In 1971, Peter Bogdanovich​ made The Last Picture Show, his third film, in Archer City, northern Texas. It was based on an autobiographical coming-of-age book by Larry McMurtry, who grew up there. It had Timothy Bottoms, Jeff Bridges and a luminous Cybill Shepherd, in her screen debut. The opening shot was of the Royal Theatre, the local cinema, in a winter dust storm. The cinema had burned five years before, but they dressed it up for filming. It's still there – just. I visited recently, on a movie pilgrimage. It has no roof, no seats and no screen, but the die-hards of Archer City (population 1750) keep doing events there.

Bogdanovich loved the Hollywood golden age, so he made the film in black and white. McMurtry's title already carried the idea that something had passed: it was the last picture show. How right they were. They would not be able to make that film now, even if they wanted to do it in colour. It's the kind of high-quality, artistic drama that Hollywood has all but abandoned, in favour of large-scale, big-budget, action-based, computer-generated, cookie-cutter movies featuring robots, men in capes, and giant scary machines.

The biggest film of 2014 was Transformers: Age of Extinction, with $US1.1 billion in worldwide gross box office. The next nine films were all based on fantasy and superhero franchises (The Hobbit – Battle of the Five Armies, Guardians of the Galaxy, Maleficent, The Hunger Games – Mockingjay Part 1, X-Men: Days of Future Past) or reboots of 50-year-old ideas, most of them from comic books: The Amazing Spiderman 2, Captain America, Dawn of the Planet of the Apes. Interstellar, at No.10, was the first sign of an original idea. Sure, some were fun, but which of them delivered a rich dramatic story that offered anything more than sensory stimulation based on pace, noise and action? Even when they're good, these movies are bad, if you take the view that cinema at its best is about who we are as humans, and earns its place among the great arts. Modern blockbuster cinema barely has any humans.

I do not dismiss action movies. Mad Max: Fury Road was one of the best films of this year, just as Seven Samurai was one of the best of 1954. Both will be remembered in 50 years. How many others of the last few years will be? I have been writing about movies since 1984 and it is hard to think of a worse era than now. When and why did movies get so bad? I offer some ideas below, with no certainty. There are 100 other factors I could cite. No one knows anything, as everyone involved in film knows. Especially when it comes to working out what to do about it.

The studio blues. Hollywood doesn't really exist, in the sense of one industry dominated by seven major studios. They're all owned by conglomerates, so a studio head answers to a boss in Tokyo, New York, or London. That was true of the old Hollywood to some extent, but the higher-ups were usually in the entertainment business, even if based in New York. When the studios were forced to divest their theatres in 1948, most sold off their backlots to raise cash. The "writers' building" became a thing of the past. The best directors (like Frank Capra) and stars left to become "independent", controlling their own production companies, even as they went broke. When TV kicked the stuffing out of the studios in the '50s, big corporations moved in on the studio carcasses. The new bosses came from anywhere but show business: insurance, car parking, Vegas, oil wildcatting. There are still some good people running studios, who love movies and know a good script when they see it, but no studio is looking for modest successes any more.

Head office on line 1. Corporations hate risk and movies can't be made without it, especially the good ones. No studio would touch Citizen Kane now. A fundamental schism opened up in the 1960s between the studios and the new, younger audience, because Hollywood could not keep pace with social change. Baby boomers wanted Bonnie and Clyde, not The Sound of Music. There was a brief flowering in the 1960s and early 1970s, when a new generation of young directors came in (Altman, Coppola, Scorsese, Malick) to make art cinema. Hollywood doesn't know much about art but it knows what it hates. And then along came Jaws and Star Wars to change the expectations of how big one movie's profits could be. George Lucas and Stephen Spielberg saved Hollywood and nobody had to think about art any more. "Less risk, more profit" was the goal in old Hollywood too, they just didn't know how to achieve it. TV advertising of movies changed that: it became possible to maximise the take at a film's opening, before word-of-mouth could kill a bad movie. Hollywood has been perfecting that idea for 30 years now and they have become very good at persuading the public that a good movie is the one that opened strongest last weekend, even if the critics hated it. The media helps them do it, by reporting on box office figures without discussing the ways that those figures are manipulated. The media are part of the gravy train anyway, because of the ad campaign revenue.

There are no new ideas. And if you have one, they won't let you make it. The traditional method of reducing risk was to pack a film with stars. The new method is the tent-pole franchise, based on a hit book series for young adults. Then you don't need stars. It's true that the young actors in the Harry Potter films were well paid. It's also true that Jennifer Lawrence at the start of the Hunger Games franchise was worth a lot less than she is now. The franchise doesn't have to be new: in fact, it's safer if it has already been done successfully in the distant past – as in the reboot of Planet of the Apes and Star Wars. Originality is over-rated. Old ideas have pedigree and track record. Even old ideas and characters that old people have forgotten can be revived. Looking forward to the new Peanuts movie in January?

Will it play in Shanghai? The US domestic market is shrinking; most of the revenue now comes from offshore and that means China, where box office growth is phenomenal. In order to maximise the reach of films into that highly restricted market, the studios need films that are easy to market to people who don't speak English. That means dialogue and characterisation are out, broad action and simple plot (beasts/sharks/robots chase humans) are in. Forget nuanced political issues and be careful about supernatural themes – the Chinese won't license the film if they don't like the treatment. The new Chinese audiences aren't stupid, but they don't want to read subtitles any more than Americans do. A new mantra has risen: Make the monsters bigger.

The big score. Piracy forces the studios to try to recoup all their profits at once. That means the film is released around the world at the same time. At certain times of the year – like Christmas in Australia with a Star Wars coming down the pike – everyone gets out of the way. There is no room for small and high quality, except at quieter times of the year, so those films make less money. From there it's a small step in studio thinking to say smaller films can't make money, so why bother?

The talent has gone to TV. This is only partly true, but if you are a young writer with a great idea, you can have more control and make a better film if you take it to one of the big cable-based networks, or the new mini-majors like Netflix. If you produce it yourself, you also make more money. You won't get the huge budget of a tentpole movie, but you might reach more people. Big TV screens are the new picture shows, and you never have to leave home for quality drama.

The bloody internet.  Hollywood once had all the eyeballs. From the 1930s to the 1950s movies and radio were the only mass entertainment. Television stole half of that, but movies came back slugging with 3D and cinemascope. They're trying to do the same thing now with Imax 3D and giant spectacles (on the screen, as well as on your face), but nothing can compete with the internet, where you can watch what you want all the time and for very little or no cost. Internet porn, gaming and free pirated movies – on your phone, your pad, or your PC.

The cinemas are rank.  From George Street to Leicester Square, going to a movie is often a diabolical, not to mention expensive, experience. Projection standards are terrible because the exhibitors got rid of the projectionists; there are no ushers if you want to complain, and many people refuse to turn off their mobile phone. And who can blame them for texting when the movie they're watching is so bad? Once the connection with audiences is degraded, the behaviour follows suit.

Cinephilia is dead. Quentin Tarantino would say that one reason the movies are in trouble is that they have abandoned film in favour of digital shooting and projection, and digital doesn't have the same appeal to the eyes. That is why he is paying cinemas to install 70-millimetre projectors for The Hateful Eight (out in January). In a wider sense, the history of movies was once hard to acquire. That made it cool to be a cinephile who had seen all the early works of Godard. The great films are now more accessible than they have ever been, so less cool.  I'm not sure I buy these arguments, but it is certainly true that cinema is less appealing to the young and hip than it once was. Maybe that is the films they are being offered?

The movies are all the same. This is true if you only go to the big cinemas. There is a huge range of great movies we are not seeing in those venues. Even the art houses choose conservatively (French, Italian, anything with Judi Dench). Repertory cinemas once flourished in places that had a good student population, like the inner-west of Sydney. In Melbourne, they still do. There are signs of new life in this area, in smaller funkier places like The Golden Age cinema in Sydney. We can only hope.