Of these eight, five were fully integrated conglomerates known as the original Big Five, combining ownership of a production studio, distribution division, and substantial theater chain, and contracting with performers and filmmaking personnel: Metro-Goldwyn-Mayer (owned by Loews Incorporated, owner of America's largest theater chain), Paramount Pictures, Warner Bros., 20th Century-Fox (later renamed 20th Century Studios after its Disney acquisition brought back the Big Five for the first time since then), and RKO Radio Pictures (the last of these five, which emerged in 1928).
The years 1927 and 1928 are generally seen as the beginning of Hollywood's Golden Age and the final major steps in establishing studio system control of the American film business.
The success of 1927's The Jazz Singer, the first feature-length "talkie" (in fact, the majority of its scenes did not have live-recorded sound) gave a big boost to the then midsized Warner Bros. studio.
The following year saw both the general introduction of sound throughout the industry and two more smashes for Warners: The Singing Fool, The Jazz Singer's even more profitable follow-up, and Hollywood's first "all-talking" feature, Lights of New York.
In October, through a set of stock transfers, RCA gained control of both FBO and the Keith-Albee-Orpheum theater chain; merging them into a single venture, it created the Radio-Keith-Orpheum Corporation, Sarnoff chairing the board.
The ranking of the Big Five in terms of profitability (closely related to market share) was largely consistent during the Golden Age: MGM was number one eleven years running, 1931–41.
President Franklin Delano Roosevelt said of Shirley Temple, "When the spirit of the people is lower than at any other time during this Depression, it is a splendid thing that for just fifteen cents an American can go to a movie and look at the smiling face of a baby and forget his troubles".
Holding that the conglomerates were indeed in violation of antitrust, the justices refrained from making a final decision as to how that fault should be remedied, but the case was sent back to the lower court from which it had come with language that suggested divorcement—the complete separation of exhibition interests from producer-distributor operations—was the answer.
The Big Five, though, seemed united in their determination to fight on and drag out legal proceedings for years as they had already proven adept at—after all, the Paramount suit had originally been filed on July 20, 1938.
As RKO controlled the fewest theaters of any of the Big Five, Hughes decided that starting a divorcement domino effect could actually help put his studio on a more equal footing with his competitors.
The major studio that adapted to the new circumstances with the most immediate success was the smallest, United Artists; under a new management team that took over in 1951, overhead was cut by terminating its lease arrangement with the Pickford-Fairbanks production facility and new relationships with independent producers, now often involving direct investment, were forged—a business model that Hollywood would increasingly emulate in coming years.
That year, General Tire and Rubber Company, which was expanding its small, decade-old broadcasting division, approached Hughes concerning the availability of RKO's film library for programming.
Under the deal, the films were stripped of their RKO identity before being sent by C&C to local stations; the famous opening logo, with its globe and radio tower, was removed, as were the studio's other trademarks.
While the studio system is largely identified as an American phenomenon, film production companies in other countries did at times achieve and maintain full integration in a manner similar to Hollywood's Big Five.
As historian James Chapman describes, In Britain, only two companies ever achieved full vertical integration (the Rank Organization and the Associated British Picture Corporation).
Other countries where some level of vertical integration occurred were Germany during the 1920s (Universum Film Aktiengesellschaft, or Ufa), France during the 1930s (Gaumont-Franco-Film-Aubert and Pathé-Natan) and Japan (Nikkatsu, Shochiku and Toho).
India, which represents perhaps the only serious rival to the U.S. film industry due to its dominance of both its own and the Asian diasporic markets, has, in contrast, never achieved any degree of vertical integration.
[10] We find ourselves ... dealing with corporations rather than with individuals.In the 1950s Hollywood faced three great challenges: The Paramount case ending the studio system, the new popularity of television, and consumer spending providing its audience with many other leisure options.
[12] Harry Cohn of Columbia, who died the following year,[13] informed investors in the studio's annual report of 1957 that: We find ourselves in a highly competitive market for these talents [stars, directors, producers, writers].
Top independent directors George Stevens, Billy Wilder, and William Wyler also saw their paychecks increase, in part because their involvement attracted star actors.
Studios increasingly provided funding and facilities to independent producers as opposed to making their own films, or just like United Artists, they focused on distribution.
[7] At the beginning of the 1960s the major studios began to reissue older films for syndication and transformed into mainly producing telefilms and b-movies to supply TV's demand for programming.
[17] The release of films at hundreds of venues became the norm, with hits such as the sequels to Lucas's Star Wars, The Empire Strikes Back and Return of the Jedi, Spielberg's back-to-back successes with Raiders of the Lost Ark and E.T.
They stand somewhere between latter-day versions of the old "major-minor"—just like Columbia and Universal were in the 1930s and 1940s, except Lionsgate has about half their market share—and leading Golden Age independent production outfits such as Samuel Goldwyn Inc. and the companies of David O. Selznick.
[citation needed] The COVID-19 crisis contributed to a further decline, as audiences began switching from movie theatres to streaming services such as Netflix, Hulu, and Apple TV+.