18 Facts About How The Old Hollywood Studio System Worked

It’s interesting to look back at how the old Hollywood studio system worked compared to today. Studios controlled all things film from the early '30s to the late '50s, including the lives and careers of screen legends. The system began unraveling when the US government banned block booking, a method of locking down screens through ownership and an onslaught of films. Television stole eyeballs. Agents undermined bargaining power. The Red Scare sparked the Hollywood blacklist, and the industry and government overplayed their hands. 

Another death knell was the Hays Code, a system of self-censorship that made Hollywood whitewash and water down film content. While it worked just fine for a while, it eventually undermined Hollywood, as European and independent filmmakers made bold storytelling choices that didn’t adhere to the code. Audiences filled art house theaters to watch Italian neorealism, Japanese imports, the cerebral films of Ingmar Bergman, and the beginning of the French New Wave. 

Old Hollywood stars under contract may have lived the dream, but a lot was expected of them. Studios controlled every aspect of their lives, from marriages to pregnancies. How they looked mattered more than how well they could act. Scandals were handled and buried. Studio abuses went unchecked. 

But it wasn’t all bad. Tinsel Town historical facts also reveal how screenwriters created the template for American cinematic narrative. The studio system made it possible for writers to transition to directing by helping them understand camera work and character blocking. The environment of collaboration helped produce countless classic films, including Casablanca, The Maltese Falcon, and some not starring Humphrey Bogart.   

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  • The Big Five And Little Three Studios Dominated Hollywood
    Photo: WarnerMedia / Wikimedia Commons / Public domain

    The Big Five And Little Three Studios Dominated Hollywood

    Five studios emerged from the silent film era of the 1920s to dominate American cinema. Those studios, known as the Big Five, were MGM, 20th Century Fox, RKO, Paramount, and Warner Bros. (whose first studio is pictured here).

    Various other studios and production companies clamored for a piece of the pie. The three others that ate at the big boy table, known as the Little Three, were Universal, United Artists, and Columbia. 

  • The Men Behind The Big Five Were Jewish Immigrants With A Background In Theater
    Photo: Unknown / Wikimedia Commons / Public domain

    The Men Behind The Big Five Were Jewish Immigrants With A Background In Theater

    Jewish immigrants Adolph Zukor, Louis B. Mayer, and brothers Harry, Albert, Samuel, and Jack Warner came to Hollywood when the vaudeville and burlesque circuit began to flag in the Northwest. They owned theaters that attracted working-class immigrants and first-generation Americans. 

    They chose Hollywood for several reasons. California was as far as they could get from Thomas Edison, who was more than happy to sue filmmakers for patent infringement. They also came for the weather. The warm and practically rainless climate allowed for longer production time, particularly inland from the coast. The terrain mirrors many other national and even international locations, and the light is perfect for filming. 

    The biggest reason they chose film over theater, though, was very simple: It was more profitable. 

  • Studios Controlled Which Films Appeared In Theaters With Block Booking
    Photo: Paramount Pictures / Wikimedia Commons / Public domain

    Studios Controlled Which Films Appeared In Theaters With Block Booking

    Studios sold films to theaters in blocks. A standard block contained 20 or more features, one of which was a high-quality picture with broad appeal, the rest of which were a grab bag of B movies of varying quality. Theater owners weren’t fans of the block system because it ate up the majority of the playbill for the year, but they had to go along with it in order to get the biggest films each year. 

    In many cases, when theater owners bid on a block from a studio, some films included weren't even made yet. Because of this, programmers had no idea how bad a picture might be. What's more, if the final product differed from descriptions provided by the studio, programmers would have no idea to whom the project might appeal and how to promote and schedule it. Theaters were also required to take short films, which were tacked onto features. Block booking was a major impediment to theater owners meeting the taste of their clientele. 

    On top of this, the Big Five owned controlling stakes in theater chains, which were exempt from block booking, and therefore would only show the best, most commercially successfully and high-quality films. This cut into the business of theaters lashed to the block system. 

  • War Was Big Business For The Studios
    Photo: Capitol Film Exchange / Wikimedia Commons / Public domain

    War Was Big Business For The Studios

    World War I led to a boom in the American film industry. The public wanted stories to escape from their lives, yet also craved news from the front, which theatrical newsreels provided. Public demand led to technological advances, while Hollywood’s competition, European cinema, had a hard time getting much done with all the fighting going on.

    Hollywood stars were also a huge part of the war effort during WWII. Bette Davis headed up the Hollywood Canteen, where stars like Frank Sinatra, Rita Hayworth, Cary Grant, Joan Crawford, Judy Garland, Humphrey Bogart, and Shirley Temple served and entertained the troops.

    Clark Gable, Jimmy Stewart, Marlene Dietrich, and Leslie Howard even joined the armed forces, and Dietrich was awarded the Presidential Medal of Freedom.

  • The Hays Code Was A Self-Censorship System Created To Avoid Federal Interference
    Photo: United Artists / Wikimedia Commons / Public domain

    The Hays Code Was A Self-Censorship System Created To Avoid Federal Interference

    Formally known as the Motion Picture Production Code, the Hays Code was put in place in 1930, but wasn't strictly enforced until 1934. The code was a way for the studios to self-censor in answer to the government’s threat to ban films the public might deem offensive or morally unacceptable.

    Pre-code films were far racier and more tolerant than post-code films. Sexuality, nudity, feminism, and gay characters were part of the cinematic landscape before the code was enforced. Will H. Hays was president of the Motion Picture Producers and Distributors of America when the code was adopted, hence the name, but it was more closely associated with Joseph Breen, who was appointed by Hays to enforce it. 

    The code drastically changed American cinema by banning sex, pregnancy, and promiscuity, upholding the sanctity of marriage, and adding twin beds in the budoir. The code also banned biracial relationships and gay characters. Villains couldn’t get away with murder. Violence was toned down or sanitized. 

    The American happy ending was born. Meanwhile, in Europe, characters had angst, were betrayed, and pondered real-life issues where a happy ending was never guaranteed. The upside of the Hays Code? It created snark. Many took direct shots at the code, mocking it outright. 

  • The Talent Scout System Was Wide-Ranging And Ravenous
    Photo: Eiga No Tomo / Wikimedia Commons / Public domain

    The Talent Scout System Was Wide-Ranging And Ravenous

    Hollywood talent scouts searched for fresh talent on Broadway, on the vaudeville circuit, and in radio. They were on the lookout for a fresh face just about anywhere, including the street. 

    In January 1937, a 15-year-old Julia Jean Turner was spotted drinking a soda outside of a shop in Hollywood after she ditched a typing class (by some accounts, it was The Hollywood Reporter founder William R. Wilkerson who spotted her, though it may have simply been a talent scout). She was approached and was later introduced to Zeppo Marx (who was an agent as well as an actor). With her mother's approval, she signed with his agency and was soon after cast in They Won’t Forget.

    Turner was an instant success, not because of her talent (she had no lines and was killed off pretty quickly), but because of her tight skirt and chest-hugging sweater. Turner, who chose Lana as her first name, was known as the “Sweater Girl.”  

    Turner said of her studio years:

    It was all beauty and it was all power. Once you had it made, they protected you; they gave you stardom. The ones who kept forging ahead became higher and higher and brighter and brighter and they were stars. And they were treated like stars. We had the best.