The film industry boomed in America during World I. Freedom finally to make the most of filmmaking technology was one reason. At the end of the war, Hollywood motion pictures were America’s fifth largest industry.
Classical style
For good reason were the studios called “dream factories.” They were organized and run to deliver a steady stream of product to theaters that the studios owned or partly owned. Their product, in a word, was storytelling. Continuity in movement, actors’ positions, dialogue, lighting, sound—in sum, every aspect of the filmmaking process—was imperative.
Anything that diverted attention from the story to the filmmaking process was a mistake. The final responsibility for continuity resided with film editors, ergo the term “continuity editing,” aka “invisible editing”.
Content
Hollywood’s studios mainly agreed that movies should be an escape from reality , not a reflection of reality. Though some films were exceptions, exceptions ended in 1934 with enforcement of the Motion Picture Production Code, nicknamed the Hayes Code, which banned morally unacceptable content. Although the Code did not mandate happy endings, it did prevent any film villain from having one. Sexual contact was limited to kissing, violence was bloodless and sanitized, dialogue was devoid of vulgarities, etc
Production
Everyone and everything needed to shoot a motion picture was inside a studio’s walls save open terrain for non-urban action scenes—e.g., cowboys on horses, soldiers in combat, rural car chases—and landmarks for establishing shots—e.g., Eiffel Tower, New York skyline, the Golden Gate Bridge. Because sound technology was in its infancy, outdoor scenes with extensive dialogue were usually shot on sound stages.
Studio self sufficiency made production design simpler for producers and art directors, who oversaw in-house artists, carpenters, costume designers and lighting technicians. Sets, props and costumes were often used for multiple movies as were studio backlots which commonly included urban, Old West and residential street fronts. Of course, factory efficiency is pointless without consistent high demand for products. For the dream factories, demand came from extensive distribution chains that included Europe, which by the late 1930s accounted almost 40 percent of revenue
Role of Director
Directors could modify the script, but creative control remained with the producer and studio and their primary responsibility was to get the best performances possible from actors while remaining on schedule and within budget. Films were made within an established classical style and within clear genre conventions .The system enabled directors to be replaced quickly or to direct multple films in one year, as did Victor Fleming, such contrasting films as “The Wizard of Oz” (1939) and “Gone With the Wind” (1939).
Stars
Everyone was under contract—producers, directors, actors, writers, cinematographers, art directors, technicians, etc. The stable of actors consisted of lead actors, supporting actors and central casting extras. All casting was type casting. Lead actors were groomed and promoted by a “star system” more concerned with camera presence than acting skill.
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Monopoly and power
By 1945, 17% of theaters accounting for 45% of domestic film rentals were owned wholly or largely by The Big Five studios. Theaters not part of a studio system were subject to “block booking,” i.e., the requirement that, to rent a studio’s A-budget films, a theater must purchase a block of films that included B films, shorts, newsreels and cartoons The Big Five evolved the practice to where theaters were asked to purchase packages of 20 or more films not yet produced based on listings of film titles, their stars and brief plot descriptions. Studio star systems were consequently critical because star power figured prominently in selling packages.
The end of the studio system
The studio system ended in 1948 with the U.S. Supreme Court decision United States v. Paramount, which banned block booking and ordered the studios to divest themselves of all theater holdings. The loss of guaranteed revenue streams spelled fadeout for “Classic Hollywood.” Accelerating the fadeout was television. Had there been no Supreme Court decision, block booking would have gone extinct competing with television. By 1958, A-budget movies found television stiff competition.
Legacy and the role of the director
The legacy of the studio system continues to be debated. Critics argue that reliable revenue streams made it not a priority to make "good" movies and pointed out that creative control by the studio prevented directors having any creativity and less interesting films and formulaic genre films being made as a result. However others argue that reliable revenue enabled studios to ignore risk occasionally and indulge originality to a degree modern filmmakers cannot and that directors ( working within the limits of classical style and the studio system) could still produce creative and high quality work.