As the conglomeration of the film industry was in full swing in the late 1970s, the development of new technologies such as cable and pay-cable television, home video and (during the 1980s) satellite television created new lucrative markets for the exploitation of the feature film. Gradually, the theatrical run became only one - though still extremely important -avenue for the commercial exploitation of a film, before it found its way to the other ancillary markets. With the commodity already produced, the only expenses involved would include new marketing campaigns tailor-made to the particular demographics the new exhibition technologies served, and the cost of the transfer to the new format (such as the production of video cassettes). Realising that the ancillary markets could increase the potentially large profits from film production exponentially, the conglomerate owners of the majors moved swiftly to control all those markets.
This move became particularly evident in the early and mid-1980s when the conglomerates started downsizing their interests in other areas, concentrating instead on expanding their holdings in the entertainment and leisure areas. The result of this process was that the conglomerates evolved gradually into fully diversified entertainment corporations. This evolution was characterised by a wave of mergers and takeovers in which the parent companies of the majors acquired or established a large number of entertainment divisions to accompany their film-producing and -distributing subsidiaries. The main consequence was the creation of a horizontal structure whereby all the divisions of the conglomerate were in the business of distributing and promoting different formats and versions of the same product, a feature film that was originally financed and distributed by the majors. This 'interdependency of cultural production and distribution', which is often referred to as 'synergy', influenced immensely the trajectory of mainstream American cinema, as these companies increasingly privileged the production of properties that could be easily exploited in ancillary markets. In other words, they privileged the production of films that could attract repeat viewings (because of the stars they featured, the special effects they contained, the music that accompanied them, and so on).1
The introduction of all these distribution technologies signalled the creation of new exhibition outlets, all of which needed sufficient product to operate cost-effectively. At a time when the majors were distributing just over 100 films a year on average, it was clear that demand for films would be staggering. Exploiting their existing film libraries (licensing their old films for exhibition in the cable and video markets) was one of the main measures the majors took, but the demand was mainly for new product. This became particularly evident in the mid-1980s when the home video market showed a tremendous growth (from 1,850,000 VCR sets in 78,000,000 households [2.4 per cent penetration] in 1980, the number reached 32,000,000 in 87,400,000 households [37.2 per cent penetration] in 1986, on the way to 67.6 percent penetration three years later).2 With pay-cable subscriptions exceeding slightly the number of VCRs in 1986 (32,500,000 subscriptions),3 it was clear that any film producer stood a chance of having their film released in one or more of the non-theatrical markets, regardless of the film's quality and regardless of whether the film received theatrical distribution. This was particularly good news for the exploitation independents who survived the cut-throat environment of the theatrical market in the late 1970s. Companies like New World Pictures and Crown International moved almost exclusively to the home video market and took their place next to a number of newcomers (Vestron, Vidmark, Full Moon and many others), which were established to exploit specifically these highly unusual circumstances.
These circumstances, however, were not auspicious only for the exploitation companies. As those low-end independents exited the theatrical market they created new gaps that larger companies like Filmways (the re-branded American International Pictures) were in no position to fill on their own. Existing theatrical distributors like New Line Cinema and Cannon started reducing the number of imports in the early 1980s, focusing instead on the financing and distribution of American films that could be exploited more easily in the ancillary markets. Furthermore, the theatrical market saw the establishment of a number of new companies, both in the distribution business (Miramax Films) and in the production business (the De Laurentiis Entertainment Group and Orion Pictures, both of which later entered theatrical distribution). Although these companies would also feel the pressure of the majors, they would nevertheless try to survive first by feeding the many distribution pipelines of the majors before exploiting the option of branching out to ancillary markets themselves, and perhaps compete directly with the entertainment conglomerates.
These companies have been labelled - often interchangeably - 'minimajors' or 'major independents' and represent a new development in the independent sector. Although a concrete definition for both terms is still largely elusive, Justin Wyatt and Jim Hillier have offered some useful suggestions. On the one hand, Wyatt argues that major independents are the hybrid production and distribution companies that were allowed a large degree of creative autonomy after they were taken over by a conglomerate parent.4 This makes New Line Cinema and Miramax major independents after their respective takeovers in 1993 by Turner Broadcasting System and the Disney Corporation respectively. On the other hand, Hillier suggested that a mini-major was an adequately capitalised independent production and distribution company that 'operate[d] - or tried to operate - outside the orbit of the majors', but which set itself up as a smaller version of a major.5 This definition makes pre-1993 New Line Cinema and a company like Orion Pictures mini-majors. Although such definitions are somewhat problematic (the first one uses the term independent while a company is a subsidiary of a conglomerate; the second presents the companies simply as smaller majors and does not allow space for qualitative differences between majors and mini-majors), they nevertheless provide a platform from which one could explore this relatively new phenomenon in the independent sector.
Whether labelled mini-majors or major independents, Orion, Miramax, New Line and a few others were responsible for the production, finance and/or release of a very large percentage of US films during the 1980s and 1990s. As they were not owned by a conglomerate parent company (at least until 1993 for Miramax and New Line), but mainly because they worked with much lower budgets than the majors and with more unusual film material, these companies became part of the discourse of American independent cinema. Very soon each company had found their own niche in the film market: Orion became known for the production of mid-budget, quality films; New Line became particularly associated with low-budget horror films, like the Nightmare on Elm Street series and later in the 1980s with the very successful Teenage Mutant Ninja Turtles franchise; while Miramax, originally specialising in the marketing and distribution of controversial films from Britain and the United States, eventually took over Orion's place in the industry after moving to the production and distribution of mid-budget quality films with the potential for crossover success.
Together these 'independents' contributed to the institutionalisation of American independent cinema as they provided a large part of the infrastructure for the development of a thriving brand of filmmaking that presented several differences from mainstream filmmaking (the blockbusters and star-studded vehicles of the majors). The phenomenon of the institutionalisation of independent cinema will be discussed in detail the following chapter. This chapter will concentrate on the phenomenon of mini-majors as particular examples of independent companies within the American film industry in the 1980s. As the subject has been under-researched, the chapter will undertake a thorough examination of one such mini-major, Orion Pictures, and will discuss in detail its organisation, structure, conduct of business and especially its position in the industry. Even though Orion went bankrupt in December 1991, it was widely considered throughout the 1980s as 'a sanctuary for creative filmmakers', who could not make the films they wanted within the conglomerate environment of 1980s Hollywood.6 For that reason, this chapter will pay particular attention to the measures the company took to avoid the possibility of a corporate takeover and thus retain its independence amidst a small number of fully diversified entertainment conglomerates.
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