Red Carpet

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The Book of the Week is “Red Carpet, Hollywood, China, and the Global Battle for Cultural Supremacy” by Erich Schwartzel, published in 2022. In this hodgepodge of a volume, the author described the interactions between the United States and China in connection with their movie and television industries, beginning in the 1990’s.

America seeks to profit in everything it does.

The Chinese government’s number one goal is to boost its national pride when selling video entertainment to end-users. The government therefore keeps a tight rein on the optics of its products– limits the stories of its public-private partnership’s shows to:

  • glorifying itself and its Communist Party history;
  • recounting its victimization at the hands of evil, Western powers and Japan with regard to militarism and trade in the 19th century;
  • glorifying superheroes who convey Communist ideology.

The Chinese government gets very offended when even one movie-line or one tweet implies that Tibet or Taiwan are not part of China. It censors story-characters who challenge authority, buck established order, or shake things up. It censors disparagement of China, adult themes of vice, religion, gruesome violence, ghosts and gays. China financially punishes the perpetrators– the entertainment companies. Because it can.

Another aspect of China’s video culture is rampant pirating of Western entertainment. Further, deals made with foreign countries to screen shows in China, are always financially superior for China. Contrarily, in various ways, China will curtail revenues for all parties if it sees that the foreign entities’ shows are too influential with Chinese viewers.

November 1994 saw the first American movies (made by Warner Brothers) shown in China. Even though in the next quarter century, foreign videos shown in China became China-fied, only Chinese people watch movies made in China. Americans aren’t watching movies made in China.

Beginning around 2014, China’s dictator Xi began to punish Chinse entertainment-industry dissidents. Between 2017 and 2020, America had 17 of the fifty highest-grossing movies of all time. China had 27.

China has begun to export its movies and TV shows to Kenya at a deep discount in order to push its ideology. But viewers enjoy American shows better. The younger generation yearns for the consumer goods they see on TV. Interestingly, Disney was one of the few American content-providers that didn’t portray Africa as a “lawless land of disease and despots.”

Read the book to learn many more details of how Hollywood became experienced at dealing with China in seeking to make money, while China played Hollywood, and how China is spreading its gospel to the African continent with the goal of world domination.

Fatal Subtraction

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The Book of the Week is “Fatal Subtraction, How Hollywood Really Does Business” by Pierce O’Donnell and Dennis McDougal, published in 1992.

“I asked myself whether this uncanny similarity and anticompetitive market was the result of coincidence or conspiracy. Thanks to my populist tendencies and a healthy distrust of powerful institutions, I opted for the sinister explanation.”

Politics? Big Tech? Medical, legal, music, sports or oil industry?

The above quote happens to refer (in various ways) to all of the major Hollywood movie studios, just after their most lucrative years. The skyrocketing size of the home video market in the 1980’s made movie studios richer and richer, what with cable TV, VCRs and global distribution. They retained the best entertainment law firms on an ongoing basis so that whenever any powerless parties who felt wronged, tried to hire those firms to bring legal actions against them, there were conflicts of interest.

In 1988, Art Buchwald and Alain Bernheim– respectively a seasoned humorous newspaper writer and lecturer who dabbled in the movie industry, and a producer– sued Paramount Pictures Corporation for thirteen causes of action; among them, breach of contract in connection with the movie Coming to America starring Eddie Murphy. They were fortunate in that they were able to hire a big firm and could afford to pay hundreds of thousands of dollars to hire topnotch attorneys to fight a years-long legal battle.

The crux of the dispute involved the boilerplate contracts almost everyone in Hollywood was compelled by their agents to sign, in order to get work. The studios engaged in cartelizing behavior, so the powerless creative personnel were at their mercy at contract-signing. Only a tiny percentage of powerful elite stars reaped a ton of money for all movies they did, regardless of financial success. The agents claimed they were getting great deals for their less powerful talent, but that was a lie. For, starting in the 1950’s, the contracts evolved pursuant to the studios’ shady accounting practices, in a way that cheated screenwriters especially.

By the dawn of the 1990’s, big-name actors were allowed to behave like prima donnas, basically enjoying excessive expense accounts and reaping outrageously generous compensation from gross movie revenues. The movie idea originators and writers received net profit participation– i.e., the crumbs after all expenses had been deducted. The studios’ definition of “profit” was topsy turvy so when it came time to pay lowly workers, they claimed their movies were losing money!

O’Donnell and his legal team argued that certain provisions in Buchwald’s and Bernheim’s contracts were unconscionable, and therefore legally unenforceable. On principle, the studios’ oligopoly was economically bad not just for his clients, but for society (See this blog’s post “Wikinomics / Courting Justice”).

Read the book to learn every last detail of the case.

Indecent Exposure

The Book of the Week is “Indecent Exposure, A True Story of Hollywood and Wall Street” by David McClintick, published in 1982. This volume with the provocative but misleading title had nothing to do with sex. It actually consisted of a suspenseful, albeit long story seen mostly through the eyes of Alan J. Hirschfield, the CEO and officer at Columbia, the movie company. It was about how a lack of honesty, the power of propaganda, and clashing egos basically resulted in the redistribution of wealth among the wealthy. This sort of thing happens all the time.

In February 1977, then-famous actor Cliff Robertson received a document saying he owed taxes in connection with a check he never received. He later found out that the check had been forged and cashed in his name, by David Begelman, a high-level executive at the aforesaid Columbia. Robertson became the victim of cancel culture, for NOT being a tax cheat in Hollywood.

It was common practice for Hollywood studios to send movie actors checks for thousands of dollars (usually unreported to the IRS) that defrayed a small portion of their promotion expenses for a new picture. The IRS had just then begun cracking down on that taxable income. Robertson’s reaction set in motion a series of consequences that affected thousands of people; mostly financially.

Columbia was a public company, and the bad publicity resulting from news of a serious crime committed by one of its executives was a serious public relations problem. Hirschfield, who was on the board of directors, was told by an attorney that he had a duty to inform the executive committee, corporate counsel and the SEC after an internal investigation had been conducted.

As has been the case since the discovery of journalism/tabloidism, (supposedly said by Mark Twain), “A lie can travel halfway around the world while the truth is putting on its shoes.” Begelman’s friends in the Hollywood community (of which the check forger had many) rushed to his defense, having heard only vague rumors that described his transgressions in euphemisms. They really had no clue that he had actually committed several felonies, it turned out. They didn’t want to know.

The friends planted tabloidy messages in the media making the excuse “Everybody Does It” because they took unethical liberties with their own expense accounts, and made Hirschfield the villain, saying he was a power-hungry, vindictive executive, as he technically did compete for power with Begelman in the company hierarchy. Hollywood’s and the public’s gullibility in automatically believing in Begelman’s innocence and Hirschfield’s treachery is human nature.

At the board meeting that initiated the long, heated discussion that would determine whether Begelman was fired, Begelman acted like a prisoner on death row who had suddenly found religion. He implied he might kill himself if removed from his primary job. But actually, anyone who knows this kind of person knows that he would be too arrogant to kill himself.

A preliminary inquiry into Begelman’s history yielded more than one serious crime during his Columbia tenure, and previous lying and other worse misdeeds. Hirschfield argued for termination, saying Begelman was unlikely to change his spots, as dishonesty was a lifelong habit with him. Over the next few years, the Hollywood community and the public, however, still having heard only distorted soundbites that minimized Begelman’s sins, fooled itself into believing they weren’t that bad, and continued to defend him.

Interesting sidenote: In 1982, in a joking context, Hirschfield exclaimed to a female friend who was high on the corporate ladder, in front of some colleagues: “Female executives suck!” She laughed. Clearly, if that was uttered in 2018, hilarity would NOT ensue.

Read the book to learn of the consequences of the stupid actions taken by most of the main characters of this entertaining saga.