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 seven 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 the Hollywood mogul Darryl Zanuck. However, the fact remains that the Hollywood majors are world beaters in business—nobody else comes even remotely close.
    The venerable seven are Walt Disney Studios, Columbia Pictures/TriStar Pictures (also known as Sony Pictures), Metro-Goldwyn-Mayer, Paramount Pictures, Twentieth Century Fox, Universal Pictures, and Warner Bros. Their worldwide revenues amounted to over $41 billion annually in 2003. These seven have been the eternal Hollywood giants since the 1920s.
    Those seven—when including their affiliates—account for more than 97% of box office in the United States in a normal year (although less in 2004 because indies distributed blockbusters “The Passion of the Christ” and “Fahrenheit 9/11”).
    There are no middle-size film companies, just seven giants on the one hand and a bunch of small players on the other. At one time, Orion Pictures (“Dances with Wolves” and “The Silence of the Lambs”) and A-picture producer Carolco Pictures (“Basic Instinct” and “Terminator 2: Judgment Day”) were hefty mid-sized players, but they landed in bankruptcy in 1991 and 1995, respectively.
    The major studios spend heavily on marketing—mostly paid ads—to launch their films, and their approach has grown in sophistication since the 1980s. The five biggest Hollywood majors spend somewhere between $350 and $600 million per year on advertising for domestic theatrical releases. Thus, the job of studio marketing chief requires adroit management skills because ad expenditures are spread over a wide array of television, radio, print, and other media.
    The complexion of the executive suites at the major studios began to change radically in the 1980s because of marketing considerations. For the first time, the top studio jobs went to executives with backgrounds in television, movie distribution (those who licensed films to theaters), and marketing.
    Former Paramount and MGM chief Frank Mancuso and ex-Universal Pictures chairman Robert Rehme climbed up the ranks from theatrical distribution jobs. Former Paramount motion picture group vice chairman Rob Friedman started his career in film publicity. The late Dawn Steel, who was head of production at Columbia, came from a promotions/merchandising background.
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Hollywood’s Seven Major Studios Ranked by Revenue 2003–2004

Studio                                            Est. revenue ($ bil.)

Warner/New Line                    $11.0

Walt Disney Miramax                $7.4

Universal                                     $7.0

Sony/Columbia                          $6.0

Twentieth Century Fox             $5.0

Paramount                                  $3.5

Metro-Goldwyn-Mayer              $1.7

Total                                           $41.6

Note: Revenue figures include television programming activities at studios
Source: Marketing to Moviegoers, based on company reports