Wednesday, March 23, 2016

Things the Film Industry Doesn't Want You to Know About

Things the Film Industry Doesn’t Want You to Know About

Cinematic Listology By Ashe Cantrell on September 8 |

You may already be a film industry cynic. Maybe you think Hollywood is a barren wasteland, devoid of creativity and originality. Maybe you’re sick of seeing talented people get ignored and vapid hacks get splashed all over the trades. Maybe you’re tired of 3D everything and having to re-buy your movies every five to ten years.

I’m not here to dissuade you of any of that. Hell no, I’m here to make it worse. Get ready, because this is some of the rottenest shit of which the film industry is capable. These are the things so terrible that Hollywood has to cover them up, lest God see their sin and smite them accordingly (and keep various government entities and lawyers off their backs, of course). If you still had any kind thoughts toward Hollywood, I suggest you prepare yourself for crushing disappointment.

But first, I’d like to give a very huge shout out and thank you to writers C. Coville and Maxwell Yezpitelok for their help on this article. You guys are great!

And now back to the shit storm, already in progress:

6. Tricky Hollywood Accounting


Here’s a basic example of Hollywood Accounting: A studio makes a movie. The studio distributes the movie itself, and although the distributor is technically a separate company, they both belong to the same parent company. Also, the distribution arm sets whatever fees it wants. If they want to charge themselves eleventy quintillion dollars for distribution, they totally can. Then, even if the film earns billions of dollars in box office receipts, they’re still technically in debt (to themselves) and thus haven’t turned a profit.

Sound ridiculous? It happens all the freaking time. David Prowse, the guy who was in the Darth Vader costume in the original trilogy of Star Wars (before being ousted by that douche Hayden Christensen in the special edition) has never been paid for Return of the Jedi because it hasn’t turned a profit after nearly 30 years. That’s after dozens of home video and theatrical re-releases. (All the merchandising money goes to Lucas directly, of course.)

Similarly, someone leaked Warner Bros.’ accounting sheet for Harry Potter and the Order of the Phoenix onto the internet, showing that the film that had grossed about $1 billion worldwide had lost $167 million on paper.

Winston Groom, the writer of Forrest Gump was told that the film based on his work wasn’t profitable. Of course, he got the last laugh when they came to him asking if they could turn the sequel, Gump and Co. into a film as well, and he reportedly told them, ”I cannot, in good conscience, allow money to be wasted on a failure.” In other words, “Go fuck yourself.”

And then there’s Art Buchwald, whose spec script got stolen by Paramount (remember that, it’s going to come up later), and got turned intoComing to America. When he took them to court and sued for a percentage of the profit, Paramount was totally cool with it, because according to their books, it hadn’t made any kind of profit, so they didn’t owe him one red fucking cent. The judge later ruled that it was “unconscionable” for Paramount not to pay Buchwald something in a settlement. Otherwise, he’d have to ask Paramount to open their books for the courts to review. Paramount quickly backed down and settled with Buchwald instead.

5. Extorting Theaters

Ever wondered why popcorn, something that costs $.25 a bag on Planet Earth, costs $7 at the movies? Here’s a hint: it’s not because of the reconstituted pig flesh that they call butter.

Movie theaters have had to look for more and more ways to increase revenue, like jacking up the prices of things at the concessions stand and adding a dozen ads to the beginning of each film. Why, when new releases are constantly breaking records and making obscene amounts of money? Because film studios don’t like the theaters getting their beak wet.

Movie theaters operate on a kind of sliding scale. The first weekend of a movie’s release, the profit is split heavily in the studio’s favor, typically around an 80/20 split. The second weekend, it may change to a 70/30 scale, and so on. It’s even rumored that some major blockbuster films like Avatar are released with 90/10 or even 95/5 splits. Now keep in mind that exceptionally few films do very well after the first week of their release. Today, sometimes it's 100/0.

So why do the theaters take these awful deals? Because if they don’t, the studio is under no obligation to lease their films to that theater, so they can just totally bounce if they want to. If that happens, the theater has no films to show at all, and then what have they got to draw people in? Overpriced hot dogs?

4. Fake Reviews


Have you ever seen a trailer for a shitty movie on TV and it has one of those blurbs that’s like “…stunning…,” and maybe a soothing voice reads it aloud? You may joke with your friends that the rest of that quote is “a stunning pile of horse shit.” Turns out, that actually happens. It’s not a joke at all. Marketing departments just plain don’t give a fuck. For example, one critic’s review of Live Free or Die Hard got shortened from “hysterically overproduced and surprisingly entertaining” to “hysterically… entertaining.” Sometimes they’ll even take the blurb from parts of the review where the critic was referring to a different movie entirely or the genre as a whole, like when a blurb used for Definitely, Maybe turned out to be from the critic’s description of the romantic comedy genre as a whole and not his actual thoughts on the film.

Another fun trick Hollywood likes to use is trying to woo critics with free screenings, food, set visits, and other goodies. The people who take the bait are called quote whores. If your film needs a good review, they’re there to give it. One of the most infamous is a critic named Earl Dittman, who is the film critic for a publication called Wireless Magazine. You’ve probably never heard of Wireless, and that’s because they apparently have zero subscribers and no web presence, and yet that doesn’t stop film studio marketing departments from using his blurbs like they’re gold. In fact, Dittman was the center of a lot of controversy when an e-mail he sent to Fox contained not one, but ten different blurbs for the movie Robots and instructions for the studio to pick and use whichever one they liked best. But at least Earl Dittman’s a real guy.

David Manning, however, is a different story.  Sony Pictures created the fictitious Manning and claimed that he worked for The Ridgefield Press, a real newspaper. Unfortunately, they didn’t foresee someone actually asking the paper if they’d ever heard of the guy, because, you know, they hadn’t. All of his blurbs were concocted by Sony Pictures’ marketing department. Fox pulled similar shit, using footage of employees pretending to be ordinary movie-goers for promotional material.

In the spirit of Hollywood review tactics, I’m going to build a review of my most recent articles from an e-mail that the Film School Rejects editors sent me.
“Ashe, we’re getting really sick of telling you this, but if you… don’t… keep… posting these ridiculous[ly wonderful]… articles, we’re going to have to let you go.” -Cole Abaius, Film School Rejects

–~~~~~~~~~~~~–

3. Copyright Bullshit


Now, I’m not going to sit here and say that copyright sucks and it should be abolished, because I think it’s a useful tool for creators who want to protect their work from douchebags who might rip it off. What sucks is the way that big film companies use copyright as a bludgeon to keep people away from their intellectual property.

See, originally, copyright was limited to a maximum of 28 years. If you created something, you had 28 years to get all you could out of it, because after that it became public domain. Since those days, copyright terms have been extended numerous times, and each time one company has been leading the charge: Disney.

Each time the copyright on Steamboat Willie is about to run out, Disney loses their shit and lobbies the government to pass another copyright extension law. Although a popular explanation for this is that they’d lose the rights to Mickey Mouse if Steamboat Willie were to become public domain, that’s not the case. Mickey Mouse is actually a trademarked property, and trademarks are perpetual as long as the company continues to use it. (If you haven’t noticed, Disney uses the fuck out of Mickey Mouse.) The simple fact is that Disney still makes lots of  money selling DVDs and merchandise relating to Steamboat Willie.

In fact, Duke University compiled a list of all of the films that could have entered the public domain this year if Disney hadn’t argued for the law to be changed in 1976. Movies like On The Waterfront and Seven Samurai, and even the first two books of The Lord of the Rings would be in the public domain now, free for anyone to use and enjoy and remix and learn from. As it stands now, Steamboat Willie remains under copyright until 2023, and even fairly boring things like the very first issue of Sports Illustrated are protected until 2050. You can imagine what that means for movies that came out this year.

Here’s something funny, though: Some legal experts believe that Steamboat Willie may have never been registered for copyright at all. Nowadays, the very act of creating something gives you copyright, whether you register it or not, but back then, you had to specifically register the copyright for the works you wanted protected, and you had to label it in a very certain way afterward. A Disney researcher,Gregory Brown, believes that Walt Disney may have improperly formatted the copyright notice on Steamboat Willie, thus making the copyright void. In fact, a law student at Arizona State University researched Brown’s claims and agreed with him. Not only that, but a George Washington University copyright expert agreed with both of them and published a paper saying so. It was at this point that Disney took notice of the issue and actually threatened to sue him for “slander of title.” Holy shit, Disney.

2. Strangling Consumer Choice


If you’re like many millions of other Netflix customers, you were probably pissed off when they jacked up their prices last month, effectively doubling the cost of some people’s subscriptions. And before that, you were probably annoyed when they started putting out their DVDs 28 days after they went on sale. And maybe you’re mad now that they’re losing their contract with Starz because they had an argument about money.

It’s almost like Netflix got tired of making money or something. Why do they keep doing all this stupid stuff? Well, simply put, it’s not really their fault. You see, film studios aren’t the biggest fans of things like Netflix, Redbox, or Hulu. You know, those things that allow you to pick and choose what you want to watch when you want to watch it for a reasonable, affordable price. The reason is that it eats into their sales of DVDs and pay-per-view rentals, for which they get a much higher cut of the profit. As DVD sales drop, movie studios panic.

So, instead of adapting their business model to a format that consumers obviously prefer, they’d rather try to turn back the clock and take away the distribution methods people love and enjoy. That means demanding more money from Netflix to lease their movies, ever-increasing delays between a DVD’s release and its availability out of Redbox machines, and putting Hulu, a service created by the content creators themselves, up on the auction block when it ended up being too successful. The Time Warner CEO has even taken to blasting Netflix in the press for the last year, describing them as a “fading star.” You’d fade, too, if someone wrapped their hands around your throat.

1. Stealing Scripts


Remember Art Buchwald from earlier? The guy who almost got screwed by Paramount before a judge stepped in and told them to cut that shit out? Well, there’s a little more to that story. A few years before the big court case, Buchwald was already a successful humor writer and satirist, even winning himself a Pulitzer for his work. Then he set his sights on Hollywood, and he pitched Paramount an idea for a movie about an African prince who moves to America to find a bride. He suggested Eddie Murphy as a lead actor. (That’s right, kids. People used towant Eddie Murphy in their movies.)

Paramount took the pitch, but then had trouble getting it off the ground. Eventually, the rights returned to Buchwald and he pitched it to Warner Bros. Shortly after they began work on it, though, Warner Bros. killed the project. Turns out, there was a similar film going into production at Paramount. It was a movie about an African prince who moves to America to find a bride. Oh, and it starred Eddie Murphy, who was also given writing credit. That movie, of course, was Coming to America. Buchwald was furious and immediately took Paramount to court, which instigated the events discussed back in the Hollywood Accounting entry. So Buchwald didn’t just get screwed, he almost got double-screwed. But he’s not the only one.

Turns out, some of those crazy people who constantly crop up and say Hollywood producers ripped off their scripts aren’t so crazy. In fact, it turns out that it’s a dirty little secret of Hollywood’s that stealing scripts is almost commonplace. Jeff Grosso wrote a script about his life as a professional Texas Hold ‘Em player and had it turned down by Miramax, only for them to turn around and begin production on an identical project that became the Matt Damon film Rounders. Another writer, Reed Martin, pitched his idea and, like Buchwald, even recommended the perfect actor for his script– Bill Murray. Months later, an exceptionally similar movie, Broken Flowers (starring Bill Murray, of course), went into production without Martin. Although Martin’s claim survived many attempts at dismissal, it saw a trial in which a jury sided with the studio. Due to the high cost of the appeals process (an approximated $800,000), he has not filed an appeal.

The problem is that while scripts can be copyrighted, ideas cannot. So, if Hollywood gets pitched an idea and likes it, but doesn’t want to deal with the whole “paying for the script” thing, they can just hire someone to write another script based on “their” idea. Since they have much bigger, meaner lawyers than your average spec script writer, the writer kinda gets boned. So even the mythical “original idea” in Hollywood? Yeah, it may not be so original after all.

Others: 

Writers Don't Come Up With the Ideas
The Complaint:

"There are no original ideas! Look at the top-grossing 25 films of the 2000s -- 23 were remakes or adaptations! How lazy can these writers get?"

"I made almost enough money writing Transformers 2 to drink away the shame of having written Transformers 2."

The Problem:

Even if you know nothing about how movies get made, you know that there are very specialized tasks -- the sound guy is an expert in microphones and audio but probably couldn't be trusted to do stunts. And, you assume that when it comes to thinking up the ideas for what happens in the movie, somewhere it's all just some writer hunched over a keyboard -- a professional who is an expert in story, plot and character.

Not so.

In almost all cases, the initial ideas for movie plots don't come from screenwriters at all, but from producers (basically, the people in charge of the money side of the project). So most of the movies playing in your nearest theater didn't come from some writer thinking up a story he wanted to tell -- they came from some producer saying, "There hasn't been a ThunderCats movie yet, has there?"

"Avatar was full of cat people -- we can't miss!"
At that point, the producer and whoever else is involved (other producers, maybe a famous actor if they're lucky) will then hammer out a rough idea for the movie that will appeal to at least two of the four market demographics (young males, young females, older males, older females). So if it's an action movie aimed completely at young males, you throw a romance in there for the ladies. It's only then that they will give a screenwriter a call. In other words, in most Hollywood films, the writer is basically there to fill in the dialogue holes and think of clever catchphrases for Ryan Reynolds to say every time he socks a guy in the jaw.

For Example ...

The Halloween franchise wasn't cooked up by a plucky man named John Carpenter who had a dream about a man in a creepy mask. Instead,two producers approached him after they decided it would be cool to have a movie about a psycho stalking babysitters.

It's a tale as old as time.
So what about those screenplays that your friend working at the video store is constantly writing, in hopes they will some day get made and star a naked Natalie Portman? In reality, even the great ones are treated as spec scripts (basically, a literary audition). The script is proof to the people in charge that the writer is, for the most part, not illiterate. So if you submit a powerfully emotional piece that deftly explores the facets of love and loss, you might impress someone enough to get a job co-writing Transformers 4.

On the rare occasion that an original script does get picked up for production, it's likely to get swept up by one of the big franchises. I, Robot was initially an original script called Hardwired that no one would touch until a famous Asimov title was attached to it. Die Hard 2, 3 and 4,Ocean's Twelve and Starship Troopers were all original ideas that were snapped up and rebranded as franchises. So if you're working on a passion project, maybe it's time to let the dream die and just start focusing on a gritty reboot of She-Ra.

Creativity counts for a hell of a lot less than brand awareness.

Everything Is Simplified for the International Market
The Complaint:

"Even the original movie ideas are just mindless explosions and CGI! Why does every other movie have to look like a video game and make me feel like a moron?"

The Problem:

If you're reading this, then those movies weren't made with you in mind. They were made for the international box office (Transformers 2 made $400 million overseas, for instance). Now, before you even have a chance to think it, we are not saying foreign audiences are stupid. The movies made in their home countries, for them, are no doubt just as deep and thoughtful as any Best Picture winner.

No doubt.
What we're saying is that to make a movie that appeals equally to American, Japanese, Korean, German and Mexican teenagers, you need to simplify that shit down to things they all understand equally. Anything dealing with, say, the subtle trials and hardships of everyday life in the American Midwest is going to be totally lost on someone from the other side of the planet.

But there is one thing that everyone in the world can understand and sympathize with, no matter what their culture or ethnicity: The need to run away if you are being chased by giant robots.

Forget math -- robot threat is the universal language.
Likewise, foreign audiences also aren't as picky about good writing (a lot of it will be lost in the translation to subtitles anyway) or clever comedy (which is highly culturally specific). So if you're a studio executive who is choosing between financing a poignant coming of age film about an orphan ranch hand in East Texas or a film about a giant radioactive thunderstorm that gives people superpowers, chances are you're not going to go with the poignancy.

For Example ...
Everybody chuckled at how over-the-top stupid 2012 was. And it did a "meh" $166 million in American box office. 

Overseas? It made $604 million.

"Yah! Ve liken das tidal waves unt der evil vice fuhrer."
By the way, it was that lust for foreign currency, not a sudden loss in patriotism, that was behind the G.I. Joe movie replacing its "all-American hero" with a multinational group of soldiers with a strangely American task force name.


Movie Projects Get Killed for Bad Reasons
The Complaint:

"Man, whatever happened to that Halo movie Peter Jackson was going to make? Or (insert any of a hundred impossibly cool movies rumored on Ain't It Cool five years ago that were never mentioned again)?

Caption Dept. Note: Sorry, we can't think of anything that would make this picture more ridiculous.
The Problem:

"Development Hell" is what happens when a movie gets indefinitely stuck at some point during the moviemaking process and gets lost. Now, sometimes it's nobody's fault -- Halo would be expensive and at this point would look like a cheap Avatar knockoff. But the kicker is that sometimes the studios banish projects to oblivion intentionally.

"Pay our hefty ransom, or you'll never see your precious Halo movie again."
For Example ...

Hollywood studios generally buy 10 times as many scripts as they make into movies, which means they currently own exclusive rights to a shitload of films that will never see production. And in most cases, they won't let anyone else have them. E.T., The Matrix, Pulp Fiction and Star Wars are all films that you never would have seen because the studios that owned them were content to sit on each forever. They were saved only because someone convinced another studio to re-buy them, usually at a higher price.

Sometimes the reasons for stalling a project are even more duplicitous. According to screenwriter Howard Meibach, in the 90s Disney bought a script for a hockey-related movie that was getting attention in Hollywood simply because it had a different hockey movie in production and "[didn't] want another studio to get it." Thanks to Disney's unapologetic cock-blocking, we will never know what the actual film was about.

We have our guesses.

And finally, sometimes studios will sit on entirely completed movies. We've told you about the time a studio made an abysmal low-budget adaptation of The Fantastic Four it never intended to release, simply because it wanted to keep the rights. It turns out this sort of thing is more common than you'd expect: When legendary producer Harvey Weinstein was in charge of Miramax, he used to buy exclusive rights to foreign films and then push back their releases indefinitely as part of a scheme to get bonuses from Disney. He bought the rights to distribute Jet Li's movie Hero and then didn't, releasing it a full two years later only when Quentin Tarantino finally intervened.

After what we can only imagine was one hell of a sword fight.

OK, so you probably don't care about a crappy superhero B-movie or some foreign flick about old people falling in love or, like, rain (look, we don't see a lot of foreign movies). But how about Mike Judge's movie Idiocracy? 

Despite how much America loves Judge for Beavis and Butthead and Office Space, 20th Century Fox did everything it could to bury his movie. It tried to weasel out of a theatrical release for over a year and finally did the bare minimum to fulfill its contract by opening Idiocracy in seven cities, with no trailers or press kits.

Merchandising Supremacy
The Complaint:
"Wait, Pixar is making freaking Cars 2? Of all the original films they could be working on or, hell, of all the sequels they could be making, they're making a goddamned Cars 2? Why?"
The Problem:
Five billion dollars. That's how much money Disney has made off of Cars merchandise (and that article is two years old -- hell, it could be 7 billion by now).

The inevitable conclusion here is a movie about the secret lives of Happy Meal toys.
That's why Up, despite being wildly critically acclaimed from the get-go, actually caused Pixar's stock to go down before its release; investors thought the lack of merchandise would make it bomb and wondered what the point of the movie was without the toys.
You can't overstate how huge merchandising looms in the process of getting a blockbuster made. Film merchandising is a $132 billion industry worldwide, and it's also a pretty sweet deal for filmmakers -- they don't have to actually manufacture or sell anything; they just charge a licensing fee and use that money to help fund their movie. So if the toys don't sell, the merchandiser has to take the loss, not the studio. Awesome, right?
Well, no. The more expensive films get (and they're getting pretty expensive), the more the industry becomes dependent on merchandising. So parents concerned about Hollywood's influence on their children will be happy to know that today it's nigh impossible to get a kids movie greenlit if your characters don't look like something you can put inside a Happy Meal.

REJECTED.
For Example ...
Take a look at what will probably be next year's biggest blockbuster:
Seriously. Someone is making a $200 million movie based on some pieces of plastic and a bunch of holes, some of which will be played by Liam Neeson and Rihanna. There's also a remake of Clue and a movie adaptation of motherfucking Monopoly directed by Ridley Scott.
And don't get us started on the product placement. Today, branding experts read drafts, meet with the writers and even write new dialogue. That's why you have scenes in which John Connor drives a Chrysler in the post-apocalyptic future of Terminator Salvation, even though there are about 67 solid reasons why that doesn't make any sense. You can look forward to seeing a hell of a lot more of that in the future.

"You made a time machine ... out of a box of Kellogg's Rice Krispies?"
Copyright Cinematic Listology 


MPAA Theatrical Market Statistics

Below you'll find the latest data regarding the movie-going audience in the U.S./Canada and worldwide:

http://www.mpaa.org/wp-content/uploads/2015/03/MPAA-Theatrical-Market-Statistics-2014.pdf

Overview of the Movie Industry

Movies

HISTORY OF THE MOTION PICTURE

Motion pictures and television are possible because of two quirks of the human perceptual system: the phi phenomenon and persistence of vision. The phi phenomenon refers to what happens when a person sees one light source go out while another one close to the original is illuminated. To our eyes, it looks like the light moves from one place to another. In persistence of vision, our eyes continue to see an image for about 1/10 second after the image has disappeared from view.

The Edison Lab and Other Early Experiments

Thomas Edison and William Dickson developed the first practical motion picture camera and viewing device. Dickson developed the idea of taking many pictures simultaneously by using sprocket-fed film to run past a camera lens. In 1889 the pair developed the Kinetoscope, a viewing device that allowed a single person to see the projected film through a peep hole. Edison erred, however, in thinking that film profits would be made by selling the hardware rather than mass admissions to see the film itself. Edison later recanted and developed a projection version of his machine, in 1896, which he called the Vitascope. Vaudeville theaters soon began showing early “films” in-between acts as novelty features, attractions that proved highly successful for a time.

The Nickelodeons

Public interest was soon rekindled when early filmmakers found that movies could be used to tell a story. Many early films, such as George Melies’ A Trip to the Moon, were shot with stationary cameras, much like having a front row seat at a stage production. Then a few American filmmakers saw the aesthetic potential of mobile camera placement and film editing techniques to make films more lifelike and exciting, among them Edwin Porter’s The Great Train Robbery in which he was the first to use mobile camera placement and cut-away scenes.

Nickelodeons, 50-90 seat theaters that charged a nickel admission sprung up almost overnight to accommodate the new demand for narrative films. To keep audiences returning, films had to be changed often—sometimes daily—to attract repeat customers. The demand for new films soared, and along with new film studios to meet that demand.

Zukor and Griffith

In 1912 Adolph Zukor experimented with the medium by charging audiences $1 to see the four-reel film Queen Elizabeth. His experiment proved that middle class audiences would pay a premium amount to watch long but well made films. Later, D.W. Griffith added to the experiment with his three-hour-long and racially biased 1915 film, Birth of a Nation. In response, two African-American brothers successfully produced and marketed a film aimed at black audiences.

Birth of the MPPC

Trying to bring order to a rapidly expanding industry (and to trim rising legal fees for copyright violations and patent infringements), the leading film and equipment makers banded together, pooled their patents, and formed the Motion Picture Patents Company (MPPC) in order to restrict moviemaking to the nine companies that made up the MPPC. Instead of squelching competition, however, the MPPC actually encouraged it. Annoyed by its repressive and conservative regulations, independent producers began offering films to exhibitors at cheaper rates. Smaller film-makers soon found themselves a new, and quieter, home in Hollywood. By 1917 the MPPC was extinct.

The Star System

Independent film-makers quickly recognized that the public was interested in particular actors and actresses (the MPPC refused to even identify their performers). Promoting these stars, independent studios began to capitalize on the audience drawing power of certain performers, such as Florence Lawrence (perhaps our first star), Theda Bara, Lillian Gish, William S. Hart, Charlie Chaplin(the Tramp), and Mary Pickford (America’s sweetheart). Eventually many of these stars joined together to form their own studio—United Artists. Fan interest in star-featured films soon gave birth to longer movies and cries for more comfortable and elaborate movie theaters than the nickelodeons.

Consolidation and Growth

To insure continued high profits, film producers aggressively branched out into all three divisions of the film industry: production, distribution, and exhibition. Film-makers became distributors as well as chain theater owners, while some theater owners moved toward buying their own film studios. A new practice called block booking helped solidify power as well; under this system distributors told theater owners that they would have to accept a certain number of lower quality films if they wanted to continue receiving the top feature movies. By the end of WW I in 1918, American film-makers controlled 80 percent of the worldwide film market.

The Roaring Twenties

Endorsing the idea that the only way to make money was to spend money, Hollywood soon began spending record amounts on salaries and production costs (a 1500 percent increase from 1914-1924).

Along with new-won fortunes came untamed excesses, and, under growing public pressures, the film industry tried to regulate itself. One direct result was the creation of the Motion Picture Producers and Distributors Association, which successfully averted the imposition of government controls.

The Coming of Sound

Silent films, which had never really been silent thanks to play-along pianos and organs, essentially came to an end in 1927 with the production of Warner Brothers’ The Jazz Singer, starring Al Jolson.

With the advent of sound, voices that didn’t “fit” well with existing film actors ended several silent film careers. Directors now had to contend with sound as a vital element of film making, and the cost of shooting films rose because of the new advantages (and restrictions) that sound imposed.

Not surprisingly, the Depression era economics of the 1930s cut into film profits, and Hollywood responded by introducing the practice of showing double features, two films for the price of one. Studios also began experimenting with Technicolor and animation to help encourage attendance.

The Studio Years

Hollywood’s studio years lasted between 1930-1950, featuring such famous studio names as MGM, 20th Century Fox, RKO, Warner Brothers, Paramount, Universal, Columbia, and United Artists. The studios created hundreds of acres of back-lot movie sets, constructed elaborate sound stages, and built up showy stables of creative talent, carefully groomed for stardom. Since music was easier and cheaper to put on film than dialogue, musical films also became popular at the time. The musical extravaganza emerged as a film genre, the main practitioner being New York dance choreographer Busby Berkeley. The situation comedy, a 1930s film genre that blended romance with light banter and comedy, also became a public favorite. But perhaps the most significant period for motion picture achievement was the time between 1939-1941 with the premier of such all-time film classics as Gone With the Wind, The Wizard of Oz, Stagecoach, and Citizen Kane.

Another development that significantly changed the industry was government’s 1938 suit against them which claimed that Hollywood’s vertical control of film production, distribution, and exhibition constituted a monopoly. In 1948 the courts ordered film-makers to divest themselves of at least one type of holding; most chose to get out of their theater chains, or the exhibition end. The court also stopped block booking, thus depriving the studios of a guaranteed exhibition for all their films.

The Film Industry Reacts to TV

As the new TV medium began cutting into movie profits in the late 1940s, Hollywood tried to fight back in several ways: studios refused to advertise their films on TV, refused to release old films for showing on TV, and they even tried to bar their film stars from appearing on television.

Hollywood also attempted to lure audiences back with technical wizardry, featuring such novelties as 3-D, Cinerama (a film shown using three projectors and a very, very wide screen), the “spectacle” film (noted for its lavish sets, casts of thousands, big name stars, and wide screen effects), musicals, and finally, movies with adult-oriented themes that TV couldn’t match. These attempts to compete did not work. Then, belatedly, Hollywood saw that it was in its best interests to cooperate with TV, and in the late 1950s the studios began supplying programs to network TV and began releasing pre-1948 films.

Realignments: Film in the 1960s and 1970s

Major studios began losing their industry influence, and studios began working closer with television. The continued rise of the independent producer also led a concomitant loss of power by the studios. Contracts with creative talent were terminated, and many artists quickly created their own independent film companies. They were often so successful that by the mid-1960s over 80 percent of all films were made by independent production companies. Many remaining film companies were simply absorbed by larger conglomerates.

In the 1960s film controls loosened, and a switch took place from regulating content to regulating audiences, the later through the Motion Picture Association of America’s G-PG-R-X film codes. That same period saw an even greater blend of Hollywood and television as studios began making movies expressly for television.

Film Industry Trends in the 1970s

. revenues and budgets increased
. advent of blockbuster films
. small-budget film hits that could pay back investors a hundred fold
. an increased use of market research
. continued close ties with TV
. the rating system changes: PG-13 is added, and X replaces NC-17



MOTION PICTURES IN THE DIGITAL AGE

Whatever the timetable, the film industry’s conversion from analog to digital technology will affect films at all levels; this, in turn, will put motion pictures through a significant transition period.

Making Movies

Making digital films (cameras, editing, and special effects) is a technology still relatively young. But digital’s cheaper costs and greater editorial flexibility will certainly hasten its use and development.



DEFINING FEATURES OF MOTION PICTRES

• high production costs along with sizeable marketing and distribution costs (the average marketing cost to a blockbuster film has surpassed $200 million)
• dominated by big conglomerates
• the most expensive mass medium on a per title basis
• film has a strong aesthetic dimension, the one medium most discussed as an art form
• going to the movies continues to be a social experience


ORGANIZATION OF THE FILM INDUSTRY

Production

Films are produced by a variety of organizations and individuals. In 1996 independent producers made more than two-thirds of all films, and four out of the five Oscar nominated films in 1996 were independently produced. Major studios today are generally used mainly for finance and distribution purposes.

Distribution

The industry’s distribution arm is responsible for making multiple copies of a movie, then booking and supplying prints of films to theaters around the world, as well as to TV, DVD, video, and pay-per-view outlets. Distribution people are also responsible for advertising and promoting the film.

Distribution companies are firmly entrenched in the industry for several reasons:

. big studios already have a world-wide studio-to-theater communications network set up
. unlike independents, big studios can offer theaters a steady stream films with big name stars
. distributors also serve as major sources of financial underwriting for independent film-makers

Exhibition

Perhaps the biggest trends in exhibition are the increase in theater screens, now just over 37,000, as well as theater upgrades such as digital surround sound, stadium seating, better sound proofing, and gourmet concession stands. The negative side is that the exhibition industry may have overbuilt a bit too much since several major chains are experiencing thin profit margins.


OWNERSHIP IN THE FILM INDUSTRY

As of 2016, the top six film conglomerates and their studios are:

. The Walt Disney Company (Touchstone and Buena Vista)
. Time Warner (Warner Brothers)
. Viacom (Paramount)
. Sony (Sony Pictures Entertainment)
. Comcast (Universal)
. 21st-Century FOX (20th Century Fox) a Rupert Murdoch enterprise


PRODUCING MOTION PICTURES

Departments

Though differences exist, a typical studio might be organized along these departmental lines:

. distribution
. film production division
. TV production division

Preproduction

There are three distinct phases in moviemaking:

. preproduction
. production
. postproduction

All films begin with an idea, such as a novel or play. The next phase is to write a narrative of the film and then draft/polish the final working script. All the while the producer may try to nail down financing, talent, behind-the-camera personnel (director, cinematographer, film editor, etc.), filming locations, and a general investment interest in making the film.

Production

Production if the actual filming stage of the movie. Shooting even a moderate-budget film can cost $300,000 to $500,000 a day, and the average shooting schedule for a typical film is about 70 days. Each day’s shooting results in an average of less than two minutes of usable film. Most exhibitors favor  films that are about 100 minutes long so that a theater can run through two showings in the same evening.

Postproduction

When the film is complete, the film editor begins the postproduction stage of the film. This includes deciding how long scenes should last, special effects additions, sound editing, and finally the making of the release print of the film. Later, preview audiences fill out special preview cards that indicate their reactions to the film; only fine tuning changes are generally made at this point.


ECONOMICS

Movies are an expensive medium. In the late 1990s, the average film cost $60 million to produce and another $20-25 million to market and promote. Today, the "average" Hollywood produced blockbuster film costs more than $200 million, with many films costing an ADDITIONAL $200 million to market.


Financial success is a function of U.S. and foreign box office revenue, DVD/video sales, cable fees, broadcast TV rights, airline showings, pay-per-view, hotels, and satellite channels.


Financing Films Finance sources include:

. direct loan from distributor (in return for distribution rights and/or studio equipment rentals)

. pickup distributor agrees to buy finished film for a set price at a later date; meanwhile, the
producer gets a bank loan for production. A third party, a completion guarantor, is brought
in to make sure the loan gets repaid.

. a limited partnership finances the picture through outside investors

. under a joint venture agreement, several film production and distribution companies pool their
resources and agree to finance one or more films

The producer and distributor also agree on how the distributor’s gross receipts from the film will be divided. Since the distributor takes the greatest risks, the distributor is the first to be paid. Finally, the actual film production loans are paid.

Dealing with the Exhibitor

A distributor’s license with an exhibitor sets the terms under which the showing of the film occurs, such as run length (number of days theater must show the film), holdover rights (dates film will be available), and clearance rights (the time that must elapse before film can be shown at a competing theater). A license also specifies how the receipts will be divided between distributor and exhibitor; some of the most common schemes are:

. split percentage: exhibitor splits receipts with distributor according to a pre-agreed formula

. sliding scale: as box-office revenues rise, so does the money exhibitor must pay distributor

. 90-10 deal: exhibitor first subtracts operating expenses, then pays distributor 90 percent while
exhibitor keeps the remaining 10

In some cases of big blockbuster films, the studio collects 100% of the revenue from ticket sales.

In terms of other revenue, theaters make up to 90 percent of their profits from concession sales.

Promoting the Film

The first three days a film opens (usually a weekend) is crucial to its success; films that open poorly seldom do well. Consequently, a good deal of promotion, marketing, and advertising is targeted to getting people into theaters for that opening weekend. Common promotion methods include:

. a pre-opening media promotion and advertising blitz
. using trailers (film clips from the movie) during a theater’s “Coming Attractions” segment
. opening the film simultaneously in every available theater
. engage in a merchandising tie-in with a fast food company
. scheduling a film’s opening during historically prime movie times (big Holiday weekends-- Thanksgiving, Memorial Day, Independence Day, summer breaks (when schools are out), etc.)

FEEDBACK

Box Office

Film industry feedback centers on weekly box-office figures (taken from 1600 theaters in 24 urban markets, which also accounts for about ¼ of the film’s total gross income).

Market Research

Because of rising film costs, market research has become a much more important factor in the film production process. The first step is generally to test promising plot lines, followed by an analysis of the script. That’s followed by issuing a rough cut of the film, which is in turn used for a series of test screenings. Often a focus group (10-15 random members of a target audience) is used to get a detailed analysis of the group’s reactions toward the film.

Motion Picture Audiences

Hollywood puts little faith—or money—into doing audience analysis, preferring instead the bottom line figures of box-office revenues for guidance. But we do know a few things; for example, one out of two audience members are under 30, teenagers account for 30 percent of the audience, and older fans are now more likely to go to a movie than they were five years ago.


Frequent movie goers (they see at least 12 films a year) account for 77 percent of all film admissions. Of these frequent goers, most are single, 16-39, they are more educated, from middle-class families, and they live in urban areas. The audiences for movies are largest in July and August, smallest in May. Worst two weeks of the year for exhibitors: the first two weeks in December.

The number of tickets sold domestically each year appears to have leveled off, with only slight differences over the past 20 years.

For example, the number of tickets expected to be sold in 2015 is 1.26b, and the number sold in 1996 was 1.27b. The difference, of course, is that there are considerably more people today (322m) than in 1996 (269.4m), so the rate has dropped precipitously. Put another way, in 1996 the average person went to just under 5 movies per year; in 2015 that number is less than 4. That's not a positive trend.

Annual Ticket Sales

199519961997199819992000200120022003200420052006200720082009201020112012201320142015
Tickets (billion)1.221.271.421.451.441.391.441.581.551.471.391.411.401.391.421.331.281.391.341.271.26
Revenue ($bn)5.295.596.516.787.307.488.139.189.359.118.939.259.639.9510.6510.4810.1411.0710.9010.3610.53
Note: Figures for 2015 are at an annualized rate.



Through November 1st of 2015, Universal is leading the pack in worldwide revenue:

January 1–November 1, 2015
Overall Gross: $8.960 billion
RankDistributorMarket
Share
Total
Gross*
Movies
Tracked
2015
Movies**
1Universal26.1%$2,340.51917
2Buena Vista16.6%$1,490.8139
3Warner Bros.16.0%$1,437.83422
420th Century Fox11.6%$1,039.21912
5Sony / Columbia7.5%$672.41713
6Paramount6.5%$579.4128
7Lionsgate4.1%$364.92220

The top 7 studios collectively account for nearly 93% of all market share. If one were to include the mini-major studio of The Weinstein Brothers, then the number is nearly 96%. All other film studios combined (and there are hundreds of them) account for only 4% of revenue.