Ownership Of The Major Studios

The major studios are well known to us already and have been referred to in Chapter 1. The names have been with us for more than 80 years: Columbia, Disney, MGM, Paramount, 20th Century Fox, United Artists, Universal, Warner Brothers. However, while the economic function of these companies essentially remains the same, their structure and conditions of ownership have changed dramatically. The above studios are, quite rightly, identified as large production companies in their own right; however, the size of these studios is put into perspective when we realize that they are just small parts of much larger multinational conglomerates that own a vast range of other companies, often with interlinking interests. As Richard Maltby notes, this restructuring of the film industry is nothing new and is now well established:

In the late 1960s many of the majors merged with, or were taken over by, large corporations with diverse interests. This was only the first stage of a gradual reorientation in which film production and distribution companies have become components in multimedia conglomerates geared to the marketing of a product across a number of interlocking media.

Columbia Pictures (Figure 4.1) has existed since the early days of cinema, but the company's structure and ownership have changed considerably. In 1982 the Coca-Cola company bought Columbia, and in the same year Columbia itself formed TriStar Pictures as a means of diversifying its production facilities. Five years later the two companies were merged, resulting in what is now known as Columbia TriStar. Coca-Cola's venture into film production ended in 1989 when the Sony Corporation bought Columbia TriStar. Sony intended to ensure that its media hardware production would be complemented by media software, an area where it had failed when it developed its video system in the 1970s.

Disney was not one of the original major studios and did not begin film production until 1923. However, the Walt Disney Company is now one of the biggest media groups in the world, its most profitable activities being the theme parks in the United States and Europe. The company had originally expanded into TV production in the 1950s, in association with ABC, in order to fund the development of its Disneyland theme park. Disney also formed the Buena Vista distribution company in 1953. In the 1980s it expanded its film production further with the creation of Touchstone Pictures in 1984. The 1990s saw further growth with the acquisition of Miramax Pictures in 1993 and ABC TV in 1996.

Two other studio names that have survived from Hollywood's heyday are MGM and United Artists, though both companies have had their problems. By the 1970s MGM had virtually ceased film production and in 1980 United Artists was severely weakened after the costly mistake of Heaven's Gate, which resulted in a $40 million loss. The following year the two companies amalgamated to form MGM/UA. This company went on to form the distribution giant United International Pictures (UIP) in partnership with Paramount and Universal. MGM/UA has made a slow but steady recovery, though rumours of take-overs have never been far away. The 1990s saw the company re-establish itself through funding and distribution of the James Bond films.

Columbia: an old company in a modern world Figure 4.1

Paramount was one of the original major studios and was used as the test case for the 1948 anti-trust legislation. Like the other major studios, it is now part of a large multimedia conglomerate. In 1966 Paramount was bought by Gulf & Western and was eventually renamed Paramount Communications Inc. Viacom took over the company in 1994, bringing together television, publishing, radio and film interests. Viacom also owns the MTV channel and the international video rental company, Blockbuster.

20th Century Fox has existed in one form or another since 1915. In 1985 Rupert Murdoch applied for American citizenship in order to acquire American media interests. In the same year he bought 20th Century Fox. His multinational company News Corporation already had significant media interests around the world, including television and satellite companies and the UK based News International newspaper company.

Universal Studios dates back to 1912 and has also been through several changes over the years. Universal was taken over by the Music Corporation of America (MCA) in 1962, although this was often perceived as a merger because of the use of the title MCA-Universal. However, MCA itself was bought up in 1990 by Sony's Japanese competitor, Matsushita, who hoped to match media production with media technology, which was their area of specialization with equipment such as TV sets, VCRs and CD/tape players. Matsushita had been successful with the launch of its video home system (VHS) in 1977. Although their video system was regarded by many as technically inferior to those of its competitors (Sony's Betamax system and Philips' V2000 system), it ensured success with the rights to more films for video release. Matsushita was less than successful with its venture into film though, and in 1995 it sold MCA and its assets, including Universal, to Seagram, a Canadian drinks company. In 1998 Seagram expanded its media empire with the purchase of Polygram, which produces films and owns 13 music companies, from Philips, who decided to concentrate on producing media hardware. In 2000 Vivendi, a French company with telecommunications interests, merged with Seagram to create Vivendi Universal, bringing together film, TV, satellite and Internet business interests.

Warners' beginnings were in film production but the company eventually expanded to become co-partner of the world's largest multimedia conglomerate, Time-Warner Inc. Warners was already a conglomerate with a range of media interests by 1973, the year in which it renamed itself Warner Communication Inc. (WCI). In 1989 WCI merged with Time Inc. to create Time-Warner, a company with interests in film, video, television, music, distribution, exhibition and publishing. Time-Warner's position as world leader was further reinforced through the merger in 2000 with America On-Line (AOL), the Internet service provider, to form AOL-Time Warner.

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