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Illusions depicts a fictional 1940s Hollywood studio and defines film as a powerful historian, however, one that omits many cultures from its history. The protagonist Mignon Dupree expresses the need for "films that give the public situations and characters that they can recognize as part of their own lives." Illusions is a candidly self-aware film because it takes place in a fictional studio, and its characters discuss Hollywood's film production directly. The films title refers to the faults in cinemas portrayal of reality. Furthermore, Illusions also points to its own artificiality, identifying itself as a film object. Illusions features two invisible blacks: Mignon Dupree, invisible as an African American studio executive passing for white, and Esther Jeeter, as the invisible singer hired to dub the singing parts for white film star Leila Grant.

Self-reflexive films identify themselves as cinematic objects by calling attention to the filmmaking process. Using editing techniques that depart from realism and/or film content that portrays features of the filmmaking process indicate to the viewer that, in addition to a central narrative, this is a film about a film. This film begins with a slow-zoom on a rotating Oscar and the following voice-over which is a quotation from Ralph Ellison's 1949 essay The Shadow and the Act: "To direct an attack upon Hollywood would indeed be to confuse portrayal with action, image with reality. In the beginning was not the shadow, but the act, and the province of Hollywood is not action, but illusion."

Parallel instances of self-reflexive images appear, that apply to the medium of film then to the film itself. Illusions begins with an aged "3-2-1" film-leader-countdown. This exact footage is repeated within the film, in the studio, when the filmmakers are reviewing the movie of Leila Grant singing. The film of the white starlet plays on a screen alongside Esther as she sings in the dark studio. This juxtaposition implies Hollywood's institutional racism and highlights an interest in profit over integrity. In addition, the film parallels this illusion with its own; within the films story the white woman's footage lip syncs Esther's voice however, as some audiences may recognize, the song Starlit Hour is actually a recording of Ella Fitzgerald, furthering the layers of illusions between film and reality.

Later, post recording, Mignon tells Esther she was inspired to enter the film world after overhearing a film producer at a party say, History is not what actually happened even if its written in a book. The real history, the history that most people will remember and believe in is what they see on the silver screen. Mignon makes references to other films, such as Don Ameche in The Story of Alexander Graham Bell (1939) and Claudette Colbert in Cleopatra (1934), reinforcing the idea of film as a primary historian. Therefore, it is inferred that when Mignon says to Esther that Black characters are often musical props, dancing props, or comic relief, because of film, this is how the public may interpret Blacks in history.

As an African American, Mignon states that filmmakers' "scissors" and "paste methods have eliminated [her] participation in the history of this country," and Mignon then warns that "the influence of that screen cannot be overestimated." This statement implies filmmakers should be held responsible for the images they produce, or rather do not produce, for they greatly impact the public. The film ends on a shot of Mignon thinking: "Ill stay right here and Ill fight I want to use the power of the motion picture because there are many stories to be told and many battles to begin."
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