Hollywood's Hottest Summer

By RICHARD CORLISS

E.T. leads the pack of record-breaking hits

The lines snaking around 1,323 movie theaters this summer are long and eager; faces of every hue and age glow with anticipation. Outside Los Angeles' Cinerama Dome theater, a young woman on crutches stands patiently for 90 minutes, waiting to buy a ticket. Outside a theater in Washington, D.C., an elegant couple keeps cool by sipping tangerine daiquiris. Inside every theater there is applause as two names that certify movie magic appear on the screen: Steven Spielberg and E.T.: The Extra-Terrestrial. One Boston man in his 20s exults: "This is our generation's Wizard of Oz." In Atlanta, two schoolgirls are still sobbing as they leave the theater, then segue into a spirited argument over who cried more. Back at the Cinerama Dome, the closing credits for E. T. roll by to one more standing ovation. The moviegoers may also have been applauding themselves, for they are helping to create the movies' biggest-ever hit.

That happy spirit is contagious. The summer escape hatch from work, school and the nightly news is leading Americans straight to their local moviehouses, and not just to see E.T. The mysterious combustion between a movie and its audience has created half a dozen outsize hits and made this the hottest season in U.S. film history. Records have been shattered at the box office. Biggest opening weekend for a movie: Star Trek: The Wrath of Khan (June 4-6). Biggest opening two weeks: E.T. (June 11-24). Flashiest streak for the industry: the past six weeks, every one of which earned $100 million in the U.S. Moviegoers were still lining up to see Rocky III ($75 million in six weeks), Conan the Barbarian ($39 million in eight weeks), Spielberg's suburban gothic chiller Poltergeist ($39.5 million in five weeks), and the surprise hit of the spring, the basement-budget Porky's ($100 million in 16 weeks).

The biggest noise--the music of a celestial cash register, 3 million light years above Sunset Boulevard--is for E.T. Spielberg's rapturous space romance touched down on June 11, made $86.9 million in its first 25 days (see chart) and by last weekend had raced to a record $100 million. As one awed executive says, "E.T. is beyond moviemaking." Indeed, it is mythmaking. It has become that rare film that seizes the popular imagination and attracts people who rarely go to the movies. Already the word is being passed in Hollywood and on Wall Street: E.T. should pass Star Wars to become the all-time box-office champ.

Galloping inflation has robbed some glamour from the phrase "alltime box-office champ"--in real dollars, Gone With the Wind is still No. 1--but even these days, a projected worldwide gross of $400 million is decent money. So why the boom in so many movies? And why now? Spielberg, the 34-year-old boy who wove the magic carpet of E. T. (as well as Jaws, Close Encounters of the Third Kind and Raiders of the Lost Ark, all among the ten top grossers in movie history), sees a simple explanation: "A good film is kidnaped by its audience. And this summer the industry is giving people the movies they want to see. It is bringing entertainment to the country at a time when we really need it." Others point to the supposed boom in cheap entertainment during a recession. But the current recession was in full stagnation last Christmas, when a flock of expensive dramas flopped.

Some of the rug merchants who control Hollywood are cautiously thanking Allah while waiting for the next plague of locusts. They point to numbers that have obtained for the past decade: each year, give or take 10%, the industry sells about 1 billion tickets in the U.S.; some 20% of the population buys 80% of those tickets; this core audience tends to be in the 12-to-24 age group; the young attend more movies in the months between Memorial Day and Labor Day, and so Hollywood serves up its big youth-oriented movies in that period. Says Frank Price, president of Columbia Pictures: "Kid pictures always do well in the summer. By fall everyone will wonder, 'What happened to the boom?'' Even in the box-office heat wave, Price must be wondering; his studio's Annie, released May 21, keeps waiting for tomorrow (and tomorrow and tomorrow) to recoup its $50 million investment.

For most studios, though, the financial news is so good that movie executives can dismiss the challenges from upstart competition for the American consumer's entertainment dollar. They argue that cable lures more viewers away from the networks than from the moviehouses, and that video games cannot compete with the movies' sophisticated special effects. They can also point to a recent Variety story showing that the average cost of making a Hollywood movie, which had doubled since 1977, actually declined this year (from $9.6 million to $9.4 million). Of the early summer hits, none ran up a tab of more than $20 million. Star Trek II, which has matched its predecessor's early torrid pace, was made for $11 million, one-fourth the cost of the original; the sequel returned its production cost to Paramount within ten days of release.

Hit or flop, the news travels fast these days. "With most Hollywood movies opening in 500 to 1,500 theaters," notes Industry Analyst Lee Beaupre, "their commercial fates are generally determined in the first week." Art Murphy, Variety's box-office expert, explains: "Because it costs so much to advertise in the newspapers and on television--and because of sky-high interest rates--an expensive picture has to strike big and fast. A movie in 1,500 theaters will make its money quickly and then drop off. Even a hit can use up its audience in 25 days. These movies are flashes, but they are megaflashes."

Most studio men will be happy to settle for megaflashes in their July and August releases. The biggest question mark encases the Disney organization's TRON, a $21 million sci-fi chase set inside a video game; it boasts some elegant computer-graphics effects and a heart as cold as freon (see box). Following TRON into the theaters are Woody Allen's A Midsummer Night's Sex Comedy, Robin Williams in The World According to Garp, Burt Reynolds and Dolly Parton snuggling up in The Best Little Whorehouse in Texas, a highly touted comedy called Young Doctors in Love, Henry Winkler as a morgue manager in Night Shift, Richard Gere in the gaudy An Officer and a Gentleman, and Summer Lovers, Director Randal Kleiser's first dip into soft-core sentiment since his sleeper hit The Blue Lagoon.

If all these films fill moviemakers with a mixed sense of hope and anxiety, the reason is that they are all unknown properties--and, as Frank Mancuso, Paramount Pictures' head of distribution, points out, "the American public tends to spend money on what it knows." That means sequels. In the 1960s the James Bond series proved that sequels could make lots of money, not just the traditional formula of 50% to 60% of the original film's revenue. In 1974 The Godfather, Part II legitimized the sequel as a popular art form; and in 1980 The Empire Strikes Back vaulted to second place on the all-time hit list (trailing only its big brother, Star Wars). "The Empire Strikes Back taught people to trust sequels," says Sid Ganis, vice president of marketing for Lucasfilm, Ltd., the company that produced the Star Wars series (with Revenge of the Jedi due out next May) and Raiders of the Lost Ark (with a sequel due out in the summer of 1984).

It also taught the studios. The stampede was on: the gold rush had become the old rush. Of the 110 movies announced for release by the six major companies within the next year, 17 are sequels--from The Sting II to Halloween 3, from the fourth Cheech and Chong farce to the seventh and eighth Pink Panther comedies. No hit, however venerable, is immune to the virus: Disney is preparing a Return to Oz, and Universal has begun shooting Psycho II. Paramount is planning eight tightly budgeted Star Trek films, one to be released every 18 months. Also from Paramount is a movie with the definitive rip-off title Airplane II: The Sequel.

Sequels have an honorable place in the history of movie art and commerce. From Charlie Chaplin through Garbo and Harlow and Harpo, actors developed screen personalities that changed little from one film to the next. They were their own sequels. And the conventions imposed by genre and the strict Production Code assured the moviegoer that all dilemmas would be resolved, all sins rigorously punished, all endings sealed with a kiss. The watchword was continuity--a familiarity that bred the happy addiction of mass moviegoing. In 1946, 4 billion tickets were sold.

It was the rise of television that robbed the industry of its huge audience; for most people moviegoing became an event rather than a habit. Because TV managed, by its sheer glut, to make familiarity boring, films could attract the occasional customer by offering something new and daring: giant wrap-around screens and special effects, naughty words and forbidden themes. The problem was that, unlike TV, the movies could not keep manufacturing the same product ad infinitum. You could make your money with Ben-Hur, The Sound of Music or The Graduate; then it was back to the story board to hope for some other hit.

In 1977 Star Wars changed all that.

The film had no stars, an unfamiliar story and a genre (science fantasy) that had been pronounced box-office poison. 20th Century-Fox, which took the project after two other studios had turned it down, had to strong-arm theater owners into exhibiting the film. Everyone was wrong; everything was different. Writer-Director George Lucas showed three ways a movie could make money: by attracting a core audience back to see the same movie three, four, a dozen times; by devising sequels as imaginative, and as successful, as the original film; and by marketing toys, books and other merchandise related to the movie. The writing was there for everyone to see--on the bottom line. Hit sequels have become an event that is also a habit--a new story involving characters as familiar as Archie Bunker. The moviegoing cycle has returned to Point A: what audiences are looking forward to is deja vu.

Now a hit film can generate a multimedia chain reaction. Art Murphy notes that "there are seven potential markets for a new movie: the theaters, pay TV, free TV, cassettes, television syndication, merchandising and sound tracks. The theatrical release of a film is now the introduction of a new product. With the right handling the product could have a shelf life of five, seven, even 20 years." The evidence is everywhere this summer: Annie dolls, TRON video games, Blade Runner magazines, Star Trek books. One industry expert jokes that the Holmes-Cooney fight was a merchandising spin-off from Rocky III. Little E.T. is expected to generate a lucrative ranch-house industry all his own, with dolls, clocks, lunch pails and Christmas toys.

Merchandising is nothing new to the movies either: Gone With the Wind spun off dolls, board games, Bibles and Scarlett O'Hara Panties. But Star Wars perfected the technique. Taking a cue from his pal Lucas, Spielberg retained control of the E. T. merchandising. Producer Kathleen Kennedy, 29, conducted the negotiations. "A year ago," she recalls, "it was hard to convince the heads of the big department chain stores that a little space creature was going to be lovable to all ages. I showed them E.T.'s picture and they went 'Ugghhh!' " When Kennedy approached the M&M Co. to tie its chocolate candy pellets into the movie script, she was rebuffed. Instead, E.T. follows a trail of Reese's Pieces to Elliott's house--and M&M executives are standing around with chocolate melting on their hands.

In the executive suites of Hollywood, however, the candy is covered with gold. A lot of smart people have worked hard, not just to produce hits but to insulate their companies from the big movie bust. Since the late '50s they have supplied the bulk of network TV series. Now they have bought into cable companies, publishing houses, satellite technology, the record industry. They have also partnered with one another to distribute films, and with the commercial TV networks and Home Box Office to create pay cable operations. The result is an informal cartel that could control the entertainment business well into the 21st century.

For the conservative movie mogul, diversification is a timid dream come true. Like a card shark with an ace up one sleeve and a derringer up the other, he can approach the gambling table with confidence. Win or lose, he has done everything possible to take the risk out of the game--because movies are no longer the only game in town. At Warner Communications, theatrical films accounted for about 14% of the company's 1981 income; Atari video games and other consumer electronics generated 65%. The Disney people would love TRON to be a hit, but they have much more money riding on Epcot Center and Tokyo Disneyland, their newfangled playgrounds soon opening in Florida and Japan. Only MGM/UA is unprotected by either a conglomerate owner or significant nonmovie holdings. Coincidence or not, that is the one studio in financial trouble these days.

This has not been a happy year for the MGM/UA studio or for its boss, David Begelman, 60. A flurry of flops has left the company so deep in debt ($550 million) that even the substantial profits from Rocky III and Poltergeist will not cover this year's interest payments. Rumors of Begelman's imminent removal were spreading even before the galleys of Indecent Exposure turned up on the marble coffee tables of Bel Air last month. David McClintick's book, to be published next month, is a 550-page reconstruction of the meetings, phone calls and private anguish surrounding Begelman's departure from a similar job at Columbia Pictures in 1978--after he had admitted to embezzling some $84,000 from the studio, including $40,000 in forged checks.

Indecent Exposure is an absorbing movieland saga, but would it play on the screen? Today's young movie consumers want quick thrills and fast gags. Every one of the 20 top-grossing films of 1981 was either a comedy or an action-adventure. The young movie audience has always demanded escape. But escape into what? Into the child's first thrill at the movies: to be astonished by a great image glowing in the dark--a dream or nightmare come true in two dimensions.

And what about the adult audience, for whom the most special effect comes from the interplay of complex thoughts and contradictory feelings? Is there a place at the movies for them? Yes, the industry replies--if only they would come to the theaters. Most of the time, they don't. In the last six months of 1981, more than a dozen "adult" films were released, including The French Lieutenant's Woman, Body Heat, Reds and Ragtime. Only two of them raised much more than a sigh at the box office: On Golden Pond and Chariots of Fire, with astonishing grosses of $108.6 million and $58 million.

Adult pictures will continue to be made--because they look good in the folio, because they appeal to the social conscience of a studio boss, because they can be relatively inexpensive to produce and because, you never know, one or two of them might surprise everybody and go Golden. The problem is that Hollywood's most talented young directors are not interested in making movies that appeal primarily to adults. Instead, as Writer-Director Paul Schrader has noted, "they remake the movies they loved as kids."

When the remake is as enchanting as E.T., no one can complain. But a prodigiously gifted film maker like Spielberg might hold even his youthful fans if he were to expand his range and make other kinds of movies--as Lucas and John Carpenter and Brian De Palma might. The stray adventurous mogul might be persuaded to finance their ventures into the adult world. And the baby-boom audience, just now approaching early middle age, might follow them. All this could happen tomorrow, and nobody could guarantee that the movie industry would break another box-office record. But the eager faces in those long summer lines would surely have pleasures worth waiting for. --By Richard Corliss. Reported by Elaine Dutka/New York and Martha Smilgis/Los Angeles

With reporting by Elaine Dutka, Martha Smilgis

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