1. "The real nail-biter? Our balance sheet."
Picture it: captains of industry struggling to stay relevant in a world they no longer understand. It may sound like a Citizen Kane-esque cinematic saga, but it's actually the story of today's studio executives, say film-industry watchers. The U.S. box office take dropped almost 4 percent in 2011, to $10.2 billion, marking the second straight year of decline. The root of the problem, of course, is the growing popularity of home viewing via Netflix and other video-on-demand outlets. Last year, consumer spending on video streaming jumped 50 percent, to $3.4 billion, reports the Digital Entertainment Group. The change has as many implications for the movie business as digital downloading did for the music industry. Granted, Hollywood makes some money from streaming sales. But those digital dimes aren't enough. Add it up and you have a potential crisis, says Christopher Sharrett, a professor of communication and film studies at Seton Hall University: "We could well be seeing the end of motion pictures in theaters."
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2. "3-D is for suckers."
So what are moviemakers doing to bring more bodies into theaters? They're revisiting an innovation of decades past: 3-D. And not everyone who tracks Hollywood is wild about the trend, saying it's a passing fad. Plus, action films don't always translate well to 3-D. Boston Globe film writer Ty Burr recently carped about the "sins against the visual cortex" perpetrated by 3-D releases Clash of the Titans,Gulliver's Travels and Green Lantern: They "aren't just terribly written, they're terrible to look at, with actors' faces separated from the backs of their heads," he wrote. Of course, Hollywood doesn't quite see it that way. In a 2010 interview, Clash of the Titans director Louis Leterrier praised today's 3-D, saying what viewers see on the screen is "exactly what it looked like on set." But either way, consumers are paying the price for the new-old technology: Admission to a 3-D flick is generally $3 extra.
3. "Movies are thinly veiled commercials."
Many moviegoers may recall how a trail of Reese's Pieces lures the alien out of hiding in E.T.: The Extra-Terrestrial. That's classic Hollywood product placement, circa 1982. Attracting an alien nowadays would require much bigger bait: Hollywood has increasingly come to rely on Madison Avenue for income. Indeed, product placement has doubled in value since 2005, to an estimated $1.8 billion. This blurring of the lines between entertainment and advertising -- a practice consumer advocates condemn -- has become so ubiquitous someone even made a movie about it: Documentarian Morgan Spurlock, of Super Size Me fame, spoofed the trend in his 2011 picture Pom Wonderful Presents: The Greatest Movie Ever Sold (he financed the $1.5 million film through sponsorships). But Hollywood argues that it's a necessary part of doing business -- and that ticket sales alone don't cut it: "Somebody has to pay for all this content to be created," says Lindsay Conner, a Los Angeles attorney who has represented film studios.
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4. "New York? Chicago? It's all Vancouver."
When Hollywood wants to use a particular city as a backdrop, it faces a choice: scout out settings and deal with potentially pricey or problematic local production crews, or head to a place that has a similar look and is eager to please, particularly when it comes to government financial incentives. Frequently, it chooses the latter, regardless of the possible visual compromise. As a result, some states, such as Michigan and Louisiana, have become hotbeds of production. And Canada -- especially the cities of Toronto and Vancouver -- has become such a hub that it's been dubbed Hollywood North. Even when a specific location is central to a plotline, filmmakers won't hesitate to shoot elsewhere. A case in point: The 2002 Reese Witherspoon romantic comedy Sweet Home Alabama was shot largely in Georgia, because it offered scenic locations and a solid crew of film professionals, explains Michael Fottrell, the film's executive producer. An added bonus, says Fottrell: Some New York scenes could be filmed in Atlanta.
5. "We boost sales by limiting your options."
It should come as no surprise that Hollywood times the release of youth-oriented "popcorn flicks" to the out-of-school summer months. But it might surprise people just how far studios take the timing game the rest of the year: If they deem a film unlikely to make a splash at the box office, industry observers say, they'll release it on a slow, off-season weekend -- so it won't have to compete with higher-profile fare, and so it will require fewer marketing dollars. In short, by minding the calendar (as well as the competition) and ultimately limiting options for moviegoers, studios are able to sell more tickets to movies that might otherwise be commercial disappointments, explains Paul Dergarabedian, president of Hollywood.com's box office division. "The scheduling of release dates is like a giant chess match," he says.
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