1. 10 Things Wrong With Hollywood According to
Steven Soderbergh’s State of Cinema Address
Features By Scott Beggs on April 30, 2013
Yesterday, indie filmmaker Joe Swanberg (who’s truly pulled himself up from his
bootstraps)tweeted out, ”Soderbergh’s own output over the last few years proves, to me
at least, how open the system is and how possible it is to make great stuff.”
That felt a little odd. Steven Soderbergh‘s latest bout of prolificness is genuinely
impressive, but after struggling with the studio process and ultimately, for one example,
taking his Liberace biopic to HBO, would Soderbergh himself agree with Swanberg’s
optimistic sentiment?
That’s difficult to say, especially given how Soderbergh rose to prominence, but he’s at
least given us an idea about how he feels about the studio system as it currently stands
in 2013. It isn’t pretty. It’s eloquent.
His full State of Cinema Address from the San Francisco International Film
Festival is a must-listen (see below), but here are the 10 things wrong with Hollywood
extracted from his amazing, fist-pumpingly laudable speech.
First of all, it’s important to nail down his definitions of both “movies” and “cinema,” as
one continues to dominate the landscape while the other is further marginalized:
“The simplest way that I can describe it is a movie is something you see, and cinema is
something that’s made. And it has nothing to do with the captured medium, and it doesn’t
have anything to do with where the screen is — whether it’s in your bedroom, your iPad.
It doesn’t even really have to be a movie. It can be a commercial. I can be something on

2. YouTube. Cinema is a specificity of vision. It’s an approach in which everything matters.
It’s the polar opposite of generic or arbitrary, and the result is as unique as a signature or
a fingerprint. And it isn’t made by a committee, and it isn’t made by a company, and it
isn’t made by the audience. It means that if this filmmaker didn’t do it, it either wouldn’t
exist at all or it wouldn’t exist in anything like this form.”
So what’s wrong with Hollywood studios then?
1. People Who Don’t Know Movies Are Picking Projects
“The meetings have gotten pretty weird. There are fewer and fewer executives who are in
the business because they love movies; there are fewer and fewer executives who know
movies. So it can become a very strange situation. I mean, I know how to drive a car, but
I wouldn’t presume to sit in a meeting with an engineer and tell him how to build one, and
that’s kind of what you feel like when you’re in these meetings. You’ve got people who
don’t know movies, don’t watch movies for pleasure, deciding what movie you’re going to
be allowed to make. That’s one reason studio movies aren’t better than they are, and
that’s one reason that cinema as I’m defining it is shrinking.”
2. Large, Global Cinema is Diluting What Studios Can Make
“How does a studio decide what movies get made? One thing they take into
consideration is the foreign market. Obviously, it’s become very big. The things that travel
best are going to be action-adventure, science-fiction, fantasy, spectacle, some
animation thrown in there. Obviously the bigger the budget, the more people this thing is
gonna have to appeal to, the more homogenized it’s gotta be, the more simplified it’s
gotta be. So things like cultural specificity, narrative complexity, and ,God forbid,
ambiguity. Those become real obstacles to the success of the film here and abroad.
We had a test screening of Contagion once, and a guy in a focus group stood up and
said, ‘I really hate the Jude Law character. I don’t know if he’s a hero or an asshole,’ and
I thought, ‘Well, here we go.’”
3. Marketing Expenses Are Upside Down
“So then there’s the expense of putting a movie out, which is a big problem. Point of entry
for a mainstream, wide-release movie: $30m. That’s where you start. Now you add
another 30 for overseas. Now you’ve got to remember, the exhibitors pay half of the
gross, so to make that 60 back you need to gross 120. So you don’t even know what
your movie is yet, and you’re already looking at 120. That ended up being part of the

3. reason why the Liberace movie didn’t happen at a studio. We only needed $5m from a
domestic partner, but when you add the cost of putting a movie out, now you’ve got to
gross $75m to get that 35 back, and the feeling amongst the studios was that this
material was too [Laughs] “special” to gross $70m. So the obstacle here isn’t just that
special subject matter, but that nobody has figured out how to reduce the cost of putting
a movie out.
4. No One Learns From When They’re Wrong
“…on Magic Mike for instance, the movie opened to $38m, and the tracking said we were
going to open to 19. So the tracking was 100% wrong. It’s really nice when the surprise
goes in that direction, but it’s hard not to sit there and go ‘how did we miss that?’ If this is
our tracking, how do you miss by that much?
I know one person who works in marketing at a studio suggested, on a modestly
budgeted film that had some sort of brand identity and some A-list talent attached, she
suggested, ‘Look, why don’t we not do any tracking at all, and just spend 15, and we’ll
just put it out.’
They wouldn’t do it. They were afraid it would fail, when they fail doing the other thing all
the time. Maybe they were afraid it was going to work.”
5. Marketing for Sequels is Even Worse
“The other thing that mystifies me is that you would think, in terms of spending, if you
have one of these big franchise sequels that you would say, ‘Oh, we don’t have to spend
as much money because is there anyone in the galaxy that doesn’t know Iron Man’s
opening on Friday?’ So you would think, ‘Oh, we can stop carpet-bombing with TV
commercials.’
It’s exactly the opposite. They spend more. They spend more. Their attitude is ‘You
know, it’s a sequel, and it’s the third one, and we really want to make sure people really
want to go. We want to make sure that opening night number is big so there’s the
perception of the movie is that it’s a huge success.’ There’s that, and if you’ve ever
wondered why every poster and every trailer and every TV spot looks exactly the same,
it’s because of testing. It’s because anything interesting scores poorly and gets kicked
out.
Now I’ve tried to argue that the methodology of this testing doesn’t work. If you take a
poster or a trailer and you show it to somebody in isolation, that’s not really an accurate
reflection of whether it’s working because we don’t see them in isolation, we see them in
groups. We see a trailer in the middle of five other trailers, we see a poster in the middle
of eight other posters, and I’ve tried to argue that maybe the thing that’s making it
distinctive and score poorly actually would stick out if you presented it to these people the
way the real world presents it. And I’ve never won that argument.”

4. 6. Testing Can Be Useful But It Can Also Be Ignored
“Now look, not all testing is bad. Sometimes you have to, especially on a comedy.
There’s nothing like 400 people who are not your friends to tell you when something’s
wrong. I just don’t think you can use it as the last word on a movie’s playability, or its
quality. Magic Mike tested poorly. Really poorly. And fortunately Warner Bros. just
ignored the test scores, and stuck with their plan to open the movie wide during the
summer.”
7. No One Learns From Mistakes Either
“[Side Effects] didn’t perform as well as any of us wanted it to. So, why? What
happened? It can’t be the campaign because all the materials that we had, the trailers,
the posters, the TV spots, all that stuff tested well above average. February 8th, maybe it
was the date, was that a bad day? As it turns out that was the Friday after the Oscar
nominations are announced, and this year there was an atypically large bump to all the
films that got nominated, so that was a factor. Then there was a storm in the Northeast,
which is sort of our core audience. [Winter Storm] Nemo came in, so God, obviously, is
getting me back for my comments about monotheism. Was it the concept? There was a
very active decision early on to sell the movie as kind of a pure thriller and kind of
disconnect it from this larger social issue of everybody taking pills. Did that make the
movie seem more commercial, or did it make it seem more generic? We don’t know.
What about the cast? Four attractive white people… this is usually not an obstacle.
The exit polls were very good, the reviews were good. How do we figure out what went
wrong? The answer is ‘We don’t.’ Because everybody’s already moved on to the next
movie they have to release.”
8. The Numbers Squeeze Out Smaller Budgets
“[Studios] don’t look at the singles or the doubles as being worth the money or the man
hours. Psychologically, it’s more comforting to spend $60m promoting a movie that costs

5. 100, than it does to spend $60m for a movie that costs 10. I know what you’re thinking: If
it costs 10 you’re going to be in profit sooner. Maybe not. Here’s why: Okay. $10m movie,
60m to promote it, that’s 70, so you’ve got to gross 140 to get out. Now you’ve got $100m
movie, you’re going spend 60 to promote it. You’ve got to get 320 to get out.
How many $10m movies make 140 million dollars? Not many. How many $100m movies
make 320? A pretty good number, and there’s this sort of domino effect that happens too.
Bigger home video sales, bigger TV sales, so you can see the forces that are sort of
draining in one direction in the business.”
Joe Swanberg’s Drinking Buddies
9. Filmmakers Get Punished For Executive Mistakes
“Now don’t get me wrong, there is a lot of waste. I think there are too many layers of
executives, I don’t know why you should be having a lot of phone calls with people that
can’t actually make decisions. They’ll violate their own rules on a whim, while they make
you adhere to them. They get simple things wrong sometimes, like remakes. I mean, why
are you always remaking the famous movies? Why aren’t you looking back into your
catalog and finding some sort of programmer that was made 50 years ago that has a
really good idea in it, that if you put some fresh talent on it, it could be really great. Of
course, in order to do that you need to have someone at the studio that actually knows
those movies. Even if you don’t have that person you could hire one. The sort of
executive ecosystem is distorted, because executives don’t get punished for making
bombs the way that filmmakers do, and the result is there’s no turnover of new ideas,
there’s no new ideas about how to approach the business or how to deal with talent or
material.”
10. Studios Are Forcing an Indie Landscape to Take Smaller

6. Cuts
“In 2003, 455 films were released. 275 of those were independent, 180 were studio films.
Last year 677 films were released. So you’re not imagining things, there are a lot of
movies that open every weekend. 549 of those were independent, 128 were studio films.
So, a 100% increase in independent films, and a 28% drop in studio films, and yet, ten
years ago: Studio market share 69%, last year 76%. You’ve got fewer studio movies now
taking up a bigger piece of the pie and you’ve got twice as many independent films
scrambling for a smaller piece of the pie. That’s hard. That’s really hard.”
Soderbergh ends by explaining that no one wanted to buy distribution rights
for Memento. It had done well in festivals, gotten a great response, but no one wanted it.
That’s another problem to tack onto the list, but Soderbergh views it as a kind of silver
lining as well. As proof that there are always going to be new, talented people making
interesting things.
There’s a huge amount to unpack in his speech, and a few things seem slightly off
(viewing posters/trailers in sets in the internet age) or have positive repercussions that
aren’t explored (the influx of foreign films and filmmakers gaining greater reach in the
States), but for the most part it’s difficult to argue with either the numbers or the gut
reaction here.
At any rate, I’d love to see Swanberg and Soderbergh have a conversation about all of
this. Not just because their podcast would be called Bergs on Film, but because they
both have excellent points to make and different perspectives to filter them through.
In a way, it seems like the indie world is responding and compensating for a lack of
consistent quality coming from the major studios much the same as it did when
Soderbergh found his launchpad. Two decades later, he finds himself busily retiring from
a studio system that was just as broken as he found it.

7. Cuts
“In 2003, 455 films were released. 275 of those were independent, 180 were studio films.
Last year 677 films were released. So you’re not imagining things, there are a lot of
movies that open every weekend. 549 of those were independent, 128 were studio films.
So, a 100% increase in independent films, and a 28% drop in studio films, and yet, ten
years ago: Studio market share 69%, last year 76%. You’ve got fewer studio movies now
taking up a bigger piece of the pie and you’ve got twice as many independent films
scrambling for a smaller piece of the pie. That’s hard. That’s really hard.”
Soderbergh ends by explaining that no one wanted to buy distribution rights
for Memento. It had done well in festivals, gotten a great response, but no one wanted it.
That’s another problem to tack onto the list, but Soderbergh views it as a kind of silver
lining as well. As proof that there are always going to be new, talented people making
interesting things.
There’s a huge amount to unpack in his speech, and a few things seem slightly off
(viewing posters/trailers in sets in the internet age) or have positive repercussions that
aren’t explored (the influx of foreign films and filmmakers gaining greater reach in the
States), but for the most part it’s difficult to argue with either the numbers or the gut
reaction here.
At any rate, I’d love to see Swanberg and Soderbergh have a conversation about all of
this. Not just because their podcast would be called Bergs on Film, but because they
both have excellent points to make and different perspectives to filter them through.
In a way, it seems like the indie world is responding and compensating for a lack of
consistent quality coming from the major studios much the same as it did when
Soderbergh found his launchpad. Two decades later, he finds himself busily retiring from
a studio system that was just as broken as he found it.