Last week, we quoted George Lucas as saying that in the future, most films would have budgets of $30 million or less, compared with the runaway costs of blockbuster productions such as his own Star Wars movies. Why the emphasis on lower-budget films? Libertas writes that Hollywood has discovered the formula to turn low budget, highly politicized films into money makers, while kissing off the American heartland--AKA, the Red States:

But if Hollywood is so pitifully out of touch, how does the industry’s economic train keep chugging along? Why don’t market forces come crashing in on Hollywood executives, sort of like the way the Red Sea came crashing down on Pharaoh’s army in “The Ten Commandments”? The answer’s in the numbers.

Let’s take a sampling of 5 left-leaning, ‘hot button’ films from last year, all of which were Oscar-nominated and four of which won Oscars: “Brokeback Mountain,” “Good Night, and Good Luck,” “Syriana,” “The Constant Gardener” and surprise Best Picture winner “Crash.” The average budget for these five films was about $20 million. Their average worldwide gross? Just over $80 million - and that doesn’t even include DVD revenues.

Perhaps you’re getting the picture: there’s decent money to be made being left-wing, so long as a film’s budget is low. Among left-leaning films that underperformed this year, the chief culprits were “Jarhead” and Steven Spielberg’s “Munich” - and really only because those films cost too much (both around $70 million).

So what’s going on here? Hollywood has recently perfected a formula whereby low-budget, indie-looking films generate good reviews, controversy, and oceans of free publicity (a lot of it coming from the conservative media) due to a film’s left-wing worldview. And all this free buzz gets translated into box office dollars.

The model Hollywood’s following here is that of “Fahrenheit 9/11,” Michael Moore’s $6 million film from 2004 that generated $222 million in worldwide boxoffice. “Fahrenheit” opened a lot of eyes in Hollywood - but not about George Bush or Iraq. Those bulging eyeballs were staring at “Fahrenheit”’s grosses.

One company that’s adopted “Fahrenheit”’s model is Participant Productions, founded by eBay’s Jeff Skoll. Participant co-produced “Syriana,” “Good Night, and Good Luck,” “North Country,” and soon will release the Al Gore documentary “An Inconvenient Truth” and Richard Linklater’s adaptation of “Fast Food Nation.” None of these films cost very much (”Good Night” cost only $6 million), and are easy films to sell to the sort of people who read The Huffington Post or The Daily Kos. Crazy as this may sound, this business model is increasingly making sense in Hollywood’s competitive marketplace.

So here’s the bad news: Hollywood doesn’t need the Heartland anymore. There’s basically no pressure for Hollywood to change what it’s doing, because there are plenty of Blue State audiences and DVD sales out there to make even something like the gender-bending “Transamerica” a hit, so long as the film doesn’t cost too much.

I’ve heard conservatives tell me for years that ‘market forces’ will eventually force Hollywood to change, become more mainstream. The argument goes something like this: Hollywood’s product will eventually become so toxic, so nakedly political, that there will eventually be a ‘backlash’ from the public - at which point things in Tinseltown will magically change for the better.

Guess what? It ain’t happening. Hollywood simply doesn’t need the Red States any more. Hollywood’s more interested in how a film plays in Mexico or France these days than in Kansas. After all, Charles Krauthammer may hate “Syriana” - but the Germans and the Brits love it! So do the Spanish and the Italians. That’s the global economy for you - Hollywood’s now out-sourcing its audience.

All of this may be depressing to read, but here’s the good news: if the price of entry into the movie game is $5-$20 million, conservatives can play too.