Monopoly Money

Movie TheatreWith a major Australian distributor changing its name to that of the studio owning it, is the line between production and distribution disappearing? More importantly, should it? Drew Turney investigates.

We’ve all heard the term ‘Golden Age of Hollywood’, but few know it was an actual historical period that can be measured down to the day, beginning with a simple phrase and ending in a legal skirmish.

79 years ago last month, Al Jolson spoke cinema’s first recorded words: ‘you ain’t heard nothin’ yet’. And on November 8, 1948, multi-millionaire RKO boss Howard Hughes caved in to the US government’s order to break up studio monopolies, prompting a domino effect that fragmented the industry. The Golden Age was over. Another 57 years later, could it be returning?

The early studios owned everything. Directors, producers, actors, distributors, publicity staff and technicians were all salaried staff. They made the movies on the lot and owned the film labs, the trucks that shipped the reels and, most importantly, the theatre chains. In the 20s, 30s and 40s you could only see a Paramount film at a Paramount theatre, a Universal film in a Universal theatre and so on. By enforcing block bookings of their films (20 or more as a package), independent filmmakers couldn’t get a look in. Governments of the day — far more liberal by our standards — were swift to crack down on anti-competitive behaviour, and after a protracted whirlwind of lawsuits, the industry was broken into the production, distribution and exhibition arms we know around the world today.

But as anyone who’s been watching over the last decade knows, the two upper steps of the supply chain have been amalgamating all over again.

Buena Vista International distributes Disney product worldwide, and is owned by the Disney Company. After a raft of name changes over the last five years, Sony Pictures Releasing is the name for the company that brings us Columbia films (which is owned by Sony). And in a promotional booklet launched in mid-2006, UIP has announced their intention to rename their company Paramount Pictures in 2007. As we all know, UIP distributes Paramount, Universal and Dreamworks movies.

Of course, there’s one marked difference between the old oligopolies and today’s market: cinema ownership is appropriately separate from film production according to the anti-trust legislation still in existence, at least in the US.

But think about this: we live in an age of intensive (some would say crushing) concentration of media ownership. In the late 1990s, the Packer empire acquired holdings in both the Hoyts and Village cinema chains. Its closest corporate cousin (News Ltd) has owned 20th Century Fox since 1984. Is it really such a stretch to imagine one of the media behemoths owning the popcorn machine behind the candy counter and everything in between once more?

Troy Lum, director of arthouse distributor Hopscotch, doesn’t think much has changed, and sees the cross-ownership of every level of media as business as usual. “Studio concentration has been dominant since the 30s,” he says. “They can’t really tell exhibitors what to do, but a smaller pool of cinema owners means a smaller number of decision makers. The only way to combat it is for independent theatres to support independent distributors. Even that’s not happening.”

So while we might not have a monopoly, we could still arrive at that most modern of corporate buzzwords, ‘synergy’, where the space between producers and distributors is increasingly grey. The only thing really stopping digital cinema is the fact that exhibitors won’t foot the bill when it’s distributors who’ll save money — a cost that would be shared under a conglomerate system. For the sake of competition, the gulf between the two must almost certainly remain, and to UIP’s managing director Mike Selwyn, integration can only help further up the supply chain.

“Distribution represents the link between the filmmaker and the public,”he says, “[They can] assist the filmmaker either in the crafting of the film or the design of the campaign materials to ensure that the film reaches its intended public. Lack of understanding of the market is the one of the great pitfalls for many people on the production side of the industry.”

Getting films to the public is a complicated and very expensive conflagration of separate and sometimes competing interests. Costs aren’t shared equally among the players; everyone cries poor and continued assaults on market share are taking their toll. Integration might be the only magic the movies have left.