September 13, 2011

MPPDA and the Production Code

• 1922 Formation of the Motion Picture Producers and Distributors Association of America (MPPDA) under Will Hays

• 1930 Adoption of the Hollywood Production Code

• 1934 Formation of the Production Code Administration (PCA) under Joseph Breen

Will HaysPostmaster General during

the Warren G. Harding

administration. Born in

Sullivan, Indiana. Headed

the MPPDA from 1922 to

1945.

Responsible for inventing

the Hays Production Code

and promoting the motion

picture industry globally.

From McCarthyism to Multimedia Mergers

• 1950-54 McCarthyism and the Blacklist

• 1968 End of the Production Code

• Hollywood reacts to the political movements of the 1960s (civil rights, the anti-war movement)

• 1970s Rise of the “movie brats” and the new blockbuster films

• 1980s Multimedia Mergers and the rise of the new infotainment industry

Jack ValentiJack Valenti, formerly an

advisor to President Lyndon B.

Johnson was selected head of

the Motion Picture Association

of America (MPAA) in 1963.

He resigned in 2004 and was

replaced by former Secretary of

Agriculture Dan Glickman.

Valenti created a voluntary

rating system to replace the

Production Code in 1968.

Richard Heffner: Joseph Breen’s Successor

1974 to 1994 he served as

Chairman of the Board

and Administrator of the

motion picture industry's

voluntary film

classification and rating

system

Dan Glickman: Valenti’s Successor

Secretary of Agriculture 1995-2001 (Clinton Administration)

US Representative from Kansas for 18 years prior to that

2004 Appointment as President and CEO of the MPAA

Average Weekly Attendance (in Millions) and Ticket Prices, 1929-1993

Source: Gene Brown, Movie Time; Motion Picture Association. (http://www.mpaa.org)

Studio Economic StrategiesRepackage and resell material in as many forms

as possible.

Combine phased marketing with price differentiation to maximize revenues from film rentals, VCR rentals, and tape sales.

Diversify into retailing, theme parks, etc.

Integrate upstream by building multi-cinemas, retail stores, etc.

Financing a Film The producer puts up “front money” to assemble a

script, a cast, and a film crew

“First money” comes from one set of financiers (often banks); “second money” may come from other sources

The studio assembles the financial package and often compensates the producer by giving him/her a percentage of the “gross”

What Factors Influence Film Making?

Economics availability of financing

box office potential

return on investment

reducing uncertainty

Judgment of peers

Values of film makers

Fears of controversy leading to censorship

The Rise of the Blockbuster Budgets in the tens of millions; Revenues in the

hundreds of millions

Examples

The Godfather (1972)

Jaws (1975)

Star Wars (1977)

Number of Films Released in the US, 1950-2005

0

100

200

300

400

500

600

1950 1960 1970 1980 1990 2000 2005

Source: Motion Picture Association. (www.mpaa.org)

Ratings of Films by Rating, 1968-2005

58%

7%

21%

12%2%

R

G

PG

PG-13

NC-17

Source: Motion Picture Association. (www.mpaa.org)

Domestic Gross Box Office, 1991-2005, in billions of current dollars

0

1

2

3

4

5

6

7

8

9

10

1991 1995 2000 2005

Source: Motion Picture Association. (www.mpaa.org)

MPAA Average Negative Costs, 1980-2005, in $million

0

10

20

30

40

50

60

1980 1985 1990 1995 2000 2005

Source: Motion Picture Association

US Motion Picture Employment, in thousands, 1988-2000

0

100

200

300

400

500

600

700

1988 1990 1992 1994 1996 1998 2000

Source: Motion Picture Association

Total Number of U.S. Screens (in thousands)

0

5

10

15

20

25

30

35

40

1980 1985 1990 1995 2000 2005

Source: Motion Picture Association.

US Theaters by Number of Screens, 2000

32%

43%

20% 5% Single

Miniplex (2 to 7)

Multiplex (8 to15)

Megaplex (morethan 15)