The U.S. Film Industry:
A Historical Overview
J412/J512 U.S. FILM INDUSTRY
O C TO B E R 3 , 2 0 1 3
Reading Quiz
What is the “new abnormal,”
as discussed in Lynda Obst’s article?
Answer
Essentially: Extreme reduction of risk (or attempt thereof)
Are films “properties that can be marketed into international
franchises?” (p. 5)
“International has come to be 70% of our total revenues in the
New Abnormal” (p. 7).
“They can invent stars for tentpoles, pay them less up front, and
tie them in to infinite options for sequels, like with Chris
Hemsworth in Thor” (p. 18).
The Early
(US) Film Industry
J412/512
9/27/12
Film’s Inventor?
Thomas Edison or William K. L. Dickson?
 Dickson performed bulk
of experimentation; most
scholars credit Dickson with
transforming a concept into
reality.
Fred Ott’s Sneeze, 1894
http://www.youtube.com/watch?v=8PaJ1r0udvQ
Film as novelty
http://www.youtube.com/watch?v=4nj0vEO4Q6
s
http://www.youtube.com/watch?v=agvQxm_nPI
w
Film as Business
From 1908:
Beginnings of an
Industrial Structure
Mass Production
Growth of narrative format
“Director” system
Companies: Edison, Biograph, Vitagraph, Kalem,
Essanay, Lubin, plus small producers
Struggle for Control: Patent Wars
Locations of Film Industry
in Early 1900s
New York
Edison Kinetoscope Parlor
Vitagraph Company of America
Fort Lee, NJ
Moving Pictures Studios West
Film Clip: “Hollywood East”
Motion Picture Set, 1912
Hollywood
Golden Era of Hollywood
(APPROX. 1920S-1950S/1960S)
Golden Era:
Film Studios Operating in Hollywood
Big Five:
◦ Paramount
◦ Fox
◦ Loews (MGM)
◦ RKO
◦ Warner Brothers
Little Three:
◦ United Artists
◦ Columbia
◦ Universal
Poverty Row
◦ Republic
◦ Monogram
◦ Grand National
◦ Others
The Big Five studios were:
“a large inverted pyramid, top-heavy
with real estate and theaters, resting
on a narrow base of intangibles
which constitute films”(Huettig).
Business Strategies
Block booking
Run, clearance and
zoning
Admission price
discrimination
Watch at Home:
“A Trip Through
a Hollywood Studio”
H T T P : / / W W W.YO U T U B E .CO M / WATC H ? V = W F UA M J I T Y - 0
Anti-Trust and
the Paramount Decrees
Anti-Trust Lawsuits
First antitrust lawsuit (1938):
◦ Principal objective: Divest theaters
◦ Secondary objective: End monopolistic practices in
film industry
Settled out of court: theater control remained with
studios
Paramount Decrees
Final decision in 1946
◦ Unfair practices favoring theater circuits were declared
illegal restraints of trade and prohibited
Paramount & RKO filed consent decrees to divest
theater holdings
Loew’s, Twentieth Century-Fox and Warners refused to
comply
◦ Launched another appeal
◦ Ultimately divested in 1953
Impact on Hollywood
Studio System
Production:
◦ Little Three had more share of market
◦ Boom in independent production
◦ Production Code harder to enforce
Distribution:
◦ Big Five could no longer give special
treatment to each other
Exhibition:
◦ Independent theaters had more control
over their businesses
From Film Industry to
Entertainment Industry
Key = TV provided “studios with blueprint for creating a new
market by means of exploiting their library of titles through
a new technology” (Tzioumakis, 14).
Conglomeration &
Deconglomeration
Conglomeration: Studios acquired by major
corporations
◦ e.g., Paramount = Gulf + Western
Deconglomeration: Major corporations focused
operations
◦ Studios able to focus on media, utilize synergy and crosspromotion to full advantage
Strategies:
◦ Synergy, cross-promotion, horizontal & vertical
integration, global expansion
Paramount:
By 1966:
◦ Aging leadership
◦ Production losses, lack of aggressiveness
◦ Eroding assets
1966: Gulf + Western acquired for $125m
◦ Overhauled mgmt, restructured company
◦ Independent production
◦ Television acquisitions
◦ Reduced foreign distribution overhead
Twentieth Century-Fox:
1965: The Sound of Music
Flops: Dr. Doolittle (1967), Hello Dolly! (1968),
Star! (1968)
1971: New leadership
Cut back on film production
Created music-recording companies
Acquired TV stations, Coca-Cola Bottling Midwest,
Aspen Skiing Corporation, Magnetic Video, Pebble
Beach Corporation
1977: Star Wars
Where does digital technology fit in?
“Digital media provide lucrative platforms for
new but also old media content, adding to
the value of the music, film or television
libraries kept by rights holders.”
-- Paul McDonald (quoted in Tzioumakis, p. 25)
Location of Film Industry /
Alternatives to Hollywood
Outside the Hollywood System
Artistic cinema
Minority films
Exploitation films
Documentary films
Industrial films
Pacific NW & Hollywood
Questions?