Sample Book Chapters
Chapter 9 - Major Studios
“Well, goodbye, Mr. Zanuck. And let me tell you that it certainly has been a pleasure working at Sixteenth Century Fox.”
director Jean Renoir
Hollywood’s venerable six major studios are criticized for being impersonal, stodgy, tight fisted, and unwilling to change with the times. The quote above, which plays off this viewpoint, is a farewell from the famous French director to Hollywood mogul Darryl F. Zanuck.
The reality is that the Hollywood majors are world-beaters in business—nobody else comes even remotely close—so they must be doing something right. For all the knocks about inflexibility, the majors are changing with the times, as evidenced by their embrace of the DVD video format and entrance into the video-on-demand business.
The venerable six are Walt Disney Studios, Sony Pictures/Columbia Pictures, Paramount Pictures, Twentieth Century Fox, Universal Pictures, and Warner Bros. They constitute the entire membership of the Motion Picture Association of American (MPAA) trade group.
Looking more closely at the studios, Hollywood’s top-five majors each weighs in with revenue of over $6 billion per year (see table 9.1). The sixth major, Paramount, has traditionally been much smaller, but its recent investment program is closing the gap. DreamWorks Animation SKG is also big at around $700
million a year in corporate revenue; its films are distributed by Paramount, which includes DreamWorks box office in its total.
Although the workings are little understood, even within the film industry, the majors are essentially banks and distribution machines, whose economic clout comes from their film libraries. Having a physical production facility is not critical, and no studio operates with a permanent roster of star talent,
as in the 1930s golden era. The majors today contract out for production talent with their piles of money, creating new films in what is a low-profit business to replenish their film libraries, whose licensing to TV outlets and DVD sales is a high-profit business.
Looking back in history, the major studios emerged in the 1920s. The Big Five were MGM, Paramount, RKO, Twentieth Century Fox, and Warner Bros., although RKO eventually faded and the bulk of its film library was absorbed by Warner Bros. The second-tier studios—known as the Little Three because they lacked theaters—were Columbia, United Artists, and Universal.
Chapter extracts in this section of the website amount to 4,000 words distilled from 110,000 words in the print book.
Copyright © 2009, Robert Marich. All rights reserved.
Table 9.1. Hollywood’s major studios ranked by revenue, 2006–7
Studio Revenue ($ billion)
Warner Bros. 11.0
Sony/Columbia 8.3
Walt Disney 7.5
Universal 7.0
Twentieth Century-Fox 6.7
Paramount 4.6
Total 45.1
Source: From company reports
Note: Revenue figures comprise all filmed entertainment, including television programs and
studio-affiliated indie films.