Introduction

During the studio era, the American film industry was dominated by eight companies, the ‘Big Five’ – Paramount, Loew's (MGM), 20th Century Fox, Warner Bros. and RKO – and the ‘Little Three’ – Columbia, Universal and United Artists. The Big Five were vertically integrated companies: they produced their films at self-owned studios; they developed a network of offices in the US and around the world to market their films and deliver them to the theatres; and they owned a relatively small number of theatres in the US and in key European countries where they exhibited their own (as well as each other's) films. The Little Three were organised in the same way as the Big Five but were not integrated on the same level: Columbia and Universal produced and distributed their own films but did not own any theatres, while United Artists was mainly a distribution company even though, for a time, it owned a small number of theatres in certain key markets. According to Douglas Gomery, the eight studios produced about three-quarters of all features made, while this product was responsible for about 90 per cent of box office takings.

This suggests that roughly one-quarter of all films in the US were made and distributed outside the eight studios, while 10 per cent of all dollars spent on cinema-going were for films produced and distributed by non-studio outfits.

This picture of the studio era, however, is not characteristic of the entire period from the mid-1910s, which is widely regarded as when the American film industry started to take shape. Although many production and business practices that were adopted at the beginning of this period remained in place throughout the years, it was not until the mid-/late 1920s that the overall structure of the industry became clear. For instance, RKO, the last member of the Big Five, was not established until October 1928, almost 14 years after Fox Film Corporation became one of the earliest examples of a vertically integrated film company.