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THE MOVIE INDUSTRY

Antitrust

In 1948 the Supreme Court ordered the major Hollywood studios to sell their theater holdings, ruling that the system of film distribution was anti-competitive, and the way Hollywood movies had been produced and delivered to audiences since their beginnings abruptly changed. The Supreme Court decision had many unintended and surprising effects, not the least of which was to restructure the business radically.

Selling the Theater Chains

Early in 1951 the major movie studios—Universal, Columbia, Paramount, Warner Bros., M-G-M, 20th Century-Fox, and RKO Radio—agreed with the Justice Department on the details of selling the theater holdings. The theater chains were sold, freeing a market that for decades had been run as separate monopolies, each studio distributing its own films to its own theaters. The sales had the effect of reducing the number of films produced by the studios, since there was no theater that was obliged to show them without question. In 1954 the seven largest movie studios planned to make fewer than 100 movies as opposed to the 320-400 per year that was common in the late 1940s. With the reduction in the number of movies, the theater owners were hard-pressed to keep the screens busy.

Declining Business

The emergence of television as an entertainment medium also affected film production. The studio heads were terrified of the threat that in-home visual entertainment, including in-home movies, presented to the movie business. In 1951 20th Century-Fox lowered the salaries of its top 130 executives—some as much as 50 percent—because of slumping profits. Fox president Spyros P. Skouras blamed "this great new medium, television." The moviegoing audience declined from 63 million in 1950 to 58 million in 1952. That same year approximately 640 theaters went out of business.

Moving into Television

RKO Radio, one of the major studios, went out of the movie production business altogether in 1957, its pieces sold by owner Howard Hughes. Though not a direct result of competition from television, the sale was influenced by reduced profits in the movie business. Ironically, the RKO Radio studios were bought by Desilu Productions, a television production company owned by Lucille Ball and Desi Arnaz. The RKO Radio film library was sold to General Tire to be shown on television. 20th Century-Fox drilled wells to search for oil on its property formerly used to shoot films. Many of the studios—Warner Bros., Republic, 20th Century-Fox, Columbia—set up subsidiaries to produce movies and television shows for broadcast on network television.

End of the Production Code

In addition to restructuring the movie business and reducing the number of films made, the Supreme Court decision and the subsequent Justice Department settlement indirectly affected the content of the films that were made. Since 1922 the movie industry had undertaken the task of regulating the moral content of movies through the Motion Picture Producers and Distributors of America (MPPADA) to counteract a public protest about film industry morals. This regulation was possible because of the control the studios held over both production and exhibition. The guidelines controlled the way the movies handled such things as cursing, kissing, criminal acts, cruelty to animals, and a myriad of other human behaviors. The MPPADA studios controlled the production of the movies and could deny distribution of those movies that violated the guidelines.

Independent Producers

The freeing of the exhibition market opened the opportunity for independent producers—who were not part of the MPPADA—to gain theater access for their movies whether or not they adhered to the code. Even studio movies, under the influence of the more adventurous independent producers and under the pressure of falling profits and smaller movie audiences, began to experiment with language, sex, violence, and other aspects of behavior that until then had been heavily regulated. Movies that in the early 1950s pushed the previously observed limits of morality include A Streetcar Named Desire (1951), The Moon Is Blue (1953), The French Line (1954), and Baby Doll (1956).

Increased Financial Risk

But the more adventurous movies did little to reverse the trend toward lower attendance and profits. In 1955 the audience was estimated at 50 million, a figure that was an improvement over 1953 numbers. As the audiences dwindled, producers began to spend more on the fewer movies being made, filling them with bigger stars and higher production values. The spectaculars did seem to attract larger crowds, but they had to bring in more money just to pay for themselves. In 1948 the highest grossing film was Road to Rio with $4.5 million. In 1952 there were four films that grossed more than $6 million, with the largest take being $12 million by The Greatest Show on Earth. The biggest change in the movies was the financial risk: the hits made more money, but the flops lost more.