The Hollywood Industry - A Commercial Roller-Coaster

Hollywood, from its roots in 1913, to today’s mega-machine, has naturally gone through many of its own iterations, constantly adapting to the challenges of the era. Hollywood today, would not be what it is, if not for the social, economical and technological changes of the 20th Century. Most interesting are the industries responses to changes in law, such as the Paramount Decree, technology, such as the invention of the TV or industry, or their expansion into foreign markets. Aspects, I hope to explore further in the following few lines.

The roots of the US film industry reach back as far as the late 19th century. Small time filmmakers were selling their film productions to travelling fares.

The issue was that this meant each film only made revenue once. In 1913, US filmmakers had the idea of renting their films to shops that exhibited them in backrooms, increasing revenue potential for each film exponentially.

By the end of WWI, film had become an industry and it established its production in California. The business was new, and the rules were being made on the spot. This gave rise to an economical powerhouse. One company could own production, distribution and exhibition: a competitor-less Industry.

Production companies rivalled only in space to build cinemas, often dividing complete cities between themselves. For example, Lowe capitalized on this in New York. Hollywood’s power and cash-flow grew until the 1930s, which brought the age of stars, actors, who’s job was not only to act, but to have a public persona, viewable by the General Public. Studios owned these personas and actors needed to promote their films.

After WWII, the American government returned to domestic issues and Hollywood’s monopoly was becoming an economic time bomb. 95% of the Industry was controlled by 8 companies since the 1920s.

The US Courts had attempted to break the powerhouse up before but was opposed by the Motion Picture Producers and Distributors of America (MPPDA), a lobbying group funded by Hollywood’s big-time money. 1948 marked the year of the Paramount Decree, banning the system of Vertical Integration and forcing the Movie Industry to split up its production, distribution and exhibition. It took 20 years however, for the major studios to completely surrender control over their cinemas. Ample time to prepare and adapt to the new business.

What the Cinema Industry did not have time to prepare for was the radical take-over from TV. TV has been around since before the war, but its radical success was delayed because of the industrial requirements during the war. In 1949, there were less than 1 million households with TV access. By 1969, the number had risen to 44 million. The 1950s produced sophisticated television shows for upper-middle class households, such as Broadway shows or TV quiz Shows.

By the 1960s, in which TV had reached almost all US households, shows were catering to all classes. Surprisingly, rural-themed TV Dramas such as the Andy Griffith Show (Leonard, 1960-1968) became increasingly popular, playing on an apparent nostalgia for the fading frontier USA.

Cinema had little time to react to this. Pressure was growing, not only from TV, but also from the British Invasion spreading into film. Adding to that was the damage done by the Miracle Decision, which gave rise to the cheap Italian Cinema . All of this finally brought Hollywood to its knees and ended the outdated Studio System.

Hollywood’s quick-fix solution was to move from a series of B-movies to a few, select, mega-budget Epic Movies. This, alongside a gimmick war (Surround Sound, 3D, Tumbler Seats, etc) against TVs, kept them somewhat afloat. But even then, numbers were diminishing, and the weekly attendance had plummeted from 45 million in 1965 to 19million in 1969.

It was in the 1970s that Cinema was able to make a return, but at a high cost. The solution was changing the guard. The Old Hollywood was just not in touch anymore with the youthful Counterculture teens from the 60s: It was time for a Hollywood Renaissance...

One large factor was the willingness to break the Production Code. New Hollywood, the cinema format we still have present today, provoked audiences with their liberal portrayal of inter-racial sex, drugs and especially violence, a trend they borrowed from the, then recent, French New Wave. These fresh faces, such as Martin Scorsese, pushed the envelope with the new freedoms given by the 1966 revision of the Production Code and its final abandonment in 1968.

The Code was replaced with a rating system, controlled by the Motion Picture Association of America (MPAA), a successor of Hollywood’s MPPDA. This rating system proved instrumental to the marketing potential of the later Blockbusters.

With the financial crisis in Hollywood between 1969-1971, and the following restructure, the path for the new and upcoming era of Hollywood was set. Bonny and Clyde (Penn, 1967) proved to the Studios that there was far lower risk in small, but slightly controversial productions that were tailored to the shift in society.

The 1970s saw the next mutation of New Hollywood: The Franchise Film. Almost contradictory to the Hollywood Renaissance Film, the Franchise Film was largely budgeted and politically as well as ideologically stale. It was a revisit to mass-entertainment and this time it worked. The landmark film for this system was Jaws (Spielberg, 1975), soon followed by Star Wars: a New Hope (Lucas, 1977).

These were so-called “Event Movies”, the new pinnacle of success in Hollywood. These films did not only live off the box-office but also of the merchandising surrounding them. It was also the start of so-called “pre-sold” concepts, in which the Films concept was pre-sold to the audience, either through books on which the films were based, or trailers. This meant money could be invested with, at least, a little confidence.

This system is still profitable and used today, with 120million dollar budgets for films like Batman, or even bigger movies like Avengers: Infinity War. Now the ultimate pinnacle of success is to join the billon dollar club in box office returns. It is obvious though that the “Hollywood Brats“ who became big in the Hollywood Renaissance are now considered the Old-Guard, struggling with the current, ever-growing threat of streaming services such a Netflix.

It would not be surprising to see similar events to 1965-1975 unfolding in the next couple of years again, while Hollywood crumbles once more under its own weight to rise from the ashes with a new concept of enticing us to the cinema screens.