The document summarizes the history and structure of the American film industry. It describes how the industry developed between 1895-1930, becoming dominated by five major studios by 1930. These studios operated under a vertical integration system, controlling production, distribution, and exhibition. In 1949, the government forced studios to sell their theater chains due to antitrust issues. Today, six major film studios, which are subsidiaries of larger media conglomerates, control around 90% of the North American film market.

1. 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.

2. 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

3. 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!)

4. 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.

5. 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.

6. 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.

7. 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.

8. 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).

9. WHAT IS A CONGLOMERATE?
• kuh n-glom-er-it
a corporation consisting of a number of
subsidiary companies or divisions in a variety
of unrelated industries, usually as a result of
merger or acquisition.

10. 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!

11. The Big Six
• Who do you think are the Big Six film studios
in the contemporary American film industry?
Major Studio Subsidiaries
Warner Bros Pictures
20th Century Fox
Paramount Pictures
Columbia Pictures
Walt Disney/Touchstone Pictures
Universal Studios

12. Market
• Which of the Majors do you think is the most
successful.
• Rank the studio’s market share:
– 20%
– 16%
– 14%
– 14%
– 12%
– 10%

14. Ownership
Do you know which
conglomerate owns which
film studio?

15. 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!

16. 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

17. 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=2
014
Took less in its opening weeks than The Hunger
Games Mockingjay
• Distributed by Warner Bros
• Starred: Bradley Cooper
• Directed by Clint Eastwood

18. 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?

19. 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

20. Task now … continue on Thurs
• Research one conglomerate to present back to
the class next lesson.
We need to know:
1. What they own
2. What they make
3. How much they’re worth (ish)
4. Important historical moments
5. Successes / epic failures – search news articles
perhaps?