Hollywood

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Hollywood

• Why is Hollywood such a successful film industry?

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• Hollywood

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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

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• "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).

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• "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.

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• 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.

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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.

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So, Vertical integration has gone, making the
Hollywood studios more competitive?
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Case study
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All owned by Rupert Murdoch
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Type Subsidiary of News Corporation
Industry Film
Founded May 31, 1935,1 by merger of Fox Films (founded in 1915) and 20th Century Pictures, Inc. (founded in 1929)
Founder(s) William FoxJoseph M. SchenckDarryl F. ZanuckRaymond GriffithWilliam Goetz
Headquarters Fox Plaza, Century City, Los Angeles, California, United States
Products Motion pictures, television films
Owner(s) Independent (19151985)News Corporation (1985present)
Parent Fox Entertainment Group
Divisions 20th Century Fox AnimationFox Animation StudiosFox 2000 Pictures
Subsidiaries Fox Searchlight PicturesFox AtomicFox Interactive20th Century Fox Home EntertainmentFox Television StudiosBlue Sky Studios20th Television/20th Century Fox TelevisionFox Star Studios
Website www.foxmovies.com
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Type Subsidiary of News Corporation
Industry Film, television
Founded 1990s
Headquarters Fox Plaza, Century City, Los Angeles, California, United States
Key people Jim Gianopulos, Chairman, CEO
Products Motion pictures, Television programs
Revenue  13.28 billion USD (2004)
Operating income  2.9 billion USD (2004)
Net income  1.85 billion USD (2004)
Owner(s) News Corporation
Employees 12,500 (2004)
Parent News Corporation
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Type Public
Traded as NASDAQ NWSNASDAQ NWSAASX NWSASX NWSLVNASDAQ-100 ComponentSP 500 ComponentSP/ASX 50 Component
Industry Mass media
Founded Adelaide, Australia (1979)12Delaware, United States (12 November 2004)3
Founder(s) Rupert Murdoch
Headquarters 1211 Avenue of the Americas,New York, NY 10036, USA
Area served Worldwide
Key people Rupert Murdoch(Chairman and CEO)Chase Carey(President COO)
Products Cable network programming, filmed entertainment, television, direct broadcast satellite television,publishing, and other
Revenue  US 33.706 billion (2012)4
Operating income  US 2.212 billion (2012)4
Net income US 1.179 billion (2012)4
Total assets  US 56.663 billion (2012)4
Total equity US 24.684 billion (2012)4
Employees 48,000 (2012)4
Subsidiaries List of subsidiaries
Website NewsCorp.com
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• Some of those names for this year
• BV Buena Vista a subsidiary of Disney
• P/DW Paramount Dreamworks
• Gold Samuel Goldwyn Studios (ex-MGM)

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The interesting one

• LGF Lionsgate (Canada) the most commercially
  successful independent company in North America

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Type Public
Traded as NYSE TWXSP 500 Component
Industry Mass media
Predecessor(s) Time Inc.Warner Communications
Founded 1990
Headquarters Time Warner Center,10 Columbus Circle,New York City, New York,United States
Area served Worldwide
Key people Jeffrey L. Bewkes(Chairman CEO)
Products Television, movies, entertainment, cable,broadcasting, radio, web portals
Revenue  US 28.7 billion (2012)1
Operating income  US 6.1 billion (2012)1
Net income  US 3.5 billion (2012)1
Total assets  US 68.304 billion (2012)1
Total equity  US 29.954 billion (2011)1
Employees 34,000 (2012)1
Subsidiaries List of subsidiaries
Website www.TimeWarner.com
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US Weekend box officeFebruary 15-17, 2013
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UK Box Office for 2012
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• Momentum Pictures a successful British film
  Distributer
• Owned by Paramount Pictures.

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British Involvement?
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• Most of these films have British actors, many in
  the lead role.
• Is it important to British audiences to see
  British stars on screen?

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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?

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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