>> i think the student films are the only real hope. i think they're slowly beginning to realize that students know what they're doing. >> these guys saw hollywood as deaf. they were all very influenced by the fresh new wave in european films. that's how francis saw himself. his fantasy was he was going to make a series of these out of hollywood movies with lucas and other people they attracted. they decided to start their own studio. >> the first movie they make is by george lucas. he makes "thx 11 38" and it is a flop. it goes over everybody's head. >> it probably almost ended lucas' career before it started. >> so, it was running into trouble. >> at the same time paramont was running out of money. i said what would happen if we bought the rights to some really interesting commercial novels