"During the Depression, when the spirit of the people is lower than at any other time, it is a splendid thing that for just 15 cents an American can go to a movie and look at the smiling face of a baby and forget his troubles."
-Franklin Delano Roosevelt
In the 1930's Hollywood emerged to provide an escape to audiences struggling to make ends meet. Millions of people filled movie houses each week to spend even just a few hours forgetting about their own problems, while watching heroes rescue damsels, swashbuckling pirates, and musicals about... whatever musicals are about. The musical "Gold Diggers of 1933" focused directly on the issues people were facing during the depression and became the highest grossing film of the year.
Could Hollywood be on the verge of a renaissance of its golden age?
Honestly, I don't think so.
For one thing, During the great depression, over 25% of the population was unemployed. Compared to the current 6.5% unemployment rate that was reported in November, and you can see that we are nowhere near as bad off as things were in the 30's.
Second, the cost of making a film has increased exponentially over what it cost back in the 30's. While money has always been the driving goal of the film biz, the studios are reluctant to invest the money into anything that isn't going to be an instant success. As a result, no one is willing to gamble on a film that might flop, which means that the current stable of films that gets churned out of the Hollywood machine are lame, tired cliches, rubber stamp storylines and remakes of films that came out less than a decade ago.
Finally, and possibly the biggest reason why Hollywood may be up against the ropes is that there are a variety of ways a consumer can be distracted nowadays that steal some of the fire from the good old movie house. In the 30's, the silver screen was all there was. Now television, DVDs, video games, the internet, and even cell phones can provide an escape from reality even if only for an hour or two. The movie theaters still bring in numbers - thanks in no small part to the enormous advertising budgets most modern films have - but the supply of possible distractions outweighs the demand for consumers to be distracted. Movies are no longer the only thing in town.
There is still a need for entertainment and the big screen can still provide a means of escaping reality, but the value of that escape - when compared to all the other forms in existence, and combined with what the studios tend to consider "entertainment" - continues to be strained. Hollywood lately seems to have lost sight of the most important aspect of the filmmaking process: the audience. And it's the audience that will decide the fate of the business.