Day 937: Hollywood’s Hollywood Ending – USA vs. Paramount, 1948

originally published July 25, 2014

For those who wax nostalgic about the Golden Age of Hollywood, who swoon over the catchlights dazzling in Rita Hayworth’s dark chocolate eyes, who are pushed to the brink of their seat cushions by a stabbing violin score, or who treasure a film’s complete batch of credits before the story gets rolling, you may need to taste that era’s whole truth. Sheltered in the oligopolic thatch of corporate hubris, the Big Five studios were paying themselves twice, fortifying their sweet-spot on the dais of celluloid art with soggy sandbags of nefarious business practices.

When the chips finally fell on the Golden Age, they landed with such a clatter the movie business crumpled into a slump the likes of which we’d never see again; even the modern age of easily-snatchable torrents and duplicitous street vendors pitching bootleg blockbusters hasn’t throttled the industry like this.

For the struggling filmmaker or the tiny fledgling production company, adrift without financial paddle in a sweaty sea of studio bullies, the Golden Age of Hollywood was an ordeal. It took until 1948 for the United States Supreme Court to peel the wings off the sleazy sideshow of backdoor studio arrangements, and they managed to pack the full heft of their punch into one near-unanimous decision.

Piecing together the components of a relatively new art form required some experimentation, allowing a few different business models to walk the industry’s catwalk while the studios toyed with the best way to maximize profits while maintaining the high aesthetic of the art form itself. I’m kidding of course; they wanted to make money, and it was clear from the moment Tommy Edison’s industry stranglehold was quashed by the feds in 1915 that the best way to do that was to keep everything in-house.

Writers, directors, producers, actors – everyone was under contract, which meant if you thought James Stewart would be perfect for your bubbly and wry script, you’d better also be working for MGM or you’d be out of luck. The studios also kept a clunky foot deep in the waters of film distribution and exhibition, owning nearly 20% of the movie theaters in the country. That was where the cash-bills were printed; if your theater, located on a coveted slab of foot-traffic-heavy real estate, is only showing the movies your studio produced, you’re piling dollars on top of dollars. Makes for a downright tasty bottom line.

The Federal Trade Commission had been skulking around the studios’ footprints since the silent era, but in 1938 they filed a lawsuit, claiming the Big Five – that’s MGM, Paramount, 20th Century Fox, Warner Brothers and RKO – were actively pissing all over the Sherman Antitrust Act of 1890. The studios were ordered to stop ‘block booking’ short films along with features. Block booking is the mandatory bundling of sketchier lower-budget flicks with limited appeal along with the movies people actually wanted to pay to see. So if your theater really wanted to show Casablanca, you’d also have to agree to show The Wacky Exploits Of Mrs. Picklebelly.

The Big Five could still block-book up to five features, but short flicks were out. Also, they couldn’t force theater districts to buy films without checking them out first. The demands were fair, but the studios did nothing to tweak their policies. In October of 1945, the government filed suit again, this time going after all eight major studios – Universal, Colombia and United Artists didn’t operate very many theaters, but they operated enough to get lumped in with this lawsuit. One way or another, the future looked bleak for Mrs. Picklebelly.

It took three years for the case to land on the shiny oaken table of the US Supreme Court. With Justice Robert H. Jackson abstaining (he was probably out catching a movie), the Court voted 7-1 against the studios, forcing all eight companies to pick a side: they could make movies or show them. Paramount, who had owned an impressive stable of cinemas, split in two. Paramount Pictures kept churning out flicks while United Paramount Theaters ran the houses. That company merged with brand-new TV network ABC in 1953, the company that is now owned by Disney, which theoretically should create another conflict of interest. I’m not certain how they ironed out that particular fish.

The studios had to rebuild their skeletal innards from the bottom up. It hit the big guys hardest, and with RKO already struggling under the wonky leadership of Howard Hughes, it would be the only member of the Big Five to crumble. The little guys didn’t have much to lose from the court’s decision, especially United Artists, who was more of a backer/distributor than a full-fledged studio. But the industry itself metamorphosed overnight.

While I’m sure a number of theaters closed up shop when they lost the financial backing (and the exclusive screening rights) of their studio owners, several more popped up into what was suddenly a much more democratized marketplace. Independent film companies didn’t pack the fiscal wallop of their corporate competition, but at least they had a fair shot at squeaking through the front door of a theater and maybe onto the screen.

This subsequently kicked the feet out from under the Hays Code as well. This was the precursor to the modern ratings system, and it expressly forbade the studios from allowing horrifying, scarring content (like boobs, or frightening curse words) into Hollywood movies. The new arthouse theaters that speckled the cinematic landscape in the 50’s exhibited foreign films, or movies by up-and-comers that could shove the boundaries of so-called decency just a little.

But far from a rebirth of true film, that Supreme Court decision was but one of many bullets that Bonnie-and-Clyded the movie business around 1948-50.

Just as the studios were witnessing the end to their cushy reign over all things film, they also had to contend with a stifling crowd of their most elite professionals getting hauled in front of the House UnAmerican Activities Committee to be questioned about their possible communist dalliances. At the same time, television was worming its way into every home in the country, populating everyone’s living room with a viable alternative to spending the evening out on the town.

1946 was the pinnacle year for movie-going, with box office returns at an all-time high. By 1950 the industry hit such a slump, they were willing to try anything to fight the riptide and stay near the surface. More movies were being made in shiny Technicolor. Theaters were outfitted with massive Cinerama screens, creative widescreen technology and 3-D pictures – all in an effort to offer what television could not. But despite all this innovation, the movie business’s slump would remain until the 1970’s, when The Godfather, Jaws and Star Wars would introduce the tradition of the blockbuster to shake movie-lovers away from their sets.

It was an ugly trade-off: legitimate business practices for a morbid slump in sales. Yet it’s also a facet of the glamorous good-ol-days that gets forgotten in the sweeping crane-shot of Hollywood nostalgia. Sure, those old studios produced some enduring classics, the likes of which are seldom equalled today. But that doesn’t mean they weren’t being dicks about it.

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