FilmWorks, Casablanca Record & FilmWorks and PolyGram Pictures

In 1975, Peter Guber quit Columbia Pictures to start out FilmWorks with a producing deal. A year later, during the production of The Deep, it was merged with Casablanca Records to form Casablanca Record & FilmWorks.^[2] The company would enjoy success with The Deep and Midnight Express. The music company PolyGram (owned by Dutch-based Philips and Germany's Siemens) bought out its share of Casablanca Record & FilmWorks in 1977. Two years later, in 1979, Casablanca Record & Filmworks left Columbia Pictures to join Universal Pictures, and gave Casablanca Record & Filmworks creative control over the pictures.^[3] A year later, PolyGram took on its stake of the company and it was renamed to PolyGram Pictures in 1980.^[4] PolyGram reserved the finances and Guber would run as CEO. Guber would form a partnership with Barbra Streisand's hairdresser Jon Peters, who co-produced his client's A Star Is Born remake. Peters would produce PolyGram's films, and eventually become a stockholder with Guber.^[5] He had intended to work with Boardwalk Records, but he was forced to join PolyGram Pictures instead.^[6][3]

The first film under the Universal/PolyGram alliance was King of the Mountain (1981), which was a box-office flop. More money-losers followed. Ancillary markets such as home video and pay television were not yet established, and broadcast television networks were paying less for licenses to films. PolyGram's European investors were not happy; they had lost about $80 million on its film division. Not long after, Siemens parted with Philips. Guber and Peters left PolyGram Pictures in 1982, taking their plans for a new Batman movie with them, along with a few other projects. The duo eventually found a home at Warner Bros. A part of their exit proceedings, PolyGram would still own 7.5% of profits from some of its projects, including the 1989 Batman film.^[5] Also in 1980, PolyGram launched a syndicated television division, PolyGram Television, to be headed by former Columbia Pictures Television syndication executive Norman Horowitz,^[7] both the film and television units eventually closed down by 1983 after a string of first-run syndication strip flops.^[8]

PolyGram Filmed Entertainment

In the early 1980s, PolyGram Video was launched. PolyGram Video, headed by Michael Kuhn and David Hockman, was created to distribute concert films and feature films acquired from third-parties, as well as long-form music videos and stand-up comedy videos from the likes of Roy Chubby Brown, Jethro and Bernard Manning; in 1986, a joint venture with Heron Communications, Channel 5 Video began operation.^[9] Channel 5 Video later began to obtain the rights to titles from Heron's US children's arm, Hi-Tops Video.^[10] Kuhn and Hockman were able to parlay PolyGram Video's success into financing feature films. The first film produced by PolyGram's new film division was P.I. Private Investigations in 1987.^[11] During the late 1980s and early 1990s, PolyGram continued to invest in a diversified film unit with the purchases of individual production companies.^[12] In 1989, PolyGram launched Manifesto Film Sales to handle the licensing of films outside North America.^[13] In 1991, PolyGram's Michael Kuhn became the head of PolyGram Filmed Entertainment,^[12] with US$200 million pumped in with the intention of developing a European film studio that could produce and distribute films internationally on a scale to match the major Hollywood studios.

Following the style of its music business, the company produced films through a number of creatively semi-autonomous 'labels', such as Working Title Films in the United Kingdom and Propaganda Films and Interscope Communications in the United States; it also built up its own network of distribution companies.^[14][15]

Film production within PolyGram differed from traditional Hollywood studios, in that power to make ('green light') a film was not centralised in the hands of a small number of executives, but instead was decided by negotiations between producers, management and marketing. Kuhn claimed that "movies sort of green lit themselves."

In 1993, PolyGram purchased Vision Video Ltd (which was previously the video arm of Virgin Group) from General Electric Capital for $5.6 million.^[16]

PolyGram also built up a sizable film and television library that could be profitable. In 1995, the company purchased ITC Entertainment for $156 million.^[17] Through this purchase, PolyGram acquired 350 feature films, several thousand hours of television programming, and gained further access into the television market.^[12] That same year, PolyGram Filmed Entertainment acquired a 75% majority stake in British home video distributor Abbey Home Entertainment. In 1997, PFE agreed to purchase the Epic film library, which included a thousand feature films from a variety of companies, from Crédit Lyonnais for $225 million.^[18] PolyGram also attempted purchasing MGM^[19] and The Samuel Goldwyn Company's library,^[20] but to no avail. In July 1998, PolyGram was in talks to sell their stake in Abbey Home Entertainment back to Ian and Anne Miles, letting AHE trade independently again. On December 7, 1997, PolyGram and Warner Bros. reached a deal to co-finance films produced by Castle Rock Entertainment.^[21]

PFE's film distribution arm was based in the United Kingdom, and invested heavily in British film making — some credit it with reviving the British film industry in the 1990s. Despite a successful production history, new Philips CEO Cor Boonstra began to draw back Philips' media operations, excepting their stake in PolyGram, in 1997.^[22] At the time, Philips was seen as a bloated conglomerate riddled with problems; Boonstra initially denied that PolyGram would be sold.^[23] However, by early 1998, Boonstra's attitude had shifted and various bidders began to make themselves known, as Philips began to pursue a manufacturing-only business model.^[24] At the same time, PolyGram had been suffering from their own internal issues, chiefly a series of loss-making films and a lack of major pop music hits.^[25] In hindsight, analysts have also pointed to another reason for Boonstra's sale of the assets, namely Philips manufacturing blank CDs, as music piracy subsequently impacted the music industry hugely in the years afterwards.^[26]

Philips ultimately decided to sell PolyGram to the beverage conglomerate Seagram in 1998 (Seagram had chosen PolyGram over EMI because of PolyGram's better management);^[27][28] only interested in PolyGram's music operations, Seagram, which at the time controlled Universal Pictures, looked forward to divesting in PFE. After being dissatisfied with offers to buy the studio (including a joint venture between Canal+ and Artisan Entertainment), Seagram opted to sell off individual assets and folded whatever remained into Universal.^[29] In October 1998, Metro-Goldwyn-Mayer (MGM) paid $235–250 million to acquire 1,300 films released before March 31, 1996, from PolyGram, however, the deal did not include the ITC library or the film The Last Seduction 2, which in 1999, were sold to Carlton Communications (now known as ITV Studios) for $150 million.^[30][31][32] Some of PFE's North American distribution assets, including PolyGram Video's US and Canada operations were sold to USA Networks.^[33] Universal would inherit the remaining titles, which included a third of the pre-April 1996 films, one-third of the post-April 1996 films, as well as PolyGram Television's library, and PolyGram Video's international operations. Universal would then set up their own international arm from the ashes of PFE's international division on February 9, 1999 that included theatrical and video distribution; pulling out of CIC Video and nearly pulling out of United International Pictures.^[34][35] After the box office failure of Mickey Blue Eyes, a title inherited from PolyGram that ended up becoming one of the few titles that were self-distributed by Universal internationally until 2007, all the theatrical assets of Universal Pictures International were folded into United International Pictures, which continued to exist until 2006.^[36]

PolyGram Video took over the distribution of Manga Entertainment's titles in Australia and New Zealand in late 1996 after Siren Entertainment's license to the Manga Video catalog expired, but PolyGram lost the license to the Manga Video catalog in 1998 after Madman Entertainment took over the licenses. This was due to Manga Entertainment being moved from Island Records to Palm Pictures.

Relaunch as PolyGram Entertainment

1970s

1980s

1990s