STACK February 2017 Issue 148

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become more sophisticated than previously
supposed, and the post-war baby boom meant
that the millions of new parents had far less
time and money to spend on entertainment.
The studio moguls were stunned and
perplexed, for they had believed that the
correlation between the industry's early post-
war boom and America's weekly habit of going
to the movies would continue well into the
next decade. Bereft of any immediate ideas of
how to lure mass audiences back into cinemas,
Hollywood was then hit with a series of events
that would sound the death knell for the
industry's studio system.
The most important of these events
occurred in 1948 when the Justice Department
challenged the monopolistic practices within
the movie industry. Moreover, they were able
to persuade the Supreme Court that the film
industry's studio system was in fact a criminal
conspiracy designed to strengthen their hold on
the exhibition field.
A key element – and the most profitable part
of the studio system – was the block-booking
of movies to independent exhibitors. The "big
five" studios owned or controlled a network
of some 1,400 movie theatres situated in the
major urban areas of the US. These "picture
palaces" were primarily first run theatres
premiering the big name stars' A-releases,
which also allowed the industry to charge high
ticket prices. But when independently owned
theatres – mainly located in the rural areas of
America – wanted to rent these big-budget
pictures, they would also have to take an entire
year's worth of films from the individual studios
without having the opportunity to screen them
in advance. These block or blind-booking units
would invariably include a number of mediocre
low budget movies. The studios' B-movie units
provided an indispensable training ground
for contracted novice actors and directors.
By bundling together these low budget
productions with major features guaranteed
the studios a profitable return on every film in
the unit. As a consequence, if the independent
movie houses did not take a certain number
of these lesser quality films, plus cartoons
and newsreels, they would not get the
prestige productions their paying customers
wanted to see.
This was considered an unfair trade
practice and a violation of the federal anti-
trust law, and in the case of The United
States vs Paramount Pictures, et al, block
booking was outlawed as an abuse of
market power. If that was not bad enough,
the five major studios were also forced to
divest themselves of their theatre chains
to allow for a true free market enterprise.
This meant that Paramount, Warner Bros.,
20th Century Fox, RKO and MGM no longer
1946 had been a bonanza year for
Hollywood with combined profits of the
five major, and three minor, movie studios
reaching the all-time high of $122 million ($1.6
billion in today's money). But without any
discernible warning, the following year millions
of Americans suddenly stopped going to the
movies. Hollywood's profits in 1947 dropped to
$89 million and the decline accelerated to less
than $60 million in 1948.
The demographics of US moviegoers
changed substantially after the war ended
and complex factors combined to both lower
attendance and change audience tastes.
War-time audiences had been primarily
women, made up of the mothers, wives,
daughters and sweethearts left behind
by the fighting men who had shipped out
to Europe and the Pacific. Servicemen
returning fromWWII had little taste for the
fictional and somewhat frivolous onscreen
entertainment that paled in comparison to
what they had witnessed and experienced
on the battlefield. Furthermore, a vast
majority of early post-war movies were
naïve and of poor quality, and Hollywood
was slow to realise that cinema audiences
were now carefully selecting the films that
they wanted to watch. Moviegoers had
The Decline of
Hollywood's
Studio System
1947-1950
Part 3
The lavish interior of the "picture palace" RKO
Pantages Theatre in Hollywood
The Paramount Theatre, Times Square,
Manhattan in 1948 - it was premiere theatres like
these that the major Hollywood studios were legally
forced to relinquish control of.
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24 FEBRUARY 2017