The American Film Industry

Lesson Objectives: To be aware of the historical development of the American film industry, and the contemporary structure of the industry.

The Origins of the American Film Industry

Between 1895-1930 the emerging American film industry developed into an important

popular medium.

By 1930 America was dominated by five ‘majors’ or ‘the big five’ companies.

1930 – 1949/52 is known as the Studio Era

The Studio System

• Production line – factory-like.• Casts and crew were ‘contracted’ by studios.• ‘Casablanca’, ‘Gone With the Wind’, ‘Singin’ in

the Rain’.• Big 5 + Little 3

+ Universal Pictures, United Artists, Columbia(these little ‘uns didn’t own their own cinema chain so couldn’t show their

productions….awww!)

Vertical Integration• The big 5 as they were known, applied the concept of vertical

integration to their businesses.

• This is when the company controls just about every step of the production and doesn’t need to rely on any other company.

• The big 5 made the films with contracted directors and actors (that they more or less owned), distributed them with their own distribution companies and then exhibited them in their own chain of cinemas.

All of the Big Five studios were vertically integrated.

Hollywood today• Hollywood today is a different place although the big studios (

which now number 12 or so) still control most of the money that is made in the industry. However the process of getting a film made has changed.

• Now studios no longer make films with contracted directors or actors, they ‘strike deals’ based on the ‘package’ with independent production companies, based on the actors involved, the genre and of course the quality of the script.

• If a film gets the ‘greenlight’ by a studio then they will agree to finance it.

Film Profit margins• Hollywood is still dictated by money, hence the string of

summer blockbusters that are released form around May.

• Many of the ‘blockbuster films’ are low on originality and are often remakes or sequels.

• Why do Hollywood do this?• It creates an almost guaranteed audience for the film and

therefore generates the most income.

• The films that really excite the industry are the low budget ‘sleeper hits’ that turnover millions at the box office as these will have the greatest profit margin.

The End of the Studio Era

• In 1949 the major studios were forced to sell off the cinema chains that they owned by the US government, after a court ruling that their practices were monopolistic.

• The American film industry declined further in the 1950s due to the rise of television.

• It wasn’t until the late 1980s that Hollywood studios fully recovered.

The Contemporary American Film Industry

• The American film industry is now dominated by six major film companies.

• The contemporary Big Six account for nearly 90% of the North American film market.

• All of these companies are subsidiaries of major media conglomerates (all part of bigger companies).

WHAT IS A CONGLOMERATE?

• kuh n-glom-er-ita corporation consisting of a number of subsidiary companies or divisions in a variety of unrelated industries, usually as a result of merger or acquisition.

What is a moNOPOLY?

• muh-nop-uh-lee exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices.

No or very little competition!

The Big Six

• Who do you think are the Big Six film studios in the contemporary American film industry?

Major Studio Subsidiaries

Warner Bros Pictures20th Century FoxParamount PicturesColumbia PicturesWalt Disney/Touchstone PicturesUniversal Studios

Market

• Which of the Majors do you think is the most successful.

• Rank the studio’s market share:– 20%– 16%– 14%– 14%– 12%– 10%

Ownership

Do you know which conglomerate owns which film studio?

What is a moNOPOLY?

• muh-nop-uh-lee exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices.

No or very little competition!

Conglomerate Parent Division Major Studio Subsidiary

Time Warner Warner Bros. Entertainment

Warner Bros. Pictures

News Corporation Fox Filmed Entertainment 20th Century Fox

Viacom Paramount Motion Pictures Group

Paramount Picture

Sony Corporation of America

Sony Pictures Entertainment

Columbia Pictures

The Walt Disney Company Walt Disney Motion Pictures Group

Walt Disney Pictures/Touchstone Pictures

General Electric/ Vivendi NBC Universal Universal Studios

Case Study- The American Sniper- 2014

• Rated the number one for Domestic US gross revenue 2014 - $350,126,372 total

http://www.boxofficemojo.com/yearly/chart/?yr=2014Took less in its opening weeks than The Hunger Games Mockingjay• Distributed by Warner Bros • Starred: Bradley Cooper • Directed by Clint Eastwood

Quick Questions

• Why do you think they achieved such a high revenue?

• What impact do you think being distributed by Warner Brothers impacted on this?

Case Study – Guardians of the Galaxy

• Distributed by Buena Vista – • 3rd in the top gross revenue list 2014 -

$333,176,600• Directed by: James Gunn –Monster unleased –

Scooby Doo 2• Starred: Bradley Cooper & Zoe Salandana

Task now … continue on Thurs

• Research one conglomerate to present back to the class next lesson.

We need to know:1. What they own2. What they make3. How much they’re worth (ish)4. Important historical moments5. Successes / epic failures – search news articles

perhaps?