The Studio System of Production & Vertical Integration

The Studio System of production seemed to be what propelled the popularity of the film industry into it's Golden Age. A major part of the control existed because of a vertical integration of production, distribution, exhibition, and Stars (Tait), through a handful of big money corporations called the Big Eight studios. These included the Big Five; MGM, Warner Bros., 20th Century Fox, Paramount, and RKO, and the Little Three; Universal, Columbia, and United Artists (Schatz).
While owning every aspect of the movie making process, these few corporations formed an oligopoly who mastered the art form as well as the business form of the film industry. Classical Hollywood Cinema was formed and perfected, with certain techniques in mind. By providing a working system that their leaders could closely monitor, adjust and control, the Big Eight studios would dominate the film market.
Vertical integration was key to developing film in the studio system of production. In these studios, all levels of talent were hired through a "contract system" (Schatz). This meant that every class of worker including directors, writers, editors, actors, and crew members were hired or "contracted" and worked together in the same studios. A major aspect of the studio machine was the audiences recognition of acting talent, or Stars (Tait). Producing actresses like Ingrid Bergman and Judy Garland made Hollywood literally notorious for projecting Stars into mainstream popularity. Having such close ties, the Big Eight often loaned each other their top talents.  They would also exhibit their films in their own shared theaters. Another way control was expressed was through the direct distribution of films by the Big Eight studios themselves. Cutting out the middle man seemed more efficient then the distribution process that is in use today. The vertical integration of the studio system of production made it virtually impossible for competition by placing control of every aspect of film making decisions in the hands of an elite few. This led to great success for Classical Hollywood Cinema at that time.


                 

Tait, C. (10, October 04&06) Film History lecture presented in RTF 305. University of Texas, Austin, TX.

Schatz, T. (2008) The Studio System and Conglomerate Hollywood. In P. McDonald & J. Wasko (Eds.), The Contemporary Hollywood Film Industry (p15). Malden, MA: Blackwell Publishing.

Judy Garland Picture - http://www.collider.com/entertainment/news/article.asp?aid=10773&tcid=1