On Sunday, after avoiding the Oscars, I wrote that Hollywood was on the verge of becoming just another niche market competing for consumer attention, rather than a mass media that dominated it. It seems like someone there has the same idea:

Movie mogul George Lucas predicts Hollywood will soon start shifting away from mega-budget blockbusters in favor of making more independent films for less money. Alongside Steven Spielberg, Lucas is cited as being chiefly responsible for the blockbuster phenomenon that has gripped the movie industry for the last three decades.

But he now believes big budget films can no longer be profitable and are going out of fashion, as evidenced by this year's Academy Award nominees, including independent movies Crash and Good Night, And Good Luck.

Lucas tells the New York Daily News, "The market forces that exist today make it unrealistic to spend $200 million on a movie. Those movies can't make their money back anymore. Look at what happened with King Kong."

He added, "I think it's great that the major Oscar nominations have gone to independent films. Is that good for the business? No - it's bad for the business. But movie making isn't about business. It's about art. In the future, almost everything that gets shown in theaters will be indie movies. I predict that by 2025 the average movie will cost only $15 million."

Which might not be a bad thing: as technology become more powerful, the cost of digital effects should come down, in theory making bloated budgets slightly less of an issue. Simultaneously, the size of movie going audiences will continue to shrink, as they have since the 1960s. (Samuel Rothafel's original Roxy theater sat 6,200 moviegoers. Try building that today.) And as mass culture continues to fracture, it may be increasingly difficult to find stories that attract audiences of the sizes that made the blockbusters of the past profitable (including Lucas's own movies).

That doesn't mean that I'd like to see such movies come to end--although it's difficult to imagine another David Lean or Stanley Kubrick emerging from today's movie industry, someone who can make an intelligent epic movie. But Hollywood managed to crank out an endless stream of great small to medium-sized movies during the studio system in the 1930s and '40s without spending babillions on each film (with the exception of Gone With The Wind, of course).

Which would you rather see: Casablanca and Citizen Kane, each made for fairly modest budgets, or Tom Cruise in a $175m-budgeted Mission Impossible XXIII?

Update: Related thoughts, here.