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The Economics of the Image

• Art within, not vs,Capitalism

• Cinema is the most

expensive art form• “Cheap shows for 

cheap people”

• Popular art as opposed

to the European artisticideal

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The Economics of the Image

• Thomas Edison, the

Wizard of Menlo Park

• Did not think movies

had much of a future

• Through Motion Picture

Patents Company

created a monopoly

• Used strong-arm tactics

to drive unlicensed

rivals out of business

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The Economics of the Image

• D.W. Griffith & Cecil B.DeMille

• DeMille & Griffith were

among the first to moveproduction from theEast to West Coast

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The Economics of the Image

• The Big 5

 – Paramount - 25%

 – Warner Bros. - 25%

 – Twentieth Century Fox

 – MGM

 – RKO

• The Remaining 10%

 – Columbia

 – Universal

 – United Artists

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The Economics of the Image

Paramount

Warner Brothers

MGM

RKO

20th Century Fox

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The Economics of the Image

• Production,

distribution and

exhibition allconsolidated under 

one entity - Vertical 

Integration

maximized profitslike manufacturing

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The Economics of the Image

• Block or Blind booking

• Owned theatres

• Monopoly

• System of manufacture

• Front office assignedpersonnel

• Had to divest in the

1948 - U.S. vsParamount  

• Lawsuit originallystarted in 1921

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The Economics of the Image

• Stars were

investments and

properties for themajor studios

• Box office power 

increased, so did

demands

Greta Garbo

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The Economics of the Image

• MGM, Warner Brothers,Fox, Paramount andRKO had to divest of 

their theatres• Theatres could play any

movie from any studio

• Box office fell as studioswere forced to competewith each other 

• and with…

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The Economics of the Image

• Television

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The Economics of the Image

• Part of ourculture and

society• Most important

and pervasivemedium

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The Economics of the Image

• 1950s–"Golden Age”

–Dominance of medium

–Game showscandals

–Freefall at the boxoffice

I Love Lucy 

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The Economics of the Image

• Lew Wasserman, 1913-2002– Talent agent (MCA) who saw

the potential of television– Credited with killing theStudio System

– Introduced profit sharing forstars (James Stewart inWinchester ‘73) and thus

turned the power structureaway from the studios– Engineered the rise of 

Ronald Reagan– No written or filmed

interviews and he never

wrote anything down Wasserman's NYT Obituary

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The Economics of the Image• Reputed to have earned

$350 million in 1990when the company wassold to the Japanese

electronics company,Matsushita for $6.6billion

• Seagram took over fiveyears later, Wasserman

retired with the title of chairman emeritus, butuntil 1998 remained onthe board of directors of the company, which was

bought Vivendi and soldto GE in 2004

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The Economics of the Image

Who Owns What?