Making a Blockbuster: Is Hollywood still truly a ‘film’ industry?

Hollywood sign

Introduction

Throughout the history of cinema the centre of the film industry in the United States of America has always been in Hollywood. Located in Los Angeles, Southern California, there were a number of initial factors which made Hollywood the ideal place to centralise such a business. Principal among these was the Mediterranean-type climate that provided long, bright sunny days, which was important for perfect lighting conditions in early cinema (Cooper, Hall and Wannamaker 2008).  As time progressed, camera and lighting technologies improved and these reasons for the location’s prominence in the industry no longer existed, and yet Hollywood has prevailed.  Not only has it retained its dominance in the US market but it has also gained more and more of the world’s film market, to become the dominant location in the industry at an international level. The centralisation of talent, technology and resources are all contributing factors to why the film industry remains so firmly located in Hollywood but another key factor, that is critical to Hollywood’s continued dominance, is capital.

The “Big 5” studios – 20th Century Fox, RKO, Paramount Pictures, Warner Bros and MGM – were all located in Los Angeles and by the 1920s they had a firm control of the industry from the ground up (Nelmes 1996). This control was retained by a system of vertical integration, which incorporated every aspect of the industry from production to distribution.  Systems like block booking and blind-buying were employed by these big studios to keep smaller companies and independent productions from gaining a firm foothold in the national film industry.  This practice severely limited the amount of choice and information independent cinemas could have about the types of films they bought exhibition rights for, and was the industry norm until 1948 when the smaller firms took legal action against this practice.  This landmark case resulted in what is now known as the ‘Paramount Decree,’ which ordered the cessation of such practices under anti-trust law (Caves 2000).

The decision was made in the interest of protecting the industry from concentration of ownership and the aftermath of this result meant that the big production companies could no longer operate a monopoly in the distribution and exhibition of films. They sought out other sources of revenue and quickly began to stake out a financial interest in television. By the mid 1950s these companies had firmly established themselves in the television production industry.  It is easy to argue that from this point on the industry was no longer simply a ‘film industry’, but I will argue that the industries primary product has always been profit, rather than art, and that it is deeply invested in the manufacture of ideology and consent.

The Hollywood Blockbuster

Due to the popularity of television coinciding with the dissemination of the vertical structure that had been the foundation of the early Hollywood Studio system, film returns at the box office suffered. Audiences were becoming accustomed to watching television on the small screen and no longer felt the need to attend the cinema, and box office returns took a heavy knock as a result. Studios realised that they were going to have to be more inventive and give audiences more from their big screen experiences than they could get at home on their televisions.  They experimented with numerous formats including widescreen and 3D in the hopes of attracting a bigger audience (King 2005) but box office figures did not reach their previous highs again until the emergence of the blockbuster format.

A blockbuster can be defined as a ‘high concept’ film with an emphasis on style, marketing and merchandising. Generally appealing to a wide audience, the core demographic is skewed towards a young audience and these films tend to rely heavily on a high level of awareness and the repetition of a key image or logo on all associated advertisements, tie-ins and merchandise. (Wyatt 1994)  It is the revenue from this combination of box office receipts, video and DVD retail and rental releases and returns from consumer goods and product placement, that the studios use to justify the huge levels of capital invested in the production and marketing of these Hollywood blockbuster films and it is a trend that shows no signs of ending.

Major blockbusters in more recent years still earn massive amounts of money from merchandising, tie-in and product placement deals.  The 2002 Steven Spielberg film, Minority Report, was notable for the amount of futuristic versions of modern-day products and consumer outlets, such as Nokia, Lexus and GAP that it featured (Grover 2002). Spielberg has always been an innovator in this field. Along with Lew Wasserman, the former agent who at the time owned Universal, Spielberg was one of the first to truly grasp the profit-making potential of film beyond the initial impact of box office receipts. His 1975 film Jaws was the first film to truly cement the blockbuster prototype. Wasserman ‘frontloaded’ the film, getting it onto every available screen, loading it with commercial franchising, and promoting it all with massive agency-created marketing campaign, including prime television spots (Neale and Smith 1998). Furthermore, the concept of the film was repeatable, another hallmark of the blockbuster type.  The initial film was followed by two profitable sequels (The Numbers 2010) including a 3D version (Jaws 2 1978, Jaws 3-D 1983).

Jaws was not the first film sold by and through broadcast television, but its million-dollar success proved that this strategy was the one that would re-define Hollywood. (Neale and Smith 1998 p51)

Many of Spielberg’s films are notable for their innovations in this area.  In 1982 ET: The Extra Terrestrial shone a spotlight on the area of product placement when M&M’s declined a spot in the film.  A different candy, Reese’s Pieces, was supplemented in place and enjoyed tremendous success from this exposure (Ovadia 2004). Spielberg’s 1993 film Jurassic Park took merchandising and product integration to a whole new level, selling thousands of ancillary products branded with the logo of the theme park featured in the film. Additionally, many of these ancillary products were also showcased within the film itself in a shot of the theme park ‘gift shop’.  Even stranger, the film about a dinosaur theme park gone wrong was developed into a successful ride at Universal Studios’ theme parks in Hollywood and Florida (Bryman 2004). The theme park ride incorporated its own gift shop that sold products associated with the movie. Thus the circular nature of merchandising was brought to another level of integration. Jurassic Park opened on 2,842 screens in the US and broke box office records for first-weekend returns (Morris 2007). The film had over 5,000 associated merchandise products, which proved very effective at turning over profit.  The first two Jurassic Park films had grossed $1.5 billion at the worldwide box office by 2004 but the combined total for the films and all ancillary products and associated merchandise was in excess of $5 billion (Bryman 2004). Statistics for a Hollywood movie today put the percentage of the profit attributed to box office returns at as little as 20% (Denby 2007). This surely cements the notion that the film industry today is about more than just making and exhibiting films.

The strategy maximises revenue at the box office, where attendances might quickly decline, but also in secondary markets, television sales, as well as merchandising and home entertainment releases, depend on recognition value, which in turn advertisers buy from broadcasters. (Morris 2007 p211)

Up until the 70s the only studio with a reputation for merchandising was Disney, however since the rise of the blockbuster the other studios have all recognised the financial benefits offered by intertextuality and ancillary products. Merchandising for cartoons and children’s films and programming continue to be successful, as children are an ideal market for these goods but now big budget blockbuster films like Star Wars and Jurassic Park or the more recent Spider-Man, Harry Potter and Lord of the Rings franchises are investing huge amounts of time and energy in film-based licensing and this has proved an extremely lucrative endeavour which grows from strength to strength. (Wasko 2003)

Convergence and Comodification

The film industry has continuously expanded over the years, first to encapsulate all of the processes of filmmaking and exhibition, but later into other fields such as TV programming, home entertainment distribution and the manufacturing of hardware and other consumer goods.  After the Paramount Decree in 1948 the film studios began to focus more of their money and attention on the emerging television industry. The Federal Communications Commission were so inundated with applications for new TV station licenses in 1948 that they put in place a ‘freeze’ on applications that was not fully lifted until 1952 (Boddy 1993). This expansion of the film studios into the television industry marks the beginning of the era of multi-media entertainment conglomerates, as they exist today.

In the 1980s there was a move by federal officials and industry representatives towards deregulation (Meehan 2005). This coincided with the expiration of the Paramount Decree. With the restrictions imposed by the Paramount Decree no longer in effect conglomerates could now legally control production, distribution and exhibition once more. Media conglomerates once again had the freedom to produce content and exhibit it themselves. This resulted in a sharp rise in concentration of ownership of cinemas. The introduction of large multiplex cinemas saw an 11% increase between 1988 and 1993 in the number of screens in the US that were under the control of leading chains (Caves 2000). By the late eighties the studios had also seen the potential for extra revenue in home entertainment. By 1989 video sales and rentals were making twice as much money as box office receipts and by 1990 approximately two thirds of US households had a VCR (Neale and Smith). The multiple media and industry links that became part of the media conglomerate chain continued to increase, each new subsidiary simultaneously supporting and contributing to the already existing links in the chain.

Viacom Inc. provides a perfect example of the synergistic nature of a large multi-national media conglomerate.  Many members of the public may not even be aware of how ubiquitous and influential this company is. The company not only owns the Paramount Pictures production and distribution company, but also has numerous other entertainment assets, including television channels MTV and VH1, popular websites like Neopets and Xfire and a number of game production companies including Harmonix, who produce the successful Guitar Hero games (Viacom 2010). From 2000-2005 the company also had brief control of the CBS group, which includes one of the highest-ranking TV channels in the US. Even though CBS has subsequently been split from the Viacom group, both the Viacom and CBS incorporations fall under the control of National Amusements, a company that is privately controlled by majority owner Sumner Redstone. National Amusements operates more than 1,500 movie theatres worldwide under brands such as Showcase Cinemas and KinoStar (National Amusements 2010).  Sumner Redstone is also the executive chairperson of both CBS inc. and Viacom inc. (CBS Corporation 2010, Viacom 2010). If we look at the basic structure of a conglomerate like this it is easy to see why convergence and commodification makes a great deal of sense in the film industry: the various theatre chains under the National Amusements umbrella can distribute films produced by Paramount Pictures; licensing for tie-in novels or spin-off series’ can be acquired by CBS, and their publishing subsidiary, Simon and Schuster (CBS Corporation 2010); outlets like MTV and VH1 can be used to promoted the film and all of the money made by all of these parts of the conglomerate machine eventually trickles down to fill the coffers of one elite individual.

This massive convergence of media industries has been a gradual shift that began when the studios lessened their vertical integration around the time of the Paramount Decree and turned their attention instead to horizontal integration.  At that point their target was mainly television but this was followed by home entertainment, online commodities and continued to expand to span all sorts of multimedia entertainment and to include the licensing of consumer goods such as toys, food and t-shirts. In fact, Hollywood has, to some extent, even moved on from the notion of externally licensing the rights for merchandising, and some of the big studios have begun to integrate these kinds of companies into their vast and sprawling enterprises.  The big firms rule by oligopoly and are increasingly reluctant to part with any of the control they exert on any part of the industry, dominating much of the production, merchandising and distribution channels. For example, Toybiz, the company that acquired the master toy licenses for successful film franchises such as The Lord of the Rings and Spider-Man is owned by Marvel (Ovadia 2004), which is in the process of merging with Disney (Marvel 2010).

Al Ovadia, who was the executive vice-president of Sony Pictures consumer products division, reveals in his article Consumer Products (2004) that film projects in Hollywood are evaluated on their long-term merchandising potential and their ability to appeal to multiple generations, but particularly children. This is clearly because these types of projects promote an increased level of intertextuality and stimulate a demand for ancillary products. Promotional tie-ins provide a duel purpose for the studios because not only do they provide additional finance for a film project but they also serve to promote the film, by branding their product or outlet with the film’s characters or logo during the crucial weeks around the film’s theatrical release.  These characteristics in film projects also make them ideal for a society that is increasingly moving towards a trend of ‘hybrid consumption’.

Alan Bryman writes about hybrid consumption in his book The Disneyization of Society as a mode of consumption that is becoming ever more common and expansive. The University campus is one commonplace example he gives of this hybrid space: a place where students can live, shop, study and go to class without ever leaving the campus grounds. Another example he gives is the development of the department store where we see a spatial integration of various goods and services to create one incorporated accessible environment. We can take the modern Multiplex with its integration of cinemas, chain restaurants, and music, video, clothing and toy stores as a further example of this kind of hybrid environment.  A development such as this presents an ideal environment for the film industry to present and sell their films and all associated products in one cohesive package.  (Harbord 2002)  In this way, this physical environment provides studios with a sort of intertextual infrastructure in which to market and sell their entire product.

Synergy can be defined as the cooperative action of different parts for a greater effect. (Wasko 2003 p170)

Profit as product.

It may not have been until the fifties and sixties that academics really turned a critical eye on the communications and entertainment industry from an economic perspective, but these companies had been functioning as profit-driven entities since their initial inception. Janet Wasko (2003) points out that contrary to the oft-reported financial risk associated with filmmaking, the primary goal of the Hollywood film industry has always been about making a profit. Film studios have always been on the look out for more innovative and creative ways to achieve this goal and increase their robust profit margin. This is a concept that has been embraced more and more actively by the film industry as it has developed into the fully formed multimedia powerhouse it is today.

In the past few decades, the Hollywood industry has become more explicitly commercialized through the practice of featuring products in films.  In addition, more commodities are being produced in conjunction with feature films in the form of merchadise, as well as the production of media products that flow out of the primary film commodity. (Wasko 2003 p154)

The way that the film industry has embraced the new media of video games is a recent example of this.  One of the first video games based on a film to be released was, predictably enough, based on a Spielberg film. The game for ET: The Extra Terrestrial was released on the Atari platform in 1982 but it was not as successful as the Studio, Warner, had hoped it would be (Wasko 2003). However, the film industry’s continued interest and investment in the area of video games is not at all surprising considering that by 2000 the sales figures for the video game hardware and software industry ($8.9 billion) had surpassed box office returns on films for the year ($7.3 billion)(Wall Street Journal 2000 cited in Poole 2000). Studios are very aware that incorporating a game into the intertextual fabric of their tentpole films will advance significant extra revenue. Video games based on the Harry Potter, Lord of the Rings and Spider-Man films were some of the most financially successful in 2002 and by 2003 every major studio was involved in video game production, either through a subsidiary company or through a standing arrangement with an external company. (Wasko 2003)

Sony’s marketing budget for Spider-Man was in the region of $50 million, more than one third of the budget for the film itself. Despite being the top grossing film of the summer of 2002 the film earned only around 20% of its revenue from the box office.  The rest of its income sources included home retail sales, merchandising and tie-ins with brands such as Kellogg, Hershey and Nokia (Wasko 2003). The incorporation of many different moneymaking aspects in every big-budget film production leads me to agree with Wasko’s ascertain that the film is more interested in making money than it is in making films.

Manufacturing Ideology and Consent

Manufacturing consent is a term coined by Walter Lippmann in 1922 and brought into more widespread use with the publication of Manufacturing Consent: The Political Economy of the Mass Media by Chomsky and Herman in 1988. The book theorised that the media was far from the egalitarian enabler of democracy and the common man that they portray themselves as. They suggest that the media is operating to a propaganda model, the primary aim of which is to inculcate the masses with political and social views that suit the select few at the top of the economic and political food chain. In this way, the propaganda model serves to control the general public of a democratic society in the same way as a dictatorship might use the threat of violence to control its subjects. In a talk at Wisconsin University in March 1989, Noam Chomsky illustrated the prevailing attitude of many of the privileged in the political and private spheres when, quoting Reinhold Niebuhr, he said: “Rationality belongs to the cool observers, but because of the stupidity of the average man he follows not reason but faith, and this naïve faith requires that necessary illusions be developed. Emotionally potent oversimplifications have to be provided by the mythmakers to keep the ordinary person on course.” Chomsky argues that this is the opinion of many of the people that are in powerful positions in government and the media.

In my opinion the deceptive way in which this inculcation of the masses is achieved is perhaps as worrying as the act itself, because people are much more susceptible to influence if they are not aware that they are being manipulated into thinking a certain way.  The widespread nature of the media in both its horizontal and vertical infiltration of communications systems and throughout society also makes these methods both more pervasive and less obvious. If the propaganda model is all that people know, then they may fail to think about it deeply enough to realise that it is even occurring.  The media’s presentation of itself as fair and vigilant is subtle, even to the point where they incorporate a certain level of disagreement or disharmony to give the illusion of fairness and variation of viewpoint. That subtlety is an intrinsic part of this propaganda machine.

Even though most critique of this type of activity focuses on the arena of news and current affairs, it would be naïve to think that the film industry does not have the same agenda, especially when we consider that it is generally the same people that control film and the rest of the media.  The Motion Picture Export Association of America (MPEAA) was founded in 1945 as a body to promote and facilitate the exportation of US-made films. Over their 55 year history they have at times enlisted the help and support of the US government in their quest for free access to worldwide markets. In their dealings with the US government through the years they have presented a number of points, which they believe merit the State’s support in helping them reach worldwide markets. In the post World War II period they were sure to hammer home the point that Hollywood movies re-hash and distribute the hegemonic values and agendas of the US government, stating that one of their aims was to “spread democracy and contribute to world freedom.” (Guback 1985 p124)  This was sure to go down well with a government that, at the time, was increasingly worried about the potential for a left-wing uprising in Europe, which would be extremely undesirable from a US point of view. Equally, the MPEAA emphasised the economic benefits of exporting American films, saying that they representations of US consumer goods in these films would lead to an increased foreign market for these goods. (Guback 1985) If they perceive this to be the case in foreign markets, then I would argue that these films would serve this function equally well in the domestic market.  Since the representation of these views and these consumer goods are in Hollywood movies, which is by far the dominant source of films in the US domestic market, then these films also function as promotions for US consumer goods within the US.

The inculcation of ideologies into films is perhaps more subtle that in news and current affairs media.  As an entertainment medium, film can utilise devices like metaphor and analogy to impart its message in a more oblique manner.  The inherent colour and vibrancy of the medium serve as a distraction from the insidious nature of any ideological message. No studio illustrates this better than Disney with their catalogue of colourful cartoon characters and cheerful, ‘family friendly’ films. Wasko (2001) argues that while Disney and their products are usually associated with the ‘good’ aspects of American culture, like optimism and fair play they can also be seen as a perpetuation of more negative traits such as conservatism, superficiality and homophobia and that Disney is far from alone in this respect.

“Classic Disney Fantasies are anything but open-minded and imaginative; rather, they are neatly tied into a conservative vision of the world and are linked directly with consumer culture.” (Wasko 2001 p223-224)

Conclusion

I think it is fair to say that Hollywood is no longer simply a film industry. It is clear that the Hollywood film studios are now involved in many other media and production types, such as television, video games and publishing. It is perhaps less obvious, but I believe equally true, that studios and executive are deeply invested in the integration of capitalist ideologies in the various texts that they produce.  These ideologies serve to promote consumerism and the American dream of economic prosperity. This has become even more relevant in the age of the Hollywood blockbuster.  The Hollywood studios’ ultimate aim is the production of profit, not art, and it is through the sale of ancillary products that the big studios reap the benefits of keeping these capitalist ideologies dominant in society.


References

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Cooper, S.T., Hall, A. R. and Wanamaker M. 2008.  Theatres in Los Angeles. San Francisco: Arcadia Publishing

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  1. A brilliant article, and very useful to me as I am currently writing a short essay on the making of a blockbuster from the indudustry´s point of view.
    Thanks

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