Media A2 – The Studio Star System

The Studio System

The studio system is an arrangement of film production and distribution dominated by a small number of “major” studios in Hollywood. Although the term is still used today to refer to the organisation and output of the major Hollywood studios, historically the term refers to the practice of large motion picture studios between the 1920s and 1960s of producing movies primarily on their own filmmaking lots with creative personnel under often long-term contract, and which dominated exhibition through vertical integration, i.e., the ownership or effective control of distributors and exhibition, guaranteeing additional sales of films through manipulative booking techniques.

The studio system was challenged under the anti-trust laws in a 1948 Supreme Court ruling which sought to separate production from distribution and exhibition and ended such practices, thereby hastening the end of the studio system. By 1954, with television competing for audience and the last of the operational links between a major production studio and theatre chain broken, the historic era of the studio system came to an end.

The period stretching from the introduction of sound to the court ruling and the beginning of the studio breakups, 1927/29–1948/49, is referred to by some film historians as the Golden Age of Hollywood. (Many modern film historians dispute that this age was so golden in an artistic sense, due to censorship and the mediocrity of many films made by the studio “moguls.”)

During the so-called Golden Age, eight companies constituted the so-called major studios that created the Hollywood studio system. Of these eight, five were fully integrated conglomerates, combining ownership of a production studio, distribution division, and substantial theatre chain, and contracting with performers and filmmaking personnel: Fox Film Corporation (later 20th Century-Fox), Loew’s Incorporated (owner of America’s largest theatre circuit and parent company to Metro-Goldwyn-Mayer), Paramount Pictures, RKO Radio Pictures, and Warner Bros. Two majors—Universal Pictures and Columbia Pictures—were similarly organized, though they never owned more than small theatre circuits. The eighth of the Golden Age majors, United Artists, owned a few theatres and had access to two production facilities owned by members of its controlling partnership group, but it functioned primarily as a backer-distributor, loaning money to independent producers and releasing their films.

Sound and ‘The Big Five’:

The years 1927 and 1928 are generally seen as the beginning of Hollywood’s Golden Age and the final major steps in establishing studio system control of the American film business. The success of 1927’s The Jazz Singer, the first feature-length “talkie” (in fact, the majority of its scenes did not have live-recorded sound) gave a big boost to the then midsized Warner Bros. studio. The following year saw both the general introduction of sound throughout the industry and two more smashes for Warners: The Singing Fool, The Jazz Singer’s even more profitable follow-up, and Hollywood’s first “all-talking” feature, Lights of New York. Just as significant were a number of offscreen developments. Warner Bros., now flush with income, acquired the extensive Stanley theater chain in September 1928. One month later, it purchased a controlling interest in the First National production company, more prominent than Warners itself not long before. With the First National acquisition came not only a 135-acre (0.55 km2) studio and backlot but another large string of movie theaters. Warners had hit the big time.

The last of the “Big Five” Hollywood conglomerates of the Golden Age emerged in 1928: RKO. The Radio Corporation of America (RCA), led by David Sarnoff, was looking for ways to exploit the cinema sound patents, newly trademarked RCA Photophone, owned by its parent company, General Electric. As the leading film production companies were all preparing to sign exclusive agreements with Western Electric for their technology, RCA got into the movie business itself. In January, General Electric acquired a sizable interest in Film Booking Offices of America (FBO), a distributor and small production company owned by Joseph P. Kennedy, father of the future president. In October, through a set of stock transfers, RCA gained control of both FBO and the Keith-Albee-Orpheum theater chain; merging them into a single venture, it created the Radio-Keith-Orpheum Corporation, Sarnoff chairing the board. With RKO and Warner Bros. (soon to become Warner Bros.–First National) joining Fox, Paramount, and Loew’s/MGM as major players, the Big Five that would remain for thirty years were now in place.

Although RKO and Universal were exception, the heads of studios on the west coast, the ‘movie moguls’, had mostly been in place for some years: Louis B. Mayer at MGM, Jack Warner at Warner Bros., Adolph Zukor at Paramount, Darryl F. Zanuck (at 20th Century Fox from 1935), and Harry Cohn at Columbia.

Reign of the majors:

The ranking of the Big Five in terms of profitability (closely related to market share) was largely consistent during the Golden Age: MGM was number one eleven years running, 1931–41. Paramount, the most profitable studio of the early sound era (1928–30), faded for the better part of the subsequent decade, and Fox was number two for most of MGM’s reign. Paramount began a steady climb in 1940, finally edging past MGM two years later; from then until its reorganization in 1949 it was again the most financially successful of the Big Five. With the exception of 1932—when all the companies but MGM lost money, and RKO lost somewhat less than its competitors—RKO was next to last or (usually) last every year of the Golden Age, with Warners generally hanging alongside at the back of the pack. Of the Little Three, United Artists reliably held up the rear, with Columbia strongest in the 1930s and Universal ahead for most of the 1940s.[1]

Hollywood’s success grew during the Great Depression, possibly because films helped audiences escape their personal difficulties. President Franklin Delano Roosevelt said of Shirley Temple, “When the spirit of the people is lower than at any other time, during this Depression, it is a splendid thing that for just fifteen cents an American can go to a movie and look at the smiling face of a baby …” By 1939 there were 15,000 movie theaters in the United States, more than banks; the number of theaters per capita was twice that of the mid-1980s. The cinema industry was larger than that for office machines or supermarkets. While only the 14th largest by revenue, it was second in the percentage of profits that its executives received. Top stars like Bing Crosby and Claudette Colbert were paid more than $400,000 a year ($6,601,914 today).

The end of the system and the death of RKO:

One of the techniques used to support the studio system was block booking, a system of selling multiple films to a theater as a unit. Such a unit—five films was the standard practice for most of the 1940s—typically included only one particularly attractive film, the rest a mix of A-budget pictures of lesser quality and B movies.[4] As Life magazine wrote in 1957 in a retrospective on the studio system, “It wasn’t good entertainment and it wasn’t art, and most of the movies produced had a uniform mediocrity, but they were also uniformly profitable … The million-dollar mediocrity was the very backbone of Hollywood.”[5] On May 4, 1948, in a federal antitrust suit known as the Paramount case brought against the entire Big Five, the U.S. Supreme Court specifically outlawed block booking. Holding that the conglomerates were indeed in violation of antitrust, the justices refrained from making a final decision as to how that fault should be remedied, but the case was sent back to the lower court from which it had come with language that suggested divorcement—the complete separation of exhibition interests from producer-distributor operations—was the answer. The Big Five, though, seemed united in their determination to fight on and drag out legal proceedings for years as they had already proven adept at—after all, the Paramount suit had originally been filed on July 20, 1938.

However, behind the scenes at RKO, long the financially shakiest of the conglomerates, the court ruling came to be looked at as a development that could be used to the studio’s advantage. The same month that the decision was handed down, multimillionaire Howard Hughes acquired a controlling interest in the company. As RKO controlled the fewest theaters of any of the Big Five, Hughes decided that starting a divorcement domino effect could actually help put his studio on a more equal footing with his competitors. Hughes signaled his willingness to the federal government to enter into a consent decree obliging the breakup of his movie business. Under the agreement, Hughes would split his studio into two entities, RKO Pictures Corporation and RKO Theatres Corporation, and commit to selling off his stake in one or the other by a certain date. Hughes’s decision to concede to divorcement terminally undermined the argument by lawyers for the rest of the Big Five that such breakups were unfeasible. While many today point to the May court ruling, it is actually Hughes’s agreement with the federal government—signed November 8, 1948—that was truly the death knell for the Golden Age of Hollywood. Paramount soon capitulated, entering into a similar consent decree the following February. The studio, which had fought against divorcement for so long, became the first of the majors to break up, ahead of schedule, finalizing divestiture on December 31, 1949. By this time, there were 19,000 movie theaters in the United States.[6] The Golden Age was over. Through Hughes’s deal with the federal authorities, and those by the other studios that soon followed, the studio system lingered on for another half-decade. The major studio that adapted to the new circumstances with the most immediate success was the smallest, United Artists; under a new management team that took over in 1951, overhead was cut by terminating its lease arrangement with the Pickford-Fairbanks production facility and new relationships with independent producers, now often involving direct investment, were forged—a business model that Hollywood would increasingly emulate in coming years. The studio system around which the industry had been organized for three decades finally expired in 1954, when Loew’s, the last holdout, severed all operational ties with MGM.

Hughes’s gambit helped break the studio system, but it did little for RKO. His disruptive leadership—coupled with the draining away of audiences to television that was affecting the entire industry—took a toll on the studio that was evident to Hollywood observers. When Hughes sought to bail out of his RKO interest in 1952, he had to turn to a Chicago-based syndicate led by shady dealers without motion picture experience. The deal fell through, so Hughes was back in charge when the RKO theater chain was finally sold off as mandated in 1953. That year, General Tire and Rubber Company, which was expanding its small, decade-old broadcasting division, approached Hughes concerning the availability of RKO’s film library for programming. Hughes acquired near-complete ownership of RKO Pictures in December 1954 and consummated a sale with General Tire for the entire studio the following summer. The new owners quickly made some of their money back by selling the TV rights for the library they treasured to C&C Television Corp., a beverage company subsidiary. (RKO retained the rights for the few TV stations General Tire had brought along.) Under the deal, the films were stripped of their RKO identity before being sent by C&C to local stations; the famous opening logo, with its globe and radio tower, was removed, as were the studio’s other trademarks. Back in Hollywood, RKO’s new owners were encountering little success in the moviemaking business and by 1957 General Tire shut down production and sold the main RKO facilities to Desilu, the production company of Lucille Ball and Desi Arnaz. Just like United Artists, the studio now no longer had a studio; unlike UA, it barely owned its old movies and saw no profit in the making of new ones. In 1959 it abandoned the movie business entirely.

The studio system in Europe and Asia:

While the studio system is largely identified as an American phenomenon, film production companies in other countries did at times achieve and maintain full integration in a manner similar to Hollywood’s Big Five. As historian James Chapman describes,

In Britain, only two companies ever achieved full vertical integration (the Rank Organization and the Associated British Picture Corporation). Other countries where some level of vertical integration occurred were Germany during the 1920s (Universum Film Aktiengesellschaft, or Ufa), France during the 1930s (Gaumont-Franco-Film-Aubert and Pathé-Natan) and Japan (Nikkatsu, Shochiku and Toho). In Hong Kong, Shaw Brothers adopted the studio system for its wuxia films throughout the 1950s-’60s. India, which represents perhaps the only serious rival to the U.S. film industry due to its dominance of both its own and the Asian diasporic markets, has, in contrast, never achieved any degree of vertical integration.

For instance, in 1929 nearly 75 percent of Japanese movie theatres were connected with either Nikkatsu or Shochiku, the two biggest studios at the time.

Star driven system:

In the 1950s Hollywood faced three great challenges: The Paramount case ending the studio system, the new popularity of television, and post-World War II consumer spending providing many other leisure options. The industry lost its captive audience, and United States box-office revenue declined. The scale of both successes and flops grew, with what Life magazine described in 1957 as a “dangerous market” in between consisting of films that in the previous era would have made money. A filmmaker stated that “[t]he one absolute disaster today is to make a million-dollar mediocrity. One of those you can lose not only your total investment but your total shirt.” By that year Hollywood was only making about 300 feature films a year, compared to about 700 during the 1920s.

The powerful movie moguls that had led their studios with unchallenged authority were no longer present by the late 1950s.[5] Darryl F. Zanuck, head of 20th Century Fox, had no direct involvement with the studio from 1956 to 1962, and Louis B. Mayer, sacked in 1951 from MGM, died in 1957. The last old-fashioned studio head was Harry Cohn of Columbia, who was reportedly “aghast” at the changes occurring in Hollywood. Cohn informed investors in the studio’s 1957 annual report,[5] the year before he died, that:

We find ourselves in a highly competitive market for [stars, directors, producers, writers]. Under today’s tax structures, salary to those we are dealing with is less inviting than the opportunity for capital gains. We find ourselves, therefore, dealing with corporations rather than with individuals. We find ourselves, too, forced to deal in terms of a percentage of the film’s profits, rather than in a guaranteed salary as in the past. This is most notable among the top stars.

Financial backers increasingly demanded star actors, directors, and writers for projects to reduce risk of failure. The shortage of such talent increased their salaries, while fewer contract players were available because studios had failed to renew many contracts during the 1950s because of declining domestic revenue. The growing importance of the overseas market—40 to 50% of Hollywood’s total revenue by 1957—also emphasized stars’ names as box-office attractions. With their new power, the once-rare “working for nothing”—receiving a percentage of profit instead of a salary—became a status symbol for stars. A top actor could expect 50% of profit, with a minimum guarantee, or 10% of gross revenue. Cary Grant, for example, received more than $700,000 from his 10% of the gross for To Catch a Thief (1955), while director and producer Alfred Hitchcock received less than $50,000. In one extreme case, Paramount promised Marlon Brando 75% of the profit of what became One-Eyed Jacks (1961). (Because of Hollywood accounting, studios still received much of the revenue before any profit sharing; thus, they preferred 50% of profit to 10% of gross.) The larger paychecks also increased the power of talent agents such as Lew Wasserman of MCA, whose office was now nicknamed “Fort Knox”.

By 1957, independent producers like Hal Wallis made 50% of full-length American films. Beyond working for others, top actors such as Brando, Gregory Peck, and Frank Sinatra created their own production companies and purchased scripts. Top independent directors like George Stevens, Billy Wilder, and William Wyler also saw their paychecks increase, to about $250,000 to $300,000 by 1957, in part because their involvement attracted star actors. Studios increasingly provided funding and facilities to independent producers as opposed to making their own films. Hollywood had once viewed television as its enemy, but TV production companies like Desilu and the film studios’ own TV divisions helped save the industry by using otherwise-unused facilities, and executives expected that television would eventually become more profitable than film. While some studios like Paramount had long worked with outsiders, former leader MGM adapted to the new business climate slowly and experts believed that its survival was uncertain. A possible model for the industry was United Artists, which focused entirely on financing and distributing independent productions.

Syndication, television, recession, and conglomerate Hollywood:

At the beginning of the 1960s the major studios began to reissue older films for syndication and transformed into mainly producing telefilms and b-movies to supply TV’s demand for programming. Between 1969 to 1971 the industry underwent a severe recession, due in part to big-budget flops, but soon recovered artistically with such films as The Godfather (1972) and Chinatown (1974).

The onset of George Lucas’s Star Wars (1977) became the prototype for the modern blockbuster. The release of films at hundreds of venues became the norm with hits such as the sequels to Lucas’s Star Wars, The Empire Strikes Back and Return of the Jedi, Spielberg’s back-to-back successes with Raiders of the Lost Ark and E.T. The Extra Terrestrial, and the development of home-video and cable television. Meanwhile, the uncontrolled budget of Heaven’s Gate (1980), and its limited box-office revenue, led to the sale of United Artists.

From 1990 to 1995, New Hollywood turned into more of a conglomerate Hollywood and quickly dominating the global entertainment industry. As of 2007, five of the Golden Age majors continue to exist as major Hollywood studio entities, each as part of a larger media conglomerate: Columbia (owned by Sony), 20th Century Fox (owned by News Corporation), Warner Bros. (owned by Time Warner), Paramount (owned by Viacom), and Universal (owned by Comcast/NBC Universal). In addition, The Walt Disney Company’s Buena Vista Motion Pictures Group has emerged as a major, resulting in a “Big Six.” With the exception of Disney, all of these so-called major studios are essentially based on the model not of the classic Big Five, but of the old United Artists: that is, they are primarily backer-distributors (and physical studio leasers) rather than actual production companies.

Sony, in addition to ownership of Columbia, also has effective control of the relatively small latter-day incarnation of MGM and its subsidiary UA; under the Sony umbrella, MGM/UA operates as a “mini-major,” nominally independent of but closely associated with Columbia. In 1996, Time Warner acquired the once-independent New Line Cinema via its purchase of Turner Broadcasting System. In 2008, New Line was merged into Warner Bros., where it continues to exist as a subsidiary. Each of today’s Big Six controls quasi-independent “arthouse” divisions, such as Paramount Vantage and Disney’s Miramax Films (which originally was an independent studio). Most also have divisions that focus on genre movies, B movies either literally by virtue of their low budgets, or spiritually—for instance, Sony’s Screen Gems and Buena Vista’s Hollywood Pictures brand. One so-called indie division, Universal’s Focus Features, releases arthouse films under that primary brand. Both Focus and Fox’s arthouse division, Fox Searchlight, are large enough to qualify as mini-majors. Two large independent firms also qualify as mini-majors, Lionsgate and The Weinstein Company. They stand somewhere between latter-day versions of the old “major-minor”—like Columbia and Universal in the 1930s and 1940s, except Lionsgate and The W.C. have about half their market share—and leading Golden Age independent production outfits like Samuel Goldwyn Inc. and the companies of David O. Selznick

Media A2 – The Golden Age

The Golden Age

Between late 1928, when RCA’s David Sarnoff engineered the creation of the RKO (Radio-Keith-Orpheum) studio, and the end of 1949, when Paramount divested its theater chain—roughly the period considered Hollywood’s Golden Age—there were eight Hollywood studios commonly regarded as the “majors”. Of these eight, the so-called Big Five were integrated conglomerates, combining ownership of a production studio, distribution division, and substantial theater chain, and contracting with performers and filmmaking personnel: Loew’s/MGM, Paramount, Fox (which became 20th Century-Fox after a 1935 merger), Warner Bros., and RKO. The remaining majors were sometimes referred to as the “Little Three” or “major minor” studios. Two – Universal and Columbia (founded in 1924)—were organized similarly to the Big Five, except for the fact that they never owned more than small theater circuits (a consistently reliable source of profits). The third of the lesser majors, United Artists (founded in 1919), owned a few theaters and had access to production facilities owned by its principals, but it functioned primarily as a backer-distributor, loaning money to independent producers and releasing their films. During the 1930s, the eight majors averaged a total of 358 feature film releases a year; in the 1940s, the four largest companies shifted more of their resources toward high-budget productions and away from B movies, bringing the yearly average down to 288 for the decade.

Among the significant characteristics of the Golden Age was the stability of the Hollywood majors, their hierarchy, and their near-complete domination of the box office. At the midpoint of the Golden Age, 1939, the Big Five had market shares ranging from 22% (MGM) to 9% (RKO); each of the Little Three had around a 7% share. In sum, the eight majors controlled 95% of the market and all the smaller companies combined had a total of 5%. Ten years later, the picture was largely the same: the Big Five had market shares ranging from 22% (MGM) to 9% (RKO); the Little Three had shares ranging from 8% (Columbia) to 4% (United Artists). In sum, the eight majors controlled 96% of the market and all the smaller companies combined had a total of 4%.

1950s–1960s

The end of the Golden Age had been signaled by the majors’ loss of a federal antitrust case that led to the divestiture of the Big Five’s theater chains. Though this had virtually no immediate effect on the eight majors’ box-office domination, it somewhat leveled the playing field between the Big Five and the Little Three. In November 1951, Decca Records purchased 28% of Universal; early the following year, the studio became the first of the classic Hollywood majors to be taken over by an outside corporation, as Decca acquired majority ownership. The 1950s saw two substantial shifts in the hierarchy of the majors: RKO, perennially the weakest of the Big Five, declined rapidly under the mismanagement of Howard Hughes, who had purchased a controlling interest in the studio in 1948. By the time Hughes sold it to the General Tire and Rubber Company in 1955, the studio was a major by outdated reputation alone. In 1957, virtually all RKO movie operations ceased and the studio was dissolved in 1959. (Revived on a small scale in 1981, it was eventually spun off and now operates as a minor independent company.) In contrast, there was United Artists, which had long operated under the financing-distribution model the other majors were now progressively shifting toward. Under Arthur Krim and Robert Benjamin, who began managing the company in 1951, UA became consistently profitable. By 1956—when it released one of the biggest blockbusters of the decade, Around the World in 80 Days—it commanded a 10% market share. By the middle of the next decade, it had reached 16% and was the second-most profitable studio in Hollywood. Despite RKO’s collapse, the majors still averaged a total yearly release slate of 253 feature films during the decade.

The 1960s were marked by a spate of corporate takeovers. MCA, under Lew Wasserman, acquired Universal in 1962; Gulf+Western took over Paramount in 1966; and the Transamerica Corporation purchased United Artists in 1967. Warner Bros. underwent large-scale reorganization twice in two years: a 1967 merger with the Seven Arts company preceded a 1969 purchase by Kinney National, under Stephen J. Ross. MGM, in the process of a slow decline, changed ownership twice in the same span as well, winding up in the hands of financier Kirk Kerkorian. The majors almost entirely abandoned low-budget production during this era, bringing the annual average of features released down to 160. The decade also saw an old name in the industry secure a position as a leading player. In 1923, Walt Disney had founded the Disney Brothers Cartoon Studio with his brother Roy and animator Ub Iwerks. Over the following three decades Disney became a powerful independent focusing on animation and, from the late 1940s, an increasing number of live-action movies. In 1954, the company—now Walt Disney Productions—established Buena Vista Film Distribution to handle its own product, which had been distributed for years by various majors, primarily United Artists and then RKO. (Disney’s 1937 Snow White and the Seven Dwarfs, released by RKO, was the second biggest hit of the 1930s.) In its first year, Buena Vista had a major success with 20,000 Leagues Under the Sea, the third biggest movie of 1954. In 1964, Buena Vista had its first blockbuster, Mary Poppins, Hollywood’s biggest hit in half a decade. The company achieved a 9% market share that year, more than Fox and Warner Bros. Though over the next two decades, Disney/Buena Vista’s share of the box-office would again hit similar marks, its relatively small output and exclusive focus on family movies meant that it was not generally considered a major.

1970s–1980s

The early 1970s were difficult years for all the majors. Movie attendance, which had been declining steadily since the Golden Age, hit an all-time low in 1971. In 1973, MGM president James T. Aubrey Jr. drastically downsized the studio, slashing its production schedule and eliminating its distribution arm (UA would distribute the studio’s films for the remainder of the decade). From fifteen releases in 1973, the next year MGM was down to five; its average for the rest of the 1970s would be even lower. Like RKO in its last days under Hughes, MGM remained a major in terms of brand reputation, but little more. MGM, however, was not the only studio to trim its release line. By the mid-1970s, the industry had rebounded and a significant philosophical shift was in progress. As the majors focused increasingly on the development of the next hoped-for blockbuster and began routinely opening each new movie in many hundreds of theaters (an approach called “saturation booking”), their collective yearly release average fell to 81 films during 1975–84. The classic set of majors was shaken further in late 1980, when the disastrously expensive flop of Heaven’s Gate effectively ruined United Artists. The studio was sold the following year to Kerkorian, who merged it with MGM. After a brief resurgence, the combined studio again declined. From the mid-1980s on, MGM/UA has been at best a “mini-major”, to use the present-day term.

Meanwhile, a new member was finally admitted to the club of major studios and two significant contenders emerged. With the establishment of its Touchstone Pictures brand and increasing attention to the adult market in the mid-1980s, Disney/Buena Vista secured acknowledgment as a full-fledged major. Film historian Joel Finler identifies 1986 as the breakthrough year, when Disney rose to third place in market share and remained consistently competitive for a leading position thereafter. The two contenders were both newly formed companies. In 1978, Krim, Benjamin, and three other studio executives departed UA to found Orion Pictures as a joint venture with Warner Bros. It was announced optimistically as the “first major new film company in 50 years”. Tri-Star Pictures was created in 1982 as a joint venture of Columbia Pictures (then owned by the Coca-Cola Company), HBO (then owned by Time Inc.), and CBS. In 1985, Rupert Murdoch’s News Corporation acquired 20th Century-Fox, the last of the five relatively healthy Golden Age majors to remain independent throughout the entire Golden Age and after.

In 1986, the combined share of the six classic majors—at that point Paramount, Warner Bros., Columbia, Universal, Fox, and MGM/UA—fell to 64%, the lowest since the beginning of the Golden Age. Disney was in third place, behind only Paramount and Warners. Even including it as a seventh major and adding its 10% share, the majors’ control of the North American market was at a historic ebb. Orion, now completely independent of Warner Bros., and Tri-Star were well positioned as mini-majors, each with North American market shares of around 6% and regarded by industry observers as “fully competitive with the majors”. Smaller independents garnered 13%—more than any studio aside from Paramount. In 1964, by comparison, all of the companies beside the then seven majors and Disney had combined for a grand total of 1%. In the first edition of Finler’s The Hollywood Story (1988), he wrote, “It will be interesting to see whether the old-established studios will be able to bounce back in the future, as they have done so many times before, or whether the newest developments really do reflect a fundamental change in the US movie industry for the first times since the 20s.”

1990s–present

With the exception of MGM/UA—whose position was effectively filled by Disney—the old-established studios did bounce back. The purchase of Fox by Murdoch’s News Corp. presaged a new round of corporate acquisitions. Between 1989 and 1994, Paramount, Warners, Columbia, and Universal all changed ownership in a series of conglomerate purchases and mergers that brought them new financial and marketing muscle. Paramount’s parent company Gulf+Western was renamed Paramount Communications in 1989 and was merged with Viacom five years later. Warners merged with Time Inc. to give birth to the conglomerate Time Warner. Coke sold Columbia to Japanese electronics firm Sony also in 1989. And Universal’s parent MCA was purchased by Matsushita. By the early 1990s, both Tri-Star and Orion were essentially out of business: the former consolidated into Columbia, the latter bankrupt and sold to MGM. The most important contenders to emerge during the 1990s, New Line, the Weinsteins’ Miramax, and DreamWorks SKG, were likewise sooner or later brought into the majors’ fold, though DreamWorks and the Weinstein brothers are now independent again.

The development of in-house pseudo-indie subsidiaries by the conglomerates—sparked by the 1992 establishment of Sony Pictures Classics and the success of Pulp Fiction (1994), Miramax’s first project under Disney ownership—significantly undermined the position of the true independents. The majors’ release schedule rebounded: the six primary studio subsidiaries alone put out a total of 124 films during 2006; the three largest secondary subsidiaries (New Line, Fox Searchlight, and Focus Features) accounted for another 30. Box-office domination was fully restored: in 2006, the six major movie conglomerates combined for 89.8% of the North American market; Lionsgate and Weinstein were almost exactly half as successful as their 1986 mini-major counterparts, sharing 6.1%; MGM came in at 1.8%; and all of the remaining independent companies split a pool totaling 2.3%.

Only one of the major studios changed corporate hands during the first decade of the 2000s, though it did so three times: Universal was acquired by Vivendi in 2000, then by General Electric four years later, and finally by Comcast in 2011. More developments took place among the majors’ subsidiaries. The very successful animation production house Pixar, whose films were distributed by Buena Vista, was acquired by Disney in 2006. In 2008, New Line Cinema lost its independent status within Time Warner and became a subsidiary of Warner Bros. Time Warner also announced that it would be shutting down its two specialty units, Warner Independent and Picturehouse. In 2008 as well, Paramount Vantage’s production, marketing, and distribution departments were folded into the parent studio, though it retained the brand for release purposes. Universal sold off its genre specialty division, Rogue Pictures, to Relativity Media in 2009. Disney closed down Miramax’s operations in January 2010, and sold off the unit and its library that July to an investor group led by Ronald N. Tutor of the Tutor Perini construction firm and Tom Barrack of the Colony Capital private equity firm.

The eight Golden Age majors

The eight major film studios of the Golden Age have gone through the following significant ownership changes (“independent” meaning customarily identified as the primary commercial entity in its corporate structure; “purchased” meaning acquired anything from majority to total ownership):

Columbia Pictures

• independent as CBC Film Sales, 1918–1924 (founded by Harry Cohn, Joe Brandt, and Jack Cohn)
• independent, 1924–1982 (company changes name as Columbia Pictures Corporation; goes public in 1926; changes name in 1968 to Columbia Pictures Industries after merging with TV subsidiary Screen Gems)
• Coca-Cola, 1982–1987 (purchased by Coca-Cola; Tri-Star Pictures, a joint venture with HBO and CBS initiated in 1982—CBS drops out in 1985)
• independent as Columbia Pictures Entertainment (or Columbia/Tri-Star), 1987–1989 (divested by Coca-Cola; also in 1987, HBO drops out of Tri-Star, which merges with Columbia)
• Sony, 1989–present (purchased by Sony)

20th Century-Fox

• Independent, 1935–1985 (founded by Joseph Schenck and Darryl F. Zanuck; fully purchased by Marc Rich and Marvin Davis in 1981; Rich’s interest purchased by Davis in 1984; half of Davis’s interest purchased by Rupert Murdoch‘s News Corporation in March 1985)
• News Corporation, 1985–2013 (purchases the remainder of Davis’s shares in September)
• 21st Century Fox, 2013-present (renamed conglomerate on Jun 28, 2013)

 

 

 

Warner Bros.

• independent, 1923–1929 (founded by Jack Warner, Harry Warner, Albert Warner, and Sam Warner; Sam Warner dies in 1927)
• Independent as Warner Bros.–First National, 1929–1967 (acquires First National Pictures; syndicate led by Jack Warner, Serge Semenenko of First National Bank of Boston, and Charles Allen Jr. purchases controlling interest in 1956)
• Warner Bros.–Seven Arts, 1967–1969 (purchased by and merged with Seven Arts Productions)
• Kinney National Company, 1969–1972 (Kinney purchases Warner Bros.–Seven Arts)
• Warner Communications, 1972–1989 (Kinney spins off non-entertainment assets and changes name)
• Time Warner, 1989–present (Warner merges with Time Inc.; from 2000 to 2003, the parent company was known as AOL Time Warner, following merger with AOL)

Paramount Pictures

• Independent as Famous Players–Lasky, 1916–1921 (founded by Adolph Zukor and Jesse L. Lasky)
• Independent, 1922–1966 (company adopts distribution division’s name)
• Gulf+Western Industries, 1966–1989 (purchased by Gulf+Western)
• Paramount Communications, 1989–1994 (Gulf+Western changes name after selling non-entertainment assets)
• Viacom, 1994–2005 (Viacom purchases Paramount)
• Viacom, 2006–present (Viacom splits into two companies: “new” Viacom—with Paramount Pictures, MTV, BET, and other cable channels—and CBS Corporation—which includes CBS Television Studios; both companies are controlled by National Amusements)

Universal Pictures

• Independent, 1912–1946 (founded by Carl Laemmle, Pat Powers, Adam Kessel, Charles Baumann, Mark Dintenfass, William Swanson, David Horsley, and Jules Brulatour)
• independent as Universal-International, 1946–1952 (merges with International Pictures)
• Decca, 1952–1962 (purchased by Decca)
• MCA Inc., 1962–1990 (MCA purchases Decca)
• Matsushita Electric, 1990–1995 (Matsushita purchases MCA)
• Seagram, 1995–2000 (purchased by Seagram from Matsushita)
• Vivendi, 2000–2004 (Vivendi purchases Seagram)
• General Electric/Vivendi, 2004–2011 (jointly owned by GE (80%) and Vivendi, S.A. (20%) and merged with NBC to form NBC Universal)
• Comcast/General Electric, 2011–2013 (Comcast purchases 51% of redubbed NBCUniversal)
• Comcast, 2013-present (Comcast bought the remaining 49% from GE)

 

 

 

Metro-Goldwyn-Mayer

• Loew’s Incorporated, 1924–1959 (founded by Marcus Loew; controlling interest in Loew’s purchased by William Fox in 1929; Fox forced to sell off interest in 1930; operational control ceded by Loew’s to studio management in 1954)
• independent, 1959–1981 (fully divested by Loew’s; purchased by Edgar Bronfman Sr. in 1967; purchased by Kirk Kerkorian in 1969)
• independent as MGM/UA, 1981–1990 (United Artists purchased by Kerkorian and merged into MGM; purchased by Ted Turner in 1986; repurchased by Kerkorian seventy-four days later; purchased by Giancarlo Parretti in 1990)
• Crédit Lyonnais, 1992–1997 (foreclosed upon by bank after Parretti defaulted)
• Tracinda Corporation, 1997–2005 (repurchased by Kerkorian)
• MGM Holdings
• Sony/Comcast/4 private equity firms, 2005–2010 (purchased by Sony, Comcast, and private investment firms—Providence Equity Partners, in fact, currently owns the greatest number of shares—and privately held as a minor media company independent of Sony/Columbia)
• Credit Suisse, JPMorgan Chase, other former bondholders (2011-present) including Carl Icahn (2011-2012)

United Artists (merged into MGM)

• independent, 1919–1967 (founded by Charles Chaplin, Douglas Fairbanks, D. W. Griffith, and Mary Pickford; operational control by Arthur Krim and Robert Benjamin from 1951; fully purchased by Krim and Benjamin in 1956)
• Transamerica, 1967–1981 (purchased by Transamerica)
• MGM/UA, 1981–1992 (purchased by Kirk Kerkorian from Transamerica and merged into MGM; see above for further detail)

RKO Radio Pictures (defunct 1960–80, dormant 1993–97)

• RCA, 1928–1935 (founded by David Sarnoff)
• independent, 1935–1955 (half of RCA’s interest purchased by Floyd Odlum, control split between RCA, Odlum, and Rockefeller brothers; controlling interest purchased by Odlum in 1942; controlling interest purchased by Howard Hughes in 1948; Hughes interest purchased by Stolkin-Koolish-Ryan-Burke-Corwin syndicate in 1952; interest repurchased by Hughes in 1953; fully purchased by Hughes in 1954)
• General Tire and Rubber, 1955–1984 (purchased by General Tire and Rubber—coupled with General Tire’s broadcasting operation as RKO Teleradio Pictures; production and distribution halted in 1957; movie business dissolved in 1959 and RKO Teleradio renamed RKO General; RKO General establishes RKO Pictures as production subsidiary in 1981)
• GenCorp, 1984–1987 (reorganization creates holding company with RKO General and General Tire as primary subsidiaries)
• Wesray Capital Corporation, 1987–1989 (spun off from RKO General, purchased by Wesray—controlled by William E. Simon and Ray Chambers—and merged with amusement park operations to form RKO/Six Flags Entertainment)
• independent, 1989–present (split off from Six Flags, purchased by Dina Merrill and Ted Hartley, and merged with Pavilion Communications; no films produced or distributed from 1993 through 1997)

Other significant, formerly independent entities

• Artisan Entertainment: Purchased in 2003 by Lions Gate Entertainment
• The Samuel Goldwyn Company: Purchased in 1996 by John Kluge/Metromedia International; purchased in 1997 by MGM
• Pixar: Purchased in 1986 by Steve Jobs; purchased in 2006 by the Walt Disney Company
• Turner Pictures: Purchased along with Turner Broadcasting System, Hanna-Barbera, Castle Rock Entertainment, New Line Cinema and Turner Entertainment in 1996 by Time Warner

 

 

 

Media A2 – Classical Hollywood Cinema

Classical Hollywood Cinema

Classical Hollywood cinema or the classical Hollywood narrative, are terms used in film history which designate both a visual and sound style for making motion pictures and a mode of production used in the American film industry between 1927 and 1963. This period is often referred to as the “golden age of Hollywood.” An identifiable cinematic form emerged during this period called classical Hollywood style.

Classical style is fundamentally built on the principle of continuity editing or “invisible” style. That is, the camera and the sound recording should never call attention to themselves (as they might in films from earlier periods, other countries or in a modernist or postmodernist work).

The Golden Age:

During the golden age of Hollywood, which lasted from the end of the silent era in American cinema in the late 1920s to the early 1960s, films were prolifically issued by the Hollywood studios.

The start of the golden age was arguably when The Jazz Singer was released in 1927 and increased box-office profits for films as sound was introduced to feature films. Most Hollywood pictures adhered closely to a genre—Western, slapstick comedy, musical, animated cartoon, biopic (biographical picture)—and the same creative teams often worked on films made by the same studio. For instance, Cedric Gibbons and Herbert Stothart always worked on MGM films, Alfred Newman worked at Twentieth Century Fox for twenty years, Cecil B. DeMille’s films were almost all made at Paramount, director Henry King’s films were mostly made for Twentieth-Century Fox, etc.

After The Jazz Singer was released in 1927, Warner Brothers gained huge success and was able to acquire its own string of movie theatres, after purchasing Stanley Theatres and First National Productions in 1928; MGM had also owned a string of theatres since forming in 1924, known as Loews Theatres, and the Fox film Corporation owned the Fox Theatre strings as well. Also, RKO, another company that owned theatres, had formed in 1928 from a merger between Keith-Orpheum Theaters and the Radio Corporation of America.

RKO formed in response to the monopoly Western Electric’s ERPI had over sound in films as well, and began to use sound in films through their own method known as Photophone. Paramount, who already acquired Balaban and Katz in 1926, would answer to the success of Warner Bros. and RKO, and buy a number of theaters in the late 1920s as well, before making their final purchase in 1929, through acquiring all the individual theaters belonging to the Cooperative Box Office, located in Detroit, and dominate the Detroit theaters.

Film making was still a business, however, and motion picture companies made money by operating under the studio system. The major studios kept thousands of people on salary—actors, producers, directors, writers, stunt men, craftspersons and technicians. And they owned hundreds of theaters in cities and towns across America, theaters that showed their films and that were always in need of fresh material. In 1930, MPDDA President Will Hays also founded the Hays (Production) Code, which followed censorship guidelines and went into effect after government threats of censorship expanded by 1930. However the code was never enforced until 1934, after the new Catholic Church organization The Legion of Decency—appalled by Mae West’s very successful sexual appearances in She Done Him Wrong and I’m No Angel —threatened a boycott of motion pictures if it did not go into effect, and those that didn’t obtain a seal of approval from the Production Code Administration had to pay a $25,000 fine and could not profit in the theaters, as the MPDDA owned every theater in the country through the Big Five studios.

Throughout the early 1930s, risque films and salacious advertising, became widespread in the short period known as Pre-Code Hollywood. MGM dominated the industry and had the top stars in Hollywood, and was also credited for creating the Hollywood star system altogether. MGM stars included at various times “King of Hollywood” Clark Gable, Joan Fontaine, Norma Shearer, Greta Garbo, Joan Crawford, Jean Harlow, William Powell & Myrna Loy, Gary Cooper, Mary Pickford, Henry Fonda, Marilyn Monroe, Elizabeth Taylor, Judy Garland, Ava Gardner, James Stewart, Doris Day. Frank Sinatra, Katharine Hepburn, Spencer Tracy, Vivien Leigh, Grace Kelly, Gene Kelly, Gloria Stuart, Fred Astaire, Ginger Rogers, John Wayne, Barbara Stanwyck, John Barrymore, Audrey Hepburn and Buster Keaton. Another great achievement of American cinema during this era came through Walt Disney’s animation. In 1937, Disney created the most successful film of its time, Snow White and the Seven Dwarfs.

Many film historians have remarked upon the many great works of cinema that emerged from this period of highly regimented film-making. One reason this was possible is that, with so many films being made, not every one had to be a big hit. A studio could gamble on a medium-budget feature with a good script and relatively unknown actors: Citizen Kane, directed by Orson Welles and often regarded as the greatest film of all time, fits that description. In other cases, strong-willed directors like Howard Hawks, Alfred Hitchcock and Frank Capra battled the studios in order to achieve their artistic visions. The apogee of the studio system may have been the year 1939, which saw the release of such classics as The Wizard of Oz, Gone with the Wind, Stagecoach, Mr. Smith Goes to Washington, Destry Rides Again,Young Mr. Lincoln, Wuthering Heights, Only Angels Have Wings, Ninotchka, Babes in Arms, Gunga Din, and The Roaring Twenties. Among the other films from the golden age period that are now considered to be classics: Casablanca, The Adventures of Robin Hood, It’s a Wonderful Life, It Happened One Night, King Kong, Citizen Kane, Swing Time, Some Like It Hot, A Night at the Opera, All About Eve, Mildred Pierce, The Searchers, Breakfast At Tiffany’s, North by Northwest, Dinner at Eight, Rebel Without a Cause, Rear Window, Double Indemnity, Mutiny on the Bounty, City Lights, Red River, The Manchurian Candidate, Bringing Up Baby, Singin’ in the Rain, To Have and Have Not, Goodbye, Mr. Chips, Roman Holiday, Giant, and Jezebel.

Style:

The style of classical Hollywood cinema, as elaborated by David Bordwell, has been heavily influenced by the ideas of the Renaissance and its resurgence of mankind as the focal point.

Thus, classical narration progresses always through psychological motivation, i.e. by the will of a human character and its struggle with obstacles towards a defined goal. The aspects of space and time are subordinated to the narrative element which is usually composed of two lines of action: A romance intertwined with a more generic one such as business or, in the case of Alfred Hitchcock films, solving a crime.

Time in classical Hollywood is continuous, since non-linearity calls attention to the illusory workings of the medium. The only permissible manipulation of time in this format is the flashback. It is mostly used to introduce a memory sequence of a character, e.g. Casablanca.

Likewise, the treatment of space in classic Hollywood strives to overcome or conceal the two-dimensionality of film (“invisible style”) and is strongly centered upon the human body. The majority of shots in a classical film focus on gestures or facial expressions (medium-long and medium shots). André Bazin once compared classical film to a photographed play in that the events seem to exist objectively and that cameras only give us the best view of the whole play.

This treatment of space consists of four main aspects: centering, balancing, frontality and depth. Persons or objects of significance are mostly in the center part of the picture frame and never out of focus. Balancing refers to the visual composition, i.e. characters are evenly distributed throughout the frame. The action is subtly addressed towards the spectator (frontality) and set, lighting (mostly three-point lighting) and costumes are designed to separate foreground from the background (depth).

Narrative:

The classic Hollywood narrative is structured with an unmistakable beginning, middle and end, and generally there is a distinct resolution at the end. Utilizing actors, events, causal effects, main points and secondary points are basic characteristics of this type of narrative. The characters in Classical Hollywood Cinema have clearly definable traits, are active, and very goal oriented. They are causal agents motivated by psychological rather than social concerns.

Production:

The mode of production came to be known as the Hollywood studio system and the star system, which standardized the way movies were produced. All film workers (actors, directors, etc.) were employees of a particular film studio. This resulted in a certain uniformity to film style: directors were encouraged to think of themselves as employees rather than artists, and hence auteurs did not flourish (although some directors, such as Alfred Hitchcock, John Ford and Howard Hawks, worked within this system and still fulfilled their artistic selves).

The Hollywood studio system was controlled by the “Big Eight” studios, however, the Big Five fully integrated studios were the most powerful. These five studios were MGM, Warner Brothers, 20th Century Fox, Paramount, and RKO. They all operated their own theater chains and produced and distributed films as well. The “Little Three” studios (Universal Studios, Columbia Pictures, and United Artists) were also full-fledged film factories but they lacked the financial resources of the Big Five and therefore produced fewer A-class features which were the foundations of the studio system.

Periodization:

While the boundaries are vague, the classical era is generally held to begin in 1927 with the release of The Jazz Singer. Hollywood classicism gradually declined with the collapse of the studio system, the advent of television, the growing popularity of auteurism among directors and the increasing influence of foreign films and independent filmmaking.

The 1948 U.S. Supreme Court decision, which outlawed the practice of block booking and the above-mentioned ownership and operation of theater chains by the major film studios (as it was believed to constitute anti-competitive and monopolistic trade practices) was seen as a major blow to the studio system. This was because it firstly cleared the way for a growing number of independent producers (some of them the actors themselves) and studios to produce their film product free of major studio interference, and secondly because it destroyed the original business model utilized by the studios who struggled to adapt.

“At the time of the Court decision, everyone said the quality, consistency and availability of movies would go up and prices would fall. Quite the opposite happened. By 1955, the number of produced films had fallen by 25 percent. More than 4,200 theaters (or 23 percent of the total) had shut their doors. More than half of those remaining were unable to earn a profit. They could not afford to rent and exhibit the best and most costly films, the ones most likely to compete with television.