In the cinematic world of Hollywood, why have the giants remained standing for so many years?
Even MGM, which barely produces two good films a year and is constantly being trounced by up-and-coming studios, is still considered a giant by the media, while those newcomers are merely film companies.
A very important reason is the MPAA, also known as the Motion Picture Association of America.
Everyone knows about the seven major Hollywood studios, but in the eyes of the older generation of Hollywood insiders, there are only six.
MGM, Disney, Warner, Paramount, Universal, and Sony Columbia; 20th Century Fox isn’t even in the picture.
The reason is also the MPAA; 20th Century Fox isn’t part of it at all.
What does the MPAA do?
It’s practically the martial arts alliance leader of Hollywood, with an incredibly broad scope of business.
For example, in copyright protection and anti-piracy, the MPAA represents the industry in combating piracy, suing individuals or platforms that illegally download or distribute films through legal means, and promoting international copyright protection cooperation, acting as a copyright police force.
There’s also policy lobbying and industry advocacy, where it lobbies the government and Congress for policies favorable to the film industry, such as tax incentives and access to overseas markets.
It also coordinates relationships among stakeholders like producers, distributors, and cinemas, promoting industry standardization.
Furthermore, there are international affairs.
The MPAA has offices in many countries and regions worldwide, promoting American film culture while coordinating international market ratings, censorship, and copyright issues.
Of course, the most important aspect is ratings.
Hollywood films are divided into five ratings: G, PG, PG-13, R, and NC-17.
G-rated films are harmless and friendly for all ages.
PG-rated films suggest parental guidance and have a slight edge.
PG-13 films require parental supervision, containing some violence, sexual innuendo, and other content unsuitable for children.
R-rated films are even more stimulating; viewers under 17 must be accompanied by an adult.
These films contain adult content, with extensive scenes of violence, profanity, and nudity.
NC-17 rated films have no accompaniment issues; they are strictly for adults.
Don’t underestimate these ratings; a single step down can cause box office revenue to plummet more drastically than a stock market crash.
PG is still somewhat acceptable, parents might turn a blind eye.
But PG-13 is different; most parents won’t take their children to watch, and the potential customers lost here represent a huge number.
The problem, however, is that the judgment of this boundary has no clear standard.
Why can the Big Six sit idly by?
Because they firmly control the MPAA, so all of Hollywood can only become their content processing factory.
New film companies want to emerge?
No problem, just focus on content and don’t touch distribution; we’ll still be good brothers.
Once you try to challenge the giants’ status, the Big Six will immediately team up to boycott you, using the rating system to bring you to heel.
The most famous example is DreamWorks; even someone as strong as Spielberg, what could he do?
He still had to be educated by the combined efforts of the giants, and in the end, he could only obediently work for them.
However, Drew wasn’t worried about this when starting her company; she had no intention of challenging the rules.
What gave her a headache was Hollywood’s profit-sharing system.
In Hollywood, “no investor can take a single cent” has practically become an industry maxim.
The Big Six control promotion and distribution, and their methods are ruthless.
Take Harry Potter, for example.
As one of the most successful IPs globally, would you believe it has always been a money-losing venture on paper?
Film profit sharing, at first glance, seems good.
Actors get paid when the film is released, and they also get a share of the annual copyright fees, so a single film can generate income every year.
It’s the same for film companies.
You hand it over to the Big Six for promotion and distribution, and they take a small percentage of distribution fees.
Isn’t that quite reasonable?
But this profit-sharing system is full of pitfalls.
If the Big Six wanted to, they have a thousand ways to make a blockbuster hit appear to be losing money on the books, ultimately making the production company pay out of pocket.
Take Harry Potter and the Order of the Phoenix, for example.
With a production cost of 150 million US dollars, it grossed 930 million US dollars worldwide, and that’s not even counting various copyright fees and merchandise.
Any normal person who has learned basic addition and subtraction can see that this film made a killing, but in the company’s accounts, the film actually lost money, with a net loss of 167 million US dollars.
One can only say that the highly paid accountants in the major companies were not hired in vain; the money was well spent, bringing the art of accounting to its extreme.
For example, spending huge sums on promotion and distribution, where the promotion and distribution company is their own subsidiary, essentially paying themselves an exorbitant price.
Another is high interest rates.
It’s normal to borrow money for promotion and distribution, right?
Even though the lending company is also the parent company, it doesn’t stop you from paying tens of millions of US dollars in high interest.
Then there are various expenses for actor roadshows, like renting a private jet for several million US dollars, which isn’t excessive, right?
The Big Six’s own private jets?
Just tell me if you rode it or not.
Even more ruthless is directly targeting movie fans.
Giving some gifts isn’t too much, right?
If they were shameless, a plush toy could cost over a thousand US dollars.
Profit sharing, first and foremost, requires profit.
Without certain connections and relationships, getting a single cent of return from Hollywood is incredibly difficult.
Drew had some connections, but her company couldn’t make the Big Six wary, which is why she sought out Ernst.
It’s okay to earn less, but don’t go too far.
When the company builds a reputation and the giants see your capabilities, you can bring them a steady stream of benefits, and then everyone benefits.
A residence in Santa Monica, this is Drew’s house.
At this moment, her voice hoarse, she lay sprawled on her large bed like a lump of mud, “You’re still so wild, charging ahead recklessly.” Ernst, on the other hand, looked satisfied, standing on the floor.
Under the light, his muscle lines were distinct.
“Want a drink?” Ernst was a bit thirsty, as he had lost a lot of fluids just now.
“I remember you have a bottle of treasured fine wine.
I wonder if you’ve drunk it yet.” “Fuck, you’re just a scoundrel, you haven’t changed at all.” “No,” Ernst shook his head, looking at the small leather whip on the floor, “At least I’m much gentler, aren’t I?” He turned and left the master bedroom, finding that bottle of 1961 Pétrus in the wine cabinet.
Everyone knows about the ’82 Lafite; this bottle of wine is worth more than six times the price of ’82 Lafite, valued at seventy or eighty thousand US dollars.
Without feeling anything inappropriate, Ernst directly opened the wine and entered the bedroom with the glass.
When Drew saw that he had actually opened the red wine she had always been reluctant to drink, she immediately turned into a shrew, “You are a complete and utter bastard, a scumbag…” The other party cursed for a full three minutes.
Ernst drained the red wine in his glass, revealing a mischievous smile.
“It seems you still haven’t figured out your current situation.” “What are you going to do?” Drew’s face suddenly changed, and the symphony in the room started playing again.