The Media and Entertainment Age

After struggling for more than twenty years to come to terms with its new economic structure and the rise of television, the film industry is regarded by many analysts as now being one of the most lucrative and powerful industries. Douglas Gomery argues that “the economics of the Hollywood motion picture studios prospered as never before” (1998, p. 201), and that “the 1980s and 1990s stand as the era when Hollywood achieved an international influence and mass entertainment superiority unparalleled in its history” (1993, p. 267).

Table 1 demonstrates the growth of the industry in the 1990s. Although box office attendance is extremely unlikely to ever reach the levels of the golden age of the 1940s, box office is but one component of the industry. The growth in videotape sales and rentals, cable penetration, and the Internet are important statistics for interpreting the health of the industry. DVD technology has proven to be an important area as well. In 1999, according to the Motion Picture Association of America, DVD had a consumer base of 5.4 million people and more than five thousand titles were already available in that format.

Table 2 demonstrates that 53 percent of the theater-going audience is under thirty years of age and 70 percent is under forty. Table 3 shows that while around 60 percent of those people who are more than eighteen years of age consider themselves to be “frequent” or “occasional” moviegoers, approximately 90 percent of teenagers consider themselves to be “frequent” or “occasional” moviegoers. These young people increasingly go to see (and re-see) mainly high-budget “blockbuster” action films in large entertainment multiplexes that have digital sound, stadium-style (i.e., platform) seating with cup holders, a lot of legroom, and a wide variety of concession options. Many of these theaters also have large areas that are devoted to party rooms, “VIP” seating, video games, and other options. As with sports venues,movie theaters have become entertainment complexes. Of course, most movie viewers now watch movies on television. This is a trend that is certain to accelerate with the rapid diffusion of digital widescreen receivers, DVDs, home theater systems, and broadband Internet.

As previously discussed, there are several reasons for the revival of the motion picture industry from the doldrums that it experienced in the mid-twentieth century. The primary reason, however, was its ability to leverage its powerful brand identity as a cultural purveyor into becoming a major power in the rapidly growing global entertainment and media industry. This leverage was made possible, in large part, by giving up its independence as a medium.

Each of the six major studios is connected with and/or co-owned by other major corporations that are involved with various forms of media and entertainment. Warner Brothers is a part of the AOL/Time Warner empire. Twentieth Century Fox is owned by Rupert Murdoch’s News Corporation. Paramount is one of the key elements in the Viacom/CBS entity. Disney owns ABC and ESPN, among other properties. Columbia is owned by the Sony consumer electronics giant. Universal is controlled by the Seagrams Company, which also owns distilled liquor and recording business interests. These six, along with the smaller New Line, MGM/UA, Polygram, and Mira-max companies, control in excess of 90 percent of the worldwide and domestic film grosses. The films that are distributed by these companies are typically made for a worldwide audience with the type of action and big-budget special effects that are easily transferable between cultures.

In addition to their enormous economic and cultural power as a gatekeeper for what product is able to reach a mass audience, the six major studios are all heavily invested in many other media and entertainment businesses or “platforms.” Television (Fox, UPN), publishing (Warner Books), toys (Disney), clothing (Warner Brothers Studio Store), theme parks (Disney, Universal), video games (Pokémon), theater ownership (in a revival of pre- Paramount vertical integration), casinos (MGM), cruise ships (Disney), and the Internet, along with many other businesses, are all increasingly connected with the motion picture business through ownership, co-ventures, or licensing. The brand names of the major studios and their products (Fox, “James Bond,” and so on) are so well-established on a domestic and global level that there is little doubt as to the ability of most of them to continue to prosper and expand.

Perhaps the ultimate contradiction of the U.S. motion picture industry is that it thrives because it is no longer the motion picture business. Or, more accurately, the industry is a global phenomenon that has used its strong brand identities to become a leader in the multimedia, multinational media and entertainment industry.

Better than most other industries, the studio conglomerate owners have exploited the twin trends of economic and technological convergence that are again changing the nature of media and the patterns of media usage. The result is an industry that is both faithful to its theatrical roots, as evidenced by the enormous attention that is still paid to the Academy Awards, and agile and fluid enough to maximize new opportunities in production, distribution, and exhibition whatever or wherever they may be.