After The Apex: The End of the Studio System

February 6, 2011 by · Leave a Comment 

Mr. Blandings Builds His Dream House

Mr. Bland­ings Builds His Dream House

The year is 1948. The Amer­i­can econ­omy is boom­ing. The farm­ers are pros­per­ing. Abun­dance over­all is greater than at any­time in the nation’s his­tory. The net work­ing cap­i­tal of Amer­i­can cor­po­ra­tions is at a new high of nearly $64 bil­lion. For the steel, oil, and auto­mo­bile indus­tries, 1948 is a ban­ner year. Unem­ploy­ment is below 4 per­cent. Nearly every­one who wants a job has one, and though infla­tion con­tin­ues, peo­ple are earn­ing more actual buy­ing power than ever before, and all of this fol­low­ing the record year of 1947, which, For­tune mag­a­zine reported had been the great­est pro­duc­tive record in the peace­time his­tory of this or any other nation”. In the sum­mer of 1948 Lon­don played host to the first Olympic Games since those held in Berlin in 1936. Amer­i­can ath­letes, Bob Math­ais, Har­ri­son Dil­lard, Melvin Patton-swept the track and field events, win­ning thirty-eight medals. Amer­i­can pros­per­ity, it seemed was end­less. It was a time of extra­or­di­nary tech­ni­cal and sci­en­tific achieve­ment. A 200-inch tele­scope, the world’s largest, was unveiled at Mount Palo­mar, Cal­i­for­nia. Test pilot Chuck Yea­ger, fly­ing a rev­o­lu­tion­ary rocket-plane, the Bell X-1, broke the sound bar­rier. In 1948 the tran­sis­tor was devel­oped. A new antibi­otic, Aure­omycin and Cor­ti­sone to treat rheuma­toid arthri­tis, were devel­oped. A new kind of fuel, liq­uid hydro­gen, promised, its inven­tor claimed, to “send men to the moon.”

For evening enter­tain­ment, the coun­try was tun­ing in to such radio favorites as “Duffy’s Tav­ern” and “The Jack Benny Pro­gram”. Though Radio still dom­i­nated for news and enter­tain­ment, approx­i­mately one fam­ily out of every eight now owned a tele­vi­sion. 1948 would be remem­bered as the pre­mier year for the “Camel News­reel The­ater” with John Cameron Swayze, the first nightly news pro­gram. And for the first time ever, there would be tele­vi­sion broad­casts of the polit­i­cal con­ven­tions both held in Philadel­phia to make the tele­vi­sion cov­er­age easier.

Thelonious Monk

Thelo­nious Monk

The music being sung and danced to in 1948 included such hit songs as “Enjoy Your­self It’s Later Than You Think”, and “It’s a Most Unusual Day”. A new Jazz style “Be-Bop” was flour­ish­ing in such quaint spots as Minton’s Play­house on West 118th Street in New York, where such lumi­nar­ies as Thelo­nious Monk, Dizzy Gille­spie, Char­lie Paker, and oth­ers were cre­at­ing an alto­gether new kind of music. Cole Porter’s “Kiss Me Kate” was the lat­est hit on Broad­way, and some of the motion pic­tures released that year would be the best ever.

What Hap­pened

Sud­denly and with­out warn­ing mil­lions of peo­ple stopped going to the movies. Atten­dance sank from 80 mil­lion per week in 1946 to 60 mil­lion per week in 1948, and no stu­dio fared worse than the grand­est of the all, M-G-M. Long the biggest and rich­est stu­dio in Hol­ly­wood, suf­fered griev­ously from these finan­cial blows. The stu­dio had a gross income of $18 mil­lion the first twelve months after the war, but that declined to $4 mil­lion dur­ing the phys­i­cal year of Sep­tem­ber 1947 to Sep­tem­ber 1948, and led to a net defect of some $6 million.

The most impor­tant event in Hol­ly­wood in 1948 attracted remark­ably lit­tle atten­tion. Nor did it take place in Hol­ly­wood. Nor was it actu­ally an event but rather a month-long series in events. The essen­tial fact was that the Jus­tice Depart­ment per­suaded the Supreme Court that the whole Hol­ly­wood sys­tem, all those rich and pow­er­ful stu­dios and all those highly paid exec­u­tives who talked of their tal­ents for showmanship-all this was actu­ally a crim­i­nal conspiracy.

Enter the FTC

The con­tro­versy dated back almost to the begin­ning of the movie busi­ness. As early as 1921, the Fed­eral Trade Com­mis­sion was inves­ti­gat­ing such Hol­ly­wood prac­tices as block-booking and blind-selling. The pro­duc­ers, many of whom had started out as half-hearted oppo­nents of the patent hold­ers, now insisted on their own right to pro­tect their interests.

Associate Supreme Court justice William O. Douglas

Asso­ciate Supreme Court jus­tice William O. Douglas

In Feb­ru­ary of 1948, Attor­ney Gen­eral Thomas Clark appeared before the Supreme Court to argue once again that the stu­dios must divest them­selves of their the­ater chains. There was no other way, he claimed, ¹ “to effec­tively pry open to com­pe­ti­tion the chan­nels of trade in the indus­try”. The Jus­tice Depart­ment had already sub­mit­ted a peti­tion to the Court argu­ing that its plea was not just a mat­ter of free trade in the movie busi­ness but of free trade in ideas. “The con­tent of films, regard­less of who pro­duces them or exhibits them, must nec­es­sar­ily be con­di­tioned to some extent by the prej­u­dices and moral atti­tudes of those who con­trol the chan­nels of distribution.“The Jus­tice Depart­ment brief said. “Only by assur­ance that the dis­tri­b­u­tion field is open to all may the fullest diver­sity of film con­tent be had”.

The major stu­dios were not will­ing or not able to per­mit such a diver­sity”, the Jus­tice Depart­ment said. “On the con­trary, their past efforts had con­sisted of Cre­at­ing and main­tain­ing a con­trol of the film mar­ket expressly designed to pre­vent any views other than their own. Such a past, gives lit­tle hope that they will in the future encour­age pro­duc­tion of the wide ver­ity of films needed to sat­isfy the wide vari­ety of tastes pos­sessed by the poten­tial Amer­i­can film audi­ences, rather than a stan­dard­ized mass prod­uct adapted to prof­itable exhi­bi­tion in a con­trolled market”.

In the midst of this rather con­fused sit­u­a­tion, The Supreme Court spent three months reflect­ing on the Jus­tice department’s demand for “the fullest diver­sity of film con­tent.” Then it declared on May of 1948 that the Hol­ly­wood sys­tem was indeed a con­spir­acy, and that it would finally order the breakup that Thur­man Arnold, chief of the FBI’s anti-trust divi­sion, had requested before the war. “It is clear , so far as the five major stu­dios are con­cerned, that the aim of the con­spir­acy was exclu­sion­ary, i.e., that it was designed to strengthen their hold on the exhi­bi­tion field,” said the seven to one opin­ion writ­ten by Jus­tice William O. Dou­glas, In other words, the con­spir­acy had monop­oly in exhi­bi­tion as one of its goals.

Break ’Em Up

In Octo­ber, the Jus­tice Depart­ment announced once again that it wanted the five major stu­dios to give up their inter­ests in some four­teen hun­dred movie the­aters. It served notice on Para­mount, Loew’s, RKO, Warn­ers, and Fox that this would be its posi­tion when the New York Dis­trict Court took up the case. Among the alleged con­spir­a­tors, the one who cracked was, of all peo­ple, Howard Huges. RKO told the fed­eral author­i­ties at the end of Octo­ber that it would give up the bat­tle and sell off its inter­est in 241 the­ater within a year. Ten days later, Loew’s also sur­ren­dered, and the oth­ers fol­lowed suit. A con­sent decree was approved by the Jus­tice Depart­ment, the stu­dios, and the court. Though it would take another year for the the­aters to be sold, and still longer for the stu­dios to real­ize the dev­as­tat­ing impli­ca­tions of what had hap­pened to them. The golden age that Hol­ly­wood had founded on a so-called ’con­spir­acy“ was com­ing to an end.

The Result

The Godfather, 1972

The God­fa­ther, 1972

Some great films have been made since the 1948 Supreme Court deci­sion. But have motion pic­tures really got­ten bet­ter? With the Amer­i­can Film Institute’s recent announce­ment of their top 100 films, one need only a pass­ing glance to see that the bulk of them were pro­duced by the major stu­dios, dur­ing Hollywood’s golden age.

It is doubt­ful that the stu­dios could have sur­vived even had they been able to hold on to their the­aters. As audi­ences dwin­dled, the stu­dios had lit­tle choice but to liq­ui­date their hold­ings. The dreaded seven year con­tracts that the studio’s imposed on their actors and artis­tic peo­ple were being chal­lenged. One by one the great movie stu­dios began to frag­ment. M-G-M was bought by Kirk Kerko­rian, a hotel mag­nate. Warner Broth­ers was eaten up my Seven Arts, and finally by the Kin­ney Cor­po­ra­tion. Para­mount was acquired by the Gulf+Western Com­pany. MCA took over Uni­ver­sal. Harry Cohn’s Colum­bia was acquired by Coca Cola.

The great empires have crum­bled. The pin­na­cles of power have dimin­ished. What remains is an idea, a truth that in our minds, at least those of us who cher­ish the great clas­sic period, will never van­ish. And what we take away is a con­stel­la­tion of val­ues, images, and atti­tudes, a his­tory and a mythol­ogy that is part of our cul­ture and consciousness.

¹ Otto Friedrich, “City of Nets: A Por­trait of Hol­ly­wood in the 1940’s” pg. 349

by Michael Mills

About Michael Mills
Rank-amateur photographer, I like Classic films, real Jazz, Opera, and a little Hank Williams . . . and sometimes baseball . . .