[5][6] U.S. studios have benefited from a strong first-mover advantage in that they were the first to industrialize filmmaking and master the art of mass-producing and distributing high-quality films with broad cross-cultural appeal.
[9] The current "Big Five" majors (Universal, Paramount, Warner Bros., Disney, and Sony) all originate from film studios that were active during Hollywood's "Golden Age".
Most of today's Big Five also control subsidiaries with their own distribution networks that concentrate on arthouse pictures (e.g., Universal's Focus Features) or genre films (e.g., Sony's Screen Gems); several other specialty units were shut down or sold off between 2008 and 2010.
The leading independent producers and distributors such as Lionsgate Studios, the aforementioned Metro-Goldwyn-Mayer (now owned by Amazon), A24, and STX Entertainment, are sometimes referred to as "mini-majors".
From 1998 through 2005, during a portion of the Big Six period, DreamWorks SKG commanded a large enough market share to arguably qualify it as a seventh major.
The specialty divisions (such as Disney's Searchlight Pictures and Universal's Focus Features) often acquire distribution rights to films in which the studio has had no prior involvement.
Because of The Jazz Singer's success (along with Lights of New York, The Singing Fool and The Terror), Warner Bros. was able to acquire a much larger studio in Burbank, which it began to use starting in 1928 (and which is famous for its signature water tower).
In the decades that followed, Disney and its associated distributors were able to achieve occasional successes, but its relatively small output and exclusive focus on G-rated films meant that it was not generally considered to be one of the majors.
[62] On October 6, 1927, Warner Bros. released The Jazz Singer, starring Al Jolson, and a whole new era began, with "pictures that talked", bringing the studio to the forefront of the film industry.
[63] Fox, in the forefront of sound film technology along with Warner Bros., was also acquiring a sizable circuit of movie theaters to exhibit its product.
[citation needed] The development of sound films like The Jazz Singer near the end of the Roaring Twenties resulted in a massive rush of Americans to movie theaters to watch the astonishing new "talkies".
[64][65] Of these eight, the so-called Big Five were integrated conglomerates, combining ownership of a production studio, distribution division, and substantial theater chain, and contracting with performers and filmmaking personnel: Loews/MGM, Paramount, Fox (which became 20th Century-Fox after a 1935 merger), Warner Bros., and RKO.
[21] Two—Universal and Columbia (founded in 1924)—were organized similarly to the Big Five, except for the fact that they never owned more than small theater circuits (a consistently reliable source of profits).
[66] The end of the Golden Age had been signaled by the majors' loss of a federal antitrust case that led to the divestiture of the Big Five's theater chains.
The 1950s also saw two substantial shifts in the hierarchy of the majors: RKO, perennially the weakest of the Big Five, declined rapidly under the mismanagement of Howard Hughes, who had purchased a controlling interest in the studio in 1948.
[64] Following MCA Inc.'s acquisition of Decca Records and the aforementioned Universal under Lew Wasserman in 1962, the later half of the 1960s were marked by four others — Paramount, United Artists, Warner Bros., and MGM — involved in a spate of corporate takeovers that left Columbia, Fox, and its eventual parent company Disney under original ownership.
Warner Bros. underwent large-scale reorganization twice in two years: a 1967 merger with the Seven Arts company preceded a 1969 purchase by Kinney National, under Stephen J. Ross.
As the majors focused increasingly on the development of the next hoped-for blockbuster and began routinely opening each new movie in many hundreds of theaters (an approach called "saturation booking"), their collective yearly release average fell to 81 films during 1975–84.
[64] The classic set of majors was shaken further in late 1980, when the disastrously expensive flop of Heaven's Gate effectively ruined United Artists.
[21] Film historian Joel Finler identifies 1986 as the breakthrough year, when Disney rose to third place in market share and remained consistently competitive for a leading position thereafter.
By 1986, the combined share of the six classic majors — Paramount, MGM/UA, Fox, Warner Bros., Columbia and Universal — fell to 64%, the lowest since the beginning of the Golden Age.
Orion (now completely independent of Warner) and Tri-Star were well positioned as mini-majors, each with North American market shares of around 6% and regarded by industry observers as "fully competitive with the majors", much like MGM and Lionsgate by the turn of the century.
The most important contenders to emerge during the 1990s with Viacom's purchase of Paramount Communications in 1994 — New Line Cinema, Miramax, and DreamWorks SKG — were likewise sooner or later brought into the majors' fold.
Shortly after, Matsushita sold MCA (and Universal) to Seagram in 1996, then Vivendi in 2000, and later NBC's parent company General Electric in 2004 to become NBCUniversal.
The development of in-house pseudo-indie subsidiaries by the conglomerates—sparked by the 1992 establishment of Sony Pictures Classics and the success of Pulp Fiction (1994) on home video, significantly undermined the position of the true independents.
Box-office domination was fully restored: in 2006, the then-six (now five) major movie conglomerates combined for 89.8% of the North American market; Lionsgate and Weinstein were almost exactly half as successful as their 1986 mini-major counterparts, sharing 6.1%; MGM came in at 1.8%; and all of the remaining independent companies split a pool totaling 2.3%.
[90][91] The studios were affected by the COVID-19 pandemic with some cinema chains closing, precipitating box office flops (like Disney's Onward or Sony's Bloodshot).
The negotiations were made directly with MGM board chairman Kevin Ulrich whose Anchorage Capital Group is a major shareholder.
[97][98] MGM already began to explore a potential sale of the studio since December 2020, with the COVID-19 pandemic and the domination of streaming platforms due to the closure of movie theaters as contributing factors.
[103] According to The New York Times, the board of directors of Paramount Global formally commenced negotiations with Sony and Apollo over the possible sale of the company.