In today's Wall Street Journal, Michael Medved claims that Al Gore's
latest crusade against Hollywood poses no threat to the First
Amendment, because Gore isn't serious about regulating and is taking huge
campaign contributions from Hollywood. But what does the theory of
regulation say about this?
Medved has previously argued in his 1992 book:
"the typical "PG" film generates nearly three times the revenue of the
typical R" bloodbath or shocker, then the industry's insistence on
cranking out more than four times as many "R" titles must be seen as an
irrational and irresponsible habit."
Some recent research by Art De Vany and David Walls on R-Rated movies in
Hollywood confirms this: They find that R-rated movies are dominated by
G, PG, and PG13 movies in all three dimensions of revenues, costs, return
on production cost, and profits.
Medved argued that the reason that too many R-Rated movies are produced
that there is a strong need for "approval" among Hollywood producers,
executives and stars. They attempt to earn "insider praise" and
"esteem" by making movies that are audacious, artistic, and unusual and
[they show] a disposition to dislike any piece of work that too obviously
panders to the public.
Since R-Rated movies aren't that profitable, the industry could be
searching for a (cheat-proof) way to collectively produce fewer
R-rated films. What better way than government regulation?
The Gore-Lieberman threats of regulation don't seem to have bothered big
Hollywood producers (like Harvey Weinstein of Mirimax) - do we
therefore have a nice illustration of the Stigler/Peltzman theory of
regulation in action?
Comments? Suggestions?
Alex Robson,
UC Irvine
