Geography of the Film Industry

From Baripedia

There has been a turning point in economic geography in recent years that raises questions about certain forms of distribution of economic activity or, more precisely, about a form of concentration of economic activity. There are three elements to put in place at the beginning to explain this change in the economic agency:

  • the sociocultural turning-point: it is the idea that geographers who explained economics by very economic reasoning, the examples of which are Weber, Von Thünen and Christaller's famous localization models, who come to explain the localizations of economic activities by cultural or more anthropological or sociological motives. The concentration of film activity in the United States, particularly in Los Angeles and Hollywood in general, is a very good example of this phenomenon. In traditional economic explanations, it was explained how factories were located to minimize the cost of transporting raw materials, but for cinema this did not work in the same way.
  • a dematerialised and post-Fordist economy: the reason why such a part of the global film industry is located in Hollywood has nothing to do with transport costs. Something else comes into play that has to do with cultural, political or social issues. This turning point is explained by the fact that we are facing an economy that is largely dematerialized with the idea to symbol manipulation in rich countries. Most of the wealth that is produced in developed countries, most of the growth is based on something that is no longer material and some of the production is postfordist. These are new production methods and products.
  • the industrial districts and SPL: all this has not resulted in a disappearance of geography. It is not because the economy has dematerialized that it has got rid of geographical constraints. On the contrary, we have seen fairly recently, over the past thirty years, the emergence of what were called localized production systems, or industrial districts. Many have been spotted in northern Italy, France, Germany or England. A rather spectacular example of industrial districts is the concentration of the film industry in Los Angeles.

The geographers or economists who theorized this phenomenon of industrial district and spatial concentration of economic activity are UCLA geographers namely Allan Scott and Mickeal Storper who published books that theorized this very recent phenomenon of concentration and who, in particular, produced books on Hollywood and on the geographical functioning of this curious entity that is the concentration of film production on a world scale in a district of a large city. This turn corresponds both to new objects that appear and that economic geographies look at with perplexity, but also to new theories that are designed to explain the emergence of new objects.

Distance remains the essential element referring to the problem of the cost of crossing the distance. In the classical models which explained the location of economic activities, whether agriculture with Von Thünen, industry with Weber or services with Christaller, it was explained that the location of companies or economic activities was intended to minimise transport costs. One way of increasing profits was to reduce production costs, particularly transport costs, and location made it possible to place oneself where total transport costs were lowest. The issue of transportation costs was very important in very material economies, in economies that handled many objects. We could imagine that in the case of a dematerialized economy where we produce without objects, it doesn't matter any more and so we could put ourselves anywhere, we freed ourselves from the constraint of space. There is a cost to the agglomeration because land is very expensive, there is pollution, traffic jams. It would be much more reasonable to settle in mountain pastures where the price of real estate is cheaper, where one is less crowded by neighbours. If this phenomenon has not occurred, it is because distance continues to be a problem even in a dematerialized economy. However, we know very well, with almost no cost, to circulate almost instantaneously information in gigantic quantities.

The problem is twofold:

  • it is true that much progress has been made in the transport of information. This is a revolution in transport, the latest development in transport is the Internet, which makes it possible to circulate dematerialised products and exchange information. At the same time, the economy has started to produce goods whose information content is increasingly important and goods for whose production it is necessary to have more and more information. The necessary information is produced by the economist exploded. Thirty or forty years ago, we managed to produce without needing much information and the products we produced contained little information. Now, to produce, we need a lot of information and the products manufactured contain a lot of information. Perhaps the transport revolution has greatly improved the flow of information, but this improvement is not commensurate with the explosion in the amount of information circulating and this continues to be a problem.
  • Internet, telephone, fax, etc. are very effective for circulating simple information, but not complex information, not sensitive information, not very qualitative information and not a kind of information that circulates much through interpersonal communication that are non-discursive signals and exchange and reciprocity. The dematerialized industry and the cinema in particular consume a lot of very complex and very sensitive information that is very difficult to transport. The only way to transport this information is actually to transport the people who hold it. There is a kind of paradox which is interesting being that while the economy is becoming dematerialized, whereas one could think of going to settle in the countryside, one remains stuck paying abracadabrantesque rents in Geneva, Paris or Los Angeles. Hollywood is a caricatural example of this paradox which is the difficulty of transporting information if it is massive and complex.

This small district of Los Angeles, namely Hollywood, begins to become not only the capital or a world capital of cinema, but also the very synonym of the seventh art?

The cultural industries[edit | edit source]

Definition[edit | edit source]

The cultural industry and the seventh art do not mix well enough. Talking about industry about cinema will make the most cinephiles howl, cinema is not an industry, but it is an art. For André Malraux, cinema is also an industry. Cinema is also an industry, it's not just a seventh art, it's also a commodity, film production is also a very heavy industry, it's not a craft industry, but we're in a very collective business, because there are thousands of people involved. The investment is very heavy to make a film. For example, what makes the American film industry survive is that it produces very expensive films. The big box-office successes around the world that regularly fill Hollywood boxes represent non-standard amounts costing hundreds of millions of dollars. Behind the cinema, there are big financiers, banks and insurers. For a long time and still today, the core of the film industry is production. It is a commodity, a film is sold like a commodity with advertising campaigns and marketing, but also with many derivative products. There's nothing absurd about talking about industry about film and it's not devaluing cinema.

There is the idea that industry and culture are two things that do not go together. Perhaps, on the contrary, what characterizes the recent changes in the economy of our societies is that it goes very well together.

The Canadian Department of Industry proposes the following definition of the cultural industry: "Establishments primarily engaged in the production and distribution (except by wholesale and retail methods) of information and cultural products such as written works, musical works, recorded performances, recorded drama, software and databases. Also included are establishments that provide the means to transmit or distribute these products or provide access to equipment and expertise to process the data. The main components of this sector are publishing (except Internet-only publishing), including software publishing, film and sound recording industries, broadcasting (except Internet-only broadcasting), Internet publishing and broadcasting industries, telecommunications, Internet service providers, web search portals, data processing and information services. This is a somewhat restrictive definition of the cultural industry and does not give the hard core of what cultural industries are.

A property with a strong symbolic component will be defined as cultural property. A cultural industry is an industry that produces goods whose symbolic component is essential. A cultural industry that manufactures utilitarian goods will not be a cultural industry. The same product, a shoe, may be the fruit of a non-cultural industry at all or may be a perfectly symbolic good and therefore the product of a cultural industry.

It is very difficult to say that on the one hand it would have symbolic goods and on the other hand utilitarian goods, it is a continuum, because in all goods, there is a symbolic component and a utilitarian component, but there are goods that have a very weak utilitarian component and others that have a very important utilitarian component. A cultural property is a property where the symbolic component is more important than the utilitarian component, it is a property that is essentially a sign. The symbolic share in consumer goods is increasingly important. We buy less and less utilitarian goods and more and more symbolic goods. More precisely, in the goods we buy, the symbolic part is more and more important. Today, in the goods we buy, there is a lot of design, a lot of distinction, a lot of meaning, signs and symbols and therefore industrial production is less and less utilitarian and more and more symbolic, which means that industrial production is less and less utilitarian and more and more symbolic. It is also the passage from Fordism to postfordism with the notion of mass customization.

Economies in rich countries are dematerialized and with the rise of the internet and new economies, products sold are less and less products made with material and more and more products made with information. The dematerialization of the economy has led to the fact that the book has got rid of matter. There is a real economic transformation and a real dematerialization of the economy taking place. From the 1980s onwards, culture became a commodity. Sectors of culture have become commodities when they were not before. The paradox is that this cultural industry works a lot on information, but it has not got rid of space for all that. This mystery occupied much the economic geography and in particular the geographers of the Los Angeles school.

In San Francisco Bay, south of San Francisco, around Stanford University, lies Silicon Valley." Silicon" refers to "silicon" which is part of the materials used to make printed circuit board chips. Silicon Valley is where personal computers and software were invented, so that's where this revolution and this new economy started. It is a very small space over a few tens of kilometres directly linked to the presence of Stanford University. It is an industrial district where IT activity is concentrated. Why it has remained localized here when if there is something that has emerged well from localization constraints is the Internet economy. It's an industrial district like the film district. It is a mystery that these paradoxical forms of location of cultural industries that this economic geography seeks to explain.

Schéma industrie culturelle 1.png

We can have a restrictive meaning of the definition of the cultural industry where the cultural industry is centred on information. Today, it is undoubtedly the main source of income, wealth and exports to the United States.

Taxonominy of cultural products industrial districts 1.png

We can have a definition of the cultural industry where symbolic value is essential in the goods that are manufactured. This will include many things related to fashion, heritage or cinema. Films have no utilitarian function and, even today, they have no material dimension. If the product is dematerialized, this does not mean that production is dematerialized.

Characteristics[edit | edit source]

It would seem that there is a basic contradiction between industry and culture, between industrial logic and cultural logic. Industry would be almost a "dirty word" while culture would be such a "noble" word. The first to mention it was Adorno in Dialektik der Aufklärungpublished in 1947. In view of this contradiction, how can cultural industries be characterized?

There is indeed the idea of creation, these are industries that are creative and that are creative of novelty or creative of content. At the base of any cultural industry, there is a creator, creators, or something of the creative order. We're never in full reproduction. We need a difference in content, so we need a new idea. Making the same film twice is not possible. What makes us go see a film is that it's new, it's different. Nevertheless, for some historians, the fact that current films are part of the declination of episodes would be a sign of exhaustion and even perhaps the end of cinema. Hollywood's inability right now to get new films, and the fact that there are so many films that we're starting over would be a sign that cinema is a cultural fashion over.

In the cultural industry, there will always be a tension between novelty and a product that breaks with the codes in force. A cultural product is a product that has an idea. There's nothing easier than copying. Cultural industries are copyright-based industries. There is a huge legal problem which is that it is very easy to duplicate a product, to pirate and sell it being a huge concern for the industry, music, cinema and to a lesser extent, literature. If there is more and more piracy, then there will be less and less revenue and less copyright. The challenge is to generate new ideas and secure ownership of the idea. There's the idea of secrecy. On several occasions, competing producers have released the same film at the same time. One issue is to avoid being copied and the other is the search for originality.

Cultural goods are goods of experience, i.e. it is very difficult to know in advance if an achievement will be sold. It is complicated to predict the success of a film. You can't know if an idea will please. We are in a paradox. The certainty of success is based on what happened in the past. It is in the very nature of cultural property that one cannot know in advance whether it will work. What compensates is the experience as it is the case of a great producer. It is a question of intuition and experience which consists in identifying a good scenario or a good actor. There is an extreme difficulty in the fact that the only films that work make millions of dollars, but they are very expensive films. Generally, in the industry, there is a relationship between the cost of production and the selling price, the higher the cost of production, the higher the selling price, and then there is a relationship between the selling price and the quantities sold.

There is a disconnection between production costs, sales prices and quantities. Another important idea is obsolescence which is the fact that cultural products are very quickly obsolete products. The life span of a film, music or book is very limited. The only way to perpetuate a product is to decline it. Another characteristic is that these goods have a very important technological dimension. Cultural industries often have a dual production structure, with huge oligopolistic groups on one side and fringes of small producers on the other. It is said to be an oligopolistic structure with fringes. There are a few big film producers who do most of the business and then there are a whole series of hundreds of small independent producers. These small producers at the fringe ensure the functioning of the system, its flexibility and often it is from there that innovation comes. A large firm has great difficulty innovating by definition. The small independent producer, the small workshop is more with a spontaneity, flexibility and therefore often the novelty is the fringe. That is why the economic structure in cultural life is an oligopolistic fringe structure.

It is a sector in full economic expansion whose production does not stop increasing and whose profits do not stop increasing. This has become a major source of revenue for many economies. Cinema has become a major source of income and therefore for many countries cinema has become the source of income.

Export of us in the form of film and tapes rantals 1986 - 2000.png

This table shows in constant dollars the value of film and tape exports recorded by the United States between 1986 and 2000. In 14 years, it has gone from $1.6 billion to $8 billion, almost four times that number. Revenues from the sale of the cultural industry have quadrupled since the 1980s.

Évolution de la masse salariale dans audiovisuel et les agences de presse.png

This diagram shows the evolution of the payroll of the number of people employed in audiovisual and news agencies in France between the 1970s and the 2000s. We've gone from 100 to almost 200. This means that the wage bill and employees in the audiovisual sectors doubled in the period. We are facing an industry that is really exploding, taking up more and more space, employing more and more people and generating more and more profits.

Highly concentrated production[edit | edit source]

On a global scale[edit | edit source]

We will discuss film production and its concentration. To watch film production on a global scale, we could first limit ourselves to a quantitative analysis, that is, simply look at the number of films that are produced. The United States is far from being the world's leading producer of films, the leading producer is India.

Production moyenne annuelle de film entre 2005 et 2010.png

This map represents the average annual film production between 2005 and 2010. Production is much higher in India than in the United States. On average, over the last five years, 1,150 films have been produced in India compared to 500 states, so, on average, twice as many films are produced in India as in the United States. There are several poles of film production, but the best known is in Mumbai which is Bollywood. It's a bit ironic to copy the Bollywood world to Hollywood, because the film industry developed in Mumbai before it developed in Hollywood. Hollywood development followed the development of the Mumbai studios. The Mumbai studios developed at the end of the 19th century, whereas for Hollywood, it developed in the 1915s.

Nombre de film produits en 1998.png

The 1998 statistics show that India and the United States were at almost the same level producing about the same number of films. Now, we can see that this has really increased since the average for the decade from 2005 to 2010 is twice as many films made in India as in the United States. Today, China produces 526 films in China, while 500 are produced in the United States. The two leading film producers in the world are China and India, and the United States will be in third place, but not very far from the fourth either, since the fourth country is Japan, whose production is almost equivalent to that of the United States. This is a new phenomenon since we see that the United States was clearly the second country in terms of world production in 1998. There is an erosion of the position of the United States in favour of a shift to the Pacific and the affirmation not only of India, but also of China and Japan as the place of film production. A very simple explanation can be given to this phenomenon which is the population. There are over a billion people in India and China. Another explanation that India and China constitute their own film markets that cannot be fully satisfied by American production.

There is a European production centre with an average of 220 films in France and around 100 in the United Kingdom. The European pole represents more or less the same thing as the American pole or the Chinese pole. To summarize, there are five producers worldwide today: China, India, Japan, Europe and the United States. Far behind, there are small isolated producers like Brazil, Argentina, Nigeria or Indonesia among others. It's a very concentrated structure, it's not as concentrated as other types of industries, and it's perhaps less focused today than it was yesterday to the extent that India and the United States were more distinctly different from the rest of production than they were a few years ago. The configuration shows France's very good position with 200 films per year.

Just because we produce a lot of films doesn't mean we export them, sell them a lot or make a lot of money. The truth is that films made in India and China are hardly exported, they are almost exclusively destined for the Chinese domestic market and the Indian domestic market. This still represents a market of around 3 billion people. Bollywood movies are usually musicals that tell a romantic story that from the Western point of view is unlikely and very stereotypical. These films are mainly distributed in domestic markets, which are a colossal domestic market, but a poorly solvent market for Westerners.

Profit hollywood vs bollywood.png

If we compare not the average production of films, but the profits that are made or the number of tickets that are sold, we realize that this changes completely. If the United States makes half as many films as India, if Hollywood in terms of the number of films weighs half as much as Bollywood, if we watch the profits, the profits are in the order of 2 billion dollars for Bollywood and 51 billion dollars for Hollywood. That is, Hollywood in terms of profit weighs 25 times more than Bollywood, but produces half as many films. To put it another way, American films on average make 50 times more profit than Indian films. This is not found in many tickets sold since the number of tickets sold in India is 3 billion while Hollywood represents only 2.6 billion tickets. The problem is not the number of entries, but the entry price. Most of the profits made by a film no longer have anything to do with cinema admissions. The profits made by a film have to do with TV rights, internet sales, DVD sales, merchandising and merchandising. Another huge difference between Hollywood and Bollywood is the average cost of a film: $5 million in Mumbai and $80 million in Hollywood. So an American film makes 50 times more profit than an Indian film, although it costs 20 times more. In corrective is the growth rate since the growth rate of Indian cinema is currently 13% while that of Hollywood is 6%.

It's a very concentrated structure, not in terms of the number of films produced, but in terms of profits. In terms of profits, Bollywood is still negligible on an international scale.

Production is highly concentrated in the United States, although there is some diversification. This phenomenon of spatial concentration of production in the United States is old. The cinema born in 1895, he invented almost the same time by Edison in the United States and by the Lumières brothers in Lyon. The debate is about the definition of cinema. It is not easy to say what cinema is. It is not easy to say what a film is. According to the definition given, it was invented in New York by Edison or in Lyon by the Lumières brothers. If you think that a film is moving images that are printed on a sensitive film and a viewer is watching, it's Edison. If the definition of cinema refers to a projection on a screen, then it was the Lumières brothers who invented it the same year that Edison was 1895. The situation in 1910 was rather one of duopoly, with almost two countries selling, but Europe's position was better than that of the United States essentially because European production was of better quality, less repetitive and more innovative than American production. In the 1910s, we didn't make a feature film yet. The First World War arrives which practically puts an end to European production, the United States continues to produce in the period. By the end of the First World War, the European film industry had virtually ceased to exist, while that of the United States had grown enormously. Relationships have changed and what will also change is that the United States will succeed in banning the import of European films into American territory. It is no longer possible to broadcast European films on American territory. From 1918 onwards, Europeans exported virtually no film to the United States, whereas the United States very willingly did the opposite. The United States has two markets, namely the American domestic market and the European market, while the Europeans are forced to make do with their own market, which is also very fragmented. In this configuration, American cinema has grown in power while European cinema, which is also less structured economically, will rather stagnate. The Second World War will once again be a sign of a halt in the growth of European cinema while American cinema continues to grow and embellish and we find ourselves in the 1950s in a situation very close to the current situation where American production is really massive and dominant on a world scale.

Box office mondial 1.png

This was not always the case, in the 1910s it was rather Europe that had the advantage and it was put in place thanks to an ultra-protectionist policy of the American film industry thanks to or because of the two world wars. However, at present the market is essentially dominated by US production. The top twenty box-office films in the world that have made the most money in the world are all American films or at least in English. This phenomenon is part of history. There is a bias when we look at this box office, which is that films now make much more profit than in the past and then we cannot compare the dollar today to the dollar in the past.

Box office mondial 2.png

If these figures are corrected by inflation, the box office is very different. The first twenty box-office hits worldwide are all American films. There is a very clear demonstration of the ability of American cinema to make profits and much more than Indian, Chinese, Japanese, German or French cinema. It is not only linked to the American market, it is linked to the fact that it is a cinema that is exported, whereas Indian or Chinese cinema is more difficult to export.

Box office mondial 3.png

If we take the opposite situation, we will find a phenomenon that is comparable with small variations. Looking at the European box-offices, in the context of the French box-office, the biggest success in the history of French cinema in terms of number of admissions is Titanic. He also has French films that have a huge success in France. French films that have had colossal success are films that question French identity. The film Titanic, for example, does not tell American history, but rather British history. There is a more universal possibility of identification.

American culture would have acquired universal value; basically, we understand films that talk about America while we do not understand a film that comes from India. The paradox and the reason we understand American society so well is because we saw it in movies. The reason why we can very easily see an American film from America is because we have already seen it before and that this American society thanks to cinema is much less unknown to us than the Indian society or the Chinese society. Otherness in cinema implies sharing certain codes.

The fragmentation of cinema into cultural areas is a new phenomenon. This is linked to the invention of the talking cinema in 1929. At that moment cinema ceased to be universal. In 1929 one begins to speak is the question is to know which language to speak. Cinema ceases to be a universal cinema. This is the reason why Charlie Chaplin continued the silent film.

The Majors[edit | edit source]

Cartographie majors 1.png

We will focus on production and production concentration. We will think in terms of economic structures. When we speak of concentration, we will reason in terms of spatial concentration, but also in terms of economic structures. We are not in the caricatural situation of the 1930s where there were really very few studios, the situation has become a bit more diversified, but this is also due to the fact that the studios have become a kind of conglomerate covering very different realities.

When Allen Scott proposed this scheme in On Hollywood: The Place, The Industry, published in 2004, there were seven major studios around the world that were the big companies that held a huge financial surface, ensuring the release of the most numerous and most expensive films and that made the most money.

Part des mahors dans la production audiovisuelle.png

In terms of percentage, what is the share of these media structures in production? We will distinguish the concentration in the four largest firms and in the eight largest firms and we will think in terms of production, distribution, projection and post-production. As far as film production is concerned, a third or a half depending on whether you take the four or the eight largest firms, a third of the revenues where half of the revenues are provided by the major studios, if you watch the distribution of films, it is totally blocked by the major studios, 82% of films are distributed by the four major studios and 92% by the eight major studios. For the screening, it's a little less than half because there are still small independent cinemas and the big difference is post-production. The big studios are almost absent that we take the four biggest studios or the eight biggest studios that provide a fifth of the post-production. Post-production is often outsourced. Across the United States, these four major studios make half of the profits from film production, four-fifths of the profits from film distribution and one-third of the profits from their production. It is a structure where, at all times in the film industry, film production, film distribution or screenings, almost half, two thirds or three quarters of the sector is held by the major studios. The only sector that escapes the control of the big Hollywood studios is post-production.

Hollywood and other cinema SPLs[edit | edit source]

Cartographie aérienne los angeles.png

We're going to look at how much of these different activities are in the film industry, not in Hollywood, but in Los Angeles County.

This map is a satellite map of Los Angeles. What appears in a blue color is the agglomeration, appears the city center of Los Angeles, the port of Long beach, the valley, Pasadena, Santa Monica and Hollywood. What is in red is the vegetation and what is in blue are the inhabited areas. The essentials are provided in Hollywood or Santa Monica or in the valley.

How much of the American production is insured in Los Angeles County? In terms of film production, three-quarters of the revenues are in Hollywood, where one-quarter of the establishments are in Hollywood, but two-thirds of the jobs are in Hollywood. In other words, two-thirds of U.S. jobs in film production are Los Angeles accounting for three-quarters of revenues, but that's only 26% of the number of facilities. This means that there are many establishments elsewhere, but they are small establishments that employ the world and make little profit since 75% of the film production establishments are not Los Angeles, but it is 75% in terms of number of establishments employ only a third of the industry and production employees and reap only a quarter of the profits.

Production américaine assurée dans le comté de Los Angeles.png

The phenomenon of spatial concentration in Hollywood and major, three-quarters of the revenues of American production are in Los Angeles and this is accompanied in terms of concentration in terms of studio size. To put it another way, there are studios in Los Angeles that are infinitely larger than anywhere else and account for three-quarters of revenues and three-quarters of budgets. For film distribution, this is more complicated. The profits from film distribution remain at 60% in Los Angeles, which does not mean that the films are distributed there, but as far as the control of film distribution in the United States is concerned, the revenues benefit at 60% in Los Angeles. 45% or almost half of the people who are employed in this logistics industry that is the distribution of life movies in Los Angeles. Half of the people who organize the distribution of films in the United States live in Los Angeles. Los Angeles accounts for half the post-production revenue. In terms of the film industry in the United States, in terms of both production and distribution, or post-production, it represents between half and two-thirds of the jobs that are in Los Angeles and between half and three-quarters of the revenues that are generated in Los Angeles. The only point where Los Angeles does not monopolize the activity related to the cinema is with regard to the projection of film which is distributed everywhere.

There is a major phenomenon of double concentration, an organizational concentration in a few large studios and a geographical concentration or almost the entire film industry is operated by a dozen or so studios located in the greater Los Angeles area.

What makes the 20 films that have in human history produced the most profits have all been produced not only in the United States, not only in California, not only in Los Angeles, but in this small part if the Los Angeles generation? What's going on in Hollywood to create such a phenomenon? Nothing. The question is, how did this happen?

You always get the impression when you tell the story of cinema history or industries that all of a sudden you're making a technological discovery that everyone has been waiting for. The idea would be that in 1929 we invent talking cinema and stop seeing silent films, and we get the impression that in the 1930s we invent colour film and stop seeing black and white films. That is not how it happened at all. In fact, from the very beginning of cinema, we know how to make colour films and we also know how to make talking films. The first colour films date from 1917 and 1918. What happens in 1929 is not that we invent a new technique, but we invent its interest. The first film is not a talking film, but a singing film called The Jazz Singer. Everyone stops making silent films and everyone starts making talking films, except Chaplin. Chaplin will continue obstinately to make films that are not silent because there is music, but films where he does not speak. The first film where Charlie Chaplin speaks is in 1936 in the film Modern Times. Chaplin shows that he is not an American actor, but English and if he speaks English it is with a British accent. It shows that it is an actor who speaks a universal language and it shows above all that it is not worth speaking. Chaplin shows that language in cinema is useless since we understand very well what tells us only with his postures and only with his body language. From the point of view of the geography of the film industry, faced with the risk of market fragmentation, Chaplin offers an answer in an international language that is a language of no one.

In 1885, in Hollywood, it was an orchard area on the outskirts of the Los Angeles metropolitan area. At that time, the great Californian city was San Francisco. California began to populate from the 1850s onwards with the occasional gold street, San Francisco became an important port and Los Angeles is still a really small city. The reason why Los Angeles is going to become a big city is related to the development and arrival of the railroad and the development of the major film industry as well as oil. At the end of the 19th century, Los Angeles is considered as the end of the world, it was necessary to cross the United States, the economic center of the United States is for a long time on the west coast. The Atlantic coast encompasses the coastal conurbation from Washington and Baltimore to New York City, Boston and Portland to the Great Lakes region, Detroit and Chicago. That's where most of the intellectual life and most of the production takes place, that's where the major universities and research centres are located, and so of course when cinema was invented in the United States in 1895, it was in New York. The commercial potential of cinema was immediately understood and Edison immediately created a film production company and created several studios which were the studios of the Edison company. Edison filed a patent to protect his rights. It is an industry based on ideas and knowledge, so it means keeping the benefit of ideas by filing a patent. By filing this patent, Edison prohibited anyone outside its companies from copying and making films. Thus, between 1895 and the 1920s, huge studios were created not really in Manhattan, but south of Manhattan in New Jersey which became the American capital of cinema becoming one of the top places in the world of cinema with France with Parisian studios, London, but also Berlin. The first films in the history of American cinema were shot in New Jersey until the 1930s. In California, until 1914 and 1915, nothing happened. Hollywood is an orchard. For twenty years or so, the New York film industry flourished and it was the only place in the United States where films were produced.

Then why New York? New York had the intellectual resources, the engineers, but also the inventors who had been there for a long time and who knew how to make objects; there was a mechanical industry, a photography industry, a machine industry which is at the origin of the cinema industry in terms of optics, but also in terms of electricity, that also presupposed the spectacle. In the beginning, films were like filmed theatre. The big stage in terms of theatre was Broadway. It was logical that cinema should develop where it had mechanical, electrical and optical industries on one side and then the theatre on the other. It also needed capital, there was the New York Stock Exchange, and it needed an audience and New York was the largest city in the United States. It was quite logical, because one could even say that cinema could not be built elsewhere than in New York. New York was predestined to become the American capital of cinema in a caricatural way and for many reasons. On the other hand, New York is very well connected to the United States, it is very easy to export to other states and other cities in the United States. This flourishing industry was already making huge profits in 1905 and 1910. At the beginning it is a cinema of attraction which shows things and it is little by little that it will tell stories.

One wonders why the New York area has totally declined in terms of film production since the complete switchover of all production was transferred in a few years to California. There are a number of myths that have been told. In 1885 the first Hollywood studio appeared, from 1922 the landscape changed a lot with big Hollywood studios.

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There are myths being told about why cinema left New Jersey and moved to California. The first myth and that of the sun. A second myth (justifies in a way the transfer of the studios to Southern California and that one finds in the landscapes of California all the landscapes of the world and the cinema need sceneries which are natural sceneries because they are more spectacular, less expensive and more credible than the sceneries which it is possible to create in studio. California would offer a variety of landscapes that allow all the world's films to be shot in natural settings. It is not true that time and the variety of landscapes predestined Hollywood to become the world capital of cinema. It didn't happen immediately, there was a studio development in Florida, also in Chicago.

The real explanation is linked to patents and the legal status of cinema. Edison with both legal and rogue methods had managed to enforce his patents and prevent the development of any film industry in New York State. Enforcing the law, the law and the monopoly on the film industry became more and more difficult as one moved further and further away from the place where one exercised one's power and from the place where one enjoyed one's power, namely the west coast. The main reason was that the further we got from New York, the more we could make movies without Edison getting in the way. The reason was to escape Edison's monopoly and to escape the lawsuits that Edison would not have failed to bring against them if they had developed their business. So the reason we're starting from New York is that there's a monopoly situation that limits market entry. In the 1910s, it was not possible to enter the cinema market, which was completely blocked by Edison's patents. The only solution is to flee this jurisdiction is to flee Edison's area of influence to go far. The reason we went to the end of the world to know in California was first because it was the end of the world. You had to leave the east coast, you had to leave New York and somehow go as far as possible.

It is possible to develop a chronology. The first is Griffith who in 1910 arrives in Los Angeles with great stars from the east coast that are the great stars of silent movies namely Lilian Gish and Mary Pickford to shoot In Old California. In 1911 Nestor Studios were created, in 1912 the ancestor of Universal Studios was born. Until 1913, the centre of production remained New York. It was only in 1914 that the first feature film was shot in California and it was a film by Cecil B. Demille entitled The Squaw Man. The most significant moment dates from 1915 entitled Birth of a Nation which is a Griffith film which is for many film historian the first film in the history of cinema. Griffith will put in place almost all the codes of today's cinema. In 1916, the first blockbuster entitled Intolerance took place, telling the story of humanity. From there, little by little, all the producers, all the directors, all the scriptwriters, all the actors will migrate to Hollywood where this innovation took place, which is not the invention of the cinema, but that of the film.

In the late 1910s and early 1920s the very large studios, the studios, the large structures of the Hollywood organization were set up with the creation of the association of American film producers and distributors, and in 1923 which is a canonical moment is made the Hollywood sign that is actually an advertisement for a subdivision. In 1927 the first talking film was released, in 1929 the first Oscar ceremony took place. The years 1927 to 1948 marked the great era of classical Hollywood which is the great era of American film studios. This system disintegrated a little at the end of the 1940s not because it posed economic problems, but because the structure of American cinema was an oligopoly dominated by a few large studios and the studios controlled both the production, distribution and screening of the film. In 1948, the United States Supreme Court decided to break this system, which was considered anti-competitive. It is considered that the integration of production, broadcasting and projection in the same studios is a phenomenon that breaks competition and prevents the development of cinema. This Supreme Court decision will force film producers to separate from movie theatres and therefore they will no longer own movie theatres and therefore for the owners and tenants of movie theatres, they can buy the films they want. This moment that marks the end of the great studios is also the moment when television develops so the model that makes us go to the movies will change, the movies will come more and more to us.

By reasoning about causalities, natural landscapes, light and climate are positive factors, but not important, the essential factor was to go as far as possible from Edison and his patents. There are two other factors that make it a good idea to go to California, but that were not necessary. The first is that we are in a space where there was not much and therefore land was very cheap and cinema is an industry that requires a lot of land. The fact that land is cheap is an important element whereas in New York it was very expensive. When we invent a new economy, it is not easy to put it in the same place as the past economy. In other words, when the economic paradigm changes, when there is a real economic revolution, the old rich regions will suffer from the handicap of already being developed. Paradoxically, on the economic side, the fact that California was a real desert was something positive enough for the film industry because it promised cheap land. On the other hand, there is a whole logistics of the cinema that is very labour-intensive and this labour was present in California because of the orchards. Orchard agriculture was an agriculture whose workforce base was immigrants from Mexico and it is on this workforce of agricultural workers that the film industry will rely.

Why California rather than anywhere else? There's no reason for that. That could very well have happened anywhere else in the United States. The reason this is going to happen in California and Los Angeles is that the two directors who plan to make several films will both come to Los Angeles. The first two films that count namely Birth of a Nation and The Squaw Man are made there. These two films are big hits and success calls success, it's a snowball effect. These two films will be a kind of appeal. It could no longer happen in New York, it had to happen elsewhere, and once it happened elsewhere, there was a snowball effect that was set up so that this place became more and more attractive for cinema and after ten years it became so major that it was impossible to develop cinema elsewhere than on this pole where there is such a concentration of cinematographic activities.

Why is there this agglomeration phenomenon? There is a kind of mystery that makes an industry as immaterial as cinema, which can really put itself absolutely anywhere, why are they all going to put themselves in the same place? The cluster effect is very spectacular.

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This map shows film production companies in 2001. Each small dot represents a film production company and are represented by squares below the large studios. The scale is that of the Los Angeles metropolitan area. There is a very strong logic that is a cluster logic, a logic of agglomeration that makes these production companies magnetized to each other. Another geographical logic could have emerged which would be a scattered logic or one with several poles. The phenomenon as such cannot be explained, namely the forces at work that explain this agglomeration phenomenon. Economic theorists, beginning with those who have grasped this phenomenon, use the term industrial district of the same nature, with the same processes and the same dynamics that explain the agglomeration in Silicon Valley.

One of the characteristics of cultural industries is that they are fringe oligopolies, i.e. there are a few producers who monopolize 90% of production, and on the other hand, there are very small independent companies with flexible structures that operate independently of each other and independently of the large studios. On one side there are the majors and on the other side there are the independents. What characterizes the large studios is their high financial and material means, notably allowing them to benefit from strong economies of scale and to distribute on a large scale. The self-employed are specialised in a highly flexible production and distribution sector. In addition, there are the institutions that serve to enhance and structure the system.

It is a phenomenon of massive agglomeration of activities at all scales and deserves explanation. We need to look at the organizational structure and the way this industry operates. The idea is that of an oligopolistic fringe operation with on the one hand very large production structures with big publishers and big fashion houses and on the other hand small independents. The central idea being that we need very large structures that ensure very large production and then on the other side small structures that give flexibility to the creative process itself.

Institutions are not really production systems, institutions do not produce films. There are a lot of collective actors who are not companies and who play an essential role in production. There are the Academy of Oscars, for example, unions that are sort of guilds and brotherhoods that will not bring together all the film workers, but for example bring together all the people who train animals. These unions will defend their interests and those of their affiliates. The MPAA is like the collective body that regulates the production of American films. Hollywood is not only the big studios, it's also regulatory institutions like the Hays code or the code system that are very powerful, that are very efficient and very linked to each other. These standards are implemented very carefully, but first the function is commercial.

The diagram on the left is rather descriptive, the diagram on the right is rather interpretative.

On the diagram on the left appears the part of the production which is ensured by the independent studios in grey and the large studios in dark grey. The frequency, which is the percentage of film and the domestic box office, is represented using a logarithmic scale. Almost the entire independent curve is on the left and almost the entire production of the big studios is on the right. On the left, it is mainly independents who make a lot of films that make little money, and on the right the big companies who make a lot of films that make a lot money.

The diagram on the right is a little more complicated and tries to conceptualize the evolution of cinema production. There is an axis of flexibility with large studios that are heavy and very inflexible as well as entities that are small and therefore very flexible, and there is an axis that shows the standardization of products. Old Hollywood refers back to the cell. The system exploded into and into. They are independent, small independent companies that have separated themselves from the large studios being of small size manufacturing products very little standardized. There is the evolution from old studios to new studios and then the emergence of independents. The question is the relationship between the size and flexibility of the institutions on the one hand and the innovation and standardisation of the products on offer on the other.

Why does this require a co-presence in space? Why do these big studios and also the small independent producers have to be right next to each other? The explanation lies in the same story that explains the formation and maintenance of all other industrial districts. There is a very strong interconnection between producers linked to the flow of information. It is in a professional environment where there is a lot of information circulating between the different producers. The production system is called "one shot". The implementation of these configurations gives rise to very complicated negotiations. The interaction can only take place through physical co-presence, i.e. to produce a film in Hollywood, the writer, producer, director and the two stars have to see each other all the time for six months. There is also the question of attraction, that is, there is in Hollywood the best in world cinema, the most talented, the most trained, the most reputable and the most money-making people in cinema. Hollywood has the ability to attract talent from around the world to work where the best films are made. There is a virtuous circle phenomenon. We are faced with a law that is the law of attraction, which means that the heavier a body is, the more it will attract other bodies. As far as regulation is concerned, there are local regulatory bodies that hold everything in their hands, such as these famous corporations, guilds, associations, research institutes and universities. This is political in nature, ensuring that the system is supervised and run smoothly. It is a society with authorities, institutions and centres of power that will play this role, create links and unite this environment to make it a well-organized and well-regulated one. Film as a cultural industry is not disconnected from other economic activities. The Hollywood district is a film industry, but it relies on other economic resources that are very present in the agglomeration namely the record industry, the music industry, the games industry, the tourism industry and publishing. The ultimate reason is something as simple as the fact that people need to see each other which is the need for human beings to have complex and sensitive information exchanges face to face. There is a lot of non-verbal exchange. The problem is the flow of complex information and the failure to detach complex information from those who hold it. To circulate complex information is to bring together the two people who hold it.

There is a locking effect in the space of comparative advantage that makes Hollywood cannot spread. This will remain locked locally. There is a lock in space that makes this happen locally is a lock in time that makes everything result from an accumulation over a hundred years. Everything that has been capitalized remains locally. If Hollywood remains Hollywood, it is because of this double locking in space and time of the comparative advantage.

There are two ways to map the working of Hollywood which are that Hollywood is a network and it is a network that will connect large producers and small producers who will be permanently connected for the realization of a product. The density and intensity of these links is linked to the proximity of the poles. There can be complex interactions with a person in the network if you are not too far away. There is also the idea of the concentric system with in the middle the big companies, around there are the independents, then specialized services and further the demand, institutions and the geographical environment.

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There is also a cinema district in Paris. If we map the companies involved in film and visual production in France, we see that there are 142 production companies located in France and there are almost as many in the 8th arrondissement of Paris. There is the same phenomenon of concentration and for the same reasons. In the north of Paris, there is the city of cinema created at the initiative of Luc Besson which is an old factory. These huge hangars have been transformed into film studios. The Parisian cinema district is in the process of development.

A polarized distribution[edit | edit source]

Films are cultural goods and like all cultural goods, films are made with signs and codes. To consume a film, you have to understand a code. Cultural property not only has a symbolic function, it also carries identity. Collective and national identity is based on a circulation of symbolic objects that can be novels, songs, photographs, paintings, but also films. So the film carries something symbolic according to an identity that makes sense for a given population. To disseminate a cultural good across the border, it is necessary to find a vector, because it is in the logic that it does not pass. What is mysterious is that it passes. Each country will live in a closed circuit, but some works will acquire universal value. This is linked to the exceptional value of these works, but it is also linked to the fact that it was also carried by a vector. This may explain the fact that American films are exported either because of the quality of production or because of American cultural imperialism. American culture succeeded in going beyond the borders of America, particularly during the Second World War, and became familiar. There is a geopolitical configuration, but also an ability of the American world and American society to attract and seduce. The American way of life and the American dream have a real meaning. American success is not only the result of American cultural imperialism, it is also the cause. It is the diffusion of a cultural model that manages to become transnational, even universal. In most countries, the vast majority of films seen and distributed are American films.

Annexes[edit | edit source]

References[edit | edit source]