Hollywood Means Business: To 1948 Production Distribution Exhibition

Who makes the image move? The Major Hollywood Studios ( ) Conglomerates (1970s-present), controlling: Movie studios Record companies Theater chains Amusement parks Video rental outlets And...

EARLY HISTORY OF THE MOTION PICTURE INDUSTRY Highly competitive with easy access for new business interchangeable products smallness of buyers & sellers in relation to market absence of artificial restraints accessibility of resources

THE MOTION PICTURE PATENTS COMPANY (MPPC) Thomas Edison formed MPPC (“the “Trust”) in 1908 as a PATENTS POOL  cooperative of leading U.S. and French film companies  dominated the film industry from  Successfully excluded small companies from the market

WHY did the MPPC fail?  Could not meet product demand  Some independent producers bought film stock from overseas  Some independent producers moved operations out of the NY and NJ area, eventually to California  Independent distributors set up a non-MPPC distribution network  Declared a monopoly in 1915 as the result of a 1912 anti-trust case brought by Fox

THE RISE OF THE HOLLYWOOD STUDIO SYSTEM ( ) From Monopoly (the MPPC) to Oligopoly (the Studio System)

The “Big Five” and the “Little Three” The “Big Five” or the Majors:  Warner Brothers  Paramount  20th Century Fox  Loew's (MGM)  RKO (owned by RCA) The “Little Three” or the Minors:  United Artists  Columbia  Universal

How did the Big Five control all three levels of the industry? VERTICAL INTEGRATION of  production  distribution  exhibition

How did the studios control exhibition? Run First, second, third Zone Geographic coverage without overlaps Clearance Elapsed time between runs Block Booking Rental in packages of assorted films

High Sierra: A Case Study An A feature, starring Bogart and Lupino Starts first run on January 25, 1941 Studio-run theaters in 100 large cities Ticket price=$1.00 to $1.25 Second run in May, 1941 Second run theaters (smaller cities) Ticket price=$.40 to $.75 Third run in Fall, 1941 Neighborhood and rural theaters Ticket price=$.25

Genres: How Films Are Sold GENRE: category in which conventions regarding similar characters, scenes, structures and themes reoccur REGULATED DIFFERENCE: genres benefit the industry by allowing both product standardization and product differentiation What are some Hollywood genres?

What Undermined the Studio System? Four major shifts occurred in the late 1940s:  Postwar Changes in Society  Families  Baby boom  Move to suburbs  The Rise of Television  The House Committee on Un-American Activities  The Paramount Decision of 1948

The Paramount Decision  In 1948, Supreme Court ruled the studios were in violation of the Sherman Anti-Trust Act, that they were restricting fair trade  Court ordered the Big Five studios to divest their theatre chains (“divorcement”)  Effect:  Studios cut their film production by half  This opened the way for independent producers, though that opening was short-lived

Entertainment Industry Consolidation 1980s—Reagan deregulated the industry Link between production and distribution re- established as media conglomerates formed Saturation booking replaced clearance Subsidiary markets increased in importance Willow, for example International grosses also grew as Hollywood films dominated the world market

Thought for Today “The film is to America what the flag once was to Britain. By its means Uncle Sam may hope some day, if he is not checked in time, to Americanize the world.” --Unsigned Article, New York Morning Post, 1923