Business

The Hollywood Economist
The Hidden Financial Reality Behind the Movies
by Edward Jay Epstein
Melville House, 2010.

Edward Jay Epstein once wrote the Hollywood Economist column for Slate. But these are hard times in the media industry. So clearly, it’s time to compile those columns into a book – a sequel of sorts to his earlier elucidation of Hollywood economics, The Big Picture [read my review]. As with any compilation of this type, there will be some repetition. But the column format forces him to get right to the point, and it is eminently skimmable for the most salient points.

Informed by his knowledge of industry financials, Epstein presents some truly fascinating nuggets of information. Who knew, for instance, that Tom Cruise was such a clever financier? He had enough star power that he insisted on 100% accounting, in which every penny of revenue gets counted when calculating his percentage, instead of Hollywood accounting. As a producer, he sometimes took more out of the movie than the studio – which made the powers-that-be at Paramount so mad at him that they dumped the War of the Worlds project.

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The Big Picture: The New Logic of Money and Power in Hollywood
by Edward Jay Epstein
Random House, 2005

Edward Jay Epstein occupies the strange position of being a Hollywood columnist – but one who focuses on the business side of Hollywood rather than the razzle-dazzle. That is a unique niche to be in, but it's also a very small one. When times got tough in the magazine business, Slate dropped his Hollywood Economist column, and Epstein now gets his film-business commentary out through his blog.

Hollywood Economist

But he's absolutely right to point out that the news media rarely covers the substantial parts of the film business. All the focus on box-office receipts obscures the fact that the box office is no longer so important to profitability.  A film need only do well enough to guarantee an afterlife, in which the real money gets made. On the other hand, the shallow focus on box office grosses is not unique to Hollywood. Most business coverage in newspapers is awful, whatever the industry. They focus on big day-to-day events, and rarely do the simple arithmetic to explain the economic fundamentals that drive whole industries.

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"When the early history of the Web is contemplated centuries hence, Adam Cohen's detailed and thorough account of the founding and development of eBay will be among the books that people will turn to to truly understand one of the Internet's most important companies."
— Kara Swisher, Wall Street Journal columnist, as quoted on the back cover

Adam Cohen has written a very thorough company account, one that takes into account many diverse viewpoints.  Cohen is on the editorial board of The New York Times, and each section in the book seems to follows the inverted pyramid style of journalism.  There’s an eye-catching lead to pique the reader's interest, some background, quotes from sources, and finally, an analysis of  the topic’s significance.  One could imagine this book having been compiled from several articles in the Times.

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