After the appearance of “talkies” in 1927, Hollywood structure changed significantly, enabling the rise of the Studio System and the almost complete rule of the Big 5 studios over the cinema screens of United States. With rising movie costs, financial shenanigans, long contracts that demanded production of large amount of mediocre movies and ever larger strain on the pockets of movie watching consumers, the US Federal antitrust action finally forced the decline of the studio system in the late 1940s. This direct government action was brought to life because of the business decision used by Big five studios (studios (Paramount, Fox, Warner, RKO and MGM) forced movie theaters (which they owned) only to buy movie units which consisted from one hit movie, several average ones and few bad ones. This was first implemented in 1938, when independently produced animated movie Snow White and the Seven Dwarfs from Walt Disney managed to break box office records of that time. Fearing the competition, Big 5 studios forced their movies upon theatres and caused government to react and force them to sell their theatre business (19 thousands of them).
Faced with the decline of movie ticket sales, ability of post-WW2 audiences to find their entertainment elsewhere, studios found themselves in the trouble. RKO did not survive financial struggle, new taxations and regulations elevated cost of films, long term contracts with stars and production staffs were discontinued (leading to the mixing of styles that were previously be seen only in specific studios) and the increasing presence of television forced Hollywood to start investing heavily into fewer films that could not be matched with cheaper TV productions.
New age of Hollywood started in 1950s with the increased focus of filmmakers on scrambled chronology scripts, storylines with twist endings, blurred lines between antagonists and protagonists, and the influx of directors who were schooled in Europe. With the unstable theater market, studios and their financial backers felt the pressure to secure the services of the people that would assure the attendance of customers in cinemas – and those people were actors. Star power of those actors soon elevated their salaries to incredible heights, leaving screenwriters, directors and other production staff way behind. With star power of Cary Grant, Marlon Brando, Gregory Peck and Frank Sinatra, Hollywood managed to secure their future and create movies that continued to break box office records. They also changed the way of their studio structure, by offering their facilities to independent filmmakers to make their own films.
70 and 80s brought another change in the world of Hollywood with the arrival of “blockbuster” films, films that were produced from the start to be big media events, with incredibly high marketing campaigns and movie tie-in products. First of them was of course Star Wars in 1997, but was quickly followed by its sequels and several very popular films from director/screenwriter Stephen Spielberg.
After 1990s, Hollywood fully focused itself on the worldwide market, and is based on the model that is most similar to the one of United Artists – they are not production companies, but a backer-distributor.
Current Big Six Hollywood studios and their owners: