A studio system is a method of filmmaking wherein the production and distribution of films is dominated by a small number of large movie studios. It is most often used in reference to Hollywood motion picture studios during the early years of the Golden Age of Hollywood from 1927 (the introduction of sound motion pictures) to 1948 (the beginning of the demise of the studio system), wherein studios produced films primarily on their own filmmaking lots with creative personnel under often long-term contract, and dominated exhibition through vertical integration, i.e., the ownership or effective control of distributors and exhibition, guaranteeing additional sales of films through manipulative booking techniques such as block booking. During Golden Age Hollywood, eight companies constituted the major studios that promulgated the Hollywood studio system. Of these eight, five were fully integrated conglomerates known as the original Big Five, combining ownership of a production studio, distribution division, and substantial theater chain, and contract players and filmmaking personnel: Metro-Goldwyn-Mayer (owned by Loews Incorporated, owner of America's largest theater chain), Paramount Pictures, Warner Bros., 20th Century-Fox, and RKO Radio Pictures (the last of these five, which emerged in 1928). Also at this time, two of the Little Three major-minors (Columbia Pictures and Universal Pictures) were similarly organized, though without more than small theater circuits, and the third (United Artists) owned a small number of theaters and had access to two production facilities owned by members of its controlling partnership group, but it functioned primarily as a backer-distributor, financing independent productions and releasing their films. The Walt Disney Company was founded in 1923 but it was an animation studio and did not own its own theaters, so it was not considered a peer of the major studios. Disney did expand into live-action movies in the 1940s, and by 1986 it grew to be considered one of a new "Big Six". Ironically, Disney is the only one of these studios that originated in the 1940s and continuously operated as the same company to the present day, as even those which survived into the 21st century such as Paramount and Warner Bros. went through several mergers and restructurings. The studio system was challenged under the antitrust laws in a 1948 Supreme Court ruling which sought to separate production from the distribution and exhibition and ended such practices, thereby hastening the end of the studio system. By 1954, with television competing for audience and the last of the operational links between a major production studio and theater chain broken, the historic era of the studio system was over.
Sound and the Big Five The years 1927 and 1928 are generally seen as the beginning of Hollywood's Golden Age and the final major steps in establishing studio system control of the American film business. The success of 1927's The Jazz Singer, the first feature-length "talkie" (in fact, the majority of its scenes did not have live-recorded sound) gave a big boost to the then midsized Warner Bros. studio. The following year saw both the general introduction of sound throughout the industry and two more smashes for Warners: The Singing Fool, The Jazz Singer's even more profitable follow-up, and Hollywood's first "all-talking" feature, Lights of New York. Just as significant were a number of offscreen developments. Warner Bros., now flush with income, acquired the extensive Stanley theater chain in September 1928. One month later, it purchased a controlling interest in the First National production company, then still regarded as the more prominent company. With the First National acquisition came not only a 135-acre (55 ha) studio and backlot but another large string of movie theaters. The last of the "Big Five" Hollywood conglomerates of the Golden Age emerged in 1928: RKO Pictures. The Radio Corporation of America (RCA), led by David Sarnoff, was looking for ways to exploit the cinema sound patents, newly trademarked RCA Photophone, owned by its parent company, General Electric. As the leading film production companies were all preparing to sign exclusive agreements with Western Electric for their technology, RCA got into the movie business itself. In January, General Electric acquired a sizable interest in Film Booking Offices of America (FBO), a distributor and small production company owned by Joseph P. Kennedy, father of future president John F. Kennedy. In October, through a set of stock transfers, RCA gained control of both FBO and the Keith-Albee-Orpheum theater chain; merging them into a single venture, it created the Radio-Keith-Orpheum Corporation, Sarnoff chairing the board. With RKO and Warner Bros. (soon to become Warner Bros.–First National) joining Fox, Paramount, and Loew's/MGM as major players, the Big Five that would remain for thirty years were now in place. Although RKO was an exception, the heads of studios on the west coast, the "movie moguls", had mostly been in place for some years: Louis B. Mayer at MGM, Jack L. Warner at Warner Bros., Adolph Zukor at Paramount, William Fox and Darryl F. Zanuck (at 20th Century Fox from 1935), Carl Laemmle at Universal, and Harry Cohn at Columbia.
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