The economic suicide of Hollywood:

Production-code-era Hollywood hadn’t ignored the darker side of human existence, but even its hardest-boiled noir films weren’t anything like this. The countercultural movies of “New Hollywood”—such as Arthur Penn’s violent, criminal-glorifying Bonnie and Clyde (1967), Robert Altman’s cynical antiwar comedy M.A.S.H. (1970), Hal Ashby’s sordid paean to the sexual revolution Shampoo (1975), and Martin Scorcese’s urban nightmare Taxi Driver (1976)—wowed critics, who shared their anti-establishment and anti-American attitudes.

But moviegoers turned up their noses. Weekly film attendance in 1967, the first year after Hollywood dumped the production code, plummeted to 17.8 million, from 38 million the year before (television had already eroded moviegoing from its late-1940s peak of 90 million a week). “In a single one-year period,” Medved notes, “more than half the movie audience disappeared—by far the largest one-year decline in the history of the motion picture business.” That audience then hovered around 20 million for the next three decades, despite a growing U.S. population...

Still dominated by countercultural types, Hollywood keeps churning out “edgy,” envelope-pushing movies—more than half of its films receive R ratings, for example—and Americans keep giving them thumbs-down, as the correlation of profit and ratings shows. Only five of the 50 top-grossing movies of all time have R ratings, and 13 of the top 100. A big 2005 Dove Foundation study examined the 3,000 most widely distributed Hollywood movies from 1989 through 2003 in each ratings category. It found PG- and PG-13-rated films between three and four times more profitable on average than R-rated ones—and G films, like this year’s hit nature documentary, March of the Penguins, more profitable still. The average R movie loses $6.9 million, the study showed; the average PG movie made nearly $30 million; the typical G movie made over $70 million.