The U.S. motion picture industry produces much of the world’s feature films and many of its television programs. The industry is dominated by several large studios, based mostly in Hollywood. However, with the increasing popularity and worldwide availability of cable television, video recorders, digital video disks (DVDs), and the Internet, many small and medium-sized independent filmmaking companies have sprung up to fill the growing demand. In addition to producing feature films and filmed television programs, the industry produces made-for-television movies, music videos, and commercials. Establishments engaged primarily in operating motion picture theaters and exhibiting motion pictures or videos at film festivals also are included in this industry. Other establishments provide postproduction services to the motion picture industry, such as editing, film and tape transfers, titling and subtitling, credits, closed captioning, computer-produced graphics, and animation and special effects.

Some motion picture and video companies produce films for limited, or specialized, audiences. Among these films are documentaries, which use film clips and interviews to chronicle actual events with real people, and educational films ranging from “do-it-yourself” projects to exercise films. In addition, the industry produces business, industrial, and government films that promote an organization’s image, provide information on its activities or products, or aid in fundraising or worker training. Some of these films are short enough to release to the public through the Internet; many offer an excellent training ground for beginning filmmakers.

Making a movie can be a difficult, yet rewarding, experience. However, it is also a very risky one. Although thousands of movies are produced each year, only a small number of them account for most box office receipts. Indeed, most films do not make a full return on their investment from domestic box office revenues, so filmmakers rely on profits from other markets, such as broadcast and cable television, videocassette and DVD sales and rentals, and foreign distribution. In fact, major film companies are receiving a growing portion of their revenue from abroad. These cost pressures have reduced the number of film production companies to the current seven major studios producing most of the television programs and movies released nationally. Smaller and independent filmmakers often find it difficult to finance new productions, as large motion picture production companies prefer to support established filmmakers. However, digital technology is lowering production costs for some small-budget films, enabling more independents to succeed in getting their films released nationally.

Although studios and other production companies are responsible for financing, producing, publicizing, and distributing a film or program, the actual making of the film often is done by hundreds of small businesses and independent contractors hired by the studios on an as-needed basis. These companies provide a wide range of services, such as equipment rental, lighting, special effects, set construction, and costume design, as well as much of the creative and technical talent that go into producing a film. The industry also contracts with a large number of workers in other industries that supply support services to the crews while they are filming, such as truck drivers, caterers, electricians, and makeup artists. Many of these workers, particularly in Los Angeles, depend on the motion picture industry for their livelihood.

Most motion pictures are still made on film. However, digital technology and computer-generated imaging are rapidly making inroads and are expected to transform the industry. Making changes to a picture is much easier with digital techniques. Backgrounds can be inserted after the actors perform on a sound stage, or locations can be digitally modified to reflect the script. Even actors can be created digitally. Independent filmmakers will continue to benefit from this technology, as reduced costs improve their ability to compete with the major studios.

Digital technology also makes it possible to distribute movies to theaters through the use of satellites or fiber-optic cable, although relatively few theaters are capable of receiving them in that manner right now. In the future, however, more theaters will be capable of receiving films digitally, and the costly process of producing and distributing bulky films will be sharply reduced.