Its supporters believed that it would promote the emergence of a vertically integrated film industry, with production, distribution and exhibition infrastructure controlled by the same companies.

As the vertically integrated American film industry had rapid growth in the years immediately following the end of World War I, the intention was to counter Hollywood's perceived economic and cultural dominance by promoting similar business practices among British studios, distributors and cinema chains.

By creating an obligatory market-section for British films, it was hoped that the increased economic activity in the production sector would lead to the growth of a self-sustaining industry.

A British film was defined according to the following criteria: Hollywood studios had to comply with the quota if they wanted their productions shown in Britain.

It fostered speculative investment in lavishly budgeted features for which production costs could not have been recouped on the domestic market, and it was criticised for the emergence of the inferior "quota quickies".