Exploiting Hollywood 1980.

Chapter 1599 Mini Factory
As the future owner of United Artists, which was about to be sold, Ronald was invited to attend the MPAA and meet with Chairman Jack Valenti to discuss the future arrangements of United Artists.

As an association of the American film industry, MPAA holds an important power, which is rating. For a movie with a lot of gunfights, violence, or erotic elements, being rated PG-13 or R means a 50%-100% difference in box office revenue.

If it is a typical Hollywood commercial film with a production cost of 100 million, for the studio it means a revenue difference of tens of millions.

This rating agency is under the MPAA. Although in theory, all movies will receive the same rating principles, in practice, there are still many areas that can be influenced.

The previous Oscar-nominated documentary "Dreams of a Basketball Star" was not nominated for Best Documentary due to a scandal. It was eventually investigated by the Academy of Motion Picture Technology and Arts, which revealed a corner of the awards process that has never been made public.

The MPAA's ratings are even more of a black box corner that outsiders are unknown to.

Ronald's films throughout his career were mostly made in collaboration with major studios, and he rarely produced them independently. Therefore, he was not too troubled by the MPAA ratings, as the major studios helped him with it.

However, after being in the industry for a long time, I have heard and seen many movies produced by small and medium-sized studios encounter the shady side of ratings.

It is obvious that the scale of violence in their films is much smaller than that of Spielberg's Universal films, and the scale of their erotic elements is also much smaller than that of feature films produced by TriStar or Columbia.

But they are often rated R, while the big studios can get PG-13.
Throughout all these years, few have been able to successfully challenge the MPAA's ratings, and even fewer have successfully appealed and had their ratings corrected.

One of Ronald's goals in acquiring the United Artists label was to squeeze into the inner circle that could influence film ratings and become one of the players at the table.

"Welcome, kid. When I first met you in Cannes, I knew you were different. I also saw your business acumen in China, and then I saw your directing skills in Hollywood. It's really great to meet you here."

Jack Valenti, the chairman of MPAA, personally met Ronald here. After shaking hands and greeting each other, Valenti took him to visit some historical exhibitions of MPAA.

"I am also very happy that I listened to Steven (Spielberg)'s advice when I was on the set and made you the director of the fast-paced Richmond High School, even though you were still very young at the time..."

Accompanying Jack Valenti was former Universal CEO Sidney Sheinberg. After retirement, he also served as a director of the MPAA. This position is held by some highly respected people in the industry who are respected by many people and have helped many people.

Ronald was of course very satisfied. This was his first visit to MPAA as a future board member, and he had two acquaintances to lead the way. However, he was also a little confused. The only two old men who came to see him were those who did not have full-time jobs. The direction they were heading was not the meeting room, but the history exhibition room.

"In 1922, the MPAA, then called the Motion Picture Producers and Distributors of America (MPPDA), was founded with five film studios as members: Paramount Pictures, Fox Films, Loews, Universal Pictures, and United Artists..."

Jack Valenti himself gives background on some of the photos on the wall.

"Lovis? That's the later..." Ronald heard a strange name.

"Yes, it's MGM. They were formed in 1924 by the merger of Loews, Metropolitan Pictures, Goldwyn Pictures and Louis B. Mayer Production Company... Columbia also joined the MPAA that year, and the year before that, Warner Brothers became a member. In 1928, RKO also joined... The production companies represented by the MPAA accounted for almost 70% of the films produced in Hollywood at the time."

Ronald nodded. He noticed that these eight film studios were almost the same eight major studios when he entered the industry, except that RKO was removed from the list and Disney was added. But why was Disney not on the list?
"By the 1930s, the films produced by our MPAA members accounted for more than 95% of the entire Hollywood... You know, the reason is simple, it's the Hays Code..." Jack Valenti continued to introduce the history of the MPAA.

Ronald also came out of his thoughts and nodded in understanding. Although the Hays Code did not have a good reputation, it actually played a positive role in the marketing of Hollywood movies throughout the United States.

At that time, there was no federal film censorship law in America, so each state often rejected or accepted the release of a film based on its own feelings. This was a very troublesome thing for a production base like Hollywood.

Because movies that are unimpeded in some states may be banned in other states, different versions have to be made for different states. Because each state is unhappy for different reasons, this version varies from state to state, causing great trouble for Hollywood and increasing costs.

The Hays Code was equivalent to self-correction by the industry. They passed a set of operational content to set an operating procedure that everyone could accept for various movie plots that might cause dissatisfaction in various states.

For example, kissing scenes stipulated that the male and female protagonists could not kiss on the screen for more than a certain number of seconds. As long as it met the regulations, it could be broadcast. Even if a director like Hitchcock used tricks to have Grace Kelly and Cary Grant kiss intermittently while talking on the phone to circumvent the Hays Code, no action was taken against him.

Because the founder of the Hays Code, William Hays, was the first chairman of the MPAA. He was a politician of the Democratic Party and a devout Catholic. At that time, the moral code of Catholics was more recognized in the United States, and the general audience and the states thought that the movies he approved were fine.

Although many directors were dissatisfied with the code, it allowed them to be shown in all states without any hindrance, and no state court would ban the release of films. This greatly promoted the marketing of Hollywood films, making them popular across the United States.

Therefore, everyone is proud to join the MPAA, as once they join, they can enjoy the profits brought by the unified large market they have developed.

"In 1945, after the war, Eric Johnston, four-time president of the U.S. Chamber of Commerce, was hired to succeed Hayes. Johnston was praised by the studios because he revised the code according to the evolution of the times. As long as it conforms to good taste, even some content that violates the code can be filmed. And the Film Export Association was established to promote the export of Hollywood films.

Unfortunately, Johnston died of a stroke in 1963. Three years later, I was invited to become the new chairman..." Jack Valenti continued.

"That is the Hollywood era we are familiar with. Mr. Chairman, you have recreated the reputation of Hollywood in the world."

Ronald took the opportunity to flatter him. Jack Valenti's three major achievements were: first, he abolished the Hays Code and adopted a rating system, which greatly promoted the enterprising spirit of Hollywood studios.

The second is to continue to explore overseas markets. The first time Ronald met him was in Cannes, England. He negotiated on behalf of Hollywood with the then English Minister of Culture to open European cinemas to Hollywood films.

The third is to establish a piracy supervision bureau to take the initiative to combat piracy across the United States and other parts of the world.

Three major strategies to revive Hollywood movies. The producers are very fond of their chairman.

Valenti waved his hand, but a smile appeared on his face. "Do you know when Disney joined the MPAA?"

"Hey, that's what I was going to ask..." Ronald replied.

"They joined in 1978, when the MPAA expanded to animated films, and Disney also started making live-action films after that. But when they joined, they were only a mini-major studio, not a major studio..." Jack Valenti is going to focus on the difference between major studios and mini-major studios today.

"I don't quite understand, what's the difference here?" Ronald had also heard a lot about the so-called major studios (Major) and mini major studios (Mini Major). He originally thought that they were just common names in the industry, but now it seems that they have different statuses within the MPAA.

"The so-called Hollywood Big Eight were actually divided into five majors and three minors at the beginning..."

Jack Valenti knew about this kind of history, which is rarely mentioned nowadays except by historians and film researchers.

In Hollywood back then, there were actually five largest film studios. In addition to the film studios, they also controlled their own cinemas across the United States.

They are Paramount, Warner Bros., MGM, 20th Century Fox, and RKO Pictures. They are all vertical monopoly giants. They not only have production studios, cinemas, but also distribution theaters.

Columbia, Universal, and United Artists are known as the "Three Smalls". They have not achieved a monopoly on their own cinema chains and own some cinemas but not on a large scale.

Later, the Paramount antitrust case occurred in the film industry, and the vertical monopoly was dismantled. RKO went bankrupt and was replaced by Disney. The five major and three minor cinema chains were no longer distinguished, and everyone was collectively called the eight major film studios.

It was also because there was no drag from these assets that, in an era when the television industry was massively invading the film industry, it was Columbia and Universal, two of the three small companies at the time, that got the opportunity to innovate and became the more profitable companies since the 1980s.

They all gave directors artistic freedom, but kept a tight control on the shooting schedule and budget. United Artists, which gave directors complete shooting freedom, was the first to go bankrupt and was eventually acquired by MGM.

"These are the standards of the old times. Over the years, many film companies have joined the MPAA, such as Avco Embassy in 1975 and Filmways in 1980.
In the mid-to-late 1980s, De Laurentiis Pictures and Orion Pictures were also included. When their production volume increased and they began to shoot large-scale productions, they were absorbed into the MPAA as full members, as mini major studios.

Then Menahan Glenn's Cannon Pictures would have had a chance, if he hadn't gone bankrupt so quickly. These mid-sized studios come and go, and once their ability to make big movies is gone, they are no longer interested in having a seat at the MPAA.

The only companies that remain in the MPAA that are not founders are the familiar TriStar Pictures, Sony Pictures, Miramax, and a few others.”

Ronald understood that this was Valenti's introduction and inquiry to him. If you want to enter the MPAA, you have to shoot a sufficient number of big productions every year. You also need stars to star in them, or you can create stars yourself.

Otherwise, the obligations that the MPAA has to bear will not be worth it for you.

Furthermore, once you enter the MPAA, you are divided into two levels. The major studios naturally have a seat on the board of directors, which gives them voting rights on ratings, and they can influence not only their own films, but also the ratings of other film companies' films.

The second level is the so-called Mini Major. With this status, although you cannot join the board of directors, you have a certain say in the movies that your company sends for rating. Others cannot bully you and blatantly give you a lower rating.

"But, as you said, companies that joined the MPAA at its earliest stages of establishment have board power. If I complete the acquisition of United Artists, I will naturally be able to inherit this seat, right?"

Ronald was not to be outdone. There is actually no clear standard for so-called big companies and mini big companies. As for cinema chains, the theaters on the East Coast and the high-end theaters on the West Coast that are owned and controlled by the company also meet the standards.

Unless, they change the criteria, now only companies that are integrated with media groups can get seats on the board.

However, this new industry revolution is still in progress. Companies like MGM and Sony Columbia have not yet become integrated media groups like Disney, Paramount and Viacom. Is the MPAA going to deprive them of their board seats?

This is obviously impossible, which shows that in the end, Jack Valenti's personal influence can still play a significant role in this matter.

Ronald immediately hinted that he would support Jack Valenti's request and that he could serve as MPAA chairman for as long as he wanted. Others did not know that Ronald was the first to come forward and support him.

"In fact, this is not the first time that United Artists has regained its founding seat in the MPAA..." Jack Valenti laughed with satisfaction. "In 1956, they withdrew from the MPAA due to controversy over ratings, and rejoined ten years later in 66. The founding seat was restored only after several board members at the time voted unanimously."

Ronald understood that the existing board of directors had to vote and all agreed. He counted on his fingers and found that, except for Warner Bros., Ronald had good relationships with the CEOs or chairmen of the other major studios. It seemed that he could still find a way.

Before getting a unanimous vote, United Artists must first resume its seat in the MPAA as a mini-major and become independent from the MGM/United Artists entity.