Arnheim, amazingly, was able to predict what we today would call "the virtual reality film," one that is indistinguishable from reality itself. (We haven't got there yet.) He called this "the complete film." For Arnheim, the rise of the complete film will make film as art impossible because art requires limitations and requires distance from life.
(A little cultural background will be useful here: Wikipedia's article on Arnheim provides this: "In the fall of 1932, Arnheim had an essay published in the Berliner Tagesblatt. This was about three months before the Nazis came into power, and the essay was published about the nature of Charlie Chaplin’s and Hitler’s mustaches and what it did to the nose in terms of human character. Considering the timing of this essay, and the fact that in 1933 the sale of his book Film as Art was no longer permitted due to the Nazis, some of Arnheim’s friends advised him that he should leave the country and so in August 1933, he moved to Rome.")
Arnheim was mainly worried about the over-emphasis on naturalism which he thought came with the talkies. He was worried about the "victory of wax museum ideals over creative art." Although he thought that, by accident, sound film really did have "artistic potentialities," these would be destroyed by further technical developments in film (so-called "progress") for example in technicolor and stereoscopic film. What was great about silent film was its "compositional precision" and its independence from reality. He admitted that in painting color provides possibilities but insisted that the photographer does not have a "free hand" and must "record mechanically the light values of physical reality."
Sometimes Arnheim is accused of holding to a medium specificity thesis. But that is not quite right. What he argued is that the specific media of the silent film, sound film, and color film are each different and present different potentialities. This is, I think, correct. I also think there is something to be said for the idea that film as art should be "divergent from nature."
One of these divergences can be seen in black and white film. For Arnheim, achromatic film had the artistic advantage of creating a "grey scale" medium. However, Arnheim argued, similar transformations of colors within color film would not in themselves produce a specific "formative" medium. He admitted that one can manipulate color by choosing what is to be photographed, and one can do a "montage of colored pictures," but, and here he seems to have anticipated an argument by Roger Scruton, increasingly the artistic part of the work will focus all interest on what was in front of the camera. This, on his view, would actually relegate the camera to being a "mere mechanical recording machine."
Arnheim goes further to consider the "three-dimensional film" and wide screen projection. As the illusion of reality increases "the spectator will not be able to appreciate certain artistic color effects" even though, technically speaking, it would still be possible to artistically and harmoniously arrange colors on the surface. He observes that with stereoscopic film there will no longer be a plane surface with the compositional qualities that such a surface allows. Film, then, will be reduced to being a kind of theater and not an art form of its own. Such film-specific techniques as montage and changing camera angle will no longer be useful, and montage will even be problematic since it would take away from the illusion of reality, just as changing the position of the camera would seem to displace reality. His prediction then: "Scenes will have to be taken in their entire length and with a stationary camera." And this will entail a regression of film to its beginnings where we only had a fixed camera and an uncut strip. Now my point here is that although this prediction did not come true, Arnheim may still have a point.
Arnheim's worry is that although the "striving after likeness to nature" which is ancient in man, can be thrilling, the goal itself is dangerous. It ignores the counter-tendency to "originate, to interpret, to mold." Arnheim admires those painters like Paul Klee who have broken with the principle of being "true to nature" but he thinks that the development of film in the direction of this kind of realism indicates how power this idea is. On his view, it is the very popularity of film that condemns it. "Since on economic grounds film is much more dependent on the general public than any other form of art, the 'artistic' preferences of the public sweep everything before them." He does not deny that quality can be "smuggled in" but in the end the "complete film" will fulfill this age-old striving. At this point the original and copy will be indistinguishable. When that happens "all formative potentialities which were based on the differences between model and copy are eliminated and only what is inherent in the original in the way of significant form remains to art." At this point in his argument Arnheim quotes from a writer, H. Baer, whose essay he finds "remarkable" who holds that color film accomplishes tendencies that go far back in graphic art insofar as it has striven for color. The quote from Baer shows Arnheim's alliance with an elitist tendency:
"Uncivilized man is not as a rule satisfied with black-and-white. Children, peasants, and primitive peoples demand the highest degree of bright-coloring." The quote goes further to say "it is the primitives of the great cities who congregate before the film screen" and they want bright colors. It is interesting that Arnheim would go along with this equivalence of the rise of color film with love of the kitsch effects of exclusive interest in bright colors.
Now Arnheim admits in the end that the complete film need not be catastrophe, as long as silent film, sound film, and colored sound film can all exist side by side. Complete film is a great way to experience opera and dance, for example. But only the other forms would be considered by Arnheim "real" film forms. The existence of complete film might even encourage developments in the real forms. Sound film can for example work on distinguishing itself clearly as art from the art of the stage. But he thinks, perhaps pessimistically, that complete film (which he here puts in scare quotes) will "supplant them all" because of its ability to imitate nature.