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During these crisis years, RKO production slowed but did not stop.

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According to Fortune, RKO's in-house production decreased from twenty-eight films in to ten in But there simply were not enough films to justify the overhead of running a major studio. RKO's distribution network limped along thanks largely to contracts with independent producers, including Samuel Goldwyn and Walt Disney.

As might be imagined, the mismanagement of RKO led to consistent financial losses and to the destruction of the studio's reputation. However, since all the other leading studios managed to stay afloat through the decade, the decline and fall of RKO must be blamed first and foremost on Howard Hughes.

History & Criticism

Columbia and Universal were considered minor studios because their production and distribution businesses were not complemented by ownership of a theater chain. Without the muscle of their own theaters, Columbia and Universal did not in general try to rival the star power and high production values of the five major studios. Both of these companies specialized in "B" movies or "programmers" through the mids; in Tino Balio's words, they "were useful to the majors in supplying low-cost pictures to facilitate frequent program changes and double features.

When "A" movies became predictably successful at the end of World War II, both studios raised the budgets of some films, while continuing to make less expensive Westerns, series e. Columbia benefited from having Rita Hayworth under contract—she was one of the top stars and sex symbols of the s. Universal had no star with this kind of drawing power until Rock Hudson hit his stride in the mids.

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Columbia was founded by the Cohn brothers, Harry and Jack, but this was not an equal partnership. Harry, based in Los Angeles, was after both president and head of production for the studio, while Jack, based in New York, was executive vice president. Harry Cohn was a legendary Hollywood figure, crude, petty, penny-pinching. Producer Stanley Kramer, who had a multi-picture deal at Columbia between and , describes Cohn as "vulgar, domineering, semi-literate, ruthless, boorish and some might say malevolent.

In the early s, Cohn's strategies were to raise output and to challenge the dominance of the majors with a number of high-prestige films. Columbia led the film industry with fifty-nine releases in and sixty-three in , though the cost-per-picture would not have compared to MGM, Paramount, Fox, or Warner Bros. Columbia was still making Westerns and other low-budget genre films as well as Three Stooges shorts , but was mixing in a surprising number of top-quality films.

The American Film Industry in the Early 1950s

Columbia was also making excellent films in-house, for example the George Cukor -directed Born Yesterday , and the Academy Award-winning From Here to Eternity Harry Cohn believed in short-term contracts, so it is difficult to compile a list of Columbia stars in the early s. Humphrey Bogart and Randolph Scott worked at Columbia among other studios. Production heads William Goetz Louis B. Mayer's son-in-law and Leo Spitz had raised production budgets to compete with the majors, but their prestige pictures lost money and so they had to cut back on overall spending.

Goetz and Spitz were replaced by Edward Muhl, who had previously been studio manager. The Decca-Universal combination was an early example of media conglomeration.

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Decca had been releasing records featuring Universal stars and Universal properties for more than a decade, but these arrangements were based on individual deals, not a blanket contract. Milton Rackmil told the press that certain functions of the two companies might be combined and that a joint approach to producing for television was possible.

Under Muhl and Rackmil, Universal added glossy entertainments, often in Technicolor, to its genre movies and serials. Anthony Mann's black and white Winchester '73 was noteworthy because star James Stewart was given 50 percent of the profits. This approach, designed by Stewart's agent Lew Wasserman, could be used to lure top talent away from the major studios.

United Artists, the smallest of the "little three," was founded in to distribute the films of its owners Mary Pickford , Douglas Fairbanks , Charlie Chaplin , and D. Thirty years later, Pickford and Chaplin were still the owners, but the studio was in desperate trouble. Pickford had retired from the movies, Chaplin was producing one film every four or five years, and United Artists was having difficulty attracting independent producers to its distribution setup. A number of studios were trying to sign independent producers around , and United Artists was hindered by a lack of funding and an inefficient management scheme.

UA President Grad Sears had to get approval from owners Pickford and Chaplin on proposed deals, whereas executives at other companies had much more freedom of action.

Krim and Benjamin offered to take over operation of United Artists for ten years "on the condition that if UA earned a profit in any one of the first three years, the Krim-Benjamin team would be allowed to purchase a 50 percent interest in the company for a nominal one dollar a share. The "new" United Artists took over the film inventory of Eagle-Lion Pictures Krim and Benjamin had worked for this short-lived company in the late s to get distribution moving again. United Artists was modestly profitable in , so the terms of the Krim-Benjamin agreement with Pick-ford and Chaplin went into effect almost immediately.

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Krim and Benjamin then built on their early success to design a new strategy for independent production which will be discussed later in this chapter. These production-distribution companies provided extremely inexpensive genre films primarily Westerns to fill out the programs of smaller theaters. They were badly squeezed in the late s and early s by the downturn in film receipts and the closing of many theaters. Television became a factor in the s, because set owners could now stay home and watch formula entertainment. Monogram changed its name to Allied Artists in and concentrated on medium-budget production.

In historical context, the phrase refers to a move away from a factory-like system where all aspects of a production are handled by studio employees, and toward a flexible, free-lance system where the personnel and other elements of a production are assembled for each individual film. Janet Staiger describes independent production as a "package-unit system," meaning that the key unit of organization is the individual film rather than the studio's yearly production schedule. Studios no longer control every aspect of a film's production, but they do generally provide the crucial elements of financing and distribution.

Also, to protect their investments, studios have generally retained some oversight of the production process itself—for example, cost and schedule guarantees and right of final cut—as well as control of advertising and distribution. Though Hollywood in the s and s was dominated by the big studios, a few producers such as Samuel Goldwyn, David Selznick, and Walter Wanger chose to make their films independently, negotiating distribution contracts with the major or minor studios.

Goldwyn, Selznick, and Wanger had stars and directors under contract and owned high-prestige story properties, all of which enhanced their negotiations with the studios. Selznick, for example, bought the rights to the enormously popular novel, Gone with the Wind , a property any of the studios would have been delighted to own. However, because Selznick wanted Clark Gable in the leading role of Rhett Butler, he made a distribution deal with MGM, offering the studio a substantial chunk of the profits.

Independent production was never entirely independent; it was always a negotiation. In the early to mids, producers, directors, and a few stars formed their own production companies to make films for studio distribution. There were three basic reasons for creative people to form a production company instead of working on a studio contract: 1 Independent producers were entitled to a share of a film's profits, and therefore could make huge sums from a major success; 2 Personal income taxes were very high, and corporate taxes were much lower, so film people derived immediate benefits from "becoming a corporation"; 3 Some creative people were tired of studio bureaucracies and wanted to guide their own careers.

During the boom years of the mids, banks provided easy credit to independent producers on the theory that "a feature film—any feature film—would always return at least 60 percent of its negative costs at the box office. Other loans and salary deferments provided the remaining 40 percent of funding.


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This liberal approach to credit naturally stimulated the growth of independent production. Janet Wasko notes that there were forty independent companies producing features in , and including the major studios in With the downturn in film industry receipts starting in , the "60 percent rule" proved to be unduly optimistic. Numerous films were not making back even the 60 percent of the primary bank loan. Major banks had to foreclose on motion-picture loans and to laboriously try to regain their investments through foreign distribution and other strategies. At this point the banks cut back on financing individual pictures, preferring to loan money to larger corporations with tangible assets—the major distribution companies.

So, paradoxically, independent production became more and more dependent on the judgment and oversight of the major and minor Hollywood studios. Independent productions did not dimmish or disappear with the new restrictions on bank lending, mainly because they suited the needs of the studios.

With audiences declining and the consent decrees adding considerable uncertainty to the film business, the studios had an immediate need to cut overhead. By sponsoring independent production, they could eliminate the need for large permanent staffs. A studio could be reduced to management, accounting, sales, advertising, and publicity departments, plus a skeleton crew to maintain the physical facilities. In practice, this happened gradually, over a period of years or even decades. The process of cutting permanent staff can be highlighted by some estimates from The Film Daily Yearbook.

In the major studios had actors under contract, in the number had decreased to , and in to As for writers, there were under contract at the major studios in , in , and only 67 in For creative people, the new working conditions were a mixed blessing. Those most in demand could now require princely salaries plus a percentage of the profits.

However, profit participation meant nothing if a film was not successful, and those stars who invested in their own projects could actually take a loss.

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For marginally employed actors and other creative types the end of a studio contract meant uncertainty, likely periods of unemployment, and possibly the search for a new career. Membership in the Screen Actors Guild dropped 19 percent between and it was later to rebound, because of Los Angeles—based television production.

Corrado, who had specialized in waiter and headwaiter roles his credits include Top Hat , ; Gone with the Wind , ; and Casablanca, was by out of show business and working as a real-life headwaiter at a restaurant in Beverly Hills. The trend toward independent production accelerated in and Variety reported in early that much of the support for independent production was coming from the smaller, more marginal studios.

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Cooper reached agreement with the Poverty Row studio Republic. Later in Paramount was actively recruiting independent producers and was changing to an emphasis on "semi-autonomous production units" rather than "salaried house producers. By February , Columbia was assembling a high-profile group of independent producers, Warners was working with Cagney Productions and Milton Sperling, and Fox had a three-picture deal with Joseph Bernhard.

The films made as the studio system gradually dissolved should probably be called "semi-independent productions. It arranged financing, approved story and budget, monitored production, and controlled marketing and distribution. Also, since studios in the early s retained many of their contract personnel and technical departments, independent producers were encouraged and in some cases required to use studio crews and facilities.

Independent production was really a partnership between producers and studios, with much depending on contract provisions and working relationships between the principals. Everything was open to negotiation, so that even regular studio contracts for top talent began to include profit participation and the ability to do outside films.