Hollywood Dominance of the Movie Industry

There are many contributing factors to how Hollywood became such a dominant business. Most of these factors rely on the history of Hollywood and how the film companies that founded it adapted. Hollywood’s dominance stared to grow in 1915. This was when the foundations were laid for studios such as: Paramount, Fox, Universal, MGM and Warners. These companies would form the core of the Studio System from 1930s onwards.

During this time Hollywood promoted itself by promoting the war. January 1916, the Hollywood film community made an alliance with Washington, DC to try and raise awareness of the war through film. Hollywood was able to get involved in the War effort by making films to educate the community, producing entertainment features with patriotic, morale-boosting themes and messages about the “American way of life”.

After World War 1, Hollywood put a structure in place that would dominate for 40 years and more. Influential producers like Adolph Zukor set up vertically integrated companies. He was part of ‘Paramount Pictures’ of which he served as president until 1936 when he was made chairman. He revolutionized the film industry by organizing production, distribution, and exhibition within a single company. Zukor was also an accomplished director and producer. He retired from Paramount Pictures in 1959. Also after the war, budgets rose 10 times pre-war levels, so Hollywood then became a national industry.

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During the so-called ‘Golden Age’ of Hollywood, which lasted from the late1920s to the late 1950s, thousands of movies were issued from the Hollywood studios. The start of the Golden Age was arguably when The Jazz Singer was released in 1927, ending the silent era and increasing box-office profits for films as sound was introduced to feature films. Most Hollywood films stuck closely to this method - Western, slapstick comedy, musical, animated cartoon and biographical picture.

After The Jazz Singer was released in 1927, Warner Bros gained huge success and was able to obtain their own army of movie theatres.  By the 1930s, most America’s theatres were owned by the ‘Big Five studios’ - MGM, Paramount Pictures, RKO, Warner Bros and 20th Century Fox.  These Major studios owned 75% of first-run cinemas.

The studio system was a means of film production and distribution dominant in Hollywood from the early 1920s through the 1950s. Some have compared the Hollywood studio system to a factory. Their product output in 1937 surged to over 500 feature films. By the 1980s, this figure dropped to an average of 100 films per year. During the Golden Age, the studios were remarkably consistent and stable enterprises.

The rise of the studio system also relied on the treatment of the stars of Hollywood, who were created and exploited by the studio to reflect their image and agenda. Actors and actresses were bound by contracts to one studio for several years, and the studio usually had all of the power. These stars were loaned out to other studios. Studios also had the power to force actors into bad roles and control their image.

‘[Directors were] to make sure the actors hit their marks while the camera was running’

(Biskind, Easy Riders, Raging Bulls, p.19)

However, studio heads realized that they couldn’t repeat movie storylines and roles and still make a profit. This resulted in different studio styles as they tried to differentiate themselves from other studios.

Falling attendance and the Paramount decision broke apart the studio system, depriving the studios of the financial controls that made sure of regular profits, paid the studio overhead, and thereby restructured their factory-based operations. The major studios survived by adapting the system, fundamentally changing the ways they did business and establishing methods (still in use today) that reduced their controls of production. This stopped the system of mass movie production that had occupied Hollywood for decades. Essential to the studios’ survival was their collective control of distribution, the one aspect of their monopolistic operations not affected by the Paramount decision, and their willingness to share control of filmmaking with independent producers, top talent, and talent agencies. Simply stated, the studios became primarily financing-and-distribution entities, reviewing projects that were developed and packaged by the growing ranks of independent producers, then in the event of a green light, leasing their production facilities and providing a portion of the production cost in exchange for the distribution rights-and, frequently, for the eventual ownership of the completed film. The studios themselves began producing fewer, “big” pictures-biblical epics and big-screen westerns-during the 1950s, precursors of the blockbusters that now rule the industry. The studios shared control of film production not only with independent producers and freelance directors, but also top stars whose marquee value gave them tremendous leverage. And because most filmmaking talent operated freelance by the 1950s, talent agencies like William Morris and MCA (Music Corporation of America) also became a major force in postwar film (and television) production.

The major studios initially resisted but soon came to terms with television in the 1950s, selling or leasing their older films to TV syndication companies while revamping their factory-based production operations for “telefilm” series production. By the 1960s, movies were running nightly on prime time television and the studios were turning out far more hours of telefilm series than feature films. Meanwhile, movie attendance continued to erode, despite rapid population growth, and the studios gambled on high-stakes blockbusters like Cleopatra (1963) and The Sound of Music (1965) but relied primarily on television to pay the bills. Studio fortunes by the late 1960s were at an all-time low, rendering them prime acquisition targets, and many were swallowed up by large conglomerates like Gulf + Western (Paramount), Transamerica (United Artists), and Kinney Services (Warner Bros.), as well as real estate tycoon Kirk Kerkorian (MGM). The MCA-Universal merger in 1962 was the first and by far the most successful alliance at the time, due to its savvy integration of film and television operations and its maintenance of at least a semblance of the old studio-based mode of production.

After the fall of the studio system and the influence of Television, Hollywood adapted to become ‘New Hollywood’, a term used to describe a new generation of directors who had taken inspiration from Europe in the 1960s. These new directors influenced the types of films that were produced, how they were produced and how they were marketed. This impacted the way major studios approached filmmaking.

“Jaws was devastating to making artistic, smaller films. They forgot how to do it”

Peter Bogdanovich

One of the films that changed Hollywood forever was ‘Jaws’. This film raised the bar for ‘New Hollywood’. Released in June 1975, at 460 theatres simultaneously, on an unprecedented wave of TV advertising, Jaws was everywhere at once. The film needed only 78 days to surpass The Godfather as the top-grossing movie of all time (at least until 1977, and Star Wars).

Jaws was regarded as the father of the summer blockbuster film and one of the first “high concept” films. Due to the film’s success in advance screenings, studio executives decided to distribute it in a much wider release than ever before. The Omen followed in the summer of 1976 and then Star Wars one year later in 1977, cementing the notion for movie studios to distribute their big-release action and adventure pictures (commonly referred to as tentpole pictures) during the summer. 

By making ‘Jaws’, Universal spurred the movie industry’s recovery with its phenomenal success that spawned a new breed of blockbusters like Star Wars (1977), Grease (1978), and Superman (1978), summer releases launched via nationwide marketing that resulted in record box-office profits and were the dominant, defining products of the “New Hollywood.” The success of these blockbusters reinforced an economic recovery in the industry that continues today, and it enabled the studios to regain some of their lost authority as well, as they became increasingly adept at transforming blockbuster hits into entertainment franchises-multimedia product lines comprised of movie sequels, TV spinoffs, video games, theme-park rides, soundtrack albums, music videos, and an endless array of licensed merchandise. Hollywood’s recovery accelerated during the 1980s, fueled by a range of factors that complemented the studios’ burgeoning blockbuster mentality. One factor was the rapid growth of new media technologies and new delivery systems, most notably home video and pay-cable television (i.e., subscription “movie channels” like HBO), which proved to be as hit driven as the box office. Foreign markets were equally receptive to Hollywood blockbusters, and thus the studios’ international distribution operations grew steadily during the 1980s, going into high gear in the 1990s, when the fall of the Soviet Union and the concurrent economic reforms in China created a truly global market for Hollywood films.

The Hollywood that we know today has been shaped by its history, the drive to produce movies that make a profit. Studios now focus on relying on very expensive blockbusters to remain profitable. Studios now also rely on star power and large advertising campaigns to market every new up-coming movie and attract a huge audience.

In conclusion, Hollywood has become the dominant cinema producer in the world and has retained its pre-eminence by changing and adapting to its audiences. It must also be remembered that Hollywood is a business, therefore to survive it has had to make good business decisions to continue making a profit.