GROSS POINTS.

The people who make the popcorn basically know what they're doing. The people who make the movies basically don't, at least not until the product is out there, and then it's too late. Moviemaking is a business almost in spite of itself. No film company was willing to invest in "The Birth of a Nation." Everyone said that David O. Selznick would lose his shirt on "Gone with the Wind." When he didn't, various parties determined to repeat the formula, and made "Mutiny on the Bounty," "Cleopatra," "The Greatest Story Ever Told," "Waterloo," and "The Bible." They lost their shirts. Universal and United Artists turned down "Star Wars"; Twentieth Century Fox, the studio that distributed it, gave George Lucas the rights to the sequels for nothing. After Steven Spielberg finished shooting "Jaws," he believed that his career was over. Almost the entire industry was certain that "Titanic" would be a financial black hole; it took in $1.85 billion at the box office, more than six hundred million dollars ahead of the next-highest-grossing picture of all time. The history of Hollywood is a comic routine of bad guesses, unintended outcomes, and pure luck. Half of the failures were well-intentioned, and half of the successes were, by ordinary standards of fairness and decency, undeserved. People do get rich making movies; more often than not, they're the wrong people. That's why moviemaking is so much fun to read about. Unless, of course, it's your money.

The cinema, like the novel, is always dying. The movies were killed by sequels; they were killed by conglomerates; they were killed by special effects. "Heaven's Gate" was the end; "Star Wars" was the end; "Jaws" did it. It was the ratings system, profit participation, television, the blacklist, the collapse of the studio system, the Production Code. The movies should never have gone to color; they should never have gone to sound. The movies have been declared dead so many times that it is almost surprising that they were born, and, as every history of the cinema makes a point of noting, the first announcement of their demise practically coincided with the announcement of their birth. "The cinema is an invention without any commercial future," said Louis Lumiere, the man who opened the world's first movie theatre, in Paris, in 1895. He thought that motion pictures were a novelty item, and, in 1900, after successfully exhibiting his company's films around the world, he got out of the business. It seemed the prudent move.

Of course, "death," in this context, does not mean "extinction." What it means depends on the speaker. If the speaker is the president of the Motion Picture Association of America, the condition of the movies is a function of the variable that drives all consumer culture (including the publication of novels), which is the return on investment. If the speaker is the film critic of the Times, on the other hand, it's a function of the return on critical attention. What is good news on one method of accounting is not necessarily good news on the other. Since 1992, the entertainment industry has been America's second-largest export business, after aerospace; the television audience for the Academy Awards ceremony is said to be a billion people. It is still perfectly possible that, from any creative point of view, rigor mortis has set in.

David Thomson's "The Whole Equation: A History of Hollywood" (Knopf; $27.95) is a coroner's report. The title is misleading. The book gives roughly two hundred and ninety pages to the first fifty years of Hollywood and about eighty pages to the last fifty, and the true scope of its interest is even narrower. Thomson thinks that Hollywood had only two phases of first-class product: from 1927 to 1948, "The Jazz Singer" to the Paramount decision (the Supreme Court case that broke the studio system by forcing the studios to divest themselves of the theatre chains they owned); and from 1967 to 1975, "Bonnie and Clyde" to "Jaws." He considers silent film to be, essentially, pre-cinematic, because, in his opinion, the full movie experience requires sound; and he considers the contemporary blockbuster to be beneath critical regard. "I have nothing to say," he says, "about 'Star Wars.' "

In any normal history of Hollywood, "Star Wars" is kind of important, and if you are someone who believes that "history" ...