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USA, New York. Your writers are very professional. Michael Samuel. The studio system around which the industry had been organized for three decades finally expired in , when Loew's, the last holdout, severed all operational ties with MGM. Hughes's gambit helped break the studio system, but it did little for RKO. His disruptive leadership—coupled with the draining away of audiences to television that was affecting the entire industry—took a toll on the studio that was evident to Hollywood observers. When Hughes sought to bail out of his RKO interest in , he had to turn to a Chicago-based syndicate led by shady dealers without motion picture experience.
The deal fell through, so Hughes was back in charge when the RKO theater chain was finally sold off as mandated in That year, General Tire and Rubber Company, which was expanding its small, decade-old broadcasting division, approached Hughes concerning the availability of RKO's film library for programming. Hughes acquired near-complete ownership of RKO Pictures in December and consummated a sale with General Tire for the entire studio the following summer. Just like United Artists, the studio now no longer had a studio; unlike UA, it barely owned its old movies and saw no profit in the making of new ones. In it abandoned the movie business entirely. While the studio system is largely identified as an American phenomenon, film production companies in other countries did at times achieve and maintain full integration in a manner similar to Hollywood's Big Five.
As historian James Chapman describes,. In Britain, only two companies ever achieved full vertical integration the Rank Organization and the Associated British Picture Corporation. In Hong Kong, Shaw Brothers adopted the studio system for its wuxia films throughout the s-'60s. India, which represents perhaps the only serious rival to the U. For instance, in nearly 75 percent of Japanese movie theaters were connected with either Nikkatsu or Shochiku, the two biggest studios at the time. In the s Hollywood faced three great challenges: The Paramount case ending the studio system, the new popularity of television, and post-World War II consumer spending providing its audience with many other leisure options. The scale of both box office successes and flops grew, with a "dangerous middle" consisting of films that in the previous era would have made money.
A filmmaker stated in that "[t]he one absolute disaster today is to make a million-dollar mediocrity. One of these you can lose not only your total investment but your total shirt. Zanuck , head of 20th Century Fox, had no direct involvement with the studio from to , [10] and Louis B. Mayer , sacked in from MGM, died in We find ourselves in a highly competitive market for these talents [stars, directors, producers, writers].
Under today's tax structures, salary to those we are dealing with is less inviting than the opportunity for capital gains. We find ourselves, therefore, dealing with corporations rather than with individuals. We find ourselves, too, forced to deal in terms of a percentage of the film's profits, rather than in a guaranteed salary as in the past. This is most notable among the top stars. Most actors became freelancers after the end of the studio system. With their new power, "working for nothing"—receiving a percentage of profit instead of a salary—became a status symbol for stars. The larger paychecks also increased the power of talent agents such as Lew Wasserman of MCA, whose office was now nicknamed " Fort Knox ".
Beyond working for others, top actors such as Gregory Peck and Frank Sinatra created their own production companies and purchased scripts. Top independent directors George Stevens , Billy Wilder , and William Wyler also saw their paychecks increase, in part because their involvement attracted star actors. Studios increasingly provided funding and facilities to independent producers as opposed to making their own films, or just like United Artists, they focused on distribution. While television had damaged Hollywood, TV production companies such as Desilu and the film studios' own TV divisions helped save the industry by using otherwise-unused facilities.
At the beginning of the s the major studios began to reissue older films for syndication and transformed into mainly producing telefilms and b-movies to supply TV's demand for programming. The onset of George Lucas 's Star Wars became the prototype for the modern blockbuster. Meanwhile, the uncontrolled budget of Heaven's Gate , and its limited box-office revenue, led to the sale of United Artists.
From to , New Hollywood turned into more of a conglomerate Hollywood and quickly dominating the entire global entertainment industry. Furthermore to date, Sony Pictures owned by Sony was formed by the merger of Columbia and Tri-Star while the Walt Disney Studios owned by Disney has emerged as a major, which resulted in a "Big Six" until the acquisition of 20th Century Fox by Disney announced in late was completed in early , becoming a "Big Five" once again. Not including Walt Disney, all of these so-called major studios are essentially based on the model not of the classic Big Five, but of the old United Artists: that is, they are primarily backer-distributors and physical studio leasers rather than actual production companies.
In , New Line was merged into Warner Bros. Each of today's Big Five controls quasi-independent " arthouse " divisions, such as Paramount Vantage. Miramax Films which originally was an independent studio was owned by Disney until Most also have divisions that focus on genre movies, B movies either literally by virtue of their low budgets, or spiritually—for instance, Sony's Screen Gems. One so-called indie division, Universal's Focus Features , releases arthouse films under that primary brand.
