Definition: A business model adopted by five Hollywood studios—Paramount Pictures, Metro Goldwyn Mayer, Warner Brothers Pictures, 20th Century Fox and RKO—that combined all facets of film production with studio-owned distribution chains.
History: The men who founded the studio system—Adolph Zukor, Louis B. Mayer, and the brothers Jack, Harry and Sam Warner—were all Jewish immigrants from Eastern Europe. They came to Hollywood from America’s Northeast where they owned theaters that were or had been venues for vaudeville and burlesque. These theaters primarily catered to urban working people, many of whom were Jewish, Italian and Slavic immigrants or first generation Americans. Their owners had discovered that showing films in their theaters was more profitable than staging live acts. The problem was supply, which is why the moguls-to-be were drawn to Hollywood.
In the years before World War I, America’s leading filmmakers had settled in and around Hollywood. The reasons were literally location, location, location. First, this enclave of Los Angeles was as far away as possible in the United States from the New Jersey home of Thomas Edison. The distance made it impractical if not impossible for the litigious inventor to sue filmmakers for patent infringements. Second, Southern California weather accommodated filming year round. Skies were not only sunny but cloudless, providing the consistent light needed for continuity. Hollywood was even optimal within the Los Angeles basin; being 15 miles inland, it was little affected by marine fog. Finally, the nearby and eclectic terrains—ranches, mountains, forest, desert and seashore—could pass for most locales in the world, particularly in black and white.
The film industry boomed in America during World I. Freedom finally to make the most of filmmaking technology was one reason. As director and producer Francis Ford Coppola theorized, leading writers of the 19th Century envisioned and longed for filmmaking capability. "When the human race got the gift of cinema, they just went mad," he said. No one was more enthusiastic than the industry’s many Jews, whose religion—“Thou shalt not make unto thee any graven image.”—discouraged if not prohibited sculpture and even painting. Meanwhile, Hollywood benefited from the Great War, which put the film industries of England and France on hold. Although German and Russian filmmakers remained active, their offerings never went farther west than the trenches and the Allies naval blockade of Germany. At the end of the war, Hollywood motion pictures were America’s fifth largest industry.
The Making of Classic Hollywood
Zukor’s Paramount Pictures, Mayer’s Metro Goldwyn Mayer, the brothers Warner’s Warner Brothers Pictures and (former Warner Brothers production head) Daryl Zanuck’s 20th Century Fox shaped the studio system. Later in 1928, with the advent of sound, RKO Pictures was founded by David Sarnoff to round out what would become known as “The Big Five.” Studios such as Universal Pictures, Columbia Pictures and United Artists emulated the Big Five’s production practices, but possessed no theater chains of their own and relied on The Big Five for distribution.
For good reason were the studios called “dream factories.” They were organized and run to deliver a steady stream of product to theaters that the studios owned or partly owned. Their product, in a word, was storytelling. Continuity in movement, actors’ positions, dialogue, lighting, sound—in sum, every aspect of the filmmaking process—was imperative. Anything that diverted attention from the story to the filmmaking process was a mistake. The final responsibility for continuity resided with film editors, ergo the term “continuity editing,” aka “Hollywood-style editing,” aka (with the coming of MTV-style editing) “Classic Hollywood editing.”
Hollywood’s studios mainly agreed that movies should be an escape from not a reflection of reality. Though some films were exceptions, exceptions ended in 1934 with enforcement of the Motion Picture Production Code, nicknamed the Hayes Code, which banned morally unacceptable content. Although the Code did not mandate happy endings, it did prohibit any film villain from having one. Sexual contact was limited to kissing, violence was bloodless and sanitized, dialogue was devoid of vulgarities, etc.
Still, escapist storytelling was associated with Hollywood well before the Code. Hollywood films posed a sharp contrast to German cinema, which was part of the Expressionist art movement before, during and after the war. Expressionism portrayed states of mind—e.g., anxiety, madness, suspicion, betrayal—which German films depicted through dialogue, evocative stage sets, unorthodox camera angles, light and shadows, costumes and makeup. The movement reached its pinnacle in the 1920s with directors such as Fritz Lang and Robert Wiene. Another alternative to Hollywood, this one committed to reflecting the real world, was the filmmaking of Russians Sergei Eisenstein, Vsevolod Pudovkin and Dziga Vertov. These artists pioneered the montage, a wide range of editing techniques and shot compositions, to capture bravery, brutality, suffering and heroism of the Russian Revolution. Not surprisingly, Russian filmmakers disparaged Hollywood cinema as bourgeoisie fluff. By the same token, Eisenstein’s seven-minute montage in “Battleship Potemkin,” which depicted the slaughter of protesters by the Czar’s soldiers on the Odessa Steps, would have been DOA under the Hollywood Code. The irony is that techniques invented by the Germans and Russians would later be employed by Hollywood filmmakers such as Orson Wells, Alfred Hitchcock, Stanley Kubrick and Jacques Tourneur, to name a few.
The Dream Factory
Theater company meets the Ford Motor Company—such was production at The Big Five studios by the mid-1930s. Everyone and everything needed to shoot a motion picture was inside a studio’s walls save open terrain for non-urban action scenes—e.g., cowboys on horses, soldiers in combat, rural car chases—and landmarks for establishing shots—e.g., Eiffel Tower, New York skyline, the Golden Gate Bridge. Because sound technology was in its infancy, outdoor scenes with extensive dialogue were usually shot on sound stages.
Pre-production, and particularly the writing and rewriting of the script, enjoyed the most latitude in time. Unlike today, scripts included technical directions for character and camera blocking. Although several novelists—e.g. William Faulkner, F. Scott Fitzgerald, Raymond Chandler—turned to screenwriting, scripted blocking was provided by collaborating studio screenwriters. Directors could modify the script, but their primary responsibility was to get the best performances possible from actors while remaining on schedule and within budget. The system enabled directors to be replaced only a hiccup to schedule or to direct in one year, as did Victor Fleming, such contrasting films as “The Wizard of Oz” (1939) and “Gone With the Wind” (1939). When the studio system ended, screenwriters like Billy Wilder and Joseph Mankiewicz transitioned easily into the director’s chair.
Everyone was under contract—producers, directors, actors, writers, cinematographers, art directors, technicians, etc. The stable of actors consisted of lead actors, supporting actors and central casting extras. All casting was type casting. Lead actors were groomed and promoted by a “star system” more concerned with camera presence than acting chops. “A star is made, created; carefully and cold-bloodedly built up from nothing,” said Louis B. Mayer. “All I ever looked for was a face. If someone looked good to me, I'd have him tested. If a person looked good on film, if he photographed well, we could do the rest.” Star making could include changing the actor’s name; coaching the actor in diction, posture, horseback riding, dancing, singing, fencing, and more; physical enhancement with makeup, hair styling and hair replacement; fitness training and that most Hollywood of fixes, cosmetic surgery.
Stars were expected to do nothing privately to undermine their believability playing idealized protagonists (yes, even Warner Brothers’ gangsters played by Jimmy Cagney and Edward G. Robinson were idealized). Studio PR execs kept an eye out for scandals and covered them up with the cooperation of law enforcement and local press. Nicknamed “Tinsel Town,” Los Angeles operated with the autonomy of a small company town even though its population surpassed 1 million by 1930. Even today, locals call it “town” and its motion picture industry “The Business.”
Studio self sufficiency made production design simpler for producers and art directors, who oversaw in-house artists, carpenters, costume designers and lighting technicians. Many things these employees created were ersatz, but they were ersatz to last. Sets, props and costumes were often used for multiple movies as were studio backlots which commonly included urban, Old West and residential street fronts. Of course, factory efficiency is pointless without consistent high demand for products. For the dream factories, demand came from extensive distribution chains that included Europe, which by the late 1930s accounted almost 40 percent of revenue. This statistic loomed large in Hollywood’s hesitancy to offend Nazi Germany.
The Making of a Monopoly
By 1945, 17% of theaters accounting for 45% of domestic film rentals were owned wholly or largely by The Big Five studios. Theaters not part of a studio system were subject to “block booking,” i.e., the requirement that, to rent a studio’s A-budget films, a theater must purchase a block of films that included B films, shorts, newsreels and cartoons (Disney cartoons, the first offered, were distributed by RKO.) The result was a theater experience that included each kind of film culminating with an A-budget or “feature film.” Block booking was pioneered in 1915 by Adolph Zukor, who packaged the extremely popular Mary Pickford films with other films of Famous Players-Lasky, the studio that would become Paramount Pictures. The Big Five evolved the practice to where theaters were asked to purchase packages of 20 or more films not yet produced based on listings of film titles, their stars and brief plot descriptions. Studio star systems were consequently critical because star power figured prominently in selling packages.
Of course, big stars do not guarantee good cinema. The best films in an unseen package might be the cartoons. Occasionally B films proved more popular than the feature films. So fond was George Lucas of 1930s B action films that he produced the homage Indiana Jones franchise. Still, B movies had no marquee value for theater owners. Nor did studios such as Columbia Pictures and Universal Studios, whose films were distributed by The Big Five, like their A-budget films buried in blocks of cheese. Meanwhile, studio-owned theaters were not required to rent the range of B movies in blocks and could exchange among themselves A-budget movies with big box office draw. Non-studio theaters, on the other hand, were last to receive most box office hits, and non-studio theaters in one-theater towns were last to receive any box office hits. Pearl Harbor was days from being bombed when “The Wizard of Oz” (1939) finally opened in Denison, Iowa. The good news was, Denison’s theater would have never shown “The Wizard of Oz” at all had the theater been owned by a studio—unless the studio was MGM.
The End of the Studio System
The studio system ended in 1948 with the U.S. Supreme Court decision United States v. Paramount, which banned block booking and ordered the studios to divest themselves of all theater holdings. Production at the Big Five studios would try to press on as usual, but the loss of guaranteed revenue streams spelled fadeout for “Classic Hollywood.” Theaters wanted winners. Studios couldn’t afford losers. But losers there were and lost with them was the affordability of contract directors, actors, writers, cinematographers—and eventually one studio, RKO. Accelerating the fadeout was television. Had there been no Supreme Court decision, block booking would have gone extinct competing with television. By 1958, A-budget movies found television stiff competition.
The legacy of the studio system continues to be debated. Critics argue that reliable revenue streams obviated incentive to make good movies. Proponents argue reliable revenue enabled studios to ignore risk occasionally and indulge originality to a degree modern filmmakers cannot.
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