The main changes that the paramount decree effecte Essay

This essay has a total of 2323 words and 9 pages.

the main changes that the paramount decree effected on the structure of the american film
industry and the measures the ex-studios took to remain in control of the film market


Outline the main changes the paramount decree effected on the structure of the American
film industry and discuss the measures the ex-studios took to remain in control of the
film market.


The period of the 1920's to 1950's where known as the studio era in Hollywood. A few major
companies monopolized the industry through vertical integration when the film companies
controlled all production distribution and exhibition. The majors determined which movies
were shown in which theatres, choosing their own over others. The theatres were often
palaces, about spectacle and a night out more than the movie itself. Marcus Loew said ,
"we sell tickets to theatres, not movies" (pg 113 , Hollywood cinema, Maltby R, 2003). The
majors forced independent theatres into block booking their movies. If they wanted to
purchase an individual movie from the producers they had to buy them in blocks, which
often included some low budget and less popular movies. "The system worked in the
distributors best interest by ensuring a wider distribution for lower budget movies and
preventing independent exhibitors from buying only the most successful product", (124,
Hollywood cinema, Maltby R, 2003).

The Paramount decree was passed in 1948 when the US supreme court ruled that the Hollywood
majors control over distribution and exhibition of its product constituted an illegal
monopoly and ruled that production and distribution be separated from the exhibition of
movies. It marked the end of the studio era and the beginning of decades of changes in the
industry made in order for the ex-studios to remain in control of the film market.

After the paramount decree the Big Five studios , Twentieth century fox, MGM, Paramount,
Warner Bros and RKO, were forced to sell off their theatre chains. The biggest problem the
studios faced was that "the theatres had contributed more to profits than either
production of distribution- production, of course, can only become a profitable activity
as a result of distribution and exhibition" (pg7 Hillier J , 1992, The New Hollywood).
Changes had to be made in order to make distribution of productions profitable. The studio
system worked on permanent studio facilities with a highly paid roster of stars and an
extensive payroll of technicians and staff. It soon became clear that the number of films
produced had to be cut so the studios abandoned contracted staff and permanent studio
facilities as they were on longer in constant demand.

Stars whos contracts were cut received tax breaks from investment credits in setting up
their own production companies. "Burt Lancaster and his agent Harold Hecht formed the
Hecht- Lancaster company in 1948 while Randolph Scott and producer Harry Joe Brown formed
Ranown productions in 1955" (pg8 Hillier J , 1992, The New Hollywood). This rise in
independent production did serve to diversify the industry as intended by the anti-trust
cases. The film industry also took advantage of foreign government grants and cheaper
labour by making films abroad. "between 1967 and 1972 some 45 % of the 1,200 features made
by US companies- not all A pictures were made abroad" (pg8 Hillier J , 1992, The New
Hollywood). The independents did not have the distribution facilities the majors had and
their companies were set up to produce only one or two movies at a time. The big studios
stepped in to co-finance the distribution of independent productions. "The rolling
production programme of the studio system was replaced by one-off independent productions
backed by a studio for all or part of their financing" (pg 9 Hillier J , 1992, The New
Hollywood). As well as finance the studio backing the independent production would also
rent them studio facilities.

The studios possessed lucrative assets from the studio era. The large studio lots were
prime real estate and they had the libraries of old films. Film production in the majors
was a good investment as the possessed established ditribution networks for the product.

The industry also benifetted from the new system by affording directors greater creative
freedom , and the opportunity to move from B-movie production to feature film production.
They took on more responsibility and had more time to work on the production. "since the
late 1960s it has been common for directors to average only one feature every year and a
half , two years , whereas at the height of the studio system, a John Ford or George Cukor
might regularly have made two or even three major features a year. There were serious
implications for the way in which directors learned their craft." (pg9 Hillier J , 1992,
The New Hollywood). Independent film production increased the importance of agents in the
system. After contracts were dropped, staff went to agents who brought them together with
a script and a director and a package to studios, for film projects. "by the 1960s two
thirds of films being made were pre-packaged by agents….Agents continued to grow in
importance to such an extent that by the 1980s, Michael Ovitz, president of CAA, was being
the single most influential person in the movie industry", (pg9 Hillier J , 1992, The New
Hollywood).

With fewer films in production after the Paramount decree , there were fewer films to
maintain the profitability balance and offset losses, as a result there was a need for
greater profits. Blockbusters became the industries idea of sure fire profit . New
technologies were utilized in order to make cinema something new and exciting. In order to
compete with the increasing loss of audience to television, studios began making more
films in colour. Cinerama was used for travel documentaries in the 1950s, widescreen made
its debut with Cinemascope and 3D made and appearance. All provided the opportunity to
raise ticket prices to offset falling audience figures.

The blockbuster theory caused massive losses in the 1960s when, following the success of
‘The Sound Of Music' the studios produced more films of similar budgets in the hope of
emmulating its success. It was a disaster, causing huge losses. Fox lost $77 million in
1970. in the same decade television networks begain producing films, however only for a
short period as it resulted in losses. The majors began believing only a minority of films
were making money and needed big budgets in order to have any chance of profit.
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