How Christmas Movies Explain Hollywood History

Christmas Canon: It’s a Wonderful Life, White Christmas, Miracle on 34th Street, Holiday Inn

Before there was a “theatrical” window, there were just theaters. They were the only game in town.

Eventually Hollywood made films for Christmas. Bing Crosby defined many Christmas classics and popularized them in films like Holiday Inn and later White Christmas. Miracle on 34th Street helped develop the Santa Claus mythos even further. Film critics can thank Frank Capra for creating the Christmas-adjacent film (meaning no Santa Claus) with It’s a Wonderful Life. (And there are even more films for classic film buffs, like The Bishop’s Wife, Meet Me in St. Louis and The Shop Around the Corner. HBO Max has the best collection of these classic films.)

As I said, the medium is the message, and we can see the impact on that in this first generation of Hollywood films. For the most part these films are skewed towards adults. They touch on themes of Christmas, but these aren’t children’s films. (The closest is Miracle on 34th Street.) Also, unlike later years, these films feature the tippity-top of A-List talent, like Jimmy Stewart, Cary Grant, and Bing Crosby.

Christmas Canon: Dr. Seuss’s How the Grinch Stole Christmas, A Charlie Brown Christmas, Rankin/Bass: Rudolph the Red Nosed Reindeer, Frosty the Snowman, The Year Without a Santa Claus

As TV displaced film as the medium that everyone watched every night, it too needed its own Christmas programming during the holidays. For the most part, much like now, this meant Holiday variety specials. Yet, these one-off performances don’t lend themselves to repeat viewing (again, the medium is the message), so broadcasters needed something else.

Thus, the birth of the animated TV special.

These specials served a couple of purposes. First, they were targeted at children, who in the 1960s didn’t have any other channels to watch. The specials were designed to appeal to them. Like today, kids can often drive viewing (and buying) decisions. Second, while TV was a growth industry, it wasn’t that big compared to films. Everyone got it for free after all. This meant that specials were limited in scope (usually under 30 minutes) and budget (animated, usually fairly cheaply).

The rise of TV also invented the first “window”, meaning the specific distribution method to watch a given film. Films would start in theaters and then later be aired on television, giving studios two chances to make money. Of the Golden Era Christmas films, the biggest beneficiary was It’s a Wonderful Life. Initially a box office dud—though it was nominated for a Best Picture—it entered the public domain due to a clerical error in 1974 and had a second life on TV through constant replay, since it was cheap.

VHS Christmas Canon: Home Alone, National Lampoon’s Christmas Vacation, A Muppet’s Christmas Carol, Scrooged, The Santa Clause

DVD Christmas Canon: Elf, Love Actually, The Polar Express, How the Grinch Stole Christmas

If you’re debating the greatest stretches for Christmas films, arguably from 1988, when Scrooged came out, to 2003, when Elf and Love Actually hit theaters is the best run of Christmas Films.

Why? Because VHS and then DVDs allowed more films to be made by Hollywood at higher budgets. I’d add, this was a boom in films that folks commonly say, “Don’t get made anymore.” So rom-coms (Love Actually), comedies (Christmas Vacation, Elf) and family films that aren’t animated (Home Alone) are all examples of films that have been displaced by the rise of the blockbuster.

Why? Because DVDs were so incredibly valuable. At their peak, in just the United States, DVD sales were $16.3 billion, of which the studios collected a big chunk. Now? Physical discs like DVD and Blu-Ray are only $2.2 billion business. This meant that theatrical films roughly made $6 billion more dollars for their studios in the U.S. than they do now. All that extra cash allowed smaller films to compete for smaller niches of customers. (Even a film that didn’t “win the weekend” against a blockbuster film could still make tens of millions in DVD sales, justifying its theatrical release.)

Christmas Canon: Too many Hallmark and Lifetime films to count.

The rise of home entertainment was also accompanied by a shift in TV consumption as well. Before the 1980s, folks needed an antenna to receive a signal. By the 2000s, most everyone was connected to cable in the ground. Since TV cables aren’t restricted by spectrum space, the number of channels skyrocketed into the hundreds. For years, this boom didn’t really impact Christmas films.

And then the Hallmark Channel and Lifetime went all in on the holidays.

That’s right, Hallmark and Lifetime adopted, I’ll say it, cheesy Christmas movies as their thing. Every year they cranked these films out by the dozens. Every year. These films follow a few tropes (one of the two leads is disenchanted with Christmas, the other loves it, eventually they fall in love. Often royalty is involved. Or a small town.) but these films get the ratings. Lots and lots of eyeballs.

And the medium is still the message. Cable TV channels can’t afford to make even $20 million dollar budget films, so all the Lifetime and Hallmark films are made the lowest level budgets and filmed quickly. At about $1.5-2.5 million per film and shot in 3 weeks, in other words you could make 5-10 of these movies for one episode of The Mandalorian. They also tend to be shorter than regular movies, again to limit costs and because the cable channels sell advertising in the breaks.

Cable as well provided a new window for the films of the home entertainment boom.

Cable channels like Freeform (formerly ABC Family), AMC, and others air films like Elf, Scrooged and The Santa Clause around the clock during December. This helped cement these films in the Christmas Canon the way round-the-clock airings of It’s a Wonderful Life cemented it in the canon.

Of course, now we can choose when and how to watch what we want…

The New Christmas Canon: A Christmas Prince, The Christmas Chronicles, Klaus, Noelle, Godmothered

Streaming is taking over, and with it a new generation of Christmas films. Since each streamer wants to be the home of Christmas films, they have launched their own original Christmas films, like Klaus (on Netflix) or Noelle (on Disney+).

The streamers also fight for the rights to classics. As of this writing, Prime Video has It’s a Wonderful Life, Netflix has How the Grinch Stole Christmas (2000), and Apple TV+ secured the rights to A Charlie Brown Christmas. Expect these films to switch homes many times over the coming years, whenever their rights deals expire. Disney has the motherlode of Home Alone, Miracle on 34th Street, Nightmare Before Christmas, Muppet’s Christmas Carol and The Santa Clause. Not to mention all their Mickey and Princess related films and specials.

The key question is what happens next. Will streaming usher in a new boom in spending on Christmas films akin to the home entertainment era? Or will it be sparse like the rise of cable Hallmark films?

Maybe both. Long term, while streaming is buzzy, it loses money. Lots of money. At the peak of the studio system, theaters, home entertainment and cable revenue were all booming simultaneously. Streaming threatens to disrupt all that, but at a much lower price for customers. That lost revenue means less money to produce new content. Meaning we’re more likely to get more A Christmas Prince-type films from Netflix than The Christmas Chronicles.

Yet, we’re probably in the middle of a boom. Christmas is a key time of year for the streamers. It’s the last chance for most of them to acquire new subscribers before the year ends. Moreover, as customers buy new devices, the streamers want buzzy programming to bring them in. Netflix is spending billions and Disney, Amazon and Apple all plan to match that.

So maybe it is a wonderful life…for Christmas movies.

The Entertainment Strategy Guy writes under this pseudonym at his eponymous website. A former exec at a streaming company, he prefers writing to sending emails/attending meetings, so he launched his own website. Sign up for his newsletter at Substack for regular thoughts and analysis on the business, strategy and economics of the media and entertainment industry.