Company Profile of Universal Studios ; Universal Pictures (sometimes called Universal City Studios or Universal Studios for short), a subsidiary of NBCUniversal, is one of the six major movie studios.
Founded in 1912 by Carl Laemmle, it is one of the oldest American movie studios still in continuous production. On May 11, 2004, the controlling stake in the company was sold by Vivendi Universal to General Electric, parent of NBC. The resulting media super-conglomerate was renamed NBC Universal, while Universal Studios Inc. remained the name of the production subsidiary. In addition to owning a sizable film library spanning the earliest decades of cinema to more contemporary works, it also owns a sizable collection of TV shows through its subsidiary NBC Universal Television Distribution. It also acquired rights to several prominent filmmakers' works originally released by other studios through its subsidiaries over the years.
Its production studios are at 100 Universal City Plaza Drive in Universal City, California. Distribution and other corporate offices are in New York City. Universal Pictures is the second-longest-lived Hollywood studio; Viacom-owned Paramount Pictures is the oldest by a month.

Universal Studios, Inc. is active in a variety of entertainment enterprises. Its Universal Studios Group division offers production facilities in Universal City, California, and Orlando, Florida, to independent producers of filmed entertainment and commercial advertising. The company's motion picture distribution operation includes residual video and DVD distribution. Universal also produces syndicated televisions shows and airs its archive of television shows and motion pictures on international and domestic cable networks. Much of Universal's studio facilities are open for public tours and offer attractions and rides based on motion picture and television themes. Movie theme parks are also in operation in Spain and China. Other business activities involve licensing for consumer products, such as apparel with movie and television characters, the chain of Spencer's Gifts stores (located on theme park properties and in shopping malls), online shopping and archives, and interactive electronic games. Universal Music Group, the largest music company in the world, includes over a dozen recording labels and related publishing and technology operations. A wholly owned subsidiary of Seagram Company, Ltd. since 1995, Universal has a rich history dating back to the early days of motion pictures.
Movies and theme parks are the center of Universal Studios' universe. The company's Universal Pictures produces and distributes mainstream movies (Get Him to the Greek), while its Focus Features produces smaller films (The Kids Are All Right). Universal Studios also operates theme parks such as Universal Studios Hollywood through Universal Parks & Resorts (which it co-owns with private equity firm The Blackstone Group). Its Universal Studios Home Entertainment unit handles the marketing and distribution of DVDs from its 4,000-film library. Universal Studios operates as part of NBCUniversal (NBCU), which itself is 51%-owned by cable operator Comcast Corporation. (General Electric owns 49% of of NBCU.)

Universal was founded by Carl Laemmle, a German-Jewish immigrant from Laupheim who settled in Oshkosh, Wisconsin, where he managed a clothing store. On a buying trip in 1905 to Chicago, he was struck by the popularity of nickelodeons. One story has Laemmle watching a box office for hours, counting patrons and calculating the day's take. Within weeks of his Chicago trip, Laemmle gave up dry goods to buy the first of several nickelodeons. For Laemmle and other such entrepreneurs, the creation in 1908 of the Edison-backed Motion Picture Trust meant that exhibitors were expected to pay fees for Trust-produced films they showed. Based on Edison's patent for the electric motor used in cameras and projectors, along with other patents, the Trust collected fees on all aspects of movie production and exhibition, and attempted to enforce a monopoly on distribution. It was believed that the productions were meant to be used for another company but the firm turned Universal down.
Soon Laemmle and other disgruntled nickelodeon owners decided to avoid paying Edison by producing their own pictures. In June 1911, Laemmle started the Yankee Film Company with partners Abe and Julius Stern. That company quickly evolved into the Independent Moving Pictures Company (IMP). Laemmle broke with Edison's custom of refusing to give billing and screen credits to performers. By naming the movie stars, he attracted many of the leading players of the time, contributing to the creation of the star system. In 1910, he promoted Florence Lawrence, formerly known as "The Biograph Girl," and actor King Baggot, in what may be the first instance of a studio using stars in its marketing.
On June 8, 1912, Laemmle merged IMP with eight smaller companies to form the Universal Film Manufacturing Company—the first appearance of the word "universal" in the organization's name. Laemmle, as president, was the primary figure in a partnership that included Mark Dintenfass, Charles Baumann, Adam Kessel, and Pat Powers. Eventually all would be bought out by Laemmle. Baumann and Kessel later partnered with Mack Sennett for their highly successful Keystone Film Company. The new Universal studio was a horizontally integrated company, with movie production and distribution capacity (the company lacked a major circuit of exhibition venues, ownership of which would become a central element of film industry integration in the following decade). The company was incorporated as Universal Pictures Company, Inc. in 1925.
Following the westward trend of the industry, by the end of 1912 the company was focusing its production efforts in the Hollywood area. Its first logo was an Earth with a Saturn-like ring and the text in a bold Kentucky font. In 1963, this logo was revamped with mattes and animated models. In 1990, it was replaced by a filmed 3D model, leading ultimately to today's logo (created in 1997) which uses CGI animation. In 1915, Laemmle opened the world's largest motion picture production facility, Universal City Studios, on a 230-acre (0.9-km²) converted farm just over the Cahuenga Pass from Hollywood. Studio management became the third facet of Universal's operations, with the studio incorporated as a distinct subsidiary organization. Unlike other movie moguls, Laemmle opened his studio to tourists. Universal became the biggest studio in Hollywood, and remained so for a decade. However, it sought an audience mostly in small towns, producing mostly inexpensive melodramas, westerns and serials.
Despite Laemmle's role as an innovator, he was an extremely cautious studio chief. Unlike rivals Adolph Zukor, William Fox, and Marcus Loew, Laemmle chose not to develop a theater chain. He also financed all of his own films, refusing to take on debt. This policy nearly bankrupted the studio when actor-director Erich von Stroheim insisted on excessively lavish production values for his films Foolish Wives and Blind Husbands, but Universal shrewdly got some of its money back by launching a sensational ad campaign that attracted moviegoers. Character actor Lon Chaney became a huge drawing card for Universal in the 1920s, appearing steadily in dramas. His two biggest hits for Universal were The Hunchback of Notre Dame (1923) and The Phantom of the Opera (1925). During this period Laemmle entrusted most of the production policy decisions to Irving Thalberg. Thalberg had been Laemmle's personal secretary, and Laemmle was impressed by Thalberg's cogent observations of how efficiently the studio could be operated. Promoted to studio chief, Thalberg was giving Universal's product a touch of class, something it seldom had during the silent era.
Louis B. Mayer lured Thalberg away from Universal with a promise of better pay. Without his guidance Universal became a second-tier studio, and would remain so for several decades.
In 1926, Universal opened a production unit in Germany, Deutsche Universal-Film AG, under the direction of Joe Pasternak. This unit produced three to four films per year until 1936, migrating to Hungary and then Austria in the face of Hitler's increasing domination of central Europe. With the advent of sound, these productions were made in the German language or, occasionally, Hungarian or Polish. In the U.S., Universal Pictures did not distribute any of this subsidiary's films, but at least some of them were exhibited through other, independent, foreign-language film distributors based in New York, without benefit of English subtitles. Nazi persecution and a change in ownership for the parent Universal Pictures organization resulted in the dissolution of this subsidiary.


Matsushita Electrical Industrial Company of Japan acquired MCA in November 1990. Matsushita was the largest manufacturer of home electronics in the world under the Panasonic brand and had created the VHS format. The new owners did not understand the dynamics of filmmaking, however, as they did not agree with the idea that the $40 million failure of a film like Havana would be compensated through successful films. During Matsushita's ownership, Universal released Jurassic Park, Schindler's List, and We're Back! A Dinosaur's Story. The Amblin productions grossed $548.7 million; 60 percent of Universal's movie revenues derived from three of 18 movies released in 1993.
Conflicts between Matsushita and MCA's executives over strategic expansion hampered the company's tenure of ownership. Moreover, Universal lost its top producer when Spielberg formed a new studio company, DreamWorks SKG. In 1995, Matsushita sold an 80 percent interest in MCA to Seagram Company Ltd. for $5.7 billion. The Seagram board named Frank Biondi as CEO and chairman of MCA, which they renamed Universal Studios, Inc., thus consolidating the various entertainment companies, including the music recording companies, under one name.
Edgar Bronfman, Jr., chairman of Seagram led the company through decisions which the board, Bronfman family members, and many shareholders questioned. That Seagram sold 25 percent of its stake in DuPont to acquire MCA proved to be the first of several controversial decisions. Bronfman acquired Polygram for its profitable music business but was unable to sell the film division in one piece. In September 1997 he merged USA Network with HSN, the parent of the Home Shopping Network. Though Universal still owned 46 percent of USA Network, critics were wary when USA Chairman Barry Diller gained control of a business that generated cash for Seagram. Biondi, hired for his strengths in television, resigned as CEO after 18 months at Universal.
The Universal Studios Networks Division was created in August 1997 for the international marketing of branded televisions channels. USA Network licensed Universal's library for domestic use, while Universal distributed internationally. The division successfully launched "13th Street-The Action Suspense Channel" in France, featuring dubbed versions of such American favorites as Miami Vice, Magnum PI., and similar shows. The station was launched in Spain and Germany in 1998, while some shows aired on USA Network Brazil and USA Network Latin America. Through eight international offices, the division attained program distribution in over 180 countries, including production of local talk shows in England and the Netherlands. Universal eventually integrated Polygram's television division and began productions of domestically syndicated shows, such as Motown Live and Blind Date. A new version of The Woody Woodpecker Show debuted in 1999.
While Bronfman brought a traditional business approach to Hollywood, creativity waned in movie making. Bronfman streamlined management and implemented several cost saving measures, but Universal's market share for movie tickets declined due to lower production, with only 12 films in 1997. Major failures included Fear and Loathing in Las Vegas (1998), which grossed $10 million. Nevertheless, Universal rebounded with the releases of Patch Adams, Notting Hill, and The Mummy, which together had grossed $790 million globally by mid-August 1999, while a joint release with Miramax, Shakespeare in Love, won box office success and seven Academy Awards. The Universal Pictures division lost $200 million despite revenues of $3.38 billion in 1999. The company expressed high hopes for Imagine's late 2000 release of a feature length version of The Grinch Who Stole Christmas, starring Jim Carey.
Universal Studios succeeded in other areas. In 1999 The Mummy garnered over $1 billion in video and Digital Versatile Discs (DVD) sales. Universal sought to expand on this success with the release of its horror classics, such as The Invisible Man (1933) and Alfred Hitchcock classics on DVD. Universal Music Group carried the company with strong profits. In electronic video games the company expected positive returns on the summer 2000 launch of E.T. Interactive.
Universal also sought to improve its profits through theme park expansion. In 1996 Universal City in California introduced Jurassic Park: The Ride, a replication of the theme park in the popular movie. Universal acquired Port Aventura in Spain, and opened The Universal Experience in Beijing. Universal Studios Florida added the Islands of Adventure theme park, featuring five islands of attractions, such as one based on the children's literature of Dr. Seuss and another on popular superheroes. Universal expected its studio theme park under construction in Osaka to open in 2001.
As the company headed toward a new century, some industry analysts speculated that Seagram might try to sell Universal. Though Seagram refused to comment on the rumors, critics suggested that board members at Seagram were pressuring Bronfman to consider a sale, as the Universal film studios continued to lose money. Still others alleged that the fair asking price for a company the size of Universal would be prohibitive, and that perhaps the successful theme park operations might be put on the block separately. Although its future ownership, size, and scope was perhaps uncertain, the Universal name in Hollywood had survived many such changes in parent companies, and if its illustrious history were any indication, it would likely continue as an innovator in one or more of its areas of expertise--film, television, music, theme parks, home video, and consumer products.
Principal Divisions: Universal Music Group; Universal Pictures; Universal Studios Consumer Products Group; Universal Studios Home Video; Universal Studios Recreation Group; Universal Television & Networks Group; Spencer Gifts.
Principal Competitors: EMI Group plc; Sony Music Entertainments, Inc.; Time Warner, Inc.; The Walt Disney Company; Viacom, Inc.



Statistics:
Wholly Owned Subsidiary of Seagram Company, Ltd.
Incorporated: 1912 as Universal Film Manufacturing Company
Employees:14,000
Sales: $7.5 billion (1999)
NAIC: 512120 Motion Picture and Video Distribution; 512220 Integrated Record Production/Distribution; 513210 Cable Networks; 713110 Amusement and Theme Parks; 453220 Gift, Novelty, and Souvenir Stores

Key Dates:

1913: Traffic in Souls, Universal's first feature length film, is produced.
1930: Studio's first Academy Award for Best Picture for All Quiet on the Western Front.
1945: Wartime motion picture production reaches rate at one film per week.
1952: Decca Records acquires Universal.
1962: MCA acquires Decca Records.
1975: String of hit movies topped with release of Jaws.
1982: E.T.-The Extra-Terrestrial grosses $300 million.
1995: Seagram Co. Ltd. acquires majority interest in Universal.


Key People
• President and COO: Ron Meyer
• EVP and CFO: Sean Gamble
• SVP Technical Operations, Universal Operations Group: Michael Daruty

Address:
100 Universal City Plaza
Universal City, California 91608-1002
U.S.A.
 
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