1. The studies divorcement from theaters caused the majors to focus their strengths on film distribution rather than that of the exhibitors. Also, as a consequence of the Paramount lawsuits the FCC was created, for fear that the majors would seek control over television and thus create a monopoly. As television began to gain momentum, in viewers and programming, the majors began to take notice. With large libraries of old films, the majors began to strike deals with television companies, allowing these old films to be shown on T.V. At this same time, studies began to acknowledge the decline in ticket sales for new releases and therefore the potential of television seemed far greater. The rise of television as a consequence has ensured that Hollywood movies, the product themselves will never end in the red. Also, due to television numerous companies/conglomerates have expanded into all media markets, with Hollywood films as their pyramid base and television as their second tier.
2. "Two Supreme Court decisions upholding the rights of local governments to prevent children being exposed to books or movies considered suitable only for adults" is the main cause of the switch from the Production Code to the Rating System. In order to avoid state legislature against films, the MPA created the ratings system. The rating systems biggest effect was rather than boost artistic freedom and creativity, they constrained it. In order to create a commercially viable product artists most often had to and still have to either add or cut scenes from their films in order to be granted a suitable rating. NC-17 and X equal death whereas PG is always better than G and PG-13 always better than PG and R for that matter. On the flip side, due to these ratings, the majors realized they could easily create products for specific demographics and in doing so the "Hollywood" film of today, aimed at adolescent males, began to take shape.
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Keep in mind X didn't always mean "death." Midnight Cowboy (Oscar winner), Clockwork Orange, and Last Tango In Paris were originally rated X but were successful.
NC-17 came in the 1980s. One reason it failed to remove the stigma of X was that newspapers refused to accept advertising from X or NC-17 films.
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