Hollywood is the metaphoric, if not exactly the geographic, center of the American film, television, cable, music, and digital media industry. Ripe with symbolic meaning for media consumers across the globe, Hollywood exists almost purely in the collective imaginary, since it is neither incorporated as a city, nor definable by strict borders as a geographic location within the city of Los Angeles. Even in terms of its real geography, Hollywood was only one of several industry centers: of the major film studios, only Paramount (Melrose Ave), RKO (Cahuenga and Gower), and Columbia (Gower Street) maintained production facilities directly in Hollywood, while Universal Studios was located in the San Fernando Valley (Universal City), Warner Brothers in Burbank, 20th Century-Fox in West Los Angeles (Westwood), and Metro-Goldwyn-Mayer (MGM) in Culver City. Nevertheless, millions of tourists flock each year to “Hollywood,” which has also had its ups and downs as a piece of real estate.
Located approximately ten kilometers northwest of downtown Los Angeles, Hollywood got its name in 1887, when Mr Harvey Wilcox registered his ranch with the LA County Records authorities. In 1903, Hollywood officially became a city with 700 inhabitants.
A year earlier, the Hollywood Hotel had been opened by Hobart Johnson Whitley (sometimes known as the father of Hollywood) at Hollywood Boulevard and Highland Avenue, but it was under the ownership of Myra Parker Hershey that it became one of the premiere hotels of Hollywood in the silent era. In 1910, Hollywood was officially annexed by the City of Los Angeles, a legal status that has remained to the present day.
Although film companies based on the east coast started shooting in and around Los Angeles, beginning in 1906, when the American Biograph Company sent location crews there in the winter months, it was pioneering film director D. W. Griffith who first shot scenes within the boundaries of Hollywood, for his film In Old California (1910). According to a myth now considered apocryphal, American film producers first began producing films in Los Angeles County in order to escape easily to Mexico from the goon squads of the Pinkerton Agency, which had been hired by the Motion Picture Patents Trust to enforce their monopoly on motion picture production. In reality, it was merely sunshine and the diversity of topographies that lured filmmakers from New York and New Jersey to southern California. In the early days of the film industry, producers shot on outdoor stages in natural light, rather than utilizing electric light, so that dependable sunshine was a must. Southern California’s mixture of seascapes, mountains, desert, and other topographies in a relatively limited area was thus a plus.
The first permanent film studio in Hollywood was established in the Blondeau Tavern at the corner of Sunset Boulevard and Gower Street by David Horsely’s Nestor Film Company in 1911, when H. J. Whitley encouraged studio manager Al Christie to set up shop there. Within months, 15 other film production companies had established production facilities in Hollywood. A year later, the Idyll Hour Theatre, Hollywood’s first cinema, opened. Cecil B. DeMille directed his first feature film, The Squaw Man (1914), in Hollywood after leasing the Burns and Revier Studio at Selma and Vine; the “Lasky-DeMille” barn, which functioned as office and laboratory space, survives to this day as a museum across from the Hollywood Bowl. By 1913, then, Hollywood had over 8,000 inhabitants, many of them working in the budding movie industry.
Classical Studio System
By the 1920s, numerous companies and film producers had built permanent production facilities in Hollywood. In 1913 William Clune opened a studio at Melrose and Bronson, destined to become a major rental studio in the 1920s, the Tec-Art Studios. This studio continued in the sound period under various banners (California, Enterprise, Horizon, Stanley Kramer, etc.); it still functions in the twenty-first century, as the Raleigh Studios. Today virtually all studio lots, including majors like Universal and Paramount, are also rental studios, catering to the demand of independent film and television. Fox opened its first studio at Western and Sunset in 1916, dedicating its expanded Westwood studio in 1928. Charlie Chaplin’s mock-Tudor-style studio at La Brea and Sunset was opened in 1917 and is today home to Jim Henson Productions. Columbia Pictures built its studios in 1923 on Gower, the heart of what was considered “poverty row,” where independent and low-budget “B” producers rented or owned small studios. Paramount established its presence in Hollywood relatively late (1926), having previously produced all its films in Astoria, New York.
Before 1903 producers sold their films outright by the foot, asking exhibitors to pay anywhere from $50 to $100 per title, which were run until the market was saturated. With programs changing at an ever-increasing rate, this system became economically untenable. According to conventional wisdom, Harry J. Miles of San Francisco came up with a solution to this dilemma in 1902 by purchasing films from the producer and then leasing them to individual vaudeville houses at half price. The development of exchanges meant that the distributor maintained film inventories, supervised the handling of films, and attended to the repair of damaged films. The exhibitor was thus relieved of these costs, without cutting into the profits of the producer. By 1907 more than 130 exchanges operated in various parts of the country.
In the cinema’s earliest days, films had been projected only as an adjunct to live vaudeville performances. While it is still a matter of historical debate when exactly the first store-front “nickelodeon” theaters opened, some historians have credited Harry Davis of Pittsburgh, PA, with inventing the term “nickelodeon” in 1905, but it is probable that early store fronts opened in a number of locations in that year, bearing such colorful names as “Dreamland,” “Bijou,” “The Princess,” “Electric,” and “Bijou Dream.” By early 1907 there were more than 2,500 nickelodeons in the USA. Many of the later movie moguls, including the Warner Brothers (who bought their first theater in Castle, PA, in 1906), Adolph Zukor (Paramount), Carl Laemmle (Universal), Louis B. Mayer (MGM), William Fox (20th Century-Fox), and Marcus Loew (MGM), began their careers as nickelodeon operators, eventually purchasing chains of theaters, exchanges, and production facilities. As the teens progressed, theaters increased in size and programs expanded. By the end of the 1920s, many movie palaces had been built on Hollywood Boulevard: Hollywood Theatre (1913), Fox Hollywood (1918), Sid Grauman’s “The Egyptian” (1922), the El Capitan (1925), the Ritz (1925), Graumann’s Chinese (1927), and the Pantages (1929). Such large-scale cinemas in Hollywood and in every other metropolitan area were soon controlled by the film companies. In the classical period from the 1920s to the 1950s, the film distributor supplied a complete program, including a “feature,” a second short feature (B-film), a newsreel (important before the age of television), a short documentary (often a travelogue or educational short), and a cartoon.
Thus, by the time film production had been established in Hollywood, the basic structure of the film industry was in place, divided into production, distribution, and exhibition. The first vertically organized film combine, uniting all three levels of the industry, was formed by Paramount-Famous-Players in 1919, followed by Loew’s-Metro in 1921. The initial impetus for the Paramount merger was the growing strength of First National, a theater chain controlling over 639 screens, which had signed Charles Chaplin and Mary Pickford to production contracts, thus threatening Paramount’s control over virtually all the major stars. However, it was a financial report by H. D. H. Connick to Kuhn, Loeb and Co. supporting a loan to Paramount that convinced company president Adolph Zukor of the wisdom of owning his own theater chain.
An Oligopoly Industry
The 1920s, then, saw Hollywood and the American film industry dominate the world market by structuring itself as a vertically and horizontally integrated industry. Since the huge American market allowed companies to amortize their product domestically, they could undersell the foreign competition abroad. No other country, except perhaps Germany, ever threatened Hollywood’s hegemony. Hollywood became a worldwide brand name. In 1923, an enterprising real estate agent built in the hills above Franklin Street the now famous “Hollywood” sign, which originally read “Hollywood land” in order to advertise a new housing development. In 1927 the first Oscars were staged at the Roosevelt Hotel. In the 1970s Hollywood, especially Hollywood Boulevard, degenerated to an area of drug pushers and prostitutes, but beginning in the 1990s, the street started to gentrify, and by the early twenty-first century had become prime real estate for redevelopment, again attracting legions of tourists.
One of the central ironies of the American film industry is that film production is both highly organized and ritualistic. While dependent on the exact coordination of literally thousands of people and the amassing of vast financial resources, the economic success or failure of a film is believed to be a matter of secret formulae, of luck smiling, of timing, talent, and guts. In its classical phase from the 1920s to the 1950s, Hollywood was a monolithic economic system, a multinational monopoly of corporations, whose structure of film production, distribution, and exhibition was based on laws of scientific management, an intense division of labor, the pioneering use of modern advertising techniques, and complete control of the market. Everything possible was done to minimize risk and maximize profits. Yet success was always thought of in magical terms. Naturally, as the captains of America’s largest leisure industry, film producers were neither interested in exposing their own ruthless business practices, nor willing to undermine the social and economic status quo.
Hollywood’s discourse always supported a romantic mythology, because the very commodity this industry produced was fantasy and fictional narratives. Film images sought to transport an audience from the real world into a universe of myth, where audience desires could find at least partial satisfaction. Long before economists thought in such terms, the film industry offered American consumers a service, leisure-time activity, rather than an industrial commodity, and thus foreshadowed the postindustrial, service economy of the late twentieth century.
Indeed, as early as 1917, according to most film scholars, Hollywood had instituted a highly conventionalized form for storytelling that is now subsumed under the label “classical Hollywood narrative”. In contrast to European “art films,” Hollywood movies naturalized the viewing process, imbedding the viewer through film technology and technique in the narrative, hiding artifice and any self-conscious reminders that the audience was indeed viewing a film.
In terms of film technique, this meant utilizing a system of “invisible editing” that would hide the breaks between individual shots, creating a seamless visual flow. Camera men and editors internalized a whole set of rules and regulations, including the 180-degree rule, the 45-degree angle rule, the use of establishing shots, and protagonist-centered plots. In terms of narrative, classical Hollywood demanded that character motivation and plots followed the logic of generic convention and star persona, rather than a complex, three-dimensional reality: John Wayne appeared in Westerns, Judy Garland in musicals, Joan Crawford in melodramas. Dramatically, films had to traverse an arch from exposition to the building of conflict to a resolution through a happy end, with heterosexual union being the driving narrative force of practically every film story.
The “star system” had evolved in the early teens, just as Hollywood was ascending. While the Motion Picture Patents Trust discouraged naming actresses and actors in their publicity, in order to keep salaries low, the independent producer Carl Laemmle hired “the Biograph Girl,” Florence Lawrence, in 1910, successfully exploiting her name and image. It soon became apparent that selling “stars” was the most efficient means of selling films. By the late 1910s, stars such as Mary Pickford, Douglas Fairbanks, and Charles Chaplin were so important that they could start their own company, United Artists (1919). In the classical studio period, every major studio had a table of stars, controlled through long-term contracts and an elaborate system of publicity to build them up. With the rise of independent film production, stars became their own producers.
Given continual threats of public and private censorship, beginning with the establishment of municipal and state film censorship offices in the 1910s, the industry created its own rigorous, internal pre-censorship system through the Catholic-dominated Motion Picture Production Code “Hays” office under Joseph Breen in the 1930s. Hollywood film producers thereafter privileged hetero-normative romance in their fictions as an efficient means of avoiding – with rare exceptions – political and social controversies, and thereby circumventing the crossfire of politically charged public discourse. This avoidance of the political was not just a matter of choice, but of law: in 1916, in a landmark Supreme Court decision Mutual v. Ohio, the Court held that the production and distribution of movies was a business, rather than a matter of communication, and therefore, unlike the theatre or newspapers, not subject to First Amendment guarantees of free speech. This ruling was not overturned until the 1970s, leading to a period of liberalization in sexual and social content, yet even today a “Rating” system, enforced by the Motion Picture Producers and Distributors Association (the same MPEA of the Hays Office), restricts access to the commercial media market.
For approximately 30 years, the period known as the classical Hollywood studio era, film companies were allowed to earn unprecedented profits. Their flagrant violations of antitrust laws were called into question by the US Justice Department as early as the 1920s. The courts continued hearing cases for almost 30 years, before the “Paramount Consent Decree” of 1947 effectively ended the monopolistic position of the majors. In 1921 the Federal Trade Commission had filed its first complaint against Paramount & Co. In 1929, after the acquisition of First National and the Stanley Theatre chain, Warner Brothers was sued under the provisions of the Clayton Act, which forbade the acquisition of any competitor with the intent of creating a monopoly. In a criminal case based on the Sherman Anti-Trust Act, the Justice Department in 1935 charged that Harry Warner, Paramount, and Fox had conspired to deny a St. Louis independent theater owner any first-run films, thus forcing him from the market.
When the government lost the case, they continued to prosecute in civil suit in two further courts. On July 20, 1938, the Justice Department filed suit against the five majors, accusing them of 28 separate offenses in violation of the Sherman Act, including block booking, blind buying, and the acquisition of theaters for purposes of creating a monopoly. The case was settled out of court, when a “Consent Decree” was reached in November 1940, which limited some practices, but kept the status quo intact. Not until the Paramount Consent Decree did the motion picture companies begin the process of divorcement, separating production companies from exhibition. Paramount split in 1949, RKO in 1950, 20th Century-Fox in 1951, and Warners in 1953. At the same time, the growing television industry threatened Hollywood’s hegemony in the domestic media market, while demographic shifts with suburbanization brought a predominantly youth audience to cinemas. Hollywood was never again the same.
It took a few decades, but Hollywood eventually reinvented itself as a group of transnational, multimedia conglomerates that dominate all forms of media: Walt Disney Company, Paramount Pictures (Viacom), Sony Pictures, Universal Studios (General Electric), and Warner Brothers (AOL/Time-Warner) control film, television networks, cable channels and providers, digital media, Internet portals, recorded music, billboards, newspapers, and radio stations. Leading the way was Lew Wasserman, who turned Universal (after MCA bought the company in 1962) into a powerhouse by initiating a system of independent production whereby agents and producers, at their own risk, developed and produced films that were then distributed by Universal.
Wasserman’s Universal was the first major studio to move into television production and syndication, allowing independent producers to shoot on the lot, but again at their own financial risk, while also pioneering the production of so-called television movies. Finally, with Jaws (1975), Universal created the “blockbuster,” opening a film in thousands of movie theaters across the globe at the same time, generating billions of dollars, not only in ticket sales, but also through product tie-ins (merchandising), and the sale of television and video rights. As a result of this blockbuster mentality, the average price of a Hollywood feature film had climbed by 2006 to US$75 million, and films that generate less than US$100 million are considered flops.
The Video Age
In the 1980s, then, film distribution companies quickly moved into new forms of presentation, as theatrical movie attendance continued to dwindle, supplanted by other moving image media, especially home video and, subsequently, DVD platforms. By the turn of the century, income from electronic media far outstripped that of box office, so that the industry once again evolved structurally. Sony, the giant Japanese electronics company, bought Columbia-TriStar and the Culver City studios of MGM to create SonyPictures.
Viacom, a television and cable-television provider that also owns CBS, bought both Paramount and Blockbuster, the leading home video rental outfit. Disney purchased ABC, created the Disney Channel on cable, and differentiated its film product through subsidiaries Hollywood Pictures, Touchstone, and Miramax. Rupert Murdoch, owner of the giant international News Corporation purchased 20th Century-Fox and created the Fox Television network. Warner Brothers, which was a subsidiary of the Time-Life publishing empire, also owning HBO and other cable networks, was bought by AOL in 2001. Universal Studios, after no fewer than three management changes in 10 years (Matshusta, Seagrams, Vivendi), was acquired in 2004 by General Electric (GE), which also owns NBC; GE’s yearly revenue, in excess of US$130 billion, would dwarf those of AOL-Time-Warner, Disney, and Viacom were they combined.
These companies control and dominate virtually all public communications media, from newspapers to television news, from book publishing to entertainment film and television, cable, and digital moving image media, from the Internet to satellite communications, from Broadway theatrical shows to video/Internet games, from all forms of amusement parks to billboards and electronic advertising, even political campaign media. It remains a central question and issue of communications research to ascertain if and just how the democratic process can or does survive, given the massive domination of virtually all communications media by a handful of gatekeepers.
- Bagdikian, B. (2004). The new media monopoly. Boston: Beacon Press.
- Biskind, P. (1998). Easy riders, raging bulls: How the sex-drugs-and-rock-’n’-roll generation saved Hollywood. New York: Simon and Schuster.
- Bordwell, D., Staiger, J., & Thompson, K. (1985). The classical Hollywood cinema: Film style and mode of production. New York: Columbia University Press.
- Friedrich, O. (1997). City of nets: A portrait of Hollywood in the 1940s. Berkeley, CA: University of California Press.
- Gabler, N. (1988). Empire of their own: How the Jews invented Hollywood. New York: Crown.
- Powdermaker, H. (1979). Hollywood, the dream factory. New York: Arno Press. (Original work published 1950).
- Schatz, T. (1996). The genius of the system: Hollywood filmmaking in the studio era. New York: Henry Holt.
- Sklar, R. (1994). Movie made America: A cultural history of the movies. New York: Vantage Books.