Chapter 1: Origins of the IATSE Union

  IATSE 161’s past and recent trajectory are deeply intertwined with the history of the workers' fight for rights in the entertainment industry. This section will go into the conditions and emergence of the entertainment industry while also going over the development of the Entertainment Union. Then, the chapter will go into the history of technological developments in the industry. Following this, it will go into the development of the internationalization of the American film industry. Finally, it will go into discussing how this affected workers showing how capital’s expansion came at the entertainment union’s expense.

The U.S. entertainment industry started off as stock companies and wandering troupes of actors.^[1] These stock companies were cooperatives in nature; actors and directors shared in the construction and maintenance of sets as well as tasks like selling tickets. All members of the company shared equally any profits that were generated. Certain stage mechanics became specialists in construction of sets and props in scene shops; other mechanics became specialists in handling pre-fabricated sets on the road.^[2] Originally workers had large amounts of autonomy and decision making ability in the enterprise.

At first, the division between mental [managerial, teacher, artist] and physical labor was blurred as managers and workers took on many of the menial tasks necessary for theater production, in time these divisions of labor became more stratified as technology advanced. The advancement of technology, in the form of recorded sound and film, allowed management to engage in fewer non-performance roles, however working conditions for touring stage mechanics worsened. By 1890, stage mechanics complained about long hours, wage cuts, discriminatory work assignments, reduction of crew size after setups etc. These conditions spurred mechanics to organize. Through a series of meetings, organizing discussions, and covert actions stage workers formed IATSE in 1902 as a national stage mechanics union.^[3] Eventually, this union incorporated all workers working behind the scenes, from office to mechanics, in the 1940s.^[4] This incorporation of newer crafts into the union was a part of the huge labor upsurge when IATSE, and the International Brotherhood of Electrical Workers (IBEW), and other unions unionized the film industry.  Indeed, between 1940 to the 1950s, the union density of the film industry was at 100% but, this union density rapidly declined. The decline of this density correlated to increased exploitation and worsening labor conditions. In 1979, it was around 90%. By 1986, it was 60% and by 1989, 40% due to company erosion.^[5] In the early 20th century the reduction of workers autonomy and increased exploitation of workers led workers to unionize forming IATSE; IATSE along with other unions unionized the entire entertainment business. However, this victory was temporary as businesses steadily eroded the gains made by entertainment unions as the 20th century came to a close.   

The Summary of Technical Changes 1900 to 2010

Between 1900 and 1938, the productivity growth in the entertainment industry surpassed any other manufacturing industry during the same period as technology rapidly increased.^[6] During the 1900 to 1918 period, the motion picture and theatrical industries transformed. Movies became the primary means of entertainment, as theatrical productions  like (Vaudeville, Burlesque and Opera) were sidelined.^[7] In 1900, live performances provided almost all spectator entertainment. In contrast, by 1938 live performances had fallen to less than 3 percent of all performances and 8 percent of all entertainment expenditure. In terms of audience preferences, popular theater was prevalent, as vaudeville and burlesque constituted the majority of live entertainment, with opera constituting perhaps less than 4 percent of all live entertainment provided in 1900.^[8] By 1938, “the only entertainment that remained was high- brow entertainment, heavily subsidized and supported by charities, or high value added, high concept commercial entertainment such as musicals and Broadway plays.”^[9] Entertainment output in 1938 was 27 times the 1900 output. This meant a growth of 8 percent annually, an incredible increase compared to other industries. Clearly showed that there was a high demand for professional entertainment providing a lucrative opportunity for capital to invest new technologies in film and theater.  

The industry reacted to changing consumer demands by further innovating. The existing industry faced decreasing returns to further process innovations. This decrease in returns pushed the motion pictures industry to industrialize live entertainment by automating it, standardizing it, and making it tradable. This change guaranteed audiences were buying what they saw in advertisements. Rather than dealing with the prospect of a ruined performance by understudies, second rank sets, and actors having bad nights, audiences were getting a standard rate performance, regardless of the time they saw the performance.^[10] Films became cheaper and more popular, increasing American consumption. In 1900, Americans consumed 3.4 hours of spectator entertainment per capita per year. By 1938, they consumed 53 hours. By 1938, the film industry and the American public’s consumer patterns had changed: automated film production became the dominant form of popular entertainment as Americans spent more time consuming films.

  As Gerben Bakker argues, the production of drama, feature, and longer films created  a suitable substitute over live entertainment. Before film, entertainment venues depended on visiting troupes; the reliance on visiting troupes made operations unprofitable at certain times of the day, when these troupes were not coming, or when it was too costly for a troupe to arrive at a location for a small audience. The advancement in film scenery and equipment allowed film studios to host film screenings around the clock. This technological advance was a welcome alternative to the use of theater scenery, stage equipment, and lighting, which were time specific. This reduced costs in the long run and increased profits because now there were more showings and less maintenance costs.^[11] Many of the companies that invested into feature films went bankrupt. But the few that survived became the five large and three smaller Hollywood Studios that dominate American film production.^[12] Part of the reason for the dominance of American companies had to do with World War 1, because the destruction caused by the conflict made European companies unable to participate in similar capital investments to their businesses.^[13] Only a small number of film companies were able to take advantage of advancement of film technology; those companies that did benefit from new technologies dominated the film market for decades to come.

How did this change production relations? First there was a concentration in film production in Southern California, where most of the scenery used in film was based around. Recorded sound was discovered, which displaced many of the musicians and entertainers who had complimented the silent films with sound and entertainment, especially those working in the smaller cinemas. This led to massive unemployment among musicians.^[14] Other craft based workers were displaced. However, because the demand for labor also increased, these displaced workers received work in other areas.^[15] Even though advances in technology spurred film production to concentrate in a single geographic area, and displaced a number of craft workers, because the industry also experienced a huge demand for workers, employment numbers increased.

        In 1945, American film production was focused on domestic markets and only used foreign markets to export the little excess capital that it had; this changed immediately after World War II. Eric Johnston, the late president of the Motion Picture Association of America, stated that by 1953"It's a little known fact that 9 out of 10 United States films cannot pay their way in the domestic market alone. It is only because of revenue from abroad that Hollywood is able to turn out pictures of high artistry and technical excellence.”^[16] In only 8 years, the film industry’s outlook rapidly changed from a domestic focused industry, to an aggressive entity eagerly looking to expand into foreign markets. What were the factors that led to this change?

Part of the reason for expansion into foreign markets had to do with the nature of film production itself. In the Motion Picture industry, the process of making a film was far larger than the costs of distributing it. Most of the costs in production occur in the film's first production because of editing scenes, preparing background music, and hiring workers. Once the product is finished, the cost of creating a copy of the same film is minute compared to the first. Therefore, film companies have a strong interest in promoting and selling their films. Extra films create little further investment compared to a car manufacturer that produces an excess amount of cars. This compels the manufacturer and the distributor of film to try to achieve the widest possible circulation of films. As a result, there is a structural tendency within film production to find and export to new markets. For the American Film Industry, this push for foreign markets was not only internal to film production. The film's pivot was also a reaction to factors that were external to the film industry.

In the post war period, there were additional factors external to the process of making films that drove film companies to look internationally to increase profit margins. The mass application of sound production to film increased costs, the World Wars had destroyed the film industry in Europe creating a huge demand for film, and admissions to domestic markets were declining due to the invention of television and other leisure activities. The final reason was the Paramount case of 1948. This factor is perhaps the most important. This Supreme Court case forced the American film industry to restructure by disallowing film companies from owning theaters. Block booking, the system of selling multiple films to a theater as a unit, was banned. This hit profit margins for Hollywood producers who depended on the control of theaters to make a profit on sales. The immediate effect of this decision led film distributors to look elsewhere to market their films. Looking at war ravaged Europe, American producers united into a cartel to collectively take advantage of the Continent.^[17]

The American film producers formed the Motion Pictures Export Association (MPEA) as a cartel, successfully advancing American film interest into the European Continent. The MPEA was formed in 1946. It pushed for reductions in restrictions around American films,  and increased rates towards distributors. In 20 or so years the American film industry gained control of the British and the Italian film industry. The American industry has also deeply penetrated the French and Spanish markets as well. Moreover, European films are often channeled through American distributors. Italy is a good case study of this type of cooperation happening. American companies have done a considerable amount of shooting in Italian studios. American film companies also participated in making Italian films by financing and distributing them.^[18] To gain dominance American films used a strategy of cooptation to gain control of the Western European film industry. At times however American film producers directly clashed with national governments.

A great example of American film clashing with European interests, is when West Germany attempted to pass a law setting importation quotas on American films. The MPEA immediately went to the U.S State Department and urged them to reject this law. The state government had the power to overrule West Germany’s laws because it was still under occupation by the Allied High Commission. MPEA representatives convinced the state department that since "Germany is the focal point in the current battle of ideologies",  it was "illogical to restrict the powerful message that American pictures could carry to the Western Zone" of Germany. MPEA declared that West Germany's desire to protect its industry from Hollywood competition could also hinder the "liberal democratic" message of America's film industry. They also argued that unregulated importation was not going to flood the West German film market as the Germans feared.^[19] This pressure convinced the state department to press the high commission to prohibit any further measures that restricted American films. Shortly after, the state department instructed the high commission that it preferred to see no quota on the importation of American films. By 2019, American films accounted for 69% of the total market share of the European Union whereas European movies held a market share of roughly 26 %.^[20] By successfully stopping West Germany from establishing import quotas, the MPEA was successful in maintaining American film dominance in Western Europe.

Technology and Globalization effects on Workers

How did this affect workers? Globalization created new markets and increased profits. Little of these profits only trickled down to workers. The advances in technology as Michael Nielsen notes these production measures that were to be adopted in order to reduce labor costs not only in the technical process, but also and more nefariously in creating new categories of non unionized workers that could do the same work for a lower price with less people. A similar process of technical change happened in the 1930s to 1950s with the advent of television technology. In the 1990s to 2010s ,this again happened in digital media with the mass adoption of video tapes, discs, cable technology in the motion picture business rather than on 35mm film.^[21]

The advance in technology and the growing monopolization of businesses is a familiar yet complex issue that IATSE faces time and time again. Each technical change had the potential to destroy one category of entertainment and create another one with countless jobs becoming potentially destroyed or created in the span of a decade.  In the 1950s, the  Paramount decision ended the studio system, reducing employment stability. Corporations afterwards terminated permanent staff members, refrained from entering into long term contracts with performers and movie houses. Just as the move to internationalize film production probably led to film production companies moving production to other countries in search of cheaper costs.

What is more, in addition to engaging in attempting to reduce labor costs, film industries successfully pushed for the removal of the Paramount Decrees in airwaves in the 1990s.  This caused greater monopolization of the entertainment industry. The greater monopolization was caused because smaller stations were being bought up by bigger ones resulting in two or three media corporations owning all of the major news networks. After decades of lobbying from the entertainment industry, Congress enacted the Telecommunication Act of 1996. This act deregulated the television, radio, telecommunication and cable industries. This act dramatically altered the competitive landscape of radio. A similar process is happening with the recent removal of the Paramount decree  for film studios under the Trump administration. Immediately after the removal of the Paramount decree, Amazon bought Paramount's global distribution rights and acquired MGM studios in March. HBO Max and Discovery became a single streaming service in the summer of 2023 under the Warner Bros Discovery.^[22] 

 IATSE 161 has had to navigate this very volatile landscape in order to protect and support its members.^[23] The fear among people that AI is going to take their jobs is not a new fear. Due to the film industry's attempts to increase productivity and compete with other businesses and create new markets, there is an economic drive for corporations to monopolize the market, increase tax subsidies, and a tendency to reduce employment. But, IATSE 161 was able to steadily increase its membership, and create contracts that cover new technologies whenever these technologies become standard use in the entertainment industry.