The U.S. Film Industry: A Historical Overview J412/J512 U.S. FILM INDUSTRY OCTOBER 3, 2013

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,

Film as novelty s 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 Vitagraph Company of America Edison Kinetoscope Parlor

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”

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 cross- promotion to full advantage Strategies: ◦Synergy, cross-promotion, horizontal & vertical integration, global expansion

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 Paramount:

 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 Twentieth Century-Fox:

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?