Film Studies 1022 Lecture Notes - Lecture 19: Panavision, Horizontal Integration, The Franklin Mint
6 Jun 2018
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The Globalization of Hollywood in the 1990s
By: Tino Balio
• Globalization dictated that the top players in the business develop long-term strategies
to uild o a stog ase of opeatios at hoe hile ahieig a ajo pesee i all
of the olds ipotat akets
- Companies upgraded international operations to a privileged position by:
o Epadig hoizotall to tap eegig akets oldide
o B epadig etiall to fo alliaes ith idepedet podues to
enlarge their rosters
o By partnering with foreign investors to secure new sources of financing
- Achieving the 3 goals led to a merger movement in Hollywood that has yet to run its
course
The Domestic Market
• Home video become the fastest growing revenue stream in the business
• The ajos ee ale to etat the lios shae of the eeue fo home video market
- They capitalized on retail video sales and rentals
• Home video naturally stimulate demand for product
- The domestic production jumped from around 350 pictures a year in 1983 to nearly
600 in 1988
o The majors played a small role in the matter
▪ The influx came from the so-alled ii-ajos – Orion Pictures,
Cannon Films and Dino De Laurentiis Entertainment
▪ And independents – Atlantic Release, Carolco, New World, Hemdale,
Troma, Island Alive, Vestron and New Line
• Rather than producing more pictures, the majors exploited a new feature film format –
the ulta-high-udget fil
- Containing such elements as high concepts, big name stars ad visual/special effects,
such pictures reduced the risk of financing because:
o They constituted media events
o They lent themselves to promotional tie-ins
o They became massive engines for profits in ancillary divisions like theme
parks and video
o They stood to make a profit in foreign markets
o They were easy to distribute
• Ease of distribution was linked to saturation booking: the practice of releasing new films
simultaneously in every market of the country accompanied by a massive national
advertising campaign
- Designed to recoup production costs quickly
• 6 pictures grossed over $100 million in the US – Batman, Indiana Jones and the Last
Crusade, Lethal Weapon 2, Honey I Shrunk the Kids
- The ajos at to kok off ak, ot a ad stoe – Variety
find more resources at oneclass.com
find more resources at oneclass.com
The Foreign Market
• The growth of oversees resulted in:
- The upgrading of motion picture cinemas
- The emancipation of state-controlled broadcasting
- The spread of cable and satellite services
- The pent-up demand for entertainment of all types
• Theatrical rentals constituted nearly all of the foreign revenues of American film
companies
- But became only a little more than a quarter
- The major sources of revenue → home video, theatrical exhibition and television
• Largest influx came from Western European television following the liberation of the
broadcast spectrum and the growth of privately owned commercial television stations
and cable and satellite services
• The overseas market had improved by 1990 and nearly reached parity with the US
domestic market
• Two factors boosted the foreign box office → better cinemas and more effective
marketing
- Offered new opportunities for niche marketing
- Able to boost their ultra-high budget pictures in theatrical and in ancillary markets
and overwhelm smaller, indigenous films that could not compete in such a high-
stakes environment
Hollywood’s Response to Globalization – The First Wave of Mergers
• This merger movement was characterized in part by vertical integration - the desire to
control/distribute and exhibit programming
- Synergy was supposed to function like a good marriage, in hih eah pate
would bring qualities that when combined would magically create something better
tha eithe ould ahiee aloe
- Since only a few movies do most of the business at the box office, why not go into
exhibition and profit from the hits?
o Columbia Pictures started the trend by purchasing a small group of theaters
in NYC
• Characterized by horizontal integration – a desire to strengthen distribution
- No matter how good/bad it is, it must cross through a distribution pipeline in order
to reach the consumer
o The distributor is a local monopolist who can extract a relatively high fee for
use of his facility
• Companies such as Gulf + Western (Paramount) and Warner Communications focused
o distiutio dosizig thei usiesses
- Warner Communications had evolved into a diversified entertainment conglomerate
ioled i a ide age of leisue tie usiesses
o Films, television, recorded music, book publishing, cable communications,
toys and electronic games
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
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