Things Hollywood Won't Tell You

1. "The real nail-biter? Our balance sheet."

Picture it: captains of industry struggling to stay relevant in a world they no longer understand. It may sound like a Citizen Kane-esque cinematic saga, but it's actually the story of today's studio executives, say film-industry watchers. The U.S. box office take dropped almost 4 percent in 2011, to $10.2 billion, marking the second straight year of decline. The root of the problem, of course, is the growing popularity of home viewing via Netflix and other video-on-demand outlets. Last year, consumer spending on video streaming jumped 50 percent, to $3.4 billion, reports the Digital Entertainment Group. The change has as many implications for the movie business as digital downloading did for the music industry. Granted, Hollywood makes some money from streaming sales. But those digital dimes aren't enough. Add it up and you have a potential crisis, says Christopher Sharrett, a professor of communication and film studies at Seton Hall University: "We could well be seeing the end of motion pictures in theaters."

2. "3-D is for suckers."

So what are moviemakers doing to bring more bodies into theaters? They're revisiting an innovation of decades past: 3-D. And not everyone who tracks Hollywood is wild about the trend, saying it's a passing fad. Plus, action films don't always translate well to 3-D. Boston Globe film writer Ty Burr recently carped about the "sins against the visual cortex" perpetrated by 3-D releases Clash of the Titans,Gulliver's Travels and Green Lantern: They "aren't just terribly written, they're terrible to look at, with actors' faces separated from the backs of their heads," he wrote. Of course, Hollywood doesn't quite see it that way. In a 2010 interview, Clash of the Titans director Louis Leterrier praised today's 3-D, saying what viewers see on the screen is "exactly what it looked like on set." But either way, consumers are paying the price for the new-old technology: Admission to a 3-D flick is generally $3 extra.

3. "Movies are thinly veiled commercials."

Many moviegoers may recall how a trail of Reese's Pieces lures the alien out of hiding in E.T.: The Extra-Terrestrial. That's classic Hollywood product placement, circa 1982. Attracting an alien nowadays would require much bigger bait: Hollywood has increasingly come to rely on Madison Avenue for income. Indeed, product placement has doubled in value since 2005, to an estimated $1.8 billion. This blurring of the lines between entertainment and advertising -- a practice consumer advocates condemn -- has become so ubiquitous someone even made a movie about it: Documentarian Morgan Spurlock, of Super Size Me fame, spoofed the trend in his 2011 picture Pom Wonderful Presents: The Greatest Movie Ever Sold (he financed the $1.5 million film through sponsorships). But Hollywood argues that it's a necessary part of doing business -- and that ticket sales alone don't cut it: "Somebody has to pay for all this content to be created," says Lindsay Conner, a Los Angeles attorney who has represented film studios.

4. "New York? Chicago? It's all Vancouver."

When Hollywood wants to use a particular city as a backdrop, it faces a choice: scout out settings and deal with potentially pricey or problematic local production crews, or head to a place that has a similar look and is eager to please, particularly when it comes to government financial incentives. Frequently, it chooses the latter, regardless of the possible visual compromise. As a result, some states, such as Michigan and Louisiana, have become hotbeds of production. And Canada -- especially the cities of Toronto and Vancouver -- has become such a hub that it's been dubbed Hollywood North. Even when a specific location is central to a plotline, filmmakers won't hesitate to shoot elsewhere. A case in point: The 2002 Reese Witherspoon romantic comedy Sweet Home Alabama was shot largely in Georgia, because it offered scenic locations and a solid crew of film professionals, explains Michael Fottrell, the film's executive producer. An added bonus, says Fottrell: Some New York scenes could be filmed in Atlanta.

5. "We boost sales by limiting your options."

It should come as no surprise that Hollywood times the release of youth-oriented "popcorn flicks" to the out-of-school summer months. But it might surprise people just how far studios take the timing game the rest of the year: If they deem a film unlikely to make a splash at the box office, industry observers say, they'll release it on a slow, off-season weekend -- so it won't have to compete with higher-profile fare, and so it will require fewer marketing dollars. In short, by minding the calendar (as well as the competition) and ultimately limiting options for moviegoers, studios are able to sell more tickets to movies that might otherwise be commercial disappointments, explains Paul Dergarabedian, president of Hollywood.com's box office division. "The scheduling of release dates is like a giant chess match," he says.

6. "We scratch Washington's back..."

Yep, even Hollywood has a lobbying arm: the Motion Picture Association of America, which spent more than $2 million wooing elected officials last year. And its positions aren't always popular with either the public or politicians. Recently, the association, under the stewardship of former U.S. Sen. Chris Dodd, pushed for antipiracy legislation designed to keep films from being easily shared and copied online. But the bills were seen as restricting the overall use of the Internet and failed to garner support. After Congress put the legislation on hold, Dodd warned that "those who count on 'Hollywood' for support need to understand that this industry is watching very carefully who's going to stand up for them when their job is at stake." That led some critics to charge that the MPAA was bullying legislators and prompted an online petition asking the White House to "investigate this blatant bribery." The Obama administration declined to comment on the petition.

7. "Based on a true story...loosely."

Truth is often stranger than fiction, which explains Hollywood's enthusiasm for telling true stories. There's just one problem: Sometimes reality gets in the way of the narrative or spoils the tone of a film. So Hollywood changes it. Not everyone necessarily has a problem with that, though. Chris Gardner, the homeless man-turned-financial whiz whose story was chronicled in the 2006 Will Smith picture The Pursuit of Happyness, says he understood why the film's creators changed the age of his son. In real life, the events played out when his child was still in diapers; in the movie, he's 5. The reason? It's hard to capture those poignant father-and-son moments without dialogue, so the child had to be of speaking age. Overall, says Gardner, "I could not be more happy" with the film

8. "What you see isn't what you'll get."

If you've ever felt cheated after seeing a movie that failed to deliver on what its trailer promised, you're not alone. Moviegoers are increasingly sounding the alarm that Hollywood plays a game of bait-and-switch, building marketing campaigns that present a false sense of a picture's style or subject matter. And at least one film buff has gone to the courts to make the case: A Michigan woman filed suit in September against a Hollywood distributor, saying that she was led to believe, through advertising, that the Ryan Gosling thriller Drive was about, well, driving. Instead, the film "bore very little similarity to a chase, or race action film," the suit alleged. And the reaction from Drive producer Graham King? "It's called marketing, you know?" he said in a 2011 interview. The suit was dismissed in March.

9. "We've got a bad case of sequelitis."

It's not an actual illness, but sequelitis is the term movie critics use to describe Hollywood's obsession of late with pictures that have a numeral in their title. Of last year's 10 highest-grossing films worldwide, nine were sequels. (The lone exception? The Smurfs -- and even that's practically a sequel, since the little blue creatures gained earlier fame as stars of an animated television series.) But if moviegoers are happy to buy tickets to these pictures-cum-franchises, who's being harmed? Movie mavens maintain it's stifling originality and resulting in the further commercialization of an industry that's already overcommercialized. "It's like, 'We can milk anything,'" says Sean Phillips, executive producer of the Yahoo Movies website.

10. "Of course we recycle. It pays."

Sequels may represent the artistic equivalent of recycling, but Hollywood also profits from its real leftovers. As recently as a decade ago, studios extracted silver from the physical prints that theaters sent back following a film's run, resulting in hundreds of thousands of dollars a year in added profits, according to Edward Jay Epstein, a film-business expert and the author of The Hollywood Economist 2.0. And today, the industry channels used props and costumes to auction houses that cater to the growing market of movie-mad collectors. The only problem with the squeeze-every-penny-out-of-a-picture mentality is that it's part of the "culture of the suits," Epstein says. In that culture, extra pennies go straight into studio coffers or toward blatantly commercial projects -- say, another Smurfs movie. Sure enough, a sequel is already in the works.