Though it didn't get nominated for any big Oscars (only one for Original Song, which it lost),
Grease was
the big smash hit of 1978. Hugely popular, the box office champion of the year...and it wasn't even close between it and second place. So of course Hollywood decided to put a bunch of Musicals into production again, even though they had stopped being profitable since the 1960s. And what was the result? Crap. Crap that lost money. In the three or four years after
Grease we got such gems as
Xanadu (1980),
Sgt. Pepper's Lonely Hearts Club Band (1978),
Can't Stop the Music (1980),
Annie (1982),
The Wiz (1978),
Popeye (1980),
The Pirate Movie (1982),
Yentl (1983) and of course
Grease 2 (1982).
In that period,
All That Jazz (1979) was the only Best Picture Oscar nominee, and it's a very dark and adult take on the form and hardly what somebody raised on
Seven Brides for Seven Brothers and
Finian's Rainbow would immediately embrace as a Musical.
Victor/Victoria (1982) got a bunch of nominations (seven total) without getting into the Picture or Director category and did decent business. The only one to really be a good-sized hit during this time, though nothing like the amazing take of
Grease, was
The Best Little Whorehouse in Texas (1982), which more-than-respectably finished in the middle of the pack of the top ten for domestic box office that year.
But the horrible and financially ruinous projects far outweighed the praised and profitable ones, and so for the next fifteen years or so you basically get no Musicals coming from the mainstream Studios...except for the new wave of animated Disney Musicals that started with
The Little Mermaid (1989). There was
A Chorus Line (1985) which didn't do anything,
Little Shop of Horrors (1986) which deserved a better fate than it got (though being so dark and mixing so many genres didn't give it much hope for a big mainstream success) and
Newsies (1992) which was just embarassing, but other than that Hollywood doesn't touch the Musical. There are some low-budget and off-center entries like
Absolute Beginners (1986) from the U.K., Spike Lee's
School Daze (1988), John Waters'
Cry-Baby (1990) and
Top Secret! (1984) with a couple of parody sequences, but none of them do anything to change Hollywood's attitude toward the genre, either.
In 1996 they finally tried it again with lots of money and Madonna as Andrew Lloyd Webber's
Evita, but that was a disaster on multiple levels, and though it managed to wrangle five Oscar nominations on the technical side, it was definitely
not the return of the Hollywood Musical.The suprise critical and popular response to Baz Luhrmann's
Moulin Rouge! in 2001 was twenty-three years after
Grease was a smash and nineteen years after
The Best Little Whorehouse in Texas finished in the top ten. And not that
Moulin Rouge! was even a finacial success on that kind of level, because though it did good business for a Musical, it didn't even finish in the top 40 in the U.S. box office for 2001. But it did definitely get some big Oscar nominations, and so it resulted in a few more being put into production again, including
Chicago.
Chicago finished in the number ten spot for the year, grossing an impressive $170-million domestically with thirteen Oscar nominations and six wins, including Best Picture. But as I detailed in the other post, that has simply not led to another success even close to that level (how did
From Justin to Kelly work out? I forget).
Which is why Musicals are dying out again, and why they've really been dead since the 1960s.
You can keep hoping for a major Hollywood rebirth if you like, but it just ain't gonna happen. Seriously though, check out Bollywood. You may well get into it, and then you'll have hundreds of movies to catch up on. And they're still cranking them out every year.