How the Big Five Rationalized Production

The discussion has so far implied that the majors rationalized production first of all by dividing output into A and B groups and then by allocating a specified amount of the total production budget to each group. The number and types of A films produced in a season depended mainly on the financial health of the company and the strengths of its personnel. For example, MGM budgeted $500,000 on the average for each of its top-grade pictures during the Depression, about $150,000 more per picture than any other company. MGM’s outlay reflected, of course, the financial status of its parent company, Loew’s Inc. In contrast, Warner Bros., which referred to itself as “The Ford of the Movies,” produced its class-Á films cheaply and efficiently, from $200,000 to $400,000 per picture during the Depression. Reflecting Harry Warner’s determination to pay off company debts, Warner’s class-A pictures consisted mostly of fast-paced topicals based on stories plucked out of the day’s news. The studio discouraged costly retakes and rigidly cut costs to the bare bones. RKO’s tenuous financial condition during the Depression forced the studio to cap the production costs for its top-grade product at around $200,000, but because of constant changes in front-office personnel, RKO never succeeded in formulating a successful production strategy. When economic conditions improved, the gap in production costs between MGM and the other majors closed somewhat, but Loew’s remained the most profitable company throughout the decade and in 1939 had allocated $42 million for production, the highest such budget in the industry.

Average production costs, however, do not tell the entire story, because the class-A output of the majors was actually divided into three tiers—superspecials, specials, and programmers. Superspecials typically consisted of prestige pictures and big-budget musicals with top stars, expensive production values, and running times as long as two and a half hours. Costing $1 million and more to produce, only a handful of such pictures would be produced by a studio in any given year. Specials constituted the bulk of the class-A line. Like superspecials, they were based on presold properties and contained popular stars, but they followed the principal production trends, conformed to regular running times, and had lower production budgets. Programmers had the lowest budgets of the group. They were typically based on original stories and contained minor stars and running times as short as fifty minutes. Such films were called programmers because they could fill either the top or bottom of a bill, depending on the genre, size of theater, and audience. A typical programmer, such as MGM’s THE CHASER (1938) featuring Dennis O’Keefe, was reviewed by Variety as follows: “Satisfactory programmer. Has fairly good plot, workmanlike script, capable direction and lucid acting though weak in marquee rating. Okay for the duals.”

A prevailing myth states that the motion pictures produced by a studio reflected pretty much the tastes of its chief executive.

Hailing, as many of them did, from carnivals, nickelodeons, and amusement parks, studio executives compensated for any lack of   aesthetic criteria by a “feel” for what would sell. They claimed to possess a kind of anatomical Richter scale on which they relied for their pronouncements about the taste and salability of movies: a sinking in the stomach, a tug of the heartstrings, or Harry Cohn’s oracular stimulus—a tickle on the buttocks. (Larry Ceplair and Steven Englund, The Inquisition in Hollywood: Politics in the Film Community, 1930-1960 [Garden City: Anchor Press, 1980], p. 7)

But like everything else about production, the majors also rationalized story acquisition and development. All the companies had story departments with large offices in New York, Hollywood, and Europe that systematically searched the literary marketplace and the stage for suitable novels, plays, short stories, and original ideas. Scouts for the studios sometimes even secured new works in manuscript or galleys, which was how Selznick acquired the motion-picture rights to GONE WITH THE WIND .

The question is, what policy, if any, guided a studio in acquiring properties? Robert Gustafson has attempted to answer such a question in his analysis of story acquisitions at Warners from 1930 to 1949. Warners’ story department may not be representative of all the majors; nonetheless, Gustafson’s study provides unusual insight into this phase of the production process. Gustafson argues that “the pattern of source acquisition demonstrates two often contradictory goals: (1) the desire to base films on pretested material, that is, low-risk material that was already well known and well received by the public and (2) the desire to acquire properties as inexpensively as possible, especially during declining or uncertain economic circumstances.” 49 In practice, this meant that in good times, Warners invested in pretested properties such as best-selling novels, hit Broadway plays, and popular short stories. In bad times, it offset the high costs of pretested properties by using original scripts written in its screenwriting department and by relying heavily on “the cheapest pretested material of all”—earlier Warner pictures.

Using its windfall profits from innovating sound, Warners splurged on Broadway hits, best-selling novels, popular nonfiction works, and short stories from popular magazines. From 1930 to 1934 these expensive pretested materials were used to produce nearly 50 percent of the studio’s output, while original material, such as unpublished, unproduced, and untested short stories, novels, and plays created by Warners’ writers, were used for 14 percent of the roster. Exploiting pretested source materials was an expensive but nonetheless conservative practice. But the remarkable thing about Warners’ use of these pretested properties is that little relationship existed between acquisition costs and production costs. As Gustafson points out, “motion pictures that cost $200,000 or less to produce had an average source cost of $7,000. However, films that cost more than $200,000 to produce had an average source cost of $8,000.” 50

When the studio sank into the red, Harry Warner demanded a radical change in the operations of the studio to eliminate waste. The story department, in particular, was directed to tie acquisitions to the company’s gross revenues; to be precise, Harry Warner mandated that the annual budget for the department was to be pegged at one-half of 1 percent of the company’s gross for the previous year. Pegging the budget to revenues would prevent “wild” buying and link the department to the overall performance of the company.

Harry Warner’s directive resulted in the story department moving away from expensive, tried-and-true properties to material written by salaried screenwriters working for the studio. From 1934, the first year of the pegged budget, to 1941, the last year before the World War II box-office boom, the studio relied on its writers for 40 percent of its source material, an increase of over 25 percent from the 1930-1933 period. Expensive, pretested properties were used for 21 percent of the studio’s output in the same period, a drop of nearly 30 percent. In other words, Harry Warner’s business plan reduced costs by substituting labor for capital.

Harry Warner’s business plan had the effect of further rationalizing source acquisition formulas for A and B pictures. After 1934 the story department continued purchasing expensive properties at nearly the same rate as before to stay competitive, but Harry Warner added a new wrinkle to the process; all big-ticket items had to be sent to Jack Warner for approval. Jack insisted on being presented with a one-page synopsis of the property under consideration. If he liked it, he wanted to read a sixteen-page treatment before saying yea or nay.

The spending policy on properties for the class-A films seems to have been this; the higher the estimated production cost, the more that could be spent on the underlying property. On the average, class-A films in the $200,000-$400,000 range used sources that cost $12,000, while those above $400,000 used sources that cost $16,600. Having once acquired an expensive property, it seems reasonable that a studio would want to reuse it often. After all, it had great name value and would provide a cheap and easy way to replicate success. But the studio seldom recycled expensive properties (e.g., GREEN PASTURES ) because they were by definition easily recognizable by many people and therefore were likely to make audiences feel cheated if reused. The number and percentage of remakes Warners produced increased significantly after 1934, but the majority of these pictures were Bs.

After the rise of double features, Warners boosted B production from 12 percent to 50 percent of annual output beginning in 1935, where it remained until the war. Since budgets for B pictures were between one-quarter and one-half the size of the A pictures, Harry Warner’s business plan dictated that the cost of source materials for these pictures be scaled down accordingly. From 1934 to 1941, plays used in B pictures cost $8,400 on the average, compared to $42,500 for those used in A pictures; for novels, the ratio was $6,400 to $18,500; and for short stories, it was $1,500 to $10,500.

To stay within the new budget constraints, the story department tapped Warners screenwriters for original scripts. From 1934 to 1941, 44 percent of the B films were based on original sources compared to 18 percent of the A films. To save more money, the B unit also recycled previously purchased source material from films that had originally done “fair” or “poor” at the box office.

But how did a studio determine before the start of production what the public wanted? Howard T. Lewis noted in his 1933 study of the motion-picture industry that “no company has been able to develop to its own satisfaction any method by which it can guarantee in advance that a proposed picture will be a box office success.” In deciding what to produce the next season, producers scrutinized box-office receipts; evaluated exhibitors reports, fan mail, and reviews; and watched newspapers, magazines, and books to keep abreast of public tastes. But no studio ever devised a “wholly satisfactory method of determining the probabilities of success of a proposed picture…. The method followed is still one of guessing; the producers don’t know just what the public wants, and it is doubtful if they ever will know,” Lewis concluded.

The best a producer could do in the way of market research was to test a completed picture at a sneak preview before releasing it. Although it was a common practice, previewing did not help much; the producer had already committed himself to the basic concept of the picture, and all he could do after analyzing audience reaction was to trim here and there or to reshoot a scene or two to eliminate the dull moments and to highlight the good ones.

As a result, producers attempted to protect their investments by reducing risks. The most common way, of course, was to rely on stars, which is the subject of a later chapter. Another way was to diversify the roster. Although Warners is best remembered for its gangster pictures and films of social consciousness, a survey of its output during the 1930s and 1940s conducted by John Davis reveals that the studio produced close to thirty different types of pictures, which he categorized into six groups—crime, the American scene, love, comedy, musicals, and costumers.

Another way to reduce risks was to follow trends. Production trends ran in cycles. Lewis described it thus: “What actually happens is that an outstanding gangster or war picture is produced. Immediately other directors imitate it in an effort to take advantage of the new idea conceived by someone else and to capitalize on the favorable publicity which the good picture has received. As a result a flood of such pictures, more or less copies of the original, inundates the screen.” Thomas Simonet states this idea another way: “Cautious moviemakers might minimize their risks by emphasizing the familiar—recreating with slight changes films that have proven successful in the past. More risk-oriented moviemakers, on the other hand, might emphasize the original.” 53 During the thirties, companies with the deepest pockets proved the most adventuresome, and the Little Three and Poverty Row studios, the most conservative.

The era is replete with examples of production cycles; but studios did more than imitate picture types; they even mimicked narrative structure. For example, the so-called “one locale” setting of MGM’s GRAND HOTEL , which provided the basis for interweaving several unrelated narrative threads, inspired such pictures as Columbia’s AMERICAN MADNESS , which is set in a bank, Warners’ EMPLOYEES’ ENTRANCE , which is set in a department store, and Paramount’s BIG BROADCAST , which is set in a radio station.

The best way to hedge bets was to launch a series. Once successfully launched, a series creates loyal and eager fans who form a core audience. By keeping production costs in line with this ready-made demand, series pictures are almost guaranteed a profit. The problem, of course, is to hit upon a theme or subject that will keep an audience’s interest beyond the sequel. Although series pictures were typically associated with B production, studios produced several important A series. For example, MGM’s Thin Man series, starring William Powell and Myrna Loy as the husband-and-wife detective team of Nick and Nora Charles, sustained itself for more than a decade. Consisting of six pictures that came out every two or three years beginning in 1934, the thirties’ pictures in the series consist of THE THIN MAN (1934), AFTER THE THIN MAN (1936), and ANOTHER THIN MAN (1939).

Warners’ Gold Diggers musicals is another good example of a successful A series. The series had its roots in 42ND STREET (1933), a surprise hit staged by   Busby Berkeley, featuring two juvenile leads, Ruby Keeler and Dick Powell. The picture led to GOLD DIGGERS OF 1933 and a succession of Berkeley backstage musicals, including GOLD DIGGERS OF 1935, GOLD DIGGERS OF 1937, and GOLD DIGGERS IN PARIS (1938). Although the plots varied only a little from picture to picture, the series was unusual in that the original leads were not repeated in the subsequent pictures. Rather, the series was held together by Busby Berkeley’s elaborately staged musical numbers.

Family series, particularly MGM’s Andy Hardy series, starring Mickey Rooney, were popular at the end of decade. A FAMILY AFFAIR , (1937), the first Andy Hardy picture, was a decidedly low-budget item, but the warm reception of the picture and the others it spun off earned the series class-A status, at least outside the largest metropolitan areas.

Representing 50 percent and more of the Big Five’s annual output, B pictures enabled studios to operate at optimum capacity and to provide a training ground for young actors and actresses on their way up and a resting place for performers on their way down. B pictures cost anywhere from $50,000 to $100,000 to produce. 54 The majors reduced the risks of making these pictures by using the least expensive source material of all (mostly original stories ground out by studio screenwriters), by hiring supporting players on a per-day basis, and by adhering to rigid shooting schedules of from fifteen to twenty-five days.

Regardless of the quality of these pictures, they all found exhibition outlets for the simple reason that the majors block-booked the B pictures along with their A pictures. But unlike the percentage-of-the-gross rentals charged for the higher-grade films, B’s were typically rented on a flat-rental basis. Although flat rentals prevented a producer from enjoying the extraordinary profits of an unexpected hit, the terms had the advantage of returning a predictable gross, meaning that if a studio kept costs in line, it could make a small but assured profit on its Bs.

To rationalize B production, studios relied extensively on the series. The economic rationale for B series was simple enough. As Thomas Schatz put it, “Not only the casting but the sets, props, music, even the story formula itself could be standardized, rendering what was already a low-budget enterprise that much more efficient and economical.” 55 By the end of the decade, series pictures had become staples of double-feature exhibition and provided reliable entertainment for the intrepid moviegoer. Hollywood produced over seventy different series to reach every segment of the audience—the family trade, the Western buff, the adolescent set, and the horror aficionado, among others. Series Westerns were especially cheap to produce because they were shot outdoors using standing sets and contained scenes intercut from old pictures or from a studio’s stock-footage library.

Warners’ B unit was headed by Bryan Foy. Called “the Keeper of the Bs,” Foy produced half the studio’s pictures, around twenty-five a year on a total annual budget of $5 million. 20th Century-Fox’s B unit was headed by Sol Wurtzel. Like Foy, he churned out half of the pictures on the studio roster. If Foy’s strategy was to remake Warners’ old silents and to produce cheap versions the studio’s social-problem films to fill out the roster, Wurtzel sought to develop long-running series. Charlie Chan, for example, began in 1931 and lasted at Fox until 1942, even though its original star, Warner Oland, died in 1938 and had to be replaced by Sidney Toler. As Douglas Gomery noted, “This ‘oriental’   detective constantly changed locales in order to solve his mysteries, so in 1936 he went to the Circus, visited the Race Track, and attended the Opera. ”

MGM, the most prestigious studio in Hollywood, with “More Stars Than in Heaven,” never admitted publicly that it produced  pictures. MGM took this position despite the fact its parent, Loew’s, Inc., announced that all its subsequent-run theaters were converting to double features in 1935. No one was fooled by MGM’s posturing; MGM kept a stable of B-picture specialists busy like every other studio. Producers Lucien Hubbard and Harry Rapf divided up such pictures between them; the busiest directors were George B. Seitz and Edwin L. Marin. However, MGM’s low-budget entries looked like no other B films. “When Metro goes out to make a Class B picture,” said Variety, “they give it plenty of production, steady direction and a certain amount of class. It may not have big draw stars and the situation may be overdone, but it certainly will stand up on the second picture shelf in the theatres for which it was designed.”