vertigal intergration in film

The term studio system refers to the practice of large motion picture studios

1. producing movies primarily on their own film making lots with creative personnel under often long-term contract and

2. pursuing vertical integration through ownership or effective control of distributors and movie theaters, guaranteeing additional sales of films through manipulative booking techniques.

The Little Three studios (Universal, Columbia and United Artists) also made pictures, but each lacked one of the crucial elements of vertical integration.The Big Five tryed to achieve vertical integration through the late 1940s, owning vast real estate on which to construct elaborate sets. In addition, these studios set the exact terms of films release dates and patterns, and operated the best movie palaces in the nation. 

Warner Bros, Paramount, 20th Century Fox, Loew's (MGM) and RKO. Together these eight companies operated as a big monoploly controlling the entire market.

They also controlled the terms under which you could see their films. Prestige or A-level films used studio stars and lavish production values, and then could only be seen initially in studio-owned, first-run theaters. When the studios released these films to theaters they didn't own, they forced those owners to buy A-pictures in combination with a number of often awfull, B-movies (no stars,crappy genre pictures) and shorts, a practice called "block booking." also, the studios often made the exhibitors buy the films blind, not allowing them to see what they were getting before they got it. 

  On May 4, 1948, in a federal antitrust suit known as the Paramount case brought against the entire Big Five, the U.S. Supreme Court specifically outlawed block booking. Holding that the conglomerates were in violation of antitrust, the justices refrained from making a final decision as to how that fault should be remedied, but the case was sent back to the lower court from which it had come with language that suggested divorcement which ment the complete separation of exhibition interests from producer-distributor operations—was the answer.

Actors and actresses were contract players bound up in seven-year contracts to a single studio because the studio system also hinges on the treatment of stars, who were made and exploited to suit a studio's image and schedule. The studio generally held all the options. Stars could be loaned out to other production companies at any time. Studios could also force bad roles on actors, and control the minutiae of stars' images with their mammoth in-house publicity departments.