Why it came to an end

In retrospect, Jaws (1975) and Star Wars (1977) marked the beginning of the end for the New Hollywood era. With their unprecedented box-office successes, Steven Spielberg's and George Lucas's films jumpstarted Hollywood's blockbuster mentality, giving studios a new paradigm of how to make money in the changing commercial landscape. The focus on high-concept premises, with greater concentration on tie-in merchandise (such as toys), spin-offs into other media (such as soundtracks), and the use of sequels (which had been made more respectable by Coppola's The Godfather Part II), all showed the studios how to make money in the new environment.

New Hollywood excess culminated in two unmitigated financial disasters: Michael Cimino's Heaven's Gate (1980) and Francis Ford Coppola's One from the Heart (1982). After astronomical cost overruns stemming from Cimino's demands, Heaven's Gate only earned $3.5 million in box-office sales after costing $44 million to produce. The loss was so great that it forced United Artists into bankruptcy, resulting in its sale to MGM. Coppola, having flourished after the near financial disaster of Apocalypse Now, plowed all of the enormous success of that film into American Zoetrope, effectively becoming his own studio head.