In Deregulation We Trust: The synergy of politics and industry in Reagan-Era Hollywood - Jennifer Holt

This article by Jennifer Holt talks about the stages of how the media corporations, who were once under intense scrutiny under consent decrees, such as the Sherman Act in the late 40’s, gradually transformed into major corporate conglomerates.

Hollywood went through many changes in the 80’s; newer, more improved technological and delivery systems, and also the neo classical approach to economic policies under the Reagan administration changed the Hollywood landscape forever. It also bonded even closer ties between the government and Hollywood.

Hollywood was undergoing major changes in terms of concentrated power in the hands of a few, and large scale expansions, because of more and more corporation being allowed to vertically integrate.

In the 70’s, because of rising costs of production, film making did decline a little, but came back strongly because of the rising number of billion dollar deal mergers and conglomerates.

The ‘birth of the VCR’ also changed the media landscape. VCR ‘dates’ replaced the social ritual of going to cinemas, and 30-35% of film revenues came from these home theatre sales. This also affected the media landscape, and changed its production techniques significantly.

The Paramount Decree was a U.S Supreme Court anti-trust case that decided the fate of movie studios owning their own theatres and holding exclusivity rights on which theatres would show their films. It changed the way Hollywood movies were produced, distributed, and exhibited. The court had the job of enforcing these laws, but under Reagan’s administration mergers were promoted and the essence of the decree was being manipulated by the studios.

The 5 major studios acquired almost 20 percent of the country’s theaters. Competition from cable and home video was eroding the theatrical revenues but the strategy of releasing films in many theatres on the opening week along with a 120 percent increase in the film’s average advertising cost helped overcome it.

And thus, a ‘New Hollywood era had begun, where 11 of Hollywood’s largest distributors had 96% of the box office revenues.