Many Hollywood films became more overtly political in the wake of the 9/11 attacks on the World Trade Center and the Pentagon, but it took Hollywood five years to come to terms with the tragedy itself. Paul Greengrass’s United 93 (2006), which preceded Oliver Stone’s World Trade Center by four months, faithfully and painfully re-creates the events of that dark day, in which the hijacked passengers fought a group of terrorists to bring down their plane over a Pennsylvania field before it could do significant damage elsewhere.

 Despite the emotional subject matter, Greengrass’s direction is a model of restraint, and his use of nonprofessional and unknown actors heightens the realism of the film, which emerges as an effective response to our shared need to understand the motives behind the worst terrorist attack on American soil.

Controversy seems to fuel many films in the post-9/11 era. Michael Moore’s provocative documentary Fahrenheit 9/11 (2004) dissected the Bush administration’s reactions to the attacks and its subsequent conduct of the wars in Afghanistan and Iraq; it became the most profitable documentary of all time. In the same year, actor Mel Gibson used his own money to fund the religious drama The Passion of the Christ, which also generated record returns in the face of apprehensions that the film would spark a rise in anti-Semitism. Actor George Clooney took on the McCarthy era with the technically ambitious Good Night, and Good Luck (2005), which documents the fight of veteran CBS newsman Edward R. Murrow against Senator Joseph McCarthy, a leader of the Cold War anti-Communist witch hunts; the film was an obvious comment on the responsibility of journalists (among others) to speak out against powerful government forces even in an age of fear.

The last thirty-five years of twentieth-century American cinema have given birth to a wide variety of films and filmmakers, with the line between independent films and studio productions often being blurred. In addition, a wave of mergers, corporate takeovers, and buyouts have shaken the industry, starting with Universal’s purchase by the talent agency MCA in 1962, and then moving through Paramount’s takeover by Gulf & Western Industries in 1966. The case histories of several of the major studios during this period exemplify the trend toward hyper-conglomerization, in which the studios became just cogs in a larger wheel of media organizations that controlled vast empires of television, print, and Internet outlets. It was either adapt or perish, and the major companies realized that in changing times they had to ride the new wave of corporate takeovers.

Universal would change hands several times, sold to Japanese electronics giant Matsushita in 1990 and in 1995 to Seagrams, a Canadian liquor distributor. In a head-spinning series of subsequent negotiations, the French media company Vivendi acquired Seagrams in 2000, to become Vivendi Universal. But mounting debt proved too much, and Vivendi sold off Universal’s studio and theme parks to General Electric, the parent company of NBC Broadcasting. Now known as NBC Universal, the studio functions as a production arm for the television network, in addition to making films for theatrical release. Paramount went through an equally turbulent series of corporate identities after its acquisition by Gulf & Western; in 1994 Viacom, owner of the CBS television network, purchased the studio outright. However, Viacom announced in 2005 that it would split into two distinct entities: one for the CBS television and radio networks and another for production of programming, which is now home to Paramount Pictures.

Warner Bros. was purchased by Kinney National Services in 1969 and began concentrating on big-budget co-production deals with major stars of the era, such as Paul Newman, John Wayne, and Clint Eastwood. In the 1980s, Kinney abandoned its other interests, which included a chain of funeral parlors and parking lots, to concentrate solely on film production, and in 1989 merged with Time, Inc., publishers of Time and Sports Illustrated. In 2000, Internet service provider America Online (AOL) took over Time Warner, and the firm was briefly known as AOL Time Warner, but when AOL’s stock took a hit in the dot-com crash, the company became known simply as Time Warner. Rupert Murdoch’s News Corporation now owns Twentieth Century Fox, after a series of equally Byzantine transactions.

Columbia Pictures was purchased by Coca-Cola in 1982 and announced a new slate of family pictures that would include no R or X rated films; the rule was quickly broken when John Badham’s action drama Blue Thunder and John Carpenter’s horror film Christine both appeared with an R rating in 1983. A complex series of negotiations and alliances followed, until the failure of Elaine May’s multimillion-dollar comedy Ishtar (1987) caused Coke to spin off Columbia Pictures as a stand-alone operation. In 1989, Columbia was sold to Sony.

MGM, once the ruling studio in the business, went through a series of humbling takeovers that stripped it of its film library, which went to media mogul Ted Turner; Turner used the collection as the backbone for his Turner Network Television (TNT) cable channel and later Turner Classic Movies (TCM). Turner had actually owned MGM/UA (MGM bought United Artists in 1981) for a brief time in 1985, but less than three months later he sold back the MGM name and United Artists to financier Kirk Kerkorian, while the famed MGM lot itself, home to studios for nearly a century, was sold to Lorimar Television. More heartbreak followed, as the Italian financier Gian-carlo Paretti purchased MGM/UA, minus the film library; eventually ownership of MGM/UA passed to the European banking firm Crédit Lyonnais because of financial problems, and then Crédit Lyonnais decided to sell MGM/UA again, once more to Kerkorian. In 2004, after a typically complex series of transactions, MGM was sold to a consortium of investors headed by Sony, Providence Equity Partners, and the Texas Pacific Group, resulting in a super conglomerate that now combined MGM, UA, and Columbia all under one corporate umbrella.

All this wheeling and dealing is partly due to the immense cost of making motion pictures in the present market, and partly to the current desire to build media conglomerates that control vast empires of broadcasting, print, music, television, and film production, with the necessary means to distribute these products through newly emerging technologies, such as the World Wide Web and cable television. "A” list stars routinely command $20 million or more per picture; two or three "A” list personalities can push the production cost of a film past the $60 million mark before a frame of film has been shot. Directors, too, command hefty salaries, running into the tens of millions of dollars per film, often in addition to "back end points,” a percentage of the film’s profits. The same often holds true for the stars. The studios are no longer the one-stop production centers they once were in the 1940s and 1950s; they now function basically as distribution and funding entities, providing the cash to green-light more commercial films and aggressively seeking to promote "franchise” projects, such as the Superman, X-Men, and Batman films, which seem assured of making continual profits. Studios today in Hollywood are really umbrellas for a variety of smaller production companies, where actors, directors, producers, and writers compete to get their projects funded and distributed to theaters. The system of a stock group of actors, directors, and technicians belonging to any one studio is a thing of the past; today, everyone is a free agent.

The Internet emerged as a viable tool for the promotion and even the production of films with Daniel Myrick and Eduardo Sánchez’s The Blair Witch Project (1999), a micro-budgeted movie that cost $35,000 and ultimately grossed more than $240 million at the box office. David R. Ellis’s campy action thriller Snakes on a Plane (2006) was extensively hyped using the Internet, and some of the dialogue for the film was suggested by e-mail correspondence to the film’s producers. Web downloads of feature films on a legal basis began in early 2006, and DVDs remain a potent market. Today, a film typically gets most of its revenue not from its initial theatrical run, but rather through foreign theatrical playoff, cable television, pay-per-view (also known as "on demand”), and DVDs, which now constitute most of the profit stream for Hollywood films. With the cost of exhibition rising daily, DVDs and Web downloads look increasingly attractive, as consumers become more comfortable with digital technology and on-line purchasing. Disney, for example, now licenses many of its shorts and cartoons for download through Apple’s iTunes, and other studios are sure to follow the trend.

Against this backdrop of hyper-conglomerization, Hollywood also had to compete with another new fundamental technological shift: the advent of digital photography. Briefly put, for the first hundred years of the cinema, all images had been generated on film, edited on film, and reproduced on film for final exhibition. Suddenly, all that changed. In the late 1980s, the Avid editing system was introduced, allowing editors to do away with film altogether and edit movies on a computer with remarkable ease, moving scenes and shots with the flick of a finger rather than the long and laborious process of making physical edits entailed by a standard Moviola editing machine. In 1997, film editor Walter Murch received the Academy Award for his work on Anthony Minghella’s The English Patient (1996), the first Oscar-winning film to be cut entirely on digital equipment. But advances in film editing technology did not stop there; in 2003, Murch edited Minghella’s Cold Mountain (2003) on a standard PowerMac G4 computer, using Apple’s Final Cut Pro software—costing less than $1,000—to create the finished film. Only seven years earlier, it had taken a powerful Avid machine to edit the complex images and sound tracks of a feature film; now, a standard home computer had the power to do the same thing.