Before The Walt Disney Company owned a bunch of companies, and before other film studios and companies were being bought by other big companies, there was the classic Hollywood studio system. What is the studio system? While it would be easy to simplify it as the time when movie studios owned the theaters that would play their movies, there is a bit more to the Hollywood studio era.

Classical Hollywood System

Defining the Hollywood studio system

Admittedly, just asking, “ what is the studio system” is fairly vague, but it almost always refers to the Hollywood studio system of the 1930s and ‘40s. So, while people could use the term “studio system” in other contexts, we will be sticking to the most common and original version of the term.


What is the studio system?

The studio system is a business method where Hollywood movie studios control all aspects of their film productions, including production, distribution, and exhibition. Dominated by the Big Five studios, all personnel including actors, crew, directors, and writers were under contract to the studios. It made for efficient and “assembly-line” style filmmaking that dominated the industry for about two crucial decades.

Characteristics of the studio system included:

  • Studios owned their own movie theaters (which would play their movies).
  • Studios offered independent theaters a block set of films (known as “block booking”), containing desirable movies mixed with unwanted ones.
  • Everyone from actors to directors were paid a salary instead of “per film,” along with having contracts.

Big FIve Studios

The Big Five (and Little Three)

It all starts with what will always be known as the Big Five studios. These were five major film studios that were responsible for the classical Hollywood system. They included Metro-Goldwyn-Mayer, Warner Bros., Paramount, Fox, and RKO. All of which were "vertically integrated" meaning that production, distribution, and exhibition were handled "in-house."

This made it extremely difficult for independent studios, distributors, and exhibitors to compete in the industry, but more on that later.

Most of these studios were fronted by major movie moguls who previously owned movie theaters in the 1910s before heading to Los Angeles to run their own studios. They included Louis B. Mayer (MGM), Jack Warner (Warner Bros.), Adolph Zukor (Paramount), and Darryl Zanuck (Fox).

You can learn a bit more about the time period in which these movie moguls ruled in the video below. It covers what was known as the Golden Age of Hollywood era, when some real deal classics were produced under the studio system (and the Hays Code).

What is the studio system?  •  Classical Hollywood era

Aside from the Big Five studios, there were also three smaller studios that did not own as many of their own movie theaters. They were Universal, Columbia, and United Artists, a studio founded by Charlie Chaplin, Mary Pickford, Douglas Fairbanks and D.W. Griffith precisely because the studios were so controlling of their work, salary, and creativity.

Hollywood Studio Era

The Hollywood studio system in action

The Hollywood studio era involved the Big Five studios controlling all aspects of their movies, with owning their own movie theaters being the most notable. In this way, if you lived in a town with a Warner Bros. and Paramount theater, you would have no trouble checking out their latest movies.

For all the other movie theaters they didn’t own, they offered them blocks of movies they could distribute, which was known as “block booking.” This involved having, for example, a set of five movies; one is actually good, while the rest are middling or just bad. Due to it being an “all or nothing” deal, many of these independent theaters took what they were offered, resulting in a swath of movies being distributed all across the country.

During the Hollywood studio era, there was also the “Star System,” which was when actors, under contract to a studio, would be sculpted by said studio to fit an ideal, one which could not be tarnished.

You can learn a bit more about it in the video below.

What is the Studio System?  •  Making a star

The movies made by these Big Five studios would also be stuck to the lot, which means every aspect of the filmmaking was typically done in one place. Unless you were filming establishing shots or something similar, your camera would not be leaving the Los Angeles area. To top it off, if you worked for the movie studios, you weren’t paid by film: you had a contract and salary.

Studio System Demise

The end of the Hollywood studio system

But the “good times” were not to last, because the U.S. government was knocking on the door of the Hollywood studio era. While they tried earlier, it would not be until 1948, with the United States v. Paramount Pictures, Inc. case, that the studio system would come to an end.

It stated that this studio system was in violation of the nation’s antitrust law, and was therefore illegal. This resulted in the movie studios no longer owning — either partially or fully — their movie theaters. Not only that, but television was on the rise, so ticket sales were also falling. So while it broke up what was essentially a monopoly, it also put the studios in a financial tight spot.

But it wasn’t just the movie theaters, as the court decision also brought about changes to the way the Big Five made films. For example: actors would no longer be held hostage by contracts or salaries (though contracts would still be a thing, just with less restrictions).

This was pretty great for major actors who could earn hundreds of thousands per movie, but it also meant less stable revenue for others.

In the interim, the Hollywood studio system now had to figure out how to get people back in the theaters. TV was the hottest thing in town, but limited theater events like Cinerama and CinemaScope gave the studios an unprecedented idea to change the way movies looked.

What is the Studio System?  •  CinemaScope 

By introducing new widescreen films, with CinemaScope, VistaVision, and others, the classical Hollywood system was able to find a way to make going to the movies attractive again. While it wasn’t perfect, it did help them out and ended up having a permanent impact on the way we literally look at movies.


The New Hollywood Era

You have now answered “what is the studio system,” so why not learn about how Hollywood got its groove back? The New Hollywood era breathed new life into an established but aging landscape, creating movies that broke convention and continue to influence filmmakers the world over. Read more about this innovative and exciting time.

Up Next: New Hollywood →
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  • Rafael Abreu received his M.A. in Cinema Studies from New York University. He’s written reviews, scripts, and analytical essays focusing on all aspects of cinema. He can’t stop talking about aspect ratios.

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