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By 1973, Hollywood was experiencing profound change. The once-dominant studio system had declined, mainly because studios favored making safe, familiar genre films that guaranteed returns. However, audiences had grown more discerning, and their spending on movies had decreased significantly. This prompted studios to take gambles on unconventional projects—hiring young, innovative directors to craft unique, big-screen experiences, thus ushering in the era of "New Hollywood." Among the emerging talents was George Lucas, recently having directed two films: THX 1138 (1971), based on his student project, and American Graffiti (1973), which became a massive summer hit.