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.

As well as the loss of its theatres the majors also had huge drops in attendances to contend with . "Average weekly cinema attendances in the North America Market had reached a high of 80million in 1930, declined sharply during the depression (to 50 million in 1933-34), but then rose steadily to 84million in 1943-44, staying very high for the next few years. But between 1946 and 1957 attendances halved, and they halved again between 1957