Empires of Entertainment: Road to Success

Jennifer Holt’s examination of the media industries in relation to each other within her book, Empires of Entertainment: Media Industries and the Politics of Deregulation, 1980-1996, is a very informative and close look at how policies and relationships drastically shifted within the media industries, starting with the Department of Justice (DOJ) and the film industries investigation of HBO’s policies and business practices, to the implementation of the telecommunications act, allowing the merge of telecommunication, film, cable, and broadcast interests under one empire. Holt dives into the details and history of the relationships between these many different industries and how they’ve constantly merged and shifted throughout the years to create the empires of entertainment today.

Beginning in 1979, Film studios reached out to the Department of Justice over antitrust policies within HBO, “claiming that HBO was behaving monopolistically,”(Holt, 25) but instead, the DOJ turned around and attacked the film studios for their attempt at creating their own cable-distributors which at the time remained mostly separate. The DOJ for these first couple of years constantly stopped the major film studios attempts at trying to create “pay-tv channels/services” in order to help themselves vertically integrate as well as compete with the rising success of HBO and other premium movie channels. HBO’s success even led to the merging of Premiere and Showtime, who even went as far as to get a deal with Paramount, preventing their biggest competitor and “cable giant,” HBO, from screening any of Paramount’s pictures. Other relevant merges at the time include MGM obtaining UA Corp. from Transamerica, and Coca-Cola purchasing Columbia Pictures. These shifts within the media industry made it clear that vertical and horizontal integration was becoming increasingly more possible for media industries, as it was already starting to be seen in cable, however, the Department of Justice was still uneasy about the horizontal integration between major motion picture studios and premium movie channels, due to the antitrust philosophies instated by the Carter administration.

It really wasn’t until the rise of TriStar, which involved three separate media industries that include HBO, CBS, and Columbia pictures. This merge was not only approved by the DOJ, but also allowed for Tri-Star’s entire basis to be covered, that is with film, broadcast, and pay-cable. Ronald Reagan also benefited the film industry when he was in office by intervening within the politics of the Financial Interest and Syndication Rules that allowed film studios to continue competing with television TriStar_Pictures_1992_logo production and continued to keep the two industries separate from each other. Tri Star was able to have success across the board, as it was able to benefit from all of its partnerships in many different ways. HBO was the leading pay-tv movie channel of the time, allowing TriStar to dominate the television movie industry as well as the success of Columbia Pictures and it’s parent company, Coca-Cola, who successfully allowed TriStar to promote and market their films. The success of Tri-Star even formed a new business model for the merging of different media industries to create large successful empires. Soon, Most major film studios had merged with cable. HBO with Columbia and TriStar, Paramount had USA network and many more including Disney starting a television channel of their own.

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In 1986, The Reagan administration intervened with Paramount’s consent decrees and for the first time in forty years, allowed for movie studios to once again vertically integrate, immediately leading to the purchasing of movie theaters by the studios themselves. Without the help of the Reagan Administration, the Major motion picture industry would still be having trouble staying afloat from the government’s watchful eye on their business policies. As media industries were evolving and merging, globalization was becoming more and more prominent. “ ‘Ancillary’ was no longer secondary, ‘domestic’ was no longer primary, and ‘Hollywood’ was no longer local or national.”(Holt, 115) Surprisingly, by the early 1990s, Holt notes that foreign companies owned four of the seven major studios producing US films, as they were all being bought by European, Japanese and Australian companies. (115) Geo-political events and conflicts were also happening that helped elevate the cable industry with CNN’s first live reporting of the Gulf War, allowing viewers to actively watch war at home, changing the way broadcast journalism would be seen forever. Once globalization was negotiated to become a positive global marketplace for media industries, and the final merging of media industries that began in the 80s led to The Telecommunications Act in 1996 and created the business model for future empires of entertainment.

It seems that without the help of the Reagan Administration, The horizontal and vertical integration of the major motion picture studios would have not been possible and the chance of having such a successful and well-connected industry would be less likely today.

Holt, Elizabeth. Empires of Entertainment: Media Industries and the Politics of Deregulation. Rutgers University Press, 2011. Print.

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