The Rise of the Hollywood Studio System

“The American cinema is a classical art, but why not then admire in it what is most admirable, i.e., not only the talent of this or that filmmaker, but the genius of the system.”

ANDRÉ BAZIN, FILM THEORIST, 1957

By the 1910s, movies had become a major industry. Among the first to try his hand at dominating the movie business and reaping its profits, Thomas Edison formed the Motion Picture Patents Company, known as the Trust, in 1908. A cartel of major U.S. and French film producers, the company pooled patents in an effort to control film’s major technology, acquired most major film distributorships, and signed an exclusive deal with George Eastman, who agreed to supply movie film only to Trust-approved companies.

However, some independent producers refused to bow to the Trust’s terms. There was too much demand for films, too much money to be made, and too many ways to avoid the Trust’s scrutiny. Some producers began to relocate from the centers of film production in New York and New Jersey to Cuba and Florida. Ultimately, though, Hollywood became the film capital of the world. Southern California offered cheap labor, diverse scenery for outdoor shooting, and a mild climate suitable for year-round production. Geographically far from the Trust’s headquarters in New Jersey, independent producers in Hollywood could also easily slip over the border into Mexico to escape legal prosecution brought by the Trust for patent violations.

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MARY PICKFORD With legions of fans, Mary Pickford became the first woman ever to make a salary of $1 million in a year and gained the freedom to take artistic risks with her roles. She launched United Artists, a film distributing company, with Douglas Fairbanks, Charlie Chaplin, and D. W. Griffith. No woman since has been as powerful a player in the movie industry. Here she is seen with Buddy Rogers in My Best Girl.

Wanting to free their movie operations from the Trust’s tyrannical grasp, two Hungarian immigrants—Adolph Zukor, who would eventually run Paramount Pictures, and William Fox, who would found the Fox Film Corporation (which later became Twentieth Century Fox)—played a role in the collapse of Edison’s Trust. Zukor’s early companies figured out ways to bypass the Trust, and a suit by Fox, a nickelodeon operator turned film distributor, resulted in the Trust’s breakup for restraint of trade violations in 1917.

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Ironically, entrepreneurs like Zukor developed other tactics for controlling the industry. The strategies, many of which are still used today, were more ambitious than just monopolizing patents and technology. They aimed at dominating the movie business at all three essential levels—production, everything involved in making a movie from securing a script and actors to raising money and filming; distribution, getting the films into theaters; and exhibition, playing films in theaters. This control—or vertical integration—of all levels of the movie business gave certain studios great power and eventually spawned a film industry that turned into an oligopoly, a situation in which a few firms control the bulk of the business.