Today’s Hollywood Studio System

The way that Hollywood’s film industry is run has changed a lot over the last century. From the early pioneers of film technology to the big studios that now manage vast archives of content, the business of filmmaking has expanded and grown. One of the most iconic times in the filmmaking business is known as the Golden Age of Hollywood where big studios worked as movie monopolies and churned out hundreds of movies a year. While there were many issues with the factory-like system that the Golden Age of Hollywood developed, many of their practices have been carried into the studio system that we see in Hollywood today.

What is the Studio System?

The Studio System, as it is known in the Hollywood film industry, is a business model that was used during the 1930s to 40s when large companies, known as studios, made and controlled all aspects of selling movies. This means that these studios were involved in the processes of development, production, distribution, marketing, and exhibition, or the showing of films. Using this system meant that one studio could come up with the idea of a film, make it, market it, and then show it in their own theaters. It created an assembly-line way of making films and allowed companies to make a lot of films a year. In business, this is known as being vertically integrated.

There were many key characteristics of the Studio System. Firstly, studios owned their own movie theaters where they would play their movies. That meant that if there was a film made by Warner Brothers that you wanted to see, you would have to find a Warner Brothers theater to watch it. That is unless a nearby independent theater buys the rights to exhibit the film. The second characteristic of the studio system is the use of block booking. Block booking was the practice that film studios would sell the rights to show their films in sets, forcing theaters to have to pay to screen multiple films, usually one good one and a few less popular films, rather than just being able to screen the one popular film that would draw audiences. Finally, the last key characteristic of the original studio system was that every creative including directors, writers, crew, and actors, were all on contract with the studios and paid on a salary basis. This means that rather than being paid for work done on a single film, everyone would be paid annually on a salary so studios could push their creatives to make more films a year without having to pay them more for each film.

History of the Hollywood Studio System

When the popularity of film began to grow in the early 20th century, there needed to be a more organized production and distribution method that they were not getting with independently owned studios and theaters. Because of this, the idea of “Movie Factories” was formed. The Big Five Studios and the Little Three took over the industry, essentially monopolizing the movie industry. These studios were formed as a result of mergers between powerful theater owners and production companies, merging the studio and theater, most being established by theater owners who owned a significant number of theaters. The Big Five and Little Three accounted for ninety-five percent of Hollywood films being shown in the United States during the Golden Age of Hollywood.

The Big Five Studios of the Golden Age of Hollywood -

Metro-Goldwyn-Mayer (MGM) - MGM was a result of a merger of Loew’s theater chain and three production companies in 1924. It was run by Louis B. Mayer and is known for producing films like Gone with the Wind (1939) and Wizard of Oz (1939). MGM was known as the studio with all the stars, having made so many movie stars at the peak of its time including, Greta Garbo, Judy Garland, Fred Astaire, Clark Gable, and many more.
Warner Brothers - This company was established by the three Warner brothers, Harry, Jack, and Albert, in 1924. They are known for producing the first sound film, The Jazz Singer (1927), and later for gangster films, backstage musicals, and social realism. They did not have a stable group of stars but had contracted popular directors and stars such as Howard Hawks, Bette Davis, and Joan Crawford.
Paramount - Originally a distribution company that was acquired by Adolph Zukor in 1917, Paramount was formed as a merger between the company with Zukor’s production company. Paramount became a big studio known for its light-hearted entertainment, comedies, and occasionally epics. They were known for their popular stars like Gloria Swanson and Mary Pickford as well as their talented directors, Cecil B. DeMille, Erich Von Stroheim, and D.W. Griffith.
20th Century Fox - Established in 1913 by William Fox, the Fox Film Corporation became 20th Century Fox after a 1935 merger with another production company. They were known for their musicals and later westerns and crime films. Their notable stars include Shirley Temple, Marlon Brando, and Marilyn Monroe. Their popular directors include John Ford and Elia Kazan.
RKO Pictures - The last of the Big Five was RKO Radio Pictures Incorporated which was a merger between a radio company and Orpheum theatres in 1928. Ran by David O. Selznick, who was known for introducing contracting directors to direct a certain number of films without studio interference, they attracted a lot of directors who wanted a studio that would be hands-off with their work. They were known particularly for the horror and film noir genres and with Selznick’s system, produced films like Citizen Kane (1941) and King Kong (1933).

The Little Three studios were smaller studios that did not own as many theaters and were made by creatives who wanted the big studios to have less control over their work, pay, and creativity. These studios were Universal Pictures, United Artists, and Columbia.

These Big Five studios participated in block booking so they maintained a lot of power over the work that they had. This allowed them to keep control of the industry and maintain their oligopolies. Another thing that helped them maintain their power was their ability to manufacture stars. By having actors and actresses on contract, they would fund the development of these talents and craft specific images for the actors they had on contract. These actors would then be plugged into movies and sold to audiences with their specific images, making them more desirable to audiences to go see. They molded these actors into the stars that audiences wanted to see. While many stars were created from this system, it was also a high-stress environment that led many, famously Marilyn Monroe and Judy Garland, to struggle with the pressures that come from fame, facing drug addiction and eating disorders.

All big things must come to an end though. Ultimately this system of big studios running the whole industry was not sustainable with government regulation. In 1948, United States v. Paramount Pictures found studios violated anti-trust laws so they could no longer own movie theaters. This made studios lose a lot of their power because they could no longer be in control of exhibiting their films. With this, a rise in television popularity led to more competition breaking up the monopolies the studios had in the entertainment industry.

Today’s System

The system today has changed a lot since studios are not allowed to own theaters. While there are still big studios that produce the majority of filmed content today, there are also a lot of smaller production companies that are able to make their films as well as work with larger studios in collaborations. Improvements in technology have also brought along new ways to view films opening the doors for the rise of streaming services like Netflix to start licensing films. Today there are many different variations on the big studio system with streaming services producing their own films, larger corporations like Amazon and Apple starting to make content to supplement their main product and services, as well as free streaming services like Tubi. All these offer a new watch-on-demand form of entertainment that has changed the traditional ways that films are made.

That said, there are still big studios that follow similar, but less extreme, practices as studios from the Golden Age of Hollywood. Today, big studios are able to do everything from development to distribution. The big difference is that they cannot own physical theaters to exhibit their films.

Today’s Big Five Studios Include -

Warner Bros - Having lasted from the Golden Age of Hollywood, this studio is still a powerhouse of a studio having created popular film franchises like Harry Potter and The Lord of the Rings. Their most recent blockbuster hit was Barbie (2023).
Paramount Pictures - Another one of the original Big Five studios, Paramount is still around today producing films. Post the Golden Age, they have made the Top Gun movies, The Godfather (1972), and Forrest Gump (1994).
Disney - Starting out as an animation house, Disney has expanded into one of the largest most iconic film studios. Known primarily for their family content, Disney is known for films like Toy Story (1995), Beauty and the Beast (1991), and Monsters Inc (2001).
Universal Pictures - Originally a Little Three studio owned by creatives who wanted to get away from the big studio system, Universal Pictures has grown into a major studio known for creating hit, action-packed franchises like Jurassic Park and Fast and Furious.
Columbia Pictures - Another Little Three studio that has grown, Columbia Pictures has created a lot of memorable films and franchises in movie history. Their catalog includes Ghostbusters (1984), The Karate Kid (1984), and Men in Black (1997).

The Studio System of the Golden Age of Hollywood was a pivotal era in film history. It has shaped a lot of how today’s Hollywood business works. It set the stage for big studios to have control of film production from development to distribution. While it is clear that the system has changed, the way that studios work today, more than anything, is a modernized version of the past. Luckily though, with studios having less power in exhibition, there is a lot more opportunity for creatives to experiment and bring new voices into the media.

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