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Chapter 7. MOVIES and Hollywood. 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 .

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chapter 7

Chapter 7

MOVIES

and Hollywood

early history of the motion picture industry

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

early history of the motion picture industry3

EARLY HISTORY OF THE MOTION PICTURE INDUSTRY

The Lumiere Brothers (1895)

Employees Leaving the Lumiere Factory

Arrival of the Express at Lyons

Edwin S. Porter (1903)

The Great Train Robbery

the motion picture patents company mppc
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 1908-1915
    • Successfully excluded small companies from the market
why did the mppc fail
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 1925 1948

THE RISE OF THE HOLLYWOOD STUDIO SYSTEM (1925-1948)

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

The “Big Five” and the “Little Three”
how did the big five control all three levels of the industry

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

VERTICAL INTEGRATION of:

-production

-distribution

-exhibition

how did the studios control 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
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
hollywood storytelling

HOLLYWOOD STORYTELLING

THE CLASSICAL HOLLYWOOD STYLE

three key elements
Three Key Elements:
  • Narrative
  • Technology
  • Genre
technology behind the art of movies
Technology: Behind the Art of Movies
  • The movie industry is dependent on developing new technologies
  • As an example, let’s consider sound
    • The Jazz Singer (1927)
    • Singin’ in the Rain (1952)
genres how films are sold
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
WHAT UNDERMINED THE STUDIO SYSTEM?

No one thing : four large factors came together in the late 1940s:

  • The House Committee on UnAmerican Activities
  • The Paramount Decision of 1948
  • Postwar Changes in Society
  • The Rise of Television
the red scare and huac hearings
THE RED SCARE AND HUAC HEARINGS
  • Cold War paranoia about Communist messages in mass entertainment
  • Congress formed House UnAmerican Activities Committee (HUAC)
  • 1941 and 1947 HUAC hearings were "witch hunts" to remove so-called subversives from the industry (led by Sen. Joseph McCarthy)
effect of huac hearings
EFFECT OF HUAC HEARINGS
  • blacklisting of talented members of Hollywood community
  • tarnished the Hollywood “Dream Machine” image
  • created a climate of fear and dampened creativity within the industry
  • wounds continue even today (e.g. 1999 Elia Kazan Oscar controversy)
the paramount decision
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
  • EFFECTS: studios cut their film production by half; opened the way for independent producers, though that opening was short-lived
postwar changes in society
returning soldiers

baby boom

suburbanization and new lifestyle

nuclear families with young children

changing patterns of consumption

less disposable income

decreased attendance at downtown movie palaces

POSTWAR CHANGES in SOCIETY
the rise of television
THE RISE OF TELEVISION
  • decline in motion picture attendance
  • film industry’s technological gimmicksto emphasize the spectacle of the big screen
  • film industry cooperation with TV
  • movies on TV became a continuous competitor with theatre for film customers
hollywood today
HOLLYWOOD TODAY
  • marriage of TV and movies: watching movies now takes place on the home VCR and DVD player as well as at box office
  • new Hollywood studios produce TV shows as well as feature films
  • 80-90% of new movies flop at box office, but losses recouped through video market
sources of studio income today
Sources of studio income today
  • box office revenues
  • video sales and rentals
  • distribution of films globally
  • studio distribution of independent films
  • product placement in movies
entertainment industry consolidation the modern movie oligopoly
Entertainment Industry Consolidation: the modern movie oligopoly

Ronald Reagan deregulates the industry in the early 1980s, allowing a new “Big Six” to emerge

  • Warner Brothers
  • Paramount
  • Twentieth Century Fox
  • Universal
  • Columbia
  • Walt Disney
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