when a movie that everyone agrees is pre-sold falls on its face, the dullness of the idea itself never gets the blame. Because the idea that familiarity might actually work against a movie, were it to take hold in Hollywood, would be so annihilating to the studio ecosystem that it would have to be rebuilt from the ground up. Give the people what they don’t know they want yet is a recipe for more terror than Hollywood can accommodate.

And while that bland assembly-line ethos hasn’t affected the small handful of terrific American movies that reach screens every year, it’s been absolutely devastating for the stuff in the middle—that whole tier of movies that used to reside in quality somewhere below, say, There Will Be Blood but well north of Tyler Perry’s Why Did I Get Married Too? It’s your run-of-the-mill hey-what’s-playing-tonight movie—the kind of film about which you should be able to say, «That was nothing special, but it was okay»—that has suffered most from Hollywood’s collective inattention/indifference to the basic virtues of story development. If films like The Bounty Hunter and Prince of Persia: The Sands of Time define the new «okay,» then the system is, not to put too fine a point on it, in very deep shit.

Fixing that, however, is nobody’s current priority—because fixing it would require an admission that something’s broken. Marketing isn’t about that; it’s about looking at what’s selling and then selling more of it. These days, Hollywood’s most popular commodity is the concept of endless summer. Back in the mid-’80s, the season adhered at least somewhat to actual summer: It’d launch around the last weekend of May and peter out by mid-August. That left eight months for movies that did not involve CGI or spandex. But the last decade has seen an extraordinary degree of calendar creep: In 2010, «summer» arguably began on April 30, with a remake of A Nightmare on Elm Street, and was still going pretty strong on September 10, with the opening of Resident Evil: Afterlife. And since summer’s so popular, why not have more than one of them? In Hollywood thinking, what we used to call «spring» is now «Summer: The Prequel,» festooned with movies like Clash of the Titans that are designed to slake your blockbuster thirst as early as the first weeks of spring. And once you go that far, it’s not much of a leap to reimagine Thanksgiving as «WinterSummer.» And then Christmas—which, last year, offered a new Narnia movie as well as reboots of Yogi Bear, Gulliver’s Travels, and Tron—sort of becomes «WinterSummer II: The Return of WinterSummer!»

The rise of marketers has also brought on an obsession with demographics. As anyone in Hollywood will tell you, the American filmgoing populace is divided two ways: by gender and by age. Gender is self-explanatory (usually); the over-under dividing line for age is 25. Naturally, every studio chief dreams of finding a movie like Avatar that reaches all four «quadrants» of the audience: male and female, young and not. But if it can be made for the right price, a two- or even one-quadrant film can be a viable business proposition.

In Hollywood, though, not all quadrants are created equal. If you, for instance, have a vagina, you’re pretty much out of luck, because women, in studio thinking, are considered a niche audience that, except when Sandra Bullock reads a script or Nicholas Sparks writes a novel, generally isn’t worth taking the time to figure out. And if you were born before 1985… well, it is my sad duty to inform you that in the eyes of Hollywood, you are one of what the kids on the Internet call «the olds.» I know—you thought you were one of the kids on the Internet. Not to the studios, which have realized that the closer you get to (or the farther you get from) your thirtieth birthday, the more likely you are to develop things like taste and discernment, which render you such an exhausting proposition in terms of selling a movie that, well, you might as well have a vagina.

That leaves one quadrant—men under 25—at whom the majority of studio movies are aimed, the thinking being that they’ll eat just about anything that’s put in front of them as long as it’s spiked with the proper set of stimulants. That’s why, when you look at the genres that currently dominate Hollywood—action, raunchy comedy, game/toy/ride/comic-book adaptations, horror, and, to add an extra jolt of Red Bull to all of the preceding categories, 3-D—they’re all aimed at the same ADD-addled, short-term-memory-lacking, easily excitable testosterone junkie. In a world dominated by marketing, it was inevitable that the single quadrant that would come to matter most is the quadrant that’s most willing to buy product even if it’s mediocre.

«It’s a chicken-versus-egg thing,» says writer-producer Vince Gilligan, the creator of the why-aren’t-there-movies-this-good cable hit Breaking Bad. «The studios say, ‘Well, no one else is coming to movies reliably these days except for young males, so we’ll make our movies for them.’ And yet if you make movies simply for young males, nobody else is going to want to go. So Hollywood has become like Logan’s Run: You turn 30, and they kill you.»

he good news is that the four-quadrant theory of marketing may now be eroding. The bad news is that it’s giving way to something worse—a new classification that encompasses all ages and both genders: the «I won’t grow up» demographic. As recently as 1993, three kid-oriented genres—animated movies, movies based on comic books, and movies based on children’s books—represented a relatively small percentage of the overall film marketplace; that year they grossed about $400 million combined (thanks mostly to Mrs. Doubtfire) and owned just a single spot in the year’s top ten. In 2010, those same three genres took in more than $3 billion and by December represented eight of the year’s top nine grossers.

Let me posit something: That’s bad. We can all acknowledge that the world of American movies is an infinitely richer place because of Pixar and that the very best comic-book movies, from Iron Man to The Dark Knight, are pretty terrific, but the degree to which children’s genres have colonized the entire movie industry goes beyond overkill. More often than not, these collectively infantilizing movies are breeding an audience—not to mention a generation of future filmmakers and studio executives—who will grow up believing that movies aimed at adults should be considered a peculiar and antique art. Like books. Or plays.

In a way, that kind of thinking is just the terminus of a decades-long marginalization of the very notion of creative ambition by the studios. If in the 1970s making good original movies was a central goal of the men who ran the studios, by the 1980s that goal had devolved to making good original movies to release at the end of the year, for Oscar season. In the 1990s, as the boom in American independent filmmaking began, the idea of a «good» movie, as New York Times critic Manohla Dargis has pointed out, eventually became a niche that could be outsourced—first to self-made moguls like Harvey Weinstein and then to boutique divisions of the studios themselves. «There was a moment a few years ago,» says Schamus, «when studios said, ‘Hey, all of these specialty companies seem to be taking up all the seats in the front row at the Oscars, so if they can do it, we can do it—we’ll just throw money at them!’ And the results, financially, ranged from mildly catastrophic to ridiculously catastrophic.»

That boom went bust. Several of the studio-owned boutique divisions overspent insanely, often on weak material (and we can all agree that a really bad small movie is every bit as wretched as a really bad big movie). They muscled into the marketplace, laying waste to smaller indie companies in the process; then they collapsed of their own weight and left the field of dramatic filmmaking devastated. «And for all those people who spent years trying to get movies made at all the companies that are now gone, there’s now one place to work where you can get respectfully treated and fairly judged,» says Rudin. «It’s HBO.»

So cable has become the custodian of the «good» niche; entities like HBO, Showtime, and AMC have found a business model with which they can satisfy a deep public appetite for long-form drama. Their original series don’t need to attract huge audiences; and as a result, any number of ambitious writers, directors, and producers who might long ago have pitched their best stuff to studios now turn to the small screen, because one thing nobody in cable television will ever say to them is «We don’t tell stories anymore.»

«The sad thing,» says HBO programming chief Michael Lombardo, «is that a world has closed to a group of serious storytellers—and there are some stories that should be told in a two-hour format. Our success is a sort of silver lining in a story that’s economically driven by what studios are doing to try to survive in a complicated international market. But the losers ultimately are people who are looking to appreciate serious work in film.»

 

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So who’s the bad guy here? It must be said that studio executives and marketers make such tempting bad guys that it becomes too easy to assume that the problem could be fixed by nothing more than a changing of the guard. In public esteem, they stand somewhere alongside congressmen, bankers, and health insurers.

They’re philistines, foes of art, craven bottom-liners, vulgarians. It’s a nice theory, but it ignores the fact that each studio has its own culture. And after all, somebody green-lit The Social Network and True Grit and The Town—a modestly budgeted movie that surprised even its own director-star by opening in a robust first place and then racking up strong grosses week after week. «The business has been bifurcated into big tentpole movies and dramas that have become more and more marginalized,» says Ben Affleck. «I understand that the kind of movie I made is hard to sell, so even though it was probably the least expensive movie Warner Bros. will make all year, it still represented a risk. And it’d be nice to imagine that it’s a viable business to make twelve or fifteen of those movies a year at a studio, but it’s just not.»

The economic pressures the studios are facing aren’t just an excuse—they’re real. Movie-ticket sales may be reasonably strong, but any number of economic forces are conspiring against the production of adult dramas. They don’t generally have the kind of repeat-viewing appeal that would make them DVD smashes. They often end up with an R rating, which puts a ceiling on their earning capacity and makes a modest budget absolutely essential. Oscar nominations or even wins can no longer be relied upon to goose a quality film’s revenues. (Last spring’s top honoree, The Hurt Locker, ended up as the lowest-grossing Best Picture winner since the 1950s.) And overseas markets are becoming less predictable and more insular—Schamus points out that Japan and Italy have taken a pronounced turn away from Hollywood films and toward homegrown fare, a trend that’s likely to spread around the globe. (And adult dramas play particularly poorly abroad.)

«Listen, the obligation of anyone in those studio jobs is to help their company make a profit,» says Scott Stuber, who served as Universal’s president of production before leaving in 2005 to become a producer. «When things are going well, sometimes you’re willing to reach a little bit more; you’ll say, once in a while, ‘We’re just going to do this movie because we believe in it.’ But when they’re not going so well… it gets difficult. There’s just not as much money out there as there used to be, and we’re all inundated with so much noise now that it’s hard to cut through every weekend for consumers’ attention.»

Which brings us to the embarrassing part. Blaming the studios for everything lets another culprit off too easily: us. We can complain until we’re hoarse that Hollywood abandoned us by ceasing to make the kinds of movies we want to see, but it’s just as true that we abandoned Hollywood. Studios make movies for people who go to the movies, and the fact is, we don’t go anymore—and by we, I mean the complaining class, of which, if you’ve read this far, you are absolutely a member. We stay home, and we do it for countless reasons: A trip to the multiplex means paying for parking, a babysitter, and overpriced unhealthy food in order to be trapped in a room with people who refuse to pay for a babysitter, as well as psychos, talkers, line repeaters, texters, cell-phone users, and bedbugs. We can see the movie later, and «later» is pretty soon—on a customized home-theater system or, forget that, just a nice big wide-screen TV, via Netflix, or Amazon streaming, or on-demand, or iPad. The urgency of seeing movies the way they’re presumably intended to be seen has given way to the primacy of privacy and the security of knowing that there’s really almost no risk of missing a movie you want to see and never having another opportunity to see it. Put simply, we’d rather stay home, and movies are made for people who’d rather go out.

«Remember when a video didn’t come out until ten months after the movie opened, so you really had to go see it?» says Graham King. «Gone now. It’s a vicious circle, because audiences are saying—or we’re guessing they’re saying—that they want these movies, but it’s so easy to say, ‘I’m going to wait,’ and it’s not a cheap night out to go to the movies anymore. So it’s not surprising that the studios aren’t willing to risk much money on the chance that this time, the audience is going to say, ‘Let’s actually go see this on the big screen.’ «

Still, sometimes we do actually show up. Moviegoing is, after all, a lifelong habit, and we don’t need all that much encouragement to keep trying. During one remarkable stretch last fall, the box office was dominated, on successive weekends, by The Town, Wall Street: Money Never Sleeps, and The Social Network, and as the studios suddenly seemed to reassert that they didn’t intend to give up on us completely, we fulfilled our half of the bargain by buying tickets. Now it’s your turn again, Hollywood. Because somewhere out there, somebody has a pitch as good as Inception. There will no doubt be a dozen reasons not to green-light it. But say yes and we just might give you another $800 million out of gratitude.

Make no mistake: Hollywood wants that $800 million. And in fact, they may have figured out the perfect way to extract it from our wallets. It took twenty-four years to get here, but it’s finally happening: Top Gun 2.