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The Hollywood Studio System, 1942–1945 - Income, Output, and the Balance of Studio Power

war pictures five production

At 11:26 A.M. on 7 December 1941, news of the Japanese attack at Pearl Harbor disrupted what was, by all accounts, a clear and quiet Sunday morning in Los Angeles. The news itself hit like an explosion, throwing the entire area into panic and confusion. The Hollywood movie colony, enjoying its weekly respite from an otherwise nonstop production schedule, was soon bustling with activity. In the first hours and days of the war, that activity had little to do with filmmaking. Makeshift air-raid shelters were constructed on movie lots, while dimout and blackout plans were quickly formulated. Studio employees fretted about Japanese attacks and the resemblance of the sound stages to aircraft plants.

Meanwhile, studio executives worried about the wartime status of Hollywood films and filmmaking. The U.S. entry into the war actually put the studios in a curious bind. On the one hand, there was the possibility of nationalization by the government and the suspension of all commercial operations “for the duration.” On the other hand, the studios faced the prospect of playing a marginal role (or less) in Washington’s overall war plans. After Pearl Harbor, as Richard Lingeman has noted, “the movie business was just another war industry eager to cooperate [with the government] out of fear that it would be considered ‘non-essential’ and strangled by lack of priorities.”

As seen in chapter 5, within two weeks President Roosevelt gave Hollywood the green light to continue commercial filmmaking, but with express instructions regarding the studios’ active support of the U.S. war effort. Hollywood and Washington quickly adapted a workable wartime rapport, and the studios cooperated with both the government and the military in the production of war films. Several lesser Hollywood plants—Fox’s old B-picture studio on Western Avenue, for example, and both the Disney and Hal Roach studios—were completely retooled for war-film production.

Hollywood swarmed with military personnel, including a number of filmmakers who joined up to do documentary work. Several top studio executives took military commissions, began wearing uniforms, and insisted on being addressed by rank. Jack Warner, for instance, signed up with the Army Air Corps and thereafter became “Colonel Warner,” even in interoffice memos. Of the 2,700 workers who left Hollywood for active military duty in 1942, however, few were top studio executives. One notable exception was Fox’s production chief, Darryl Zanuck, whose 1942-1943 stint as a commander in the Army Signal Corps included considerable action in North Africa.

Income, Output, and the Balance of Studio Power

The most significant developments in the Hollywood studio system during World War II were increased studio revenues (and profits) and decreased output. While the lower output of films was related to various wartime factors—the manpower shortage, for example, and restricted supplies of film stock—these cutbacks resulted more than anything else from surging wartime revenues. Simply stated, the first-run movie market was so bullish after Pearl Harbor that the major studios quickly saw the logic of increasing their emphasis on top product while cutting back on their overall output of films.

Indeed, the wartime reduction in motion picture production and overall releases was most acute, by far, among the Big Five integrated majors. During the five years before Pearl Harbor, the Big Eight producer-distributors together released 1,833 pictures. In the five years after Pearl Harbor (1942-1946), they released 1,395—a decline of 438 pictures, or nearly 25 percent. The three major-minors accounted for virtually none of that decline: Universal and Columbia averaged 50 pictures per year during both periods, and UA just over 20. The Big Five, meanwhile, declined from an average of 50 releases annually per company in the five prewar years to only 30 per year from 1942 through 1946.

The Big Five had begun to scale back output in 1941, but clearly the real cuts came with the war itself. In a one-year span from 1942 to 1943, Warners cut its output from 34 to 21 pictures, MGM from 49 to 33, Fox from 51 to 33, and Paramount from 44 to 30. RKO’s big drop came a year later, falling from 44 to 31 releases. Once instituted, these reductions held throughout the war, thus creating a very different release pattern for the early and later war years:

In terms of studio profits, all of the Big Eight fared well during the war, with the integrated majors enjoying the benefits of the war boom to a far greater degree than their competitors. As in the 1930s and early 1940s, the Big Eight took about 95 percent of the total market, with the Big Five consistently accounting for 90 percent of industry profits. Revenues and profits for the integrated majors were far beyond Depression and prewar totals: combined industry profits climbed from just under $20 million in 1939 and 1940 to $34 million in 1941, $50 million in 1942, and then right around $60 million for the next three years. 4 A key factor here, of course, was the relative size of each major company’s theater holdings. Its theater holdings gave Paramount a huge advantage over the other majors and left both MGM and RKO at an obvious disadvantage. 5 Thus, the balance of power among the Big Five that had begun to shift in 1940-1941 changed even more during the war; MGM was steadily overtaken by Paramount and Fox, with Warners close behind.

Looking at the total revenues, net profits, and profit shares of all the Big Eight during the war era, the collective domination of the Big Five and the relative balance of power among the majors—and especially Paramount, Fox, Metro, and Warners—is readily apparent.

It is important to note that the majors did not enter the war with plans to reduce output but did so rather haphazardly in 1942-1943 in response to changing industry conditions. Consider the case of 20th Century—Fox during this period. In May 1942, Fox announced plans to spend $28 million on fifty-two features for the 1942-1943 season. 6 Three months later, as the marketplace continued to heat up, Fox decided to cut ten B’s out of its schedule (following the lead of Paramount and Warners). 7 Then in September 1942, Fox announced that its profits for the previous six months were up 300 percent compared with the same period in 1941; Fox planned further reductions, with an even heavier concentration on first-run features.

The wartime decrease in output among the Big Five was accompanied by steadily increasing production costs. Between 1942 and 1945, the average cost per feature rose from $336,600 to $554,386, and the average number of shooting days per picture climbed from twenty-two to thirty-three. The total cost for all film production in Hollywood more than doubled in that period, from $198.5 million to $402 million. 9 This increase was due in part to war-induced inflation, of course, but the primary factor was the steady shift to high-end production. By 1945, the Big Five were concentrating almost exclusively on A-class product for the first-run market, the major-minors dominated the middle ground (though they put out a few modest A pictures and a few low-grade B’s), and the minors concentrated on the low end. A clear indication of this general range is provided by these figures charting the estimated costs on 300 studio productions in 1944:

Another factor in the majors’ decreased wartime output was the stockpiling of product. Initially the impulse to stockpile pictures resulted from the sales policies under the 1940 consent decree. Since blind bidding was prohibited and all pictures had to be trade-shown, the studios were compelled to have their pictures ready well in advance of release. Once the war broke out, large trade shows and national sales conventions became impractical and were phased out in lieu of advance screenings of individual films at key exchanges prior to release. Thus, the studios could have reverted to a tighter schedule from completion to release, but by then war conditions encouraged stockpiling.

Early in the war, interestingly enough, stockpiling was the result of the studios stepping up production in response to war-related restrictions, anticipated shortages, and general uncertainties. As Variety noted in late 1942: “In a race against the time when wartime exigencies are expected to circumscribe activities via further inroads on talent, technicians, material and equipment, Hollywood studios are steaming ahead at the speediest production clip in history in order to build up their picture stocks.” 10 As those stockpiles grew, along with inflated costs and first-run revenues, the studios found that they could continue stockpiling while actually cutting back production."

In other words, as the war went on, stockpiling was essentially a function of the overheated first-run marketplace. As revenues and market conditions outran even the most optimistic projections year after year from 1942 to 1946, long runs and holdovers became the rule as the studios milked their top features for every possible dollar. Thus the urge to stockpile product—studios shelved pictures which were ready for release for two years or more. Indeed, much of the falloff between 1942 and 1943 was less a matter of the Big Five producing fewer pictures than of releasing pictures.

The backlogs grew rapidly in 1942 and early 1943, ranging between 100 and 200 features completed and awaiting release. 12 At the end of the war, the Motion Picture Herald pegged the backlog at 203 pictures, while Variety estimated an industrywide inventory of $250,000,000. 13 By then, the backlogs were part of overall postwar strategy; the studios anticipated changes in the tax codes as well as a box-office surge when servicemen returned and wartime restrictions were eased. 14 That strategy paid off: 1946 saw the Big Five’s revenues and profits burst to even higher levels in the last shuddering concussion of the war boom.

The Hollywood Studio System, 1946-1949 [next] [back] The History of the Twentieth Century Camera

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