Any movie that begins with the message, “based on a true story,” is in danger of engaging in bad story telling and insufficient character development. Claiming that something is true appears to be license for lazy film-making. My objection is not that many “based on a true story” films are barely connected to real events. No, my concern is that because they claim to be real, film-makers think they can get away without doing the things necessary to make a great film.
Not all “based on a true story” movies are lousy; Argo, for example, tells a compelling story with well-developed characters. But Argo’s effectiveness is almost entirely derived from the ways the movie deviated from the “true story.” [SPOILER ALERT] The tension-filled ending was great movie making even though — actually, because — it bore no resemblance to actual events. And the most engaging character played by Alan Arkin was the one almost completely invented for the movie. In addition, we found the main character played by Ben Affleck so engaging in part because of the entirely fictitious back-story about his separation from his wife and son. The greatness of Argo comes from its effective story telling, not from its “reality.”
Zero Dark Thirty, on the other hand, was a really disappointing film because it relied on its “reality” as a substitute for great film-making. [SPOILER ALERT] There was virtually no character development. I didn’t know anything about what motivated the main character to join the CIA and hunt UBL. Yes, I saw that she had a friend killed, but her obsession with UBL pre-dates that. At one point in the movie, a supervisor specifically asks her why she was recruited by the CIA and she declines to answer. So, I know almost nothing about her life other than that she is hunting UBL. About 2/3 through the movie I realized I couldn’t even remember her character’s name because… well, because who cares about her? The movie was also poorly paced, painfully slow at times, and lacking in comic relief or any other variation in tension.
The movie is gripping, but so is playing Call of Duty with my son. Similarly, Call of Duty has no character development and maintains a numbing lack of variation in tension. But it sure is fun while you are playing it! It just isn’t a lasting story. We won’t re-tell that Call of Duty match we had several years ago nor will anyone, in all likelihood, watch Zero Dark Thirty in ten years. The appeal of it is entirely contained in the fact that it is topical. The meaning and excitement of Zero Dark Thirty comes not from the story the movie tells but from the story that I know from the world that I impart to the movie. When my knowledge of or interest in these current events fade, so will my (and everyone else’s) interest in the movie. The movie requires my knowledge of current events to mask its inadequate story-telling and character development. That’s not Best-Picture film-making.
Homeland is a much better version of Zero Dark Thirty. It is better because it has well-developed characters about whom I care and because it is intentionally crafted to be properly paced. It doesn’t have to worry about being true. It can just be good.
It’s true that Zero Dark Thirty is popular, but then again so are reality TV shows and they suffer from many of the same defects. If the Real Housewives of New Jersey were a scripted show, no one on Earth would watch it. But the show is quite popular because it claims on some level to be “real.” Everyone understands that it isn’t fully real. But it is a little bit “based on a true story.” And because of that, we accept its lousy story-telling and ridiculous characters. We do that because we are actually imparting to it knowledge of other real people that we know who we think may resemble the characters in some ways. We provide the context to make the stories work in reality TV.
Lastly, let me mention another recent film that claims to be “based on a true story,” The Way Back. Despite claiming to be real, the movie works well with an engaging story and set of characters. But as it turns out, the events on which the movie is loosely based are actually fiction. According to IMDB:
The film is based on a memoir by Slavomir Rawicz depicting his escape from a Siberian gulag and subsequent 4000-mile walk to freedom in India. Incredibly popular, it sold over 500,000 copies and is credited with inspiring many explorers. However, in 2006 the BBC unearthed records (including some written by Rawicz himself) that showed he had been released by the USSR in 1942. In 2009 another former Polish soldier, Witold Glinski, claimed that the book was really an account of his own escape. However this claim too has been seriously challenged.
I don’t see this as an indictment against the film at all. It was a compelling story that sold over 500,000 copies and led to a good movie because it was intentionally crafted to be a good story. Life rarely gives us that in its reality. That’s why we have imaginations to shape, combine, and alter our real experiences. In some sense, every story is “based on a true story.” The important thing is whether those stories are good, not whether they are true.
[Edited to add paragraph on Homeland]
Jay P. Greene's Blog 
Don’t forget “Fargo” which put up a screen saying that it was a true story when it wasn’t. I saw it in a theater in Minneapolis, and everyone laughed when that claim hit the screen.