Production, Distribution and Exhibition

Hollywood Studio History

Film and Society: Basic Questions

Who makes the movies we see, and why?

Who sees film, how and why?

What is available to be seen?

How are films evaluated, and by whom?

What makes the image move?

Persistence of vision

Critical flicker fusion

Apparent motion

Who makes the image move?

The major Hollywood studios (1910-1960) Conglomerates (1970s-present), controlling

• Movie studios

• Record companies

• Theater chains

• Amusement parks

• Cable channels

• Television networks

• And . . .

Early History of the Motion Picture Industry

Highly competitive with easy access for new business:• Interchangeable products

• Smallness of buyers and sellers in relation to the market

• Absence of artificial restraints

• Accessibility of resources

The Motion Picture Patents Company (MPPC)

Thomas Edison formed the MPPC (the “Trust”) in 1908 as a PATENTS POOL• Cooperative of leading US and French film

companies

• Dominated the film industry from 1908-1915

• Successfully excluded small companies from the market

Why did the MPPC fail?

Could not meet product demand Producers located sellers overseas not bound by

the MPPC Some independent producers moved productions

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 Studios

The Rise of the Hollywood Studio System

From Monopoly

(the MPPC)

to

Oligopoly

(the Studio System)

How did the Big Five control all three levels of the industry?

VERTICAL INTEGRATION of: • Production: Camera and projector

technology, scripting, and filming

• Distribution: Marketing and delivering films into theaters

• Exhibition: Delivering movies to the public in theaters

How did the studios control production?

Factory principles of production made it possible:• Centralized production; huge staffs

• Division and specialization of labor

• Standardization of product

• Specialization of employees

• Grading films in terms of prestige standardized budgets

How did the studios control distribution?

Trade practices effectively closed the market to films made outside the studio system, particularly the practice of block booking

Emphasis on marketing films in Europe and other foreign countries required efficient administrative organization

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

Genre: How a film is marketed

Genre: One of several categories of movies that audiences and filmmakers recognize by their familiar narrative conventions

Regulated Difference: Genres benefit the industry by allowing both product standardization and product differentiation

Examples of Hollywood genres?

What undermined the studio system?

No one thing—four large factors came together in the late 1940s:Postwar Changes in Society

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 in violation of Sherman Anti-Trust Act, restricting fair trade

Court ordered the Big Five studios to divest their theatre chains, where the bulk of their net worth was invested (94%)

Effect: studios cut their film production by half; 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

reestablished as media conglomerates formed, with a new Big Six

Saturation booking replaced clearance Subsidiary markets increased in importance International grosses also grew as

Hollywood dominated the world market

Sources of Studio Income Today

Box office revenues Cable and pay-per-view DVD sales, rentals and downloads Distribution of films globally Studio distribution of independent films Product placement in movies Merchandizing and promotion rights