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The Hollywood Studio System in 1940-1941 - The Major Studios, METRO-GOLDWYN-MAYER, WARNER BROS, 20TH CENTURY-FOX, PARAMOUNT, RKO

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By 1940, the major motion picture companies had refined a production system acutely attuned to market conditions and to the industry’s vertically integrated structure. This system was the essential feature of Hollywood’s “classical” era, the basis for what Tino Balio has called the “grand design” of 1930s American cinema. But as we have seen, the American cinema faced myriad challenges both inside and outside the industry in 1940-1941. These would have enormous impact on the studio production system during the 1940s, forcing Hollywood’s major powers to adjust the way they rationalized and organized production, and the way they produced and marketed individual films as well. In the course of the decade, the studio system that had been refined over the previous quarter-century would be steadily, inexorably, and permanently transformed.

That transformation scarcely occurred overnight, and, in fact, Hollywood’s studiobased production system was still essentially intact in 1940, despite the challenges that threatened the industry. That system was essentially a factory-oriented mass-production operation wherein revenues from distribution and exhibition enabled the studios to keep their production plants running at full capacity. This system enabled the major producer-distributors to turn out roughly one feature film per week along with assorted serials, shorts, newsreels, and so on. Hollywood’s principal product, of course, was the feature film, which in 1940 accounted for over 90 percent of the $150 million invested in studio-based production.’ Feature production at all of the major studios included both Á-class and B-class movies, with the proportion of the former to the latter dependent on the company’s resources, theater holdings (or lack thereof), and overall market strategy. The majors also turned out occasional “prestige” pictures—bigger and more expensive features that were heavily promoted and usually released on a special “road-show” basis. Prestige films of 1940 included Paramount’s NORTHWEST MOUNTED POLICE , SELZNICK/UA’s REBECCA , Chaplin/UA’s THE GREAT DICTATOR , and MGM’s THE PHILADELPHIA STORY.

While prestige pictures played an increasingly important role in the prewar movie marketplace, Hollywood’s key commodity was the Á-class picture, particularly the routine, studio-produced “star vehicle.” These films dominated the first-run market, generated the brunt of studio revenues, and provided veritable insurance policies at the box office—not only with the public but with unaffiliated theater owners as well, since a company’s A-class features effectively carried its entire block of pictures. Thus, each studio’s stable of contract stars and its repertoire of presold genre variations were its most visible and viable resources. There was a direct correlation, in fact, between a studio’s assets and revenues, the number of star-genre formulas in its repertoire, and the size and quality of its star stable—ranging from the talent-laden MGM, with over a dozen top stars on its roster, to lesser companies like RKO, Columbia, and Universal, each of which had only one or two top stars under exclusive contract and produced only a half-dozen or so A-class features per year.

Each studio’s A-class star-genre formulations also were the prime factors in its distinctive “house style.” Warner Bros, by 1940, for instance, had fashioned its corporate identity and signature style around a steady output of crime films with James Cagney and Edward G. Robinson, crusading biopics with Paul Muni, Bette Davis melodramas, and romantic swashbucklers with Errol Flynn and Olivia de Havilland. These star-genre formulas were the key markers of Warners’ house style, the organizing principles for its entire operation, from the New York office to the studio-factory a continent away. They were a means of stabilizing marketing and sales, of bringing efficiency and economy to high-end feature production, and of distinguishing the company’s collective output from that of its competitors.

To supplement their A-class product and to render overall production and marketing operations more efficient, the studios relied heavily on B pictures. This distinctive class of low-grade feature film developed early in the Depression with the emergence of double billing and the general need to economize production. B movies were made quickly and cheaply, with second-rate stars and running times of about sixty minutes. They were ruthlessly formulaic, designed to play double bills in the subsequent-run market. Often referred to as “programmers,” B’s were packaged with another feature—either another B or a top feature working its way through the subsequent-run market—along with various shorts, newsreels, and cartoons in a full afternoon or evening “program” of films. All of the studios except UA produced B’s, which, in fact, comprised up to one-half the output of Warners, RKO, and Fox by 1939-1940. While most of the studios’ revenues were earned from first-run features, B-movie production enabled them to keep operations running smoothly and contract personnel working regularly, to develop new talent, and to ensure a regular supply of product. And given their established block-booking and blind-bidding policies, the major studios were assured of an outlet for their B-grade products.

Executive management—that is, the coordination of production and marketing operations by corporate and studio executives—was a crucial facet of the vertically integrated studio system, and one which changed considerably in the late 1930s and 1940s. The Depression-era collapse of five of the Big Eight studios had put several Wall Street firms in direct control of four motion picture companies (Paramount, Fox, RKO, and Universal), and the results were complex and somewhat paradoxical. While these studios became more efficient and market-driven, they never quite conformed to Wall Street’s rigid notions of production efficiency and sound business practice. Moreover, efforts to force the studios to conform to these notions simply failed. Thus, by the late 1930s, as Robert Sklar has pointed out, “all of the studios were back under the management, if not the ownership, of men experienced in the world of entertainment.” And in terms of actual studio operations, notes Sklar, “the ultimate issue is not who owns the movie companies but who manages them.”

Significantly enough, however, the newly appointed chief executives at Paramount, Fox, RKO, and Universal all came from the business side of the industry—a clear indication   of Wall Street’s influence and the general development of the cinema into a modern business enterprise. Tino Balio considers the ownership-management split which developed during the 1930s a necessary result of industrial and economic growth. “As they grew in size,” writes Balio, the studios “became managerial, which is to say, they rationalized and organized operations into autonomous departments headed by a professional manager.” The studio founders themselves either became “full-time career managers”—the Cohns at Columbia, for example, and the Warners—or, as was more often the case, relinquished direct control to salaried executives. Balio also notes that although most of the chief executives appointed during the 1930s came from either distribution or exhibition, the management of actual filmmaking operations invariably was left to a salaried executive with a production background.

Thus, the ownership-management split in the late 1930s was accompanied by a split between the management of the corporation and the management of studio and production operations—a split that would grow even more acute during the 1940s. In the early studio era, management of the corporation, of the studio-factory, and of actual production was a top-down process with a clear chain of command. The New York office, the site of ultimate authority, dictated the direction of capital, controlled marketing and sales, and, for the Big Five, oversaw theater operations. The New York office also set the annual budget and general production requirements of the studio. The Hollywood plant, in turn, was managed by one or two corporate vice presidents—usually a “studio boss” and a "production chief—who were responsible for day-to-day studio operations and for the overall output of pictures. The chain of command extended from the studio front office into the production arena via supervisors or “associate producers” who monitored production on behalf of the higher corporate executives.

This type of central-producer system, wherein one or two executives supervised production, had all but disappeared by 1940. The studios still were managed by a studio boss and a production chief, but these individuals rarely had the kind of direct influence and authority over actual filmmaking as the studio executives of the past. Instead, the studios gradually shifted to a so-called unit-producer system during the 1930s. This system, as Janet Staiger has noted, involved “a management organization in which a group of men supervised six to eight films per year, usually each producer concentrating on a particular type of film.” While actual production remained centralized in the studio-factory and fell under the ultimate control of the executive hierarchy, the unit system clearly entailed a dispersal of administrative authority and creative control into the producer ranks.

Until the late 1930s, unit production was generally a studio-based process involving top talent and A-class pictures. The studios learned during the 1930s that unit production provided a means of ensuring quality and consistency in high-end production while controlling not only costs but temperamental high-end talent. These units invariably formed around top stars and the other high-salaried “creative” personnel—notably directors, writers, cinematographers, and composers—and were keyed to specific star-genre formulas. Some of these units were informal and fluid, changing somewhat from one star-genre formulation to the next except for a few key personnel, as with the writer Casey Robinson and the composer Max Steiner on the Bette Davis melodramas at Warners. Other units were remarkably consistent, like the so-called Seitz unit at MGM, which cranked out Hardy Family pictures every four to six months, each of which depended on the collaborative efforts of the regular cast (Mickey Rooney, Lewis Stone, et al.), the director George B. Seitz, the associate producer Lou Ostrow, the writer Kay Van Riper, the script supervisor Carey Wilson, the cinematographer Lew White, the editor Ben Lewis, and dozens of others.

The producer was in many ways the key figure in these units, and the unit’s relative autonomy in terms of studio management was a function of both the producer’s track record and the leverage (contractual or otherwise) of the top talent involved. At the A-class feature level, where product differentiation was essential, the “creativity” of the collaborators was a veritable requirement; indeed, unit production at that level was a means of managing (and limiting) innovation. At the low-budget feature level, conversely, where the “regulated difference” of products was the prime concern, the studios maintained a mass-production, assembly-line mentality. In fact, by 1940 the most obvious remnant of Hollywood’s central-producer system was in the B-picture arena: each studio assigned a foreman of sorts—J. J. Cohn at MGM, Bryan Foy at Warners, Sol Wurtzel at Fox, Harold Hurley at Paramount, and Lee Marcus at RKO—to oversee production operations.

In 1940—1941, unit production began shifting to a more genuinely independent status, owing to several related factors, and three in particular: first, the increasing leverage of top filmmaking talent; second, the growing demand for A-class product which accompanied the improving market; and third, the 1940 consent decree with its blocksof-five and trade-show provisions, which forced the studios to have A-class product on hand well in advance of release. This shift was widely anticipated in the industry, and in fact the New York Times ran an in-depth story on the coming trend in February 1940, noting: “The long-predicted bloodless revolution in picture-making appears imminent. Unit production—that system by which independent producers operating under the protective wings of major lots are encouraged to use initiative and imagination while obtaining the benefits of factory costs and methods—has become an accepted practice at four studios: Warners, RKO, Universal, and Columbia.” 5 In April, Variety ran a lead story under the banner headline “Film Unit Production Grows,” reporting that the trend to studio-based independent filmmaking was accelerating, spurred by rising production and studio overhead costs and by the fact that some independents had their own outside funding.

As discussed earlier, top talent began deserting the studios for freelance status in 1939-1940, many of them actually creating their own companies—a tactic which would accelerate rapidly in 1941-1942 as the war-related income tax codes took effect . While UA was an obvious option for independents and freelance talent, other studios began modifying the “UA model” and were beating the company at its own game. While UA offered greater autonomy perhaps, a studio could provide an in-house independent with financing, distribution, superior resources (production facilities, talent pool, etc.), and, in the case of the integrated majors, direct access to the first-run market.

Given the market and regulatory conditions, the studios were willing to consider deals with outside producers and other top talent, often on unprecedented terms, simply to secure proven filmmakers who could reliably deliver A-class features. This new leverage for independents affected studio-based contract talent as well in that the studios were forced to grant more creative and administrative authority to above-the-line personnel—stars, top directors and writers, as well as staff producers—in order to keep them under contract. The most important filmmakers in this regard, without question, were producer-directors like Frank Capra, John Ford, Leo McCarey, and Cecil B. DeMille. In fact, the number of these so-called hyphenates increased substantially in 1940-1941, and their number would continue to grow throughout the decade.

As top filmmaking talent began to enjoy more creative freedom and authority in the early 1940s than they had known in two decades of studio rule, the studios’ once-absolute control of the filmmaking process steadily diminished, particularly in the realm of A-class feature production, where the economic stakes were highest. The studios still dominated and effectively controlled the production system, of course, owing to their overall command of filmmaking resources as well as their command of distribution and exhibition. Significantly, each studio responded somewhat differently to these changing industry conditions in 1940-1941. The studio system may have been an integrated industrial and economic system, but each company actually manifested the system in a different and distinctive way.

The following survey of the Hollywood studios in 1940-1941 well indicates both the similarities and differences in studio operations and output in the prewar era. It provides, in brief, a sense of each studios house style and corporate identity at this remarkable moment in American film history—that is, at the culmination of the studio era and the height of Hollywood’s golden age, as the industry entered a period of dramatic and lasting change. This survey tracks the management and production operations, key resources, and market strategies of the five integrated majors (MGM, Paramount, 20th Century-Fox, Warner Bros., and RKO), the three major-minors (United Artists, Columbia, and Universal), and the struggling “Poverty Row” companies (Republic, Monogram), indicating both the continuity and the complexity of the studio system in prewar Hollywood and the range of studio strategies which were deployed during the volatile prewar era.

The Major Studios

The principal Hollywood powers in 1940-1941 were, of course, the so-called Big Eight studios, with the five theater-owning integrated majors by far the dominant companies. As discussed earlier, a clear rift existed between the five integrated majors and the three major-minors in terms of assets, resources, and overall industry power. That rift is readily evident in table 3.1, which charts the revenues, profits, and number of releases for each of the Big Eight companies in 1940 and 1941:

Besides indicating the clear superiority of the Big Five in terms of revenues and profits, these figures also show that all of the studios were beginning to capitalize on the prewar market surge by 1941. That was, in fact, the first year since 1929 that all of the Big Eight companies turned a profit. That trend would continue through the coming war boom, with the integrated majors enjoying the benefits of that boom to a far greater degree than the other studios. As discussed in chapter 2, the Big Five were ideally positioned to capitalize on the movie industry’s post-Depression, war-induced recovery, thanks largely to the courts’ allowing them to retain their theater chains and thus ensuring their continued domination of the industry. In fact, with the improving economic and market conditions, the Big Five’s collective domination could only increase.

These conditions brought a significant shift in the power structure within the Big Five, however. During the Depression, the theater-heavy companies—Paramount (with some 1,250 theaters), Fox (650), and Warners (500)—had taken a beating due to heavy mortgage commitments and overhead costs. Now these companies stood to realize a far greater share of the war-fueled market than MGM and RKO, which had relatively meager chains of only around 150 theaters. While this was business as usual for RKO, traditionally the weakest of the Big Five, it marked a serious reversal for MGM.


MGM, the only company to turn a profit in each year of the 1930s, had closed that decade still very much in command of the industry. In 1939, MGM produced five of the ten   biggest hits and four of the ten Academy Award nominees for best picture. Moreover, its 1939 profits of $9.5 million were roughly equivalent to the net profits of all the other major studios combined. But in 1940-1941, MGM’s decade-long dominance began to erode, with Paramount nearly pulling even in both gross revenues and net earnings in 1941.

MGM would not be overtaken easily, however, because its relatively limited theater holdings were offset by the tremendous resources it developed during the 1930s. Chief among these assets was the company’s vastly superior star stable. MGM still could boast “all the stars in the heavens” in 1940, with a roster that included the three top box-office stars—Mickey Rooney, Clark Gable, and Spencer Tracy—and some two dozen other marquee names as well. Loew’s/MGM also had the industry’s foremost sales and distribution setup, which further enhanced the market value of its pictures. In fact, Selznick released GONE WITH THE WIND through MGM largely because of its unparalleled sales and exhibition operations.

MGM’s superior resources enabled the company to emphasize top feature production—more so, in fact, than any of the majors. Metro’s high-end output in 1940 featured lavish costume dramas, literary adaptations, historical epics, biopics, and musicals. While these enhanced Metro’s critical stature and reputation for being the Tiffany’s of the industry, the high costs on these pictures often reduced (or precluded) their profitability. Much more profitable among its top features were the contemporary romantic comedies and dramas starring Clark Gable, invariably teamed with one of Metros many female stars.

The most profitable and cost-efficient MGM releases were its series pictures, most of which were produced by Joe Cohn’s low-budget unit. These included the hugely successful Hardy Family pictures starring Mickey Rooney, the Thin Man series with William Powell and Myrna Loy, the Dr. Kildare series with Lew Ayres and Lionel Barrymore, the Maisie series with Ann Sothern, and the Tarzan series with Johnny Weissmuller and Maureen O’Sullivan. Because of MGM’s superior resources, however, its series pictures qualified for first-run release. Budgeted in the $300,000 range (the industry average for all features in 1940), MGM’s series pictures carried production values well beyond their B-grade counterparts from the other studios. One indication of the superior production values of Metro’s series pictures, besides the casting of top stars as regulars, was their A-class running time of about ninety minutes, versus the sixty-to seventy-minute range of most series pictures. (The average running time for MGM’s six Hardy Family pictures of 1939-1941, for instance, was ninety-one minutes.)

Like most of the studios, the Loew’s/MGM management setup featured a chief executive in the New York office and a vice president who ran the studio and oversaw production—Nicholas Schenck and Louis B. Mayer, respectively. While Mayer acted as studio boss over MGM’s 187-acre facility in Culver City, California, actual filmmaking at MGM was supervised by a staff of executive producers. In fact, a distinctive feature at MGM—and an increasingly severe problem at the studio—was its bureaucratic management-by-committee setup in the production realm and the sheer number of contract producers. When Irving Thalberg was production chief at MGM in the 1920s and 1930s, he relied on a half-dozen supervisors to oversee forty-five to fifty pictures a year. Once Mayer went to a management-by-committee setup after Thalberg’s death in 1937, the number of producers and executives expanded enormously. By 1941, there were forty highly paid producers and studio executives at MGM. While this number included a few top producers like Mervyn LeRoy, Hunt Stromberg, Robert Z. Leonard, and Joe Mankiewicz, the majority of Metros producers were middle-management types with little production experience, rendering MGM more conservative and less efficient than any of the other majors. And while MGM’s staff of directors included such top filmmakers as George Cukor, Victor Fleming, King Vidor, and W S. Van Dyke, they enjoyed less creative and supervisory authority over their pictures than their counterparts at the other major studios.


Warner Bros., the only company besides MGM among the Big Five to avoid financial collapse during the Depression, was actually antithetical to MGM in many ways. While MGM had remained flush throughout the Depression, Warners had survived by siphoning off roughly one-quarter of its assets in the early 1930s and by developing a ruthlessly cost-efficient, factory-oriented mass-production mentality. 7 That meant tighter budgets on all features, a more streamlined studio operation, cutbacks in contract personnel, and a highly formulaic and routinized approach to its films and filmmaking. Warners split its output about evenly between the A-class star vehicles mentioned earlier and a steady output of B pictures. And unlike MGM’s low-end products, there was no mistaking a Warners B picture for anything else. Moreover, Warners often assigned its mid-range stars like Ann Sheridan and Humphrey Bogart to low-budget jobs and promptly suspended them if they balked.

Warners was the only family-run studio among the Big Five. The company president (and elder sibling), Harry M. Warner, was widely considered the most cost-conscious of   the Big Five chief executives. The younger brother, Jack Warner, ran the studio-factory; filmmaking operations were supervised by two longtime studio executives: Hal B. Wallis oversaw the production of all A-class pictures, while Bryan Foy handled Warners’ B-picture production. Wallis was an able administrator and certainly qualified as a “creative” executive—although he was not perhaps on a par with Darryl Zanuck, his predecessor as production chief at Warners, who rose through the screenwriting ranks to executive status. Wallis relied on a staff of associate producers, who would not receive screen credit until 1942 but wielded considerable authority over A-class production at Warners. Many of them—notably Henry Blanke, Robert Lord, Jerry Wald, and Mark Hellinger—were former directors or writers and were closely involved in all phases of production. Warners also had a staff of capable, efficient directors, notably Michael Curtiz, William Dieterle, Lloyd Bacon, William Keighley, and Raoul Walsh. A few of them had considerable authority over specific star-genre formulations—Curtiz on the Flynn vehicles, for instance, and Lloyd Bacon on Cagney’s action pictures.

Warners’ strategy of relying on a half-dozen star-genre formulas for its A-class pictures began to change in the prewar era, for a number of reasons. In late 1939, Paul Muni left to seek freelance status, leaving Edward G. Robinson to fill in as resident biopic star while the studio brass reconsidered their commitment to the genre. Meanwhile, musical production was phased out when Busby Berkeley defected to MGM. Warners also responded to the increasingly competitive market by varying its formulas and by teaming and “off-casting” its top stars—recasting Flynn’s swashbuckling Brit as a westerner, for instance, or teaming Davis and Cagney in a screwball comedy.

Equally uncharacteristic was Warners’ pursuit of outside deals and presold story properties. In 1940, Harry Warner signed one-picture deals with the freelance producer-director Frank Capra for MEET JOHN DOE (1941), and also with the independent producer Jesse Lasky for SERGEANT YORK (1941). Both pictures were produced on the Warners lot using contract personnel, but both involved a number of outsiders as well—most notably the freelance star Gary Cooper, who played the title role in both pictures. Meanwhile, the traditionally tightfisted Warners turned spendthrift in the pursuit of presold story material. In 1940, Warners led the industry in expenditures for stage properties, spending a total of $536,000, including the top price paid by any company that year, $275,000 for The Man Who Came to Dinner."

Warners actually increased the pace in 1941, a year in which a record number of stage plays (fifty-seven) were filmed. 9 In a three-week span in early 1941, Warners paid $125,000 for George M. Cohans Yankee Doodle Dandy, $135,000 for Emlyn Williams’s The Corn Is Green, and $175,000 for Joseph Kesselring, Russell Crouse, and Howard Lindsay’s Arsenic and Old Lace. 10 This last purchase, made at the behest of Frank Capra for his second outside deal with Warners, involved an elaborate profit-sharing deal for Capra and the playwrights—yet another radical departure from Warners’ usual way of doing business." Moreover, the picture starred Cary Grant, an even more unlikely “Warners type” than Gary Cooper, and yet another indication of how much the studio was changing in the early 1940s.

While the off-casting, outside deals, and presold story buys indicated a significant shift in Warners’ A-class operations in 1940-1941, the studio still maintained an efficient, assembly-line approach to B-picture production. Interestingly enough, Warners did not develop series pictures or serials at the B-grade level. The studio did excel in series-oriented short subjects, however, especially in animation production—an area which, for Warners, was enjoying a golden age of its own at the time. Leon Schlesinger’s animation unit came into its own in the late 1930s, dominated by the cartoon directors Friz Freleng, Tex Avery, and Bob Clampett. Its first real cartoon “star,” Porky Pig, emerged in the late 1930s, and that stuttering, porcine player provided an ideal foil for future animated stars—notably Daffy Duck and Bugs Bunny. The latter’s first star vehicle, “A Wild Hare,” was released in July 1940, unleashing a wisecracking, anarchic screen personality who not only could compete with Disney’s beloved Mickey Mouse but in the next few years would become the industry’s top cartoon star.


Twentieth Century-Fox was in a resurgent position in 1940 after barely surviving the Depression. The turn in studio fortunes came in 1935 when Fox, still struggling after financial collapse in the early 1930s, merged with 20th Century Pictures. Twentieth, a successful independent company founded in 1933 by Joseph Schenck and Darryl F. Zanuck, had released through UA and supplied most of its product in 1934-1935. But Schenck and Zanucks efforts to form a partnership with UA were repeatedly thwarted by Charlie Chaplin and Mary Pickford, who still controlled UA. So in 1935 Twentieth merged with Fox, which had been casting about for a new studio management team. The merger was engineered by Fox’s president, Sidney Kent, who continued to preside over sales and theater operations out of New York. Meanwhile, Schenck became board chairman (and studio boss) and Zanuck became vice president in charge of production.

Zanuck had climbed through the writers’ ranks at Warners in the 1920s to become the studio’s top production executive and was the last real holdover from that era of central producers and “creative” executives. Schenck was an experienced producer. Thus, their move to Fox bucked the Depression-era trend toward sales-oriented studio executives—although Schenck and Zanuck were quite sensitive to economic imperatives. Indeed, at Fox they developed an efficient and unabashedly commercial strategy that emphasized formulaic A-class star vehicles and a heavy output of B pictures. That approach proved enormously successful in the late 1930s, with the company averaging $7 million in profits from 1936 through 1939. Losses of $500,000 in 1940, marking a momentary setback, resulted primarily from a few expensive flops—notably the ponderous historical biography BRIGHAM YOUNG —and a lavish costume Shirley Temple musical-fantasy, THE BLUE BIRD, which was Fox’s answer, in effect, to Disney’s SNOW WHITE AND THE SEVEN DWARFS and MGM’s THE WIZARD OF OZ (1939).

Aside from those overblown misfires, Fox fared quite well with its high-end output in 1940-1941, notably with its energetic modest musicals, light comedy-drama, sentimental Americana, and what Zanuck himself termed "hokum"—adventure yarns and   quasi-historical biopics. Fox’s star stable was undergoing a transition in the prewar era as Shirley Temple, Alice Faye, and the skater Sonja Henie, all top stars in the late 1930s, began to fade. These declines were offset by the fast rise of Tyrone Power to top stardom and the appeal of the second-rank male lead Don Ameche. Zanuck also signed a number of promising new players in 1939-1940, including Dana Andrews, Betty Grable, Gene Tierney, Carmen Miranda, and Henry Fonda.

Fox signed several directors as well in 1939-1940, including John Ford, Fritz Lang, Henry King, and Henry Hathaway, which tended to reinforce what Joel Finler has termed the “split personality” that Fox was developing at the time. 14 Ford and Lang turned out “serious” films (usually literary adaptations or biopics done in black and white), while Hathaway and King produced commercially successful if critically suspect pictures—period musicals, quasi-historical action-adventure films, and the like, often done in Technicolor. Fox, in fact, led the industry in Technicolor production, releasing five of the eleven color pictures produced in Hollywood in 1940 and continuing to dominate color production throughout the decade.

While Zanuck oversaw production of Fox’s A-class features in its main Westwood facility, Sol Wurtzel turned out a steady supply of B’s in the company’s smaller plant on Western Avenue. Like Warners, Fox relied on its B unit for roughly one-third to one-half its output by 1940. Unlike Warners, though, Fox sustained its B-picture output into the 1940s, and it relied heavily on series pictures as well. From 1939 through 1941, while Zanuck was upgrading Fox’s high-end output, Wurtzel cranked out Charlie Chans, Mr. Motos, Jones Family comedies, Cisco Kid Westerns, and detective series featuring Michael Shayne, the Falcon, and Sherlock Holmes. The Holmes series, starring Basil Rathbone and Nigel Bruce as Holmes and Watson, was clearly the cream of Fox’s B-movie crop, and, in fact, Fox initiated it in 1939 in an effort to upgrade its B product.

One important change in Fox’s prewar production and management operations involved Schenck’s trial and conviction in 1940 on income tax charges in the Browne-Bioff labor scandal , resulting in his extended hiatus from the studio in 1941-1942. His absence gave Zanuck increased responsibility over day-to-day studio operations, although much of it was handled by the studio executive William Goetz, whose role would be upgraded further in 1941 when Zanuck committed both his own time and Fox’s resources to producing films for the military. In the area of production supervision, Zanuck relied increasingly on a few top contract writers—principally Nunnally Johnson, Lamar Trotti, and Philip Dunne—who were approaching writer-producer status by 1940-1941, although Zanuck jealously guarded his command of A-class filmmaking operations.


Paramount’s fortunes were improving dramatically in 1940 as the company’s long-term recovery strategy began to pay off. The key factor in that recovery was Paramount’s massive theater chain of 1,250 houses, which gave the company a huge advantage over its competitors as the economy improved. Another was the management team of Barney Balaban and Y. Frank Freeman, two theater men who brought efficiency and a fiercely market-oriented approach to studio operations. Balaban, cofounder and long-time head of the Chicago-based Balaban and Katz theaters (the prime subsidiary in Paramount’s affiliated chain), was appointed company president in 1936 in the wake of Paramount’s early-Depression collapse and fiscal reorganization. In 1938, Balaban Page 54  hired Freeman away from a successful Paramount theater subsidiary in the South, installing him as vice president in charge of the studio.

Freeman had little direct involvement with filmmaking operations, concentrating instead on the day-to-day management of Paramount’s twenty-one-acre studio and its three thousand employees. Supervision of top features was handled by Henry Ginsberg and Buddy De Sylva, while Harold Hurley oversaw the extensive B-picture operation. Paramount’s B output included several successful series, notably the Henry Aldrich films, which were adapted from a successful NBC radio program in an obvious effort to capitalize on the popularity of MGM’s Hardy Family saga.

Paramount’s resurgence in the prewar era involved not only a new management setup but a reformulated house style as well. In the late 1930s, Balaban and Freeman embarked on what Fortune magazine termed a “deadwood clearance program,” shuf-fling off the high-paid talent and high-cost genres which had pushed the studio overhead and star salaries to an exorbitant level during the Depression. Among the stars departing Paramount after Balaban’s arrival were Marlene Dietrich, Gary Cooper, Claudette Colbert, Fredric March, Carole Lombard, and Mae West. They were replaced by a new generation of younger, lower-paid contract players and rising stars such as Bob Hope, Ray Milland, Fred MacMurray, Dorothy Lamour, Paulette Goddard, and Veronica Lake. Balaban did maintain a nonexclusive deal with Barbara Stanwyck, as well as an exclusive contract with Bing Crosby, who had been with the studio for a decade.

Actually, Crosbys career was sagging somewhat when, in 1940, he was teamed with Hope and Lamour in a lightweight musical comedy, ROAD TO SINGAPORE. That unexpected hit hastened Paramount’s recovery and initiated the hugely successful Hope-Crosby-Lamour Road series. It also typified the studio’s shift to moderately priced con-temporary comedies and dramas—an obvious departure from the stylish exotica and high-cost spectacles turned out in the 1930s by Ernst Lubitsch, Josef Von Sternberg, and Rouben Mamoulian. Those filmmakers also left upon Balaban’s arrival, and by 1940 the only remnant of those heady, exorbitant years was Cecil B. DeMille. A Paramount cofounder back in the 1910s, DeMille built his career on historical spectacles and continued to turn them out under Balaban—including in NORTHWEST MOUNTED POLICE in 1940, his first Technicolor production. The studio’s other top filmmaker was Mitchell Leisen, who specialized in romantic comedy and also served as a mentor of sorts to Preston Sturges and Billy Wilder, who would emerge in the early 1940s as the studio’s top writer-directors.

Paramount had a tradition of allowing its top directors considerable authority and creative freedom. In fact, Lubitsch not only had produced his own pictures but for a brief period in the mid-1930s had been the executive in charge of all production at Paramount. This trend continued with Leisen, Sturges, and Wilder, while DeMille worked out a contractual arrangement giving him quasi-independent producer status and a percentage of the profits on his pictures. DeMille also capitalized on Paramount’s ties with radio and enhanced his own celebrity status as host of the popular Lux Radio Theatre, a weekly program which dramatized (and thus publicized) not only DeMille’s own pictures but a wide array of Paramount stars and products.


RKO was unique among the Big Five in 1940-1941 in terms of studio operations and market strategy, owing largely to its limited resources and its brief but troubled history. RKO had been created virtually overnight in 1928 at the dawn of the sound era and flourished in the ensuing “talkie” boom. But the company quickly faded once the Depression hit and in 1934 suffered financial collapse. In 1940, RKO was just coming out of receivership under its recently appointed president—and the company’s fourth chief executive in its brief life span—George Schaefer, who before coming to RKO in 1938 had been the top domestic distribution executive with UA. Its assets at the time were $68 million, barely half those of MGM and Warner Bros.

Schaefer’s regime was quite distinctive among top studio executives in that he maintained direct control over both the home office in New York and the Hollywood studio. Thus, he shuttled continually from coast to coast and tried to supervise all production during his visits to Los Angeles. Schaefer’s sporadic involvement in production infuriated Pandro S. “Pan” Berman, a top producer and capable production chief who left RKO for MGM in 1939 to escape Schaefer’s interference. Berman was replaced by former agent Harry Edington, who had little authority over studio operations. As the RKO historian Richard B. Jewell states, Edington “was nominal head of production, but Schaefer continued to run things like a potentate, insisting on final say with regard to all important studio decisions.”

Schaefer had come to RKO in 1938 with the idea of adapting UA’s independent strategy to the resources and operations of a major studio. Interestingly enough, Walt Disney had deserted UA and gone to RKO the year before, and in 1938 Disney was enjoying terrific success with his company’s first animated feature, SNOW WHITE AND THE SEVEN DWARFS (1937), which was released via RKO. Once at RKO, Schaefer strongly supported Disney’s shift into feature production, and in 1940-1941 Disney delivered three more feature-length cartoons: PINOCCHIO , FANTASIA (both 1940), and DUMBO (1941). By then Schaefer was urging other leading UA independents to follow him to RKO—most notably Sam Goldwyn, who did in fact move to RKO in 1941.

Both Disney and Goldwyn were exceptional among RKO’s unit producers in that both had their own production facilities and established lines of credit and thus were almost completely autonomous from RKO in terms of production operations and studio control. Schaefer also signed a number of so-called in-house independents—filmmakers who maintained their own production units but operated within the physical and administrative purview of the studio. This arrangement included several important producer-directors, including established talent like Leo McCarey and promising newcomers like Orson Welles and Alfred Hitchcock. Overall, these independent (and quasi-independent) filmmakers produced almost all of RKO’s first-run product in the prewar era, supplying fifteen of the company’s fifty-three releases in 1940 and thirteen of forty-six in 1941.’

Another of Schaefer’s distinctive tactics, at least among the integrated majors, was his penchant for signing one- and two-picture deals with freelance stars like Irene Dunne, Cary Grant, Carole Lombard, and Charles Laughton. In 1940, RKO had only one major star, Ginger Rogers, under exclusive studio contract, and in 1941, after an Oscar-winning performance in KITTY FOYLE (1940), she too demanded—and received—a limited, nonexclusive deal.

While outside producers supplied a dozen or so A-class pictures per annum during the prewar era, RKO itself turned out another twenty-five to thirty features, most of them B-grade series pictures. RKO also released newsreels, shorts, and cartoons, with Disney’s animated output by far the most reliable commercial products on its schedule. Roughly three-quarters of the RKO-produced features were budgeted at $200,000 or less; its cut-rate Westerns starring Tim Holt and George O’Brien cost under $100,000. Among its top series offerings were the Mexican Spitfire films with Lupe Velez and a crime series featuring George Sanders as the Saint. Besides complementing RKOs high-end independent productions, these series films also served as a training ground for contract talent specializing in low-budget production, including such emerging talents as the editors-turned-directors Edward Dmytryk and Robert Wise, the editor (and later director) Mark Robson, and the director Jacques Tourneur.

Another RKO tactic worth mentioning here, and one which anticipated major postwar developments, involved so-called package deals: a leading talent agency, the Music Corporation of America (MCA), packaged the script, director, stars, and producer for several RKO pictures in late 1939 and early 1940. Variety termed this “a scheme utterly new to the picture industry, a variation of the increasingly popular independent production unit idea.”’ 7 MCA had no control over the actual production, nor did it have any financial stake in the finished pictures; still, the agency clearly was facilitating the shift in filmmaking authority—especially in terms of the initiation and development of movie projects—away from the studios and into the hands of individual filmmakers.

Significantly enough, George Schaefer’s bold experiment was a decided failure commercially, and thus the Schaefer regime at RKO was essentially a prewar phenomenon. RKOs most costly and ambitious films invariably lost money—notably the critically acclaimed A BE LINCOLN IN ILLINOIS , with losses of $740,000 in 1940, and THE MAGNIFICENT A MBERSONS, an early-1942 release produced and directed by Orson Welles, which lost $620,000. Moreover, the Goldwyn deal involved such favorable terms for the independent producer that even major hits like BALL OF FIRE and THE LITTLE FOXES (both 1941) showed up as losses on the RKO ledger. Schaefer’s failure in 1941 to re-sign Ginger Rogers, whose films were money in the bank for RKO, further undermined his position. Thus, Schaefer was ousted by the RKO board in June 1942 as the studio opted for a more conservative strategy during the war era.

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over 6 years ago

film city lighting jobs

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over 6 years ago

I have an question about Newshowstudios? Do you know them and can they be trusted? Donny van Dorst Email - backup1954@hotmail.com Thanks if you can anwser my question.

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almost 8 years ago

researching for theater owner's catalog value. parents owned small movie theater 1939 and into 1940's. Have catalog in excellent shape showing movies of that year (I think 1940-41) and bio of actors from two different movie companies. Physically in another state right now but would like to research value and possible sale.