8.2 The political economy of the film industry
4 min read•august 15, 2024
The film industry operates within a capitalist system, dominated by major studios that control production, distribution, and exhibition. This economic structure impacts the types of films produced, often prioritizing commercial success over artistic or social value.
The industry's ties to other sectors, like advertising and tourism, further shape its output. Political influences, , and the rise of streaming platforms have disrupted traditional power structures, leading to new economic and creative challenges for filmmakers.
Economic Structures of the Film Industry
Capitalist Economic System and Private Ownership
Top images from around the web for Capitalist Economic System and Private Ownership
Toronto City Life » What’s to be done? View original
Is this image relevant?
Pyramid of Capitalist System | An Industrial Worker capitali… | Flickr View original
Is this image relevant?
File:Pyramid of Capitalist System.jpg - Wikimedia Commons View original
Is this image relevant?
Toronto City Life » What’s to be done? View original
Is this image relevant?
Pyramid of Capitalist System | An Industrial Worker capitali… | Flickr View original
Is this image relevant?
1 of 3
Top images from around the web for Capitalist Economic System and Private Ownership
Toronto City Life » What’s to be done? View original
Is this image relevant?
Pyramid of Capitalist System | An Industrial Worker capitali… | Flickr View original
Is this image relevant?
File:Pyramid of Capitalist System.jpg - Wikimedia Commons View original
Is this image relevant?
Toronto City Life » What’s to be done? View original
Is this image relevant?
Pyramid of Capitalist System | An Industrial Worker capitali… | Flickr View original
Is this image relevant?
1 of 3
- The film industry operates within a capitalist economic system where the means of production and distribution are privately owned and operated for profit
- Major Hollywood studios, known as the "Big Five" (Walt Disney Studios, Paramount Pictures, Warner Bros. Pictures, Universal Pictures, and Columbia Pictures), dominate the industry
- The Big Five hold significant power in terms of production, distribution, and exhibition
- Independent filmmakers and smaller production companies often struggle to compete with the resources and market share of the major studios, leading to an imbalance of power within the industry
Vertical and Horizontal Integration
- allows major studios to maintain their dominance and control over the industry by controlling multiple stages of the production and distribution process
- For example, a studio may own its own production facilities, distribution networks, and movie theaters
- has led to further consolidation of power among the major studios through the acquisition or merging with other companies in the same industry
- This can include mergers between studios or the acquisition of smaller production companies by larger studios
Capitalism's Impact on Film
Prioritization of Commercially Viable Projects
- The profit-driven nature of the film industry often leads to the prioritization of commercially viable projects over artistic or socially conscious films
- Studios tend to favor films with proven formulas, established franchises (Marvel Cinematic Universe), and star power (Tom Cruise) to minimize financial risk and maximize potential returns
- The reliance on box office success as a measure of a film's worth can lead to the marginalization of smaller, independent, or experimental films that may not have the same commercial appeal
Homogenization and Limited Diversity
- The pressure to generate profits can result in the homogenization of film content, as studios aim to appeal to the widest possible audience
- This can lead to a reliance on familiar genres, tropes, and storylines that have proven successful in the past
- The capitalist model of film production and distribution can limit the diversity of voices and perspectives represented on screen, as the decision-making power often lies with a small group of executives
- This can result in a lack of representation for marginalized communities and a narrower range of stories being told
- The emphasis on intellectual property rights and the protection of copyrights can hinder the free flow of ideas and the ability of filmmakers to build upon existing works
- This can stifle creativity and innovation in the industry, as filmmakers may be hesitant to take risks or explore new ideas for fear of legal repercussions
Film Industry and Other Institutions
Ties to Other Economic Sectors
- The film industry is closely tied to other sectors of the economy, such as advertising, merchandising, and tourism, which can influence the types of films produced and their potential for financial success
- Product placement and brand integration in films (Coca-Cola in "E.T. the Extra-Terrestrial") serve as a form of advertising, allowing companies to promote their products to a captive audience
- Successful films can lead to lucrative merchandising opportunities (Star Wars action figures) and increased tourism to filming locations (New Zealand after "The Lord of the Rings")
Political Influences and Globalization
- The film industry's reliance on tax incentives and subsidies from local and national governments can impact where films are produced and the economic benefits they generate for those regions
- Many states and countries offer tax breaks and other incentives to attract film productions, leading to competition among locations
- Political pressures and censorship, both domestically and internationally, can shape the content of films and limit their distribution in certain markets
- Films may be edited or banned in certain countries due to political or cultural sensitivities ("The Interview" and North Korea)
- The globalization of the film industry has led to increased collaboration and competition among filmmakers and studios from different countries, as well as the need to navigate varying economic and political landscapes
- Co-productions between studios from different countries (US-China co-productions) can help films gain access to new markets and funding sources
- The rise of streaming platforms (Netflix, Amazon Prime) and their vertical integration into content production has disrupted traditional power structures within the film industry, leading to new economic and political considerations
- Streaming platforms have the ability to bypass traditional distribution channels and reach audiences directly, changing the dynamics of the industry
Key Terms to Review (19)
Audience commodity: The audience commodity refers to the concept of viewers being treated as a product that can be bought and sold in the context of media industries. This idea highlights how media companies monetize their content by attracting large audiences, which are then sold to advertisers looking for specific demographics. By focusing on viewers as commodities, the film industry shifts attention from artistic expression to profit-driven motives.
Box office revenue: Box office revenue refers to the total amount of money generated from ticket sales for a film during its theatrical release. This financial measure is crucial for understanding the commercial success of a film, influencing production budgets, marketing strategies, and overall industry dynamics. High box office revenue can lead to increased funding for future projects and affect the economic landscape of the film industry as a whole.
Capitalism: Capitalism is an economic system characterized by private ownership of the means of production and the creation of goods or services for profit. This system is driven by market forces where supply and demand dictate prices, and competition encourages innovation and efficiency. In the context of media, capitalism plays a crucial role in shaping both the production and consumption of film and media content, influencing how stories are told and which narratives are prioritized.
Content regulation: Content regulation refers to the rules and policies that govern the creation, distribution, and consumption of media content, aimed at protecting audiences from harmful or inappropriate material. It encompasses various approaches, including government censorship, industry self-regulation, and community standards, all of which play a significant role in shaping the media landscape. These regulations can impact artistic expression, influence public perception, and determine how media messages are crafted and delivered to audiences.
Creative labor: Creative labor refers to the work performed by individuals in fields that involve imagination, innovation, and artistic expression. This type of labor is essential in industries like film, where storytelling, visual aesthetics, and emotional engagement are paramount. Creative labor encompasses not just the act of creating but also the processes, collaborations, and socio-economic factors that influence how creative products are made and consumed.
Cultural capital: Cultural capital refers to the non-financial social assets that promote social mobility in a stratified society. This includes education, intellect, style of speech, and appearance, which can enhance an individual's status and influence within their community. In the film industry, cultural capital can determine access to resources, networks, and opportunities that shape production, distribution, and reception of films.
Cultural Imperialism: Cultural imperialism refers to the practice of promoting and imposing a dominant culture over others, often through media, film, and various forms of communication. This process can marginalize local cultures and reinforce power dynamics by establishing norms, values, and practices that reflect the interests of the dominant group, thereby influencing how societies view themselves and each other.
David Bordwell: David Bordwell is a prominent film theorist and historian known for his influential contributions to film analysis and the understanding of cinematic narratives. His work has shaped critical discourse around film form, emphasizing the importance of context and audience reception, while also exploring the historical evolution of film theory and its intersection with the political economy of the film industry.
Digital distribution: Digital distribution refers to the process of delivering film and media content through digital channels, bypassing traditional physical media and theatrical releases. This method allows for greater accessibility and global reach, transforming how films are produced, marketed, and consumed in the modern landscape.
Film workers: Film workers are individuals who contribute to the production, distribution, and exhibition of films, encompassing a wide range of roles from directors and producers to technicians and crew members. They are essential in shaping the film industry, impacting not only the creative aspects of filmmaking but also the economic and political dynamics that govern the industry as a whole.
Globalization: Globalization refers to the process by which businesses, cultures, and societies become interconnected and interdependent on a global scale. It encompasses the flow of information, ideas, goods, and people across borders, leading to increased cultural exchange and economic integration. This phenomenon significantly impacts various fields, particularly film and media, as it shapes narratives, influences production practices, and alters audience reception across different regions.
Horizontal integration: Horizontal integration is a business strategy that involves the acquisition of companies at the same level of the supply chain, allowing a firm to increase its market share, reduce competition, and expand its operations. In the film industry, this means that major studios may buy or merge with other production companies or distributors to consolidate power and control over more of the filmmaking process and distribution channels.
Independent cinema model: The independent cinema model refers to a filmmaking approach that operates outside of the major studio system, emphasizing creative freedom, lower budgets, and unique storytelling. This model allows filmmakers to explore unconventional narratives and diverse voices, often resulting in films that challenge mainstream conventions and cater to niche audiences. As a result, independent cinema plays a vital role in the broader film landscape, influencing trends and diversifying the types of stories told in the industry.
Laura Mulvey: Laura Mulvey is a prominent feminist film theorist known for her influential essay 'Visual Pleasure and Narrative Cinema' (1975), which critiques the way women are portrayed in film and introduces the concept of the male gaze. Her work examines how cinema reinforces patriarchal structures and the dynamics of spectatorship, emphasizing the power relations between viewers and the viewed, particularly in terms of gender.
Marxist Theory: Marxist theory is a socio-political and economic framework that critiques capitalism and analyzes class relations, emphasizing the conflict between the bourgeoisie (owners of the means of production) and the proletariat (working class). It highlights how cultural products, including films, are shaped by and reinforce social and economic structures, affecting both the creation and consumption of media.
Media consolidation: Media consolidation refers to the process by which a small number of large companies or corporations come to dominate the ownership and control of media outlets, including television, radio, newspapers, and online platforms. This trend can significantly impact the diversity of viewpoints presented in the media and shape public discourse, as fewer entities control what content is available to audiences. As media consolidation increases, it raises concerns about monopolistic practices and the potential for reduced quality in news coverage and entertainment.
Streaming services: Streaming services are online platforms that provide on-demand access to audio, video, or other media content through the internet, allowing users to watch or listen without needing to download files. These platforms have revolutionized how we consume media, impacting traditional distribution methods and creating new avenues for content creators and consumers alike. By offering vast libraries of films, television shows, and music, streaming services challenge established media boundaries and have become central to contemporary entertainment consumption.
Studio system: The studio system refers to a production and distribution model that dominated Hollywood from the 1920s to the 1960s, where a small number of major studios controlled the entire filmmaking process, including talent, production, and distribution. This system created a stable environment for film production and established the star system, where actors were contracted to specific studios, creating a recognizable set of stars and genres that shaped audience expectations.
Vertical integration: Vertical integration is a business strategy where a company expands its operations by acquiring or merging with companies at different stages of production within the same industry. This strategy allows a company to control multiple aspects of its supply chain, from raw materials to manufacturing and distribution, leading to increased efficiency and reduced costs. In the film industry, vertical integration often manifests as studios owning production, distribution, and exhibition elements, which can significantly influence market dynamics and competitive advantages.