Other Free Encyclopedias » Online Encyclopedia » Encyclopedia - Featured Articles » Contributed Topics from P-T » The Hollywood Studio System in 1940-1941 - The Major Studios, METRO-GOLDWYN-MAYER, WARNER BROS, 20TH CENTURY-FOX, PARAMOUNT, RKO


production pictures top run

Outside the privileged cartel of integrated majors, the three most important studios were United Artists, Universal, and Columbia. These were Hollywood’s Little Three major-minors—"major" because they produced first-run features and had their own distribution setups; “minor” because they did not own theater chains. Like the Big Five, the Little Three benefited from the improving market conditions in 1940-1941, although their lack of theater chains limited those benefits in two significant ways. First, it meant that the major-minors had to rely on the integrated majors for access to the first-run market, which the Big Five controlled. And second, it meant that the Little Three lacked the revenue flow and financial leverage—and thus the resources—to generate the same volume of high-end product as the Big Five studios.


One of the Little Three, United Artists, focused even more heavily than the Big Five studios on high-end product, although it scarcely operated at the same volume. As mentioned earlier, UA was not a studio per se but a distribution company for Hollywood’s major independent producers, serving as the industry’s chief supplier of supplemental high-end product for some two decades. Founded in 1919 by Charlie Chaplin, Mary Pickford, Douglas Fairbanks, and D. W. Griffith, UA was designed to distribute its founders’ prestige pictures and to ensure their independence from the emerging studio-factory system. UA changed radically, however, as the studio system took hold and as the founders’ careers waned; by 1940, it relied for product almost exclusively on major independents like Goldwyn, David Selznick, Walter Wanger, and the British producer Alexander Korda. Of the founders, only Chaplin was still active in production—which in his case meant a new picture every four or five years.

Whatever their claims to independent status, UA’s producers relied on the integrated majors in certain crucial areas. While a few of them had their own modest production facilities, they generally leased studio space from one of the majors for their more ambitious productions. And although all of the UA producers had top talent under contract, they also borrowed top personnel from the majors. Perhaps most important, UA’s producers relied on the majors’ first-run theaters for their productions. Thus, UA competed directly with the majors in the first-run market, while relying on the majors’ theater chains for access to that market. The majors, in turn, relied on UA to provide supplemental high-grade product for their theaters. And with the accelerating first-run market and the flight of top talent to freelance status, in 1940-1941 UA saw its production operations and release schedule increase accordingly. UA released twenty pictures in 1940, slightly above its average for the previous five years; in 1941, UA released twenty-six films, its highest total ever. All were A-class pictures geared for the first-run market.

While industry conditions in the prewar era seemed to favor UA, the company actually was in a rather paradoxical state: its critical prestige and the demand for its product were at an all-time high, while its finances and management were shaky at best. UA reached a peak of sorts in 1940, scoring five of the ten Oscar nominations for best picture with REBECCA , FOREIGN CORRESPONDENT , THE GREAT DICTATOR , THE LONG VOYAGE HOME , and OUR TOWN . But UA turned a profit of only $200,000 on twenty releases in 1940, down from $400,000 on sixteen pictures in 1939. UA was the only company among the Big Eight to see its profits actually decline in 1941, netting only $100,000 on twentysix releases. Clearly UA was not benefiting from the improving market conditions to any-where near the extent of the other majors. The difference was due in part to weaker product, although UAs producers complained about the poor distribution terms secured for their pictures, especially theaters affiliated with the Big Five—as indicated by Selznick’s decision to release GONE WITH THE WIND through MGM rather than UA.

Another significant problem for UA involved the management of the company. While Pickford was inactive and Chaplin had produced only two pictures in the last decade (MODERN TIMES in 1936 and THE GREAT DICTATOR , 1940), the cofounders still controlled UA’s board of directors and effectively undercut partnership deals with several top producers and production executives, including Schenck and Zanuck in 1935 and Walt Disney in 1937. Similar difficulties hampered a possible deal with Frank Capra, the industry’s leading producer-director, who left Columbia in 1939 and began courting UA. Even more important was the highly publicized lawsuit from the fallingout in 1940 with Sam Goldwyn, who had produced some fifty top features for UA since the 1920s, many of them sizable hits. Goldwyn and UA settled the lawsuit in early 1941, with the producer following Disney to RKO. That left Selznick, who had been with UA since creating Selznick International Pictures (SIP) in 1935, as the company’s top producer. Selznick took over the top management role at UA after Goldwyn’s formal resignation in 1941, although he retreated from active production following his back-to-back blockbuster hits, GONE WITH THE WIND and REBECCA.


The two other major-minor studios had a great deal in common with each other but very little in common with United Artists—other than a similar reliance on the Big Five for access to the first-run market. Like UA, Columbia and Universal both increased their output by about 20 percent—from roughly fifty films in 1940 to sixty in 1941.’ 19 While both companies hoped to upgrade their A-class output, these increases were mainly in   the realm of B-picture production, which was Columbia’s and Universal’s forte. Both companies were full-fledged movie factories with ample production facilities and nationwide distribution setups, but without theater chains they lacked the financial leverage and the resources to compete with the major studios at the A-class level. (The assets of both Universal and Columbia were roughly $16 million—barely one-tenth those of MGM and Warners.)

During the 1930s, Universal and Columbia had developed low-cost, high-volume production operations geared to the subsequent-run market. They sustained this strategy during the prewar era, releasing a plethora of B s, series pictures, and serials. One clear measure of their overall market strategy and the status of their product was the running time of their features. Well over half of Universal’s releases in 1940 and 1941, for instance, ran sixty-five minutes or less, while only three each year exceeded ninety minutes. The average running time for all of Universal’s features in each year was under seventy minutes.

Universal and Columbia also turned out A-class pictures, which in fact were crucial to their established production and market strategies, for three basic reasons. First, an occasional first-run hit earned far more than even a dozen routine, reliable programmers. Second, top features brought credibility and prestige not only with critics and the public but with first-run exhibitors as well. And third, since both companies relied heavily on block booking, top features played a vital role in moving their annual output of primarily second-rate features. With the booming first-run market and the demand for high-end product in 1940-1941, both companies increased their A-class efforts. Doing so occasionally involved long-term deals with outside producers and independent units, but for the most part the two studios simply signed one- and two-picture deals with free-lance stars and filmmakers, who came in and worked with contract personnel under the usual factory conditions.

By 1940, both Universal and Columbia had devised similar strategies regarding A-class production, focusing in-house on a single star-genre formula built around the studio’s one bona-fide contract star, while outside talent supplied a few additional first-run features. Universal’s top contract star was Deanna Durbin, whose musicals were produced by the “Pasternak unit”—which included the producer Joe Pasternak, the director Henry Koster, the musical director Charles Previn, and the cameraman Joe Valentine—at the rate of two per annum. Universal also banked on a few B-plus formulas in 1940-1941, principally horror films with Lon Chaney Jr. and comedy musicals with second-rank stars (including W. C. Fields, Mae West, and Edgar Bergen on limited contracts). And in an interesting parallel to Paramount’s Hope-Crosby pictures, Universal parlayed the unexpected success of the comedy duo Abbott and Costello into a succession of low-budget comedy hits.

Columbia’s top product during the prewar era came primarily from a single genre, the romantic or “screwball” comedy. Frank Capra had refined the screwball comedy into Columbia’s house genre during the Depression, and after Capra went freelance in 1939, Columbia signed one- and two-picture deals with top outside producer-directors like Howard Hawks, George Stevens, and Wesley Ruggles for its A-class product—invariably romantic comedies in the Capra mode. About half of these top features teamed Jean Arthur, the studio’s lone contract star, with an outside male star, and the others featured freelance stars on limited studio contracts. Harry Cohn also signed several young contract players in 1939-1940, including William Holden, Rita Hayworth, and Glenn Ford, all of whom seemed well suited to Columbia’s brand of light comedy.

Universal and Columbia also pursued similar strategies for their low-end series and serials. Universal’s B-grade output included Johnny Mack Brown series Westerns and its ever-popular sci-fi serials (such as THE GREEN HORNET), many of which were produced and directed by the serial specialist Ford Beebe. Columbia’s low-grade output included the Lone Wolf, Blondie, and Boston Blackie series and several serials adapted from comic strips, such as “The Shadow” and “Terry and the Pirates.” Columbia also built a successful series of comedy shorts around the Three Stooges, as well as the silentera comedy stars Buster Keaton, Charlie Chase, and Harry Langdon.

Despite their similar production and marketing strategies, Columbia and Universal were altogether different in other key areas, particularly their facilities and management operations. Universal City had been Hollywood’s preeminent filmmaking facility when Carl Laemmle opened it in 1915, and in 1940—1941 it was still a first-rate movie factory. Columbia, conversely, began in the early 1920s in a ramshackle facility on the corner of Sunset and Gower on Poverty Row. Although Columbia steadily swallowed up the surrounding facilities and by 1940 occupied an entire city block, it still carried a Poverty Row stigma—which studio boss Harry Cohn seemed to regard as a badge of honor.

Both studios began as family-run businesses but underwent significant changes during the 1930s; by 1940, they evinced radically different management setups. Universal was run until 1936 by Carl Laemmle out of New York, with his son, Carl Laemmle Jr., over-seeing   seeing production at the studio. Economic collapse led to the Laemmles’ ouster, and in 1938 Universal replaced its company president and studio boss with two theater men, Nate Blumberg and Cliff Work—following Paramount’s lead by installing exhibition executives in top management positions, even though Universal did not have a theater chain. Blumberg and Work quickly reversed Universal’s fortunes: the company’s net revenues in 1940-1941 exceeded those of not only Columbia and UA but RKO as well.

Columbia was founded in 1920 by Harry Brandt and the brothers Harry and Jack Cohn. Brandt and Jack Cohn ran the company out of New York while Harry, the younger Cohn brother, managed the studio, until Brandts retirement in 1931 led to a fraternal power struggle for control of the company. Harry Cohn prevailed, thanks largely to support from A. H. Giannini of the California-based Bank of America. Consequently Columbia was the only major producer-distributor in Hollywood whose chief executive also ran the studio and oversaw production and whose second-in-command ran the New York office.


The huge demand for low-grade product that accompanied double billing and frequent program changes during the 1930s created another class of Hollywood production company: the B-picture studio. Throughout the Depression, as Todd McCarthy and Charles Flynn point out, “there were literally dozens of tiny studios, usually with impressive corporate names, that lasted two or three years and then disappeared.” 21 The most successful of these minor studios were Monogram and Republic, which set up their own distribution exchanges in major cities and thereby survived the Depression. The two companies’ histories were closely intertwined, dating back to Monograms founding in 1929 by W Ray Johnston and its ongoing indebtedness to Consolidated Film Laboratories. Monogram was Hollywood’s leading B studio by 1934, turning out thirtysix films per year and specializing in series Westerns. Monogram also accumulated a sizable debt to Consolidated, whose owner, Herbert J. Yates, became interested in production. In 1935, Yates foreclosed on Monogram and another small independent, Mascot Pictures, merging them into Republic Pictures.

Republic quickly took off, thanks largely to its serials and the growing popularity of die singing cowboy Gene Autry. By 1939-1940, Republic was working in a wide range of genres, including a family series (the “Higgins”), a lawyer series (“Mr. District Attorney”), and even an occasional musical. Meanwhile, Johnston and his longtime associate Trem Carr left Republic in 1936 and resurrected Monogram, which soon was turning out about twenty B’s of its own per year. Leaving serials to Republic (and the major-minors), die revived Monogram continued to specialize in series production, generally Westerns and action pictures. Other companies also challenged Republic in the late 1930s, akhough less successfully than Monogram. The most prominent of these was Grand National, which was created in 1936 and did well enough to take over another low-budget studio, Educational, in 1938. At that point, the Grand National president, James R. Grainger, tried to move into A-class production, an ill-fated effort that bankrupted the studio in 1939.

That left the B-picture field more securely in the hands of Monogram and Republic as Hollywood entered the prewar era, and the two low-budget outfits made the most of their limited means and market niche. Republic, the stronger of the two, turned out some two dozen features per annum on a production budget of about $2 million (less than MGM spent on a single top feature), notably its trademark John Wayne and Gene Autry Westerns and several popular serials. 24 By 1940-1941, Republic was doing remarkably well, returning gross rentals of $6-7 million with profits of just over $500,000. While its profits were roughly on a par with Columbia’s, Republic assets of about $3.5 million hardly compared. (Columbia’s assets in 1940 were $16 million.) But as a subsidiary of Consolidated Labs, Republic did enjoy greater financial stability than any other minor independent. 25 Republic also enjoyed the benefits of having two stars on its roster, and in fact Yates by 1940 was exploiting Autry and Wayne in quite different ways. He sustained Republic’s signature Western series with three or four Autry pictures per year, while alternating Wayne between Republic Westerns and A-class loan-outs—to UA in 1940 for THE LONG VOYAGE HOME , for instance, and to Universal SEVEN SINNERS (1940) opposite Marlene Dietrich.

Monogram had a more modest operation, with assets of just under $1 million and a stable of second-class stars, notably Westerners Buck Jones and Tim McCoy. By 1940, Monogram was concentrating almost exclusively on Westerns and “actioners,” with gross rentals that year of $1.9 million, which translated into a small net loss. Monogram’s fortunes improved somewhat in 1941, when rentals of just over $2 million yielded a profit of $11,000. 26 Johnston and Carr remained optimistic as the economy improved, although the prewar industry shift away from B-grade product toward big first-run pictures did not bode well for the likes of Republic and Monogram.

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