From the 1920s through the 1940s, Hollywood as it is known today was quite different. The Classic Hollywood Era was a time of high profits, high attendance, and most importantly, the mostly gone studio system. With this system, classic Hollywood studios thrived with relatively little competition.
Perhaps the most important aspect of the studio system was that it operated under a policy of vertical integration. In other words, the Big Five Studios (MGM, Paramount, 20th Century Fox, Warner Brothers, and RKO) owned and controlled every aspect of their business from production all the way to distribution and exhibition. This ownership also included the actors and actresses themselves. This tight control allowed the studios to be much more efficient than today. Simply, vertical integration made classic Hollywood the powerhouse that it was.
Since part of vertical integration included the contract labor of the “stars,” studios’ films often reflected the actors and actresses that were in their respective stable. A good example of this is the Warner Brothers studio, which was famous for their crime films. Humphrey Bogart, an actor that Warner Brothers had on contract, became famous in crime films for his signature look of a trench coat and fedora. Since he had so much star power, Warner Brothers produced many crime films because the studio system and vertical integration essentially gave them control of Bogart (Casablanca 1942). If they could cast Bogart in a crime film, audiences would love it. They expected his casting from Warner Brothers.
A good example of how powerful vertical integration made the studio system was how films were distributed. MGM was linked with Loews Theaters in the same vertically integrated corporation. This meant that the studio that made the film also had direct access to a place to distribute them without having to worry about an outside theater. In addition, when MGM wanted to show films in a theater owned by another company, they would package up to 5 together, with only 1 being of quality, and the theater would have no choice but to accept all of them.
Overall, vertical integration allowed the classical Hollywood studio to put a lock on the market. They controlled everything from the start to the finish of a film. Essentially, he studio did everything, a concept that today would violate anti-trust laws left and right. From the 1920s to the 1940s, vertical integration made Hollywood the powerhouse that it was.
Surely when a one man company expands in any direction that's 'vertical integration for you'. Anti-Trust Laws ignore the fact that more often than not it's difficult to find someone 'to do a job for you, it ignores the fact that the job might be beyond their capability, or the opposite too small for them to tackle, or they don't have the funds, materials, staff and equipment or might be located miles away. So doing as much as one can 'in-house' is often best. The film industry is art, and the artist film Director needs it done today, needs to view the work immediately in order to approve it, print it, or to scrap it and start again. So USA Trust Laws killed progress and crippled an industry in order to allow small service companies a slice of the take. R Wilson.
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