The film industry would have never taken the direction it did without the incorporation of certain worker management techniques and capitalist vertical integration pioneered by the founders of Hollywood. The methods of operation that Hollywood established in the realms of production, manufacturing, exhibition and distribution of film has shaped the face of the industry to how we recognize it today. In the warm, sunny outskirts of Los Angeles lay Hollywood.
This was the location of choice for several enterprising film companies in the early 1910s to settle and establish themselves away from the cold winters of New York, the headquarters of the Motion Picture Patent’s Company known as the Trust. By the time of the Great Depression, this small band of independent entrepreneurs would demonstrate that by applying certain worker management techniques within a capitalist vertical integration system, near absolute control of the film industry could be achieved.
Prior to the domination of Hollywood, French film making was amongst those at the fore front, if not the fore front itself of the film industry. However, in the wake of the First World War, the film industry within many European countries were hindered which gave the American cinema the necessary breathing space to obtain great advancements in technical and industrial mastery. The Hollywood film companies centralized their productions in giant warehouses, and were able to devise a very effective and lucrative method of making their star performers into icons within this studio system.
Many countries including Germany and Russia attempted to replicate the style of studio system generated in Hollywood in order to compete within the global market. These attempts at simulating and imitating would prove to be in vein because by the mid-1920s, Hollywood would virtually monopolize the international marketplace for film. This studio system that Hollywood designed was so efficient that no competition could contend with its industrial might.
Vertical integration and low overhead were essential in allowing their films to be produced frequently, viewed widely by consumers in American cities and exported broadly amongst foreign countries. These were objectives that the Motion Picture Patents Company, or the Trust, could not achieve even though they possessed the majority of patents for cameras, projectors and film itself, made thousands of films, and were comprised of the top ten European and American inventors, manufacturers, and producers.
The Trust attempted to control the industry by charging rental fees for cameras and projectors, and by inflating the cost of film. These tactics proved to be unsuccessful with the swift and adverse emergence of Hollywood producers, unsatisfied with the conditions by which they were forced to operate beneath the Trust. Many of these independent figures founded the companies we are so accustomed to presently. Adolph Zukor founded Paramount, William Fox founded 20th Century Fox, Carl Laemmle founded Universal, and Marcus Loew founded what would eventually be known as Metro Goldwyn Mayer.
The warm temperature and year-round sunlight of the west coast was very beneficial for the new studios. This along with low land costs and no real established union allowed producers to focus more on the content of their output. These studios along with others were quick to brand their individual products and began to make innovations in the medium of film as an art form. “Actual plays, novels and magazine content became incorporated into the development of stronger and more interesting plots.
These studios were producing complex stories for their films in order to make them longer and of superior quality to the Trust’s mundane fare of 20 minute short films. “… Not one member of the MPPC, with which the independents had competed between 1908 and 1915, survived. “2 By evading the Trust on the other side of the continent and developing new strategies for film form and production in their new low overhead environment, Hollywood studios were producing a great deal of films. So many films in fact, that they were able to fill theatrical bills by 1912.
Around this time, there was a rapidly growing appeal among the public for films and over the course of the following eight years, the independent studios systematically acquired over two thousand key picture palaces thereby taking control of the exhibition of film across the country. By the time that 1920 rolled around, the independent studios of Hollywood had taken the reins. They had successfully overcome the Trust, were making millions of dollars in profit a year, and were continuing to dominate the exhibition and production of movies.
Having achieved these great feats, the next logical step was to master the distribution aspect of the business, which proved to be a relatively simple task. In this era of silent film, all a studio had to do to make a film internationally accessible was to translate the inter titles and pay a little more for reproduction costs. So successful was this system that industry delegates from around the world came to take note of the workings of Hollywood.
“… sitors from France, Germany, Britain, Hollywood was to play host in the 1930s to Luigi Freddi, head of the Italian Fascist film industry, and to Boris Shumyatsky, Stalin’s Henchman in charge of the industry in the Soviet Union. “3 Even though it was a fairly easy accomplishment to tap into the world market, Hollywood in turn had to maintain the high supply of films to meet the high amount of demands world-wide. Fortunately for Hollywood, the studio system was able to cater to this high demand for production because of the particular climate and diverse landscape of southern California.
The area surrounding Hollywood was ideal in that it could lend itself to a variety of movie themes and of course, the all year sunlight that allowed longer days to get work accomplished. With these factors on their side, producers were able to in effect, manufacture their products at an astonishing speed. These movies were usually about an hour and a half in duration which totally contradicted any previous notions of motion picture being strictly novelty. Cinema had established itself as a legitimate form of entertainment, now seeming light years away from its gritty origins within the seedy nickelodeons.
Now strangely enough, this notion of longer quality feature films is a European one- previously disregarded by American exhibitors, but now embraced by American audiences care of Hollywood studios. People paid more money, and came in far greater numbers to see these features in regal theaters as opposed to the minute screenings put together by the Trust. It is this idea of legitimizing cinema that allowed Hollywood to appeal to the orthodox middle class and thus get a solid foothold in the American market.
Having proved itself as a true art form, the industry was then able to focus on the task of cultivating desire and fascination within the audience. Publicity was a great tool utilized by Hollywood. The industry was a major contributor for the development of mass advertising and being able to create a sense of desire, yearning for consumption, and other by-products of capitalist culture. Without the industry’s use of publicity, the direction of cinema could have quite conceivably taken a different path.
Newspaper headlines, and radio advertisements served as access points for the film industry to reach the minds of the public and promote their respective products. These products, however, were not restricted to the films themselves. The star management system was put in place for a variety of purposes; each studio would have their own stars not only as talent within their features but to act as figure-heads for the studio itself, enabling studios to differentiate and thereby effectively compete with one another.
These charismatic individuals portrayed the American ideals of beauty, success, and honesty- all characteristics that the middle class could appreciate, respect and ultimately strive to be. Because of the public’s fixation and ability to relate with the stars, the studios went to great lengths to keep them bound to long, high paying contracts so to ensure sales of admissions. In order for Hollywood to maintain the high demand for product and achieve even greater success, their worker management techniques became streamlined further.
Studios came up with many different ways of cutting corners when it came to film making so that they could be constantly creating quality movies for the thousands of theaters that came to expect them on a almost a weekly basis. Ultimately, in the tradition of Fordism, the factory style system of worker management established itself as the most effective means of reaching the studios’ potential. A variety of special positions were assigned in order to aid the director of a given film.
Since there was such a broad spectrum of tasks necessary in making a film, it was important to delegate objectives so as to complete projects in as little time as possible. Set designers, writers, and cinematographers all became essential personnel in the production of a film- each fulfilling their respective role and in essence, adding their piece to the overall puzzle. That being said, the process of shooting itself came under scrutiny when film makers decided it was cheaper to shoot the movie out of sequence.
This was quite a revolutionary method since previously, in the days of the Trust, stories would be shot in sequence or as they happened theatrically. With this new technique, scenes could be filmed in a logical order rather than a chronological order and then assembled as the original script prescribed. The minimum costs were projected after prioritizing all required shooting aspects for each production. These logical plans for shooting came to be known as shooting scripts and were an integral factor in the making of films as cheaply as possible.
In turn, as narratives became more complicated within films and movies became longer in duration, so did the shooting scripts and the responsibilities of the crew involved in the production. These scripts were also very helpful in the filtering out of problematic or risky endeavors. If a script was approved by the studio boss, a producer would be able to come up with a shooting script for the actual sequence of production in order to make the movie as fast and as economically as possible. So calculated and efficient were the Hollywood studios, that they eventually became almost 100 percent self sufficient machines.
Every person and facility played an important role in the production of films. Upon approval of a project, phases of the film’s creation were filtered through the appropriate avenues similar to a factory production line. “Directors mostly became glorified foremen’ and, with assembly line specialization, were as much typecast as were the players. There were directors of westerns, comedies, romances, and so on. “4 Directors oversaw the operation while writers and producers created the necessary scripts, and designers and artists made the required preparations for sets, costumes, etc.
These sets, and even costumes, were used on multiple occasions- adjusted as needed to coincide with various stories. All of these measures were taken into account because studio bosses organized film programmes over a year in advance. Therefore time was always a major factor in every aspect of production. Actors were often transported from the set of one film to the set of another. Directors went to great lengths to avoid retakes and often used multiple cameras to achieve complicated shots. So busy, vast and complex were these arrangements of buildings and people that they were in essence, miniature cities.
Out of sheer common sense these bustling hubs needed their own internal emergency authorities. Fires would frequently be a threat to production, so there were studio fire fighters in case a fire got out of hand. In order to keep out unauthorized people or retain crowds, these studios often had their own force of security guards that effectively policed the grounds. It was quickly becoming apparent that Hollywood’s management techniques and the vertical integration of all aspects of the business was proving to be a high profit earner.
During the mid 1910s studios were turning in profits exceeding a million dollars annually and with demand for product constantly on the rise, studios saw benefits in the block booking of its yearly supply of films. This technique allowed producers to experiment with new plot genres and develop new stars with the guarantee that they would be able to attract audiences. As opportunistic as this was for studios to block book their annual programmes, it seemed very risky on the side of the exhibitors that were asked to pay exorbitant lump sums for unknown products.
Many exhibitors participated in the block booking system of distribution blindly trusting that there would be enough films with famous stars in it and stories interesting enough to attract sales. Famous Players is the prime example of a studio that maximized off of the block booking system. By 1921, Famous Players was the largest film production company on the scene and provided nearly 25% of on-screen fare. “Any new would-be independents were effectively kept out of this closed system. If they wanted to produce, the screens weren’t available to them; if they wanted to exhibit, they couldn’t get access to films.
With profits continuously rising and exhibitors booking films before they were even shot, film companies began to look into the tapping of the exhibition market itself. Because of the capital generated by these studios, they quickly became notable players within the New York Stock Exchange and found heavy financial support in investment banking. It was this incorporation of Wall Street that provided the extra strength necessary for Hollywood film companies to enter the arena of real estate and ultimately theater chains. It was common fact that money was made at the box-office.
With the new found financial support from Wall Street in New York, these film barons were now able to control all three sides facets of the film business: production, distribution, and now exhibition. Hollywood’s success in controlling these aspects did not come to be simply by competing, but by the innovation and evolution of certain management techniques that gave them the edge over their competitors. The companies again focussed on the middle class, and looked not only to the major cities but to the suburbs to set up their new picture palaces- magnificent theaters that would feature their products.
Again the notions of desire and spectacle were paramount at these sites, creating an atmosphere of sheer luxury for people paying to be entertained. This idea was not an original Hollywood innovation however. In 1925, Adolph Zukor and his Famous Players corporation were able to merge with the then very popular, and highly competitive theatrical exhibitors, Balaban & Katz. “… a cluster of movie palaces situated on main streets from New York to Los Angeles, Chicago to Dallas, and, within a short time, London and Paris as well.
With the construction of these picture palaces, so was constructed a major pillar that gave Hollywood its strength to move and dominate the world. As notable as it was for a small band of companies to control all of the major movie stars and theaters across the United States, this did not stop the Hollywood moguls from moving on to infiltrate international markets. At this point, the extra funds necessary to establish international distribution were insignificant. The only factor that posed any real serious challenge to the film companies would be the geo-political situations of the world.
In order to become internationally competitive and be able to manage their enterprises in foreign countries, the companies banded together and formed the Motion Picture Producers and Distributors Association of America. This association would not only ensure that operations ran smoothly abroad, but when it boiled down to it, maximize profits. With support from the government vis a vis the State Department, Hollywood companies were able to achieve great success internationally, landing fantastic contracts in foreign markets, and effectively, doubling their annual revenues.
Many countries attempted to impose tariffs or taxes to counteract the enterprising forces of Hollywood but to no real degree of success. So lucrative were these companies that they were able to overcome any real obstacle that was thrown in their path and by 1925 Hollywood was effectively dominating North American, South American, Central American, Australian, and most European markets. Even competitive countries such as Germany had all but succumb to the powers of Hollywood: leading away many foreign stars and production companies by the last years of the 1920s.
The film industry took the direction it did because of the incorporation of certain worker management techniques and capitalist vertical integration created and applied by the pioneers of Hollywood. Being able to achieve maximum production value, employ stars as cultural icons, erect breath-taking theaters for exhibition, and reach vast international market places proved that through strategic worker management techniques a minority of capitalistic vertically integrated companies came to control Hollywood and propelled the film industry in the trajectory it soars at today.
