Hollywood Why is Hollywood such a successful film industry?
Vertical integration of the Hollywood film industry Vertical integration was a key feature of the Hollywood studio system up to 1948. The ‘Big Five’ studios were:
"The Big Five," major studios realized they could maximize their profits by controlling each stage of a film's life: • production (making the film), • distribution (getting the film out to people), • exhibition (owning first-run cinemas in major cities).
"The Little Three" studios also made pictures, but each lacked one of the crucial elements of vertical integration. • Together these eight companies essentially controlled the entire market.
They also controlled the terms under which you could see their films. Prestige or “A-Movies” used studio stars and lavish production values, and then could only be seen initially in studio-owned, first-run cinemas. When the studios released these films to cinemas they didn't own, they forced those owners to buy A-pictures in combination with a number of, often mediocre, B-pictures (no stars, bargain-basement genre pictures) and shorts, a practice called "block booking." Moreover, the studios often made the exhibitors buy the films blind, not allowing them to see what they were getting before they got it.
The end of Hollywood's Golden Age In 1948 the studios were ordered to give up their cinemas, opening the market to smaller producers. This, coupled with the advent of television in the 1950s, seriously compromised the studio system's power and profits. Hence, 1930 and 1948 are generally considered bookends to Hollywood's Golden Age, the period when these eight companies secured 95 percent of all film rentals and close to 70 percent of all box-office receipts.
So, Vertical integration has gone, making the Hollywood studios more competitive?
Some of those names for this year: • BV = Buena Vista – a subsidiary of Disney • P/DW = Paramount Dreamworks • Gold = Samuel Goldwyn Studios (ex-MGM)
The interesting one: • LGF = Lionsgate – (Canada) the most commercially successful independent company in North America
Momentum Pictures – a successful British film Distributer ……Owned by Paramount Pictures.
Most of these films have British actors, many in the lead role. • Is it important to British audiences to see British stars on screen?
Media Ownership • Have the big studios managed to find a modern equivalent of vertical integration? • Why do you think that the big studios own smaller production companies? • Why not just focus on making big, mainstream releases? • Can the British film industry compete?
Case Studies • Find out what information you can about at least one American film production company. Do they have links to wider media ownership? • Do the same for a UK film production company hint: Aardman, Film4, New Line Cinema, etc Look at co-productions