Hollywood as we know it today started its life in the second decade of 20th century with the rise of the production facilities in South California. They were created there by the numerous filmmakers who moved their business from New York in search of more consistent climate for round-the-year film shooting, and of course, to escape fees imposed by Tomas Edison who owned many patents on the movie making process. As the production capabilities of filmmakers grew, Californian movie industry focused on the city of Los Angeles.
Influx of immigrants into United States quickly forced this new workforce to find new ways of running business, and the popularity of movies quickly gave birth to the new kind of movie entity – movie studios. Established by the ambitious men like Samuel Goldwyn, Carl Laemmle, William Fox, Louis B. Mayer and the four Warner Brothers (Harry, Albert, Samuel, and Jack), organized production of movies in Hollywood became standard. Production of movies in Hollywood was almost exclusively held by eight studios, five majors and three smaller ones. Major were Paramount, Fox Film Corporation (later 20th Century Fox), Warner Bros, RKO and Loew's (eventually becoming eventually became Metro-Goldwyn-Mayer). They managed to revolutionize movie making business by having complete control over not only production business (owning filming lots, equipment, editing studios, long-term contracts with both production crew and actors) but also distribution firms and wide networks of film theaters across the USA. Three smaller production companies were Universal, Columbia (they had similar structure as “Big 5” studios, but did not have their own distribution network and theatres) and United Artists (who was structured to be more as backer-distributor to the independent producers).
Big Five movie studios (Paramount, Fox, Warner, RKO and MGM) were supreme rulers of the US movie industry between late 20s and late 50s, dominating the theaters and creating around 700 movies at the height of the short movie popularity in the 1920s. This “Golden Age of Hollywood Cinema” started with the release of the first long running feature talkie film The Jazz Singer in 1927. Popularity of this movie quickly elevated Warner Bros into one of the big Hollywood Studios. All film studios received substantial growth during the years of Great Depression in the US, with ever rising number of people seeking entertainment on silver screens, and the adventures of their favorite film stars (especially child sensation Shirley Temple).
Total domination of Hollywood over US territory very quickly started to showcase signs of financial manipulation. Studios owned their own theaters, prices were fixed by the studios, and theaters were obliged to buy movie “unites” packages that consisted of one or two highly desirable movies, few A-budget movies and few lesser quality movies. This led to the saturation of the theaters with movies that were uninspired and created “by the formula”. Series of antirust court battles started fighting studio system, which all culminated in the RKO’s willingness (under the new leadership of millionaire Howard Hughes) to help federal government to break the reign of big studios who one by one severed their ties with theaters.
With over 19 thousand theatres in the US in 1949, Golden Age of Hollywood was over and the post-WW2 consumers and the rise of Television forced the Hollywood to reinvent itself.