[1] Hammons found that there was a larger market for short comedies in movie theaters, and shifted the firm's focus.

Although Educational Pictures would continue to release occasional documentary shorts, its primary output was comedy.

Hammons became a highly respected film executive, and in 1938 he attempted to branch out into the lucrative feature-film market by joining forces with Grand National Pictures.

The merger failed, owing to insufficient capital to operate both companies, and Hammons declared bankruptcy in 1940.

Ten years after the demise of Educational Pictures, Hammons tried to gain a foothold in the new field of commercial television, using Educational's brand name and slogan ("The Spice of the Program"): "This corporation employs men who have the experience, integrity, and the know-how of producing films and live shows for the television industry.