After years of thriving, the Hollywood movie industry began to falter after 1946. Weekly movie attendance in the United States peaked at ninety million in 1946, then fell to under twenty-five million by 1963. Critics and observers began talking about the death of Hollywood, claiming that the Golden Age was over. However, the movie industry adapted and survived, just as it continues to do today. Among the changing conditions facing the film industry were the communist witch-hunts in Hollywood, the end of the industry’s vertical integration, suburbanization, the arrival of television, and the appearance of home entertainment.

The Hollywood Ten

In 1947, in the wake of the unfolding Cold War with the Soviet Union, conservative members of Congress began investigating Hollywood for alleged subversive and communist ties. That year, aggressive witch-hunts for political radicals in the film industry by the House Un-American Activities Committee (HUAC) led to the famous Hollywood Ten hearings and subsequent trial. (HUAC included future president Richard M. Nixon, then a congressman from California.)

During the investigations, HUAC coerced prominent people from the film industry to declare their patriotism and to give up the names of colleagues suspected of having politically unfriendly tendencies. Upset over labor union strikes and outspoken writers, many film executives were eager to testify and provide names. For instance, Jack L. Warner of Warner Brothers suggested that whenever film writers made fun of the wealthy or America’s political system in their work, or if their movies were sympathetic to “Indians and the colored folks,”14 they were engaging in communist propaganda. Other “friendly” HUAC witnesses included actors Gary Cooper and Ronald Reagan, director Elia Kazan, and producer Walt Disney. Whether they believed it was their patriotic duty or they feared losing their jobs, many prominent actors, directors, and other film executives also “named names.”

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Eventually, HUAC subpoenaed ten unwilling witnesses who were questioned about their memberships in various organizations. The so-called Hollywood Ten—nine screenwriters and one director—refused to discuss their memberships or to identify communist sympathizers. Charged with contempt of Congress in November 1947, they were eventually sent to prison. Although jailing the Hollywood Ten clearly violated their free-speech rights, in the atmosphere of the Cold War many people worried that “the American way” could be sabotaged via unpatriotic messages planted in films. Upon release from jail, the Hollywood Ten found themselves blacklisted, or boycotted, by the major studios, and their careers in the film industry were all but ruined. The national fervor over communism continued to plague Hollywood well into the 1950s.

The Paramount Decision

Coinciding with the HUAC investigations, the government also increased its scrutiny of the movie industry’s aggressive business practices. By the mid-1940s, the Justice Department demanded that the five major film companies—Paramount, Warner Brothers, Twentieth Century Fox, MGM, and RKO—end vertical integration, which involved the simultaneous control over production, distribution, and exhibition. In 1948, after a series of court appeals, the Supreme Court ruled against the film industry in what is commonly known as the Paramount decision, forcing the studios to gradually divest themselves of their theaters.

Although the government had hoped to increase competition, the Paramount case never really changed the oligopoly structure of the Hollywood film industry because it failed to challenge the industry’s control over distribution. However, the 1948 decision did create opportunities in the exhibition part of the industry for those outside Hollywood. In addition to art houses showing documentaries or foreign films, thousands of drive-in theaters sprang up in farmers’ fields, welcoming new suburbanites who embraced the automobile. Although drive-ins had been around since the 1930s, by the end of the 1950s, more than four thousand existed. The Paramount decision encouraged new indoor theater openings as well, but the major studios continued to dominate distribution.

Moving to the Suburbs

Common sense might suggest that television alone precipitated the decline in post–World War II movie attendance, but the most dramatic drop actually occurred in the late 1940s—before most Americans even owned TV sets.15

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The transformation from a wartime economy and a surge in consumer production had a significant impact on moviegoing. With industries turning from armaments to appliances, Americans started cashing in their wartime savings bonds for household goods and new cars. Discretionary income that formerly went to buying movie tickets now went to acquiring consumer products, and the biggest product of all was a new house far from the downtown movie theaters—in the suburbs, where tax bases were lower. Home ownership in the United States doubled between 1945 and 1950, while the moviegoing public decreased just as quickly. Additionally, after the war, the average age for couples entering marriage dropped from twenty-four to nineteen. Unlike their parents, many postwar couples had their first child before they turned twenty-one. The combination of social and economic changes meant there were significantly fewer couples dating at the movies. Then, when television exploded in the late 1950s, there was even less discretionary income—and less reason to go to the movies.

Television Changes Hollywood

In the late 1940s, radio’s popularity had a strong impact on film. Not only were 1948 and 1949 high points in radio listenership, but with the mass migration to the suburbs, radio offered Americans an inexpensive entertainment alternative to the movies (as it had during the Great Depression). As a result, many people stayed home and listened to radio programs until TV displaced both radio and movies as the medium of national entertainment in the mid-1950s. The movie industry responded in a variety of ways.

First, with growing legions of people gathering around their living room TV sets, movie content slowly shifted toward more serious subjects. At first, this shift was a response to the war and an acknowledgment of life’s complexity, but later movies focused on subject matter that television did not encourage. This shift began with film noir in the 1940s but continued into the 1950s, as commercial movies, for the first time, explored larger social problems such as alcoholism (The Lost Weekend, 1945), anti-Semitism (Gentleman’s Agreement, 1947), mental illness (The Snake Pit, 1948), racism (Pinky, 1949), adult–teen relationships (Rebel without a Cause, 1955), drug abuse (The Man with the Golden Arm, 1955), and—perhaps most controversial—sexuality (Peyton Place, 1957; Butterfield 8, 1960; Lolita, 1962).

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These and other films challenged the authority of the industry’s own prohibitive Motion Picture Production Code. Hollywood adopted the Code in the early 1930s to restrict film depictions of violence, crime, drug use, and sexual behavior and to quiet public and political concerns that the movie business was lowering the moral standards of America. (For more on the Code, see Chapter 16.) In 1967, after the Code had been ignored by producers for several years, the Motion Picture Association of America initiated the current ratings system, which rated films for age appropriateness rather than censoring all adult content.

Second, just as radio worked to improve sound to maintain an advantage over television in the 1950s, the film industry introduced a host of technological improvements to lure Americans away from their TV sets. Technicolor, invented by an MIT scientist in 1917, had improved and was being used in more movies to draw people away from their black-and-white TVs. In addition, Cinerama, CinemaScope, and VistaVision all arrived in movie theaters, featuring striking wide-screen images, multiple synchronized projectors, and stereophonic sound. Then 3-D (three-dimensional) movies appeared, although they wore off quickly as a novelty. Finally, Panavision, which used special Eastman color film and camera lenses that decreased the fuzziness of images, became the wide-screen standard throughout the industry. These developments, however, generally failed to address the movies’ primary problem: the middle-class flight to the suburbs, away from downtown theaters.

Hollywood Adapts to Home Entertainment

Just as nickelodeons, movie palaces, and drive-ins transformed movie exhibition in earlier times, the introduction of cable television and the videocassette in the 1970s transformed contemporary movie exhibition. Although the video market became a financial bonanza for the movie industry, Hollywood ironically tried to stall the arrival of the VCR in the 1970s—even filing lawsuits to prohibit customers from copying movies from television. The 1997 introduction of the DVD helped reinvigorate the flat sales of the home video market as people began to acquire new movie collections on DVD. Today, home movie exhibition is again in transition, this time from DVD to Internet video. As DVD purchases began to decline, Hollywood endorsed the high-definition format Blu-ray in 2008 to revive sales, but the format didn’t grow quickly enough to help the video store business. The biggest chain, Blockbuster, filed for bankruptcy in 2010, closed hundreds of stores, and was auctioned to the Dish Network in 2011, while the Movie Gallery–Hollywood Video chain shuttered all its stores. The only bright spot in DVD rentals has been at the low end of the market—automated kiosks like Redbox that rent movies for $1.50 to $2.00 a day—but even the kiosk rental business began to flatline by 2013.

The future of the video business is in Internet distribution. Movie fans can download or stream movies and television shows for rent or for purchase from services like Netflix, Amazon, Hulu, Google Play, and the iTunes store to their television sets through devices like Roku, Apple TV, TiVo Premiere, video game consoles, and Internet-ready TVs. As people invest in wide-screen TVs (including 3-D televisions) and sophisticated sound systems, home entertainment is getting bigger and keeping pace with the movie theater experience. Interestingly, home entertainment is also getting smaller—movies are increasingly available to stream and download on portable devices like tablets, laptop computers, and smartphones.

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