That's the gist of this Variety profile of George Lucas:

Lucas said he believes Americans are abandoning the moviegoing habit for good.

"I don't think anything's going to be a habit anymore. I think people are going to be drawn to a certain medium in their leisure time and they're going to do it because there is a desire to do it at that particular moment in time. Everything is going to be a matter of choice. I think that's going to be a huge revolution in the industry."

Two of those sentences are tautologies of course. I've read dozens and dozens of books on Hollywood, and I guess I missed the chapters on the era when movie watching was forced upon the American people. As if in 1935 Irving Thalberg declared marshal law in the U.S. and ordered all moviegoers on a forced march to the Roxy.

Setting that aside, it's not like this is an entirely unforeseen development. When Jack Valenti retired in 2004, Michael Medved asked him a great question:

With all the gratitude and acclaim surrounding Jack Valenti's recently announced retirement, no one dares confront the long-time president of the Motion Picture Association of America over the chief mystery of his 38-year reign: What happened, Jack, to all those missing moviegoers?

Despite his unquestioned eloquence, elegance and charm, Mr. Valenti presided over history's most disastrous decline in the audience for feature films. In 1965, the year before he left the Johnson administration to assume his plush position as chief mouthpiece for the entertainment industry, 44 million Americans went out to the movies every week. A mere four years later, that number had collapsed to 17.5 million.

In other words, some potent, puzzling force drove more than half of the nation's film fans to break the habit of movie going. That same mystical power served to suppress attendance for the next 20 years, with figures on ticket sales remaining flat until they began to rise moderately in the 1990s, reflecting the construction of thousands of new movie screens at multiplex theaters. Most recent figures (from 2003) show weekly attendance today at just over 30 million. As a percentage of the nation's population, however, the numbers on movie attendance remain only slightly improved from the devastating trough of 1970 (10.3% vs. 8.6%) and still vastly lower than the robust box-office years of 1965 (44%) or 1960 (45%).

It's amazing how many movie professionals remain altogether unaware of this long-term decline in film going--or, when informed about the depressing but undeniable figures, wrongly attribute them to the advent of television. TV sets began appearing in living rooms in the late 1940s, of course, and by the time the audience for feature films started its sharpest slump in 1966, the tube had already arrived in nearly all American homes.

Medved blames the loss of viewers to the transition from the more rigorous Hays Code to Valenti's G/PG/R/X ratings system:

The resulting changes in the industry showed up with startling clarity at the Academy Awards. In 1965, with the Production Code still in force, "The Sound of Music" won Best Picture of the Year; in 1969, under the new rating system, an X-rated offering about a homeless male hustler, "Midnight Cowboy," earned the Oscar as the year's finest film. Most critics, then as now, welcomed the aesthetic shift and hailed the fresh latitude in cinematic expression, but the audience voted with its feet.

And of course, in the post-9/11 era, a similar shift has been occurring. While Chris Anderson's Long Tail of media choices is definitely a factor, so is Hollywood's hard-line doctrinaire liberalism, which flared up dramatically during the 2004 election season, and shows little sign of abating. The result is that while outspoken activists such as Sean Penn have enormous clout within Hollywood, 2005 became "A Big Year For Films Nobody Will See", as blogger Charlie Richards wrote. (So far, Penn's most recent film has grossed a miniscule $6,501,727 on a $55,000,000 budget).

As a result, during this year's Oscar season, Lucas claimed that Hollywood's future was a spate of small $15 million dollar movies, as opposed to a dozen or so $200 million summertime blockbusters. But it looks as though Lucas is thinking even smaller:

He gave $175 million -- $100 million for endowment and $75 million for buildings -- to his alma mater. But he said that kind of money is too much to put into a film.

Spending $100 million on production costs and another $100 million on P&A makes no sense, he said.

"For that same $200 million I can make 50-60 two-hour movies. That's 120 hours as opposed to two hours. In the future market, that's where it's going to land, because it's going to be all pay-per-view and downloadable.

$200 million divided by 50=$4 million. In other words, Lucas expects Hollywood films to eventually average four million dollars a pop, so that the industry survives on an excess of quantity, rather than pure excess itself. That's a far cry from films such as Titanic and Lucas's recent Star Wars prequels, all of which had gynormous, nine-figure budgets.

Fifty years ago, Norma Desmond had no idea how small the pictures were really going to get. Or that her industry would become just another niche market.