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American Film Industry; Oligopoly Essay

1310 words - 6 pages

The American Film Industry - A Model of Oligopoly
Kim R. Williamsbernard
Virginia College, Online

The American Film Industry - A Model of Oligopoly

The American Film Industry or Hollywood refers to the successful oligopoly economy of the major Hollywood studios in the 1920s to the 1940s. The term implies that it studios, so the production of films constituted the decisive factor in the economic system. But the concept of system refers here to large companies, production, film distribution / sales and film screening at this time controlled.

Vertical Integration
The actual switching was indeed for most firms in New York City, but the company has ...view middle of the document...

Only in the largest American cities competed for the 'Big Five' with each other directly. Otherwise, the country was divided into areas where only one company was talking cinema. A film that was not given access to these cinemas could have no great popular success (Anderson, 1994).
Also integrated into the oligopoly was the "Little Three" Columbia Pictures , Universal Pictures and United Artists , but with less influence, because they did not have its own movie theater.
An independent production companies, for example appeared Republic Pictures and Monogram Pictures in appearance. Their main business was to "B-movies" to sell, which filled the theater program and it then usually in the "double" (double feature) with an elaborate "A Movie", produced by a major studio.
Together, it ensured the majors in the 1930s and 1940s for 90% of American film production and 60% of world production. The vertical integration of the functional areas (production, distribution and exhibition), the premiere took place in movie theaters, of course the oligopoly.

The Oligopoly of the MPPC
The first attempt to destroy free competition and an oligopoly to form was operated by means of patents. MPPC tried to impede the access of foreign companies by licensing fees through this difficult competition. In order to implement the system, should also be a high market penetration. At its height, the MPPC controlled via license most of the cinemas. Also, access to film footage was not possible without a license, as Eastman Kodak signed an exclusive contract was signed with the MPPC.
The Edison Trust attacked above all the points 2-4. The system finally failed with the cancellation of Edison's patents relating to the Supreme Court of the United States, but its decline had begun much earlier (Anderson, 1994).

The Movie Theater
The cinemas were a hierarchy of agreements according to their importance. In Los Angeles or New York had its premiere films in general and then underwent a period of time only in the local movie palaces ("first run"). In other major cities were then the largest centrally located cinemas, the second series of shows ("run second") instead. Then a movie was also in the smaller theaters in the neighborhoods ("Nabes") and finally, in fourth place in the rural areas and in seedy theaters ("grind houses"). Between the individual "runs" in each case there was a time, usually a month in which the film was not shown. The status of a movie theater in the wake of the tiered screening period was determined from specific geographical areas and territories.
Independent cinema operators were able to show you various Hollywood movies at will, but had to film an entire package "en bloc" book. In order to offer a great program and can earn profits, the cinemas were forced to book movie packages, even if this was often, buy a pig in a poke - especially since some films had to be booked before they were shot. An...

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