Studio System Dominates Hollywood Filmmaking Summary

  • Last updated on November 10, 2022

Motion-picture production changed profoundly during the Great Depression and World War II, as studio executives exercised control over much of the creative process of filmmaking.

Summary of Event

Motion-picture fans often fail to appreciate that Hollywood film production began as a form of private enterprise. Vigorously competitive since the early years of the twentieth century, the companies that made Hollywood famous were locked in intense competition during the Depression-ridden 1930’s and the war-torn 1940’s. These trying times witnessed the emergence of the studio system, which consisted of five major corporations—Metro-Goldwyn-Mayer (MGM), Paramount, Radio-Keith-Orpheum (RKO), Warner Bros., and Twentieth Century-Fox—and the three smaller organizations Universal, Columbia, and United Artists. Studio executives consolidated their operations through “vertical integration,” which gave them control of the entire process from film production to exhibition in theaters. These eight studios accounted for 95 percent of U.S. film rentals by the late 1930’s. Internal centralization of studio operations meant that executives often personally supervised actual film production. For many screenwriters, directors, and performers, this extension of executive authority was an intrusion into the creative process. For management, it was a necessary means to reduce costs and increase production. In spite of this and other conflicts, the studio system left a lasting imprint on American popular culture. [kw]Studio System Dominates Hollywood Filmmaking (1930’s-1940’s) [kw]Hollywood Filmmaking, Studio System Dominates (1930’s-1940’s) [kw]Filmmaking, Studio System Dominates Hollywood (1930’s-1940’s) Motion pictures;studios Metro-Goldwyn-Mayer[Metro Goldwyn Mayer] Paramount Pictures Radio-Keith-Orpheum[Radio Keith Orpheum] Warner Bros. Twentieth Century-Fox[Twentieth Century Fox] Universal Pictures Columbia Pictures United Artists [g]United States;1930’s-1940’s: Studio System Dominates Hollywood Filmmaking[07460] [c]Motion pictures;1930’s-1940’s: Studio System Dominates Hollywood Filmmaking[07460] [c]Trade and commerce;1930’s-1940’s: Studio System Dominates Hollywood Filmmaking[07460] Capra, Frank Laemmle, Carl DeMille, Cecil B. Mayer, Louis B. Thalberg, Irving Warner, Jack

Not only did the studios confront rivals in Hollywood, they also faced other challenges, such as the growth of modern home entertainment with the rise of radio in the 1930’s and the advent of television in the 1940’s. The catastrophe of the period, however, was the Great Depression. By 1932, the unemployment rate in the United States was at least 25 percent. Public attendance at movie theaters declined sharply from 1930 to 1933, and studio profits plummeted. The prosperity of the 1920’s had encouraged heavy investments in new theaters, sound equipment for talking pictures, and new studios. In the 1930’s, Hollywood staggered under the burden of these debts and became increasingly dependent on New York bankers.

MGM rode out the Depression with the least difficulty, but the reasons for its success are difficult to pinpoint. The paternalistic, flamboyant studio boss Louis B. Mayer was certainly no model of efficient management. One obvious MGM strength, however, was the brief but brilliant tenure of executive producer Irving Thalberg, whose sickly physique contained a dynamo of energy. He pushed the studio while he drove himself to an early death. Thalberg supervised production, from the hiring of screenwriters to the final editing of the film. At a time when other studios cut their budgets, MGM maintained an expensive payroll. The results were impressive, and the studio provided audiences with relief from the doldrums of the Depression through its popular, lavish productions.

In contrast to MGM, both Paramount and RKO stumbled through the 1930’s in financial disarray. Paramount’s legendary chief, Adolph Zukor, Zukor, Adolph lost control of his company’s finances as box-office receipts declined. Banks and investment companies removed Zukor as Paramount slipped into bankruptcy. An extensive housecleaning followed. Paramount survived under new management, with a trimmed-down structure that could support only a few major productions each year. RKO fared little better. Frequent changes in management and a few box-office successes such as 1933’s King Kong were not enough to solve basic financial weaknesses. In the 1940’s, both Paramount and RKO continued to struggle and were backed by increasingly skeptical investors.

Warner Bros. was closest to MGM’s profit levels. Jack Warner, a somewhat heavy-handed version of Irving Thalberg, assumed control of studio operations and intervened at various stages of production. Unlike Thalberg, who was concerned with quality, Warner pressed for quick, efficient production. He held down costs to the point of personally switching off lights in studio bathrooms. Although Warner was the subject of surreptitious humor among writers, directors, and actors, his notorious cost-control methods seemed to work. The studio clung to a respectable prosperity in the 1930’s.

Twentieth Century-Fox gambled on new sound equipment and a large theater chain in the late 1920’s, but the studio’s timing was disastrous. Studio head William Fox Fox, William borrowed heavily just before the initial shocks of the Depression hit. Rights to the Fox sound system became entangled in a legal battle, and the payments on the studio’s immense debt overwhelmed its income. Corporate restructuring removed Fox, and the studio survived on a narrow margin.

The “little three” of the Hollywood studios also experienced rough times. Universal was an industry leader in the 1920’s under founder and patriarch Carl Laemmle, but he was forced to sell his interests in 1936. Like Columbia and United Artists, Universal struggled through the Depression. All three small studios enjoyed momentary box-office successes with the work of certain directors or stars, but the general trends were reduced income and corporate retrenchment.

World War II provided relief from financial troubles, but only temporarily. Hollywood turned out a series of morale-boosting films that pleased politicians in Washington, bankers in New York, and theater audiences across the country. The basic problems, however, were uncertain income and rising production costs. Shortages of lumber made set construction more expensive. Technicians, writers, and performers commanded higher salaries. The most devastating blow, however, came from the courts in the Paramount case (1940-1949). Federal judges ordered Paramount to sell its theater chain on the grounds that control of both production and exhibition facilities constituted unfair competition against local theaters. This decision eventually changed the structure of the film industry. Pressed by the expansion of television and rising costs, the studios faced a dim future.


Economic problems shifted the artistic force behind motion pictures from the individual director—the focus of film production before 1930—to the studios themselves and to the producers and directors entrusted with the task of converting budgets directly to screen images. Each studio emphasized certain popular themes to find formulas for success at the box office. Although restricted budgets, tight schedules, and intrusive bosses generally suffocated the creative impulses in filmmaking, some strong-willed producers and directors managed to achieve high-quality productions. Studio heads, whether the autocratic Louis B. Mayer or short-term executives chosen by East Coast bankers, were quick to identify themselves and their corporations with the style and success of producers and directors who could attract large audiences and occasionally please the critics.

Two of the most solvent studios offered a striking contrast in the types of films that brought them profits. MGM used elegance and glamour to provide audiences with escapism, whereas Warner Bros. turned to films of social and political relevance. Hyperkinetic Irving Thalberg left his personal imprint on many of MGM’s expensive productions, including the South Seas saga Mutiny on the Bounty (1935) Mutiny on the Bounty (film) and the Victorian romance The Barretts of Wimpole Street (1934). Barretts of Wimpole Street, The (film) After Thalberg’s death in 1936, MGM continued to attract large audiences. Director Victor Fleming worked with independent producer David O. Selznick on 1939’s immensely popular Gone with the Wind. Gone with the Wind (film) The studio shared in the profits, and, in 1944, MGM purchased sole rights to the long-term moneymaker.

Warner Bros. did not attempt to match MGM’s grandeur, but Jack Warner used his limited resources well. Organized in 1923 by four brothers who were outcasts in Hollywood’s movie-mogul society, the studio took a large risk on sound films in the 1920’s and vaulted to the forefront in the 1930’s. Warner Bros. pushed directors for fast-paced, low-cost productions. Mervyn LeRoy LeRoy, Mervyn responded by pioneering the gangster film; he directed a strong performance from Edward G. Robinson in the title role of Little Caesar (1931) Little Caesar (film) and then worked with Paul Muni as the victim of a corrupt judicial system in the powerful I Am a Fugitive from a Chain Gang (1932). I Am a Fugitive from a Chain Gang (film) William Wellman Wellman, William directed James Cagney to stardom in The Public Enemy, Public Enemy, The (film) a 1931 gangster film. Director John Huston’s Huston, John 1941 version of The Maltese Falcon Maltese Falcon, The (film) created a grim world of ambiguity and betrayal, and The Treasure of the Sierra Madre (1948) Treasure of the Sierra Madre, The (film) dramatized moral degeneration through greed. World War II elicited the studio’s patriotism, as reflected in Casablanca (1942), Casablanca (film) a potent combination of romance, character study, and propaganda. The production methods employed by Warner Bros. were exemplified in Casablanca, as director Michael Curtiz Curtiz, Michael made the most of inexpensive sets and screenwriters completed the sharp, literate script while the film was being shot.

Hard-pressed RKO had a remarkable string of much-admired films. King Kong King Kong (film) astounded audiences with its innovative special effects, and in 1937 the studio began to distribute the inventive products of cartoon genius Walt Disney, bringing adults and children alike into theaters. Orson Welles’s Welles, Orson Citizen Kane (1941) Citizen Kane (film) was a powerful and controversial film but drew small audiences. Val Lewton Lewton, Val produced eleven low-budget, highly impressive horror classics, led by Cat People (1942). Cat People (film) Producer Adrian Scott, Scott, Adrian director Edward Dmytryk, Dmytryk, Edward and screenwriter John Paxton Paxton, John collaborated on Murder, My Sweet (1944), Murder, My Sweet (film) a dark, moody detective story punctuated by witty dialogue adapted from Raymond Chandler’s novel. This film and the work of Welles and Lewton were typical of RKO’s stylish, literate productions that, somehow, never solved the company’s financial woes.

Paramount and Twentieth Century-Fox also floundered financially but, thanks to skillful directors, both studios produced some superior films. Veteran producer-director Cecil B. DeMille brought out a series of historical dramas, including Cleopatra (1934) and Union Pacific (1939). Billy Wilder Wilder, Billy directed and cowrote two taut stories about contemporary life: Double Indemnity (1944) Double Indemnity (film) featured murder, and The Lost Weekend (1945) Lost Weekend, The (film) took a somber look at alcoholism. Twentieth Century-Fox survived with help from John Ford’s Ford, John 1940 film version of John Steinbeck’s 1939 novel The Grapes of Wrath, Grapes of Wrath, The (film) which was perhaps the epitome of topicality as it sympathetically portrayed the migration of a dispossessed farm family from Oklahoma to California. The commercial mainstay of Fox, however, was child star Shirley Temple, Temple, Shirley who acted, sang, and danced her way through a series of box-office hits.

Carl Laemmle turned over Universal to his twenty-one-year-old son, Carl, Jr., in 1929. The younger Laemmle supervised the production of All Quiet on the Western Front (1930), All Quiet on the Western Front (film) a provocative antiwar film, and then innovated in the horror genre with Bela Lugosi’s Lugosi, Bela Dracula (1931) Dracula (film) and Boris Karloff’s Karloff, Boris Frankenstein (1931). Frankenstein (film) These creative thrusts fell victim to bad timing, however. Audiences were too small in the Depression years, and Universal soon faced a fiscal crisis. The Laemmles sold their interest in the studio, which worked its way back to solvency through B-pictures, serials, and the popularity of teen star Deanna Durbin. By the 1940’s, Universal had achieved a modest prosperity.

The two remaining minor studios relied heavily on talented directors. Frank Capra carried Columbia with films of social and political relevance, including It Happened One Night (1934), It Happened One Night (film) in which romance overcame class barriers, and highly charged populist films such as Meet John Doe (1941). Meet John Doe (film) Robert Rossen’s Rossen, Robert 1949 exposé of the perils of demagoguery, All the King’s Men, All the King’s Men (film)[All the Kings Men] marked Columbia’s return to solvency. United Artists turned to the legendary comic actor Charles Chaplin, Chaplin, Charles who poked fun at industrial society in Modern Times (1936) Modern Times (film) and ridiculed authoritarian leaders in The Great Dictator (1940). Great Dictator, The (film) Director John Ford brought maturity to the Western in his popular United Artists release Stagecoach (1939). Stagecoach (film)

This colorful, turbulent era contained major contradictions. The period’s forceful, profit-seeking executives undercut the creative process but left an impressive list of popular, critically acclaimed films, including The Grapes of Wrath, Casablanca, and Gone with the Wind. The drive to boost profits, however, ultimately failed. The growth of television, rising production costs, and adverse court decisions meant the decline and ultimate demise of the studio system in the 1950’s and 1960’s. The Hollywood film industry, for all its power, notoriety, and many contributions to American popular culture, had a short life span. Motion pictures;studios Metro-Goldwyn-Mayer[Metro Goldwyn Mayer] Paramount Pictures Radio-Keith-Orpheum[Radio Keith Orpheum] Warner Bros. Twentieth Century-Fox[Twentieth Century Fox] Universal Pictures Columbia Pictures United Artists

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Bergman, Andrew. We’re in the Money: Depression America and Its Films. 1971. Reprint. Chicago: Ivan R. Dee, 1992. Brief interpretive study of the connection between films and American society in the 1930’s. Offers especially interesting discussion of gangster and “shyster” lawyer films of the early part of the decade. Includes bibliography and index.
  • citation-type="booksimple"

    xlink:type="simple">Dick, Bernard. The Star-Spangled Screen: The American World War II Film. 1985. Reprint. Lexington: University Press of Kentucky, 1996. Presents wide-ranging analysis that includes film content and historical accuracy. Features bibliographical essay, film index, and subject index.
  • citation-type="booksimple"

    xlink:type="simple">Dooley, Roger. From Scarface to Scarlett: American Films in the 1930’s. New York: Harcourt Brace Jovanovich, 1981. Provides extensive coverage of Hollywood films, organized by thematic chapters. Useful for thematic discussions and as a reference on individual films.
  • citation-type="booksimple"

    xlink:type="simple">Gabler, Neal. An Empire of Their Own: How the Jews Invented Hollywood. New York: Anchor, 1988. Social history enlivened by biographical portraits of the generation of studio executives who led the motion-picture industry through the 1930’s and 1940’s. Includes discussion of Laemmle, Mayer, and Jack and Harry Warner.
  • citation-type="booksimple"

    xlink:type="simple">Kindem, Gorham, ed. The American Movie Industry: The Business of Motion Pictures. Carbondale: Southern Illinois University Press, 1982. Collection of eighteen specialized essays on business aspects of film, including the rise of the studio system and competition with television.
  • citation-type="booksimple"

    xlink:type="simple">Koppes, Clayton R., and Gregory D. Black. Hollywood Goes to War: How Politics, Profits, and Propaganda Shaped World War II Movies. New York: Free Press, 1987. Carefully researched account of the film industry and its relations with the government and the war effort in general. Focuses on the Office of War Information and its influence on the propagandistic content of Hollywood’s World War II films.
  • citation-type="booksimple"

    xlink:type="simple">McElvaine, Robert. The Great Depression. New York: Times Books, 1984. Social, economic, and political history of the United States in the 1930’s focuses on the causes and consequences of the Depression. Discusses Hollywood films as a reflection of culture and values of the era, especially the public’s ambivalence toward individualism and collectivism.
  • citation-type="booksimple"

    xlink:type="simple">Shindler, Colin. Hollywood in Crisis: Cinema and American Society, 1929-1939. New York: Routledge, 1996. Describes the state of the American motion-picture industry during the years of the Great Depression. Includes filmography, bibliography, and index.
  • citation-type="booksimple"

    xlink:type="simple">Sklar, Robert. Movie-Made America: A Cultural History of American Movies. Rev. ed. New York: Vintage Books, 1994. Historical survey connects trends in Hollywood motion pictures with broad economic and social forces in the United States. Chapters covering the 1930’s and 1940’s include much useful information on the rise and fall of the studio system.
  • citation-type="booksimple"

    xlink:type="simple">Stanley, Robert. The Celluloid Empire. New York: Hastings House, 1978. Readable study on the business side of the film industry. Provides succinct analysis of the eight studios that dominated Hollywood from the Depression to the end of the 1940’s.

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Sound Technology Revolutionizes the Motion-Picture Industry

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Hollywood Enters Its Golden Age

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The Wizard of Oz Premieres

Gone with the Wind Premieres

Categories: History