Flashback: The roots of the Hollywood Studio System

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    By Subir Ghosh

    Before Hollywood had come an abject failure – that of the Motion Pictures Patent Company (MPPC) to monopolise the film business. This was a cartel of 11 leading American and European producers of films and manufacturers of cameras and projectors.

    In December 1908, a “trust” was formed by major American film companies (Edison, Biograph, Vitagraph, Essanay, Selig, Lubin, Kalem, American Star, American Pathé), the leading film distributor (George Kleine) and the biggest supplier of raw film stock, Eastman Kodak, to inflate the prices of equipment they alone could manufacture. The companies pooled patents and made thousands of short films. Only cooperating companies, licensed by the MPPC could manufactur “legal” films and film equiment. It was a big bully.

    The MPPC ended the domination of foreign films on American screens, standardised the manner in which films were distributed and exhibited in the US, and improved the quality of American motion pictures by internal competition. The MPPC was modelled on the Edison licensing system, which had existed ephemerally in 1907–1908. It was a desire of one man – inventor Thomas Alva Edison, who owned most of the major American patents relating to motion picture cameras – to control the industry with allies.

    The Edison Manufacturing Company’s would routinely file patent lawsuits against its competitors. The American film industry was crippled. Biograph was the only Edison rival to survive since it used a different camera design. The sesser mortals had no hoice but import foreign-made films, mostly French and British. Not content, Edison also harassed distributors and exhibitors on the ground that if they did not use his machines and films exclusively, they would be subject to litigation for supporting filmmaking that infringed Edison’s patents.

    Rivals Essanay, Kalem, Pathé Frères, Selig, and Vitagraph approached the Edison Manufacturing Company in 1907 to broker a licensing agreement. Lubin too was invited, but Biograph kept out. The motto of this agreement was clear: to “preserve the business of present manufacturers and not to throw the field open to all competitors.”

    And when the MPPC was formed, it sought to eliminate the outright sale of films to distributors and exhibitors, replacing it with rentals, which allowed quality control over prints that had formerly been exhibited long past their prime. Then came a uniform rental rate for all licensed films. Price as a factor for the exhibitor in film selection was thus removed.

    The cartel monopoly slowly increased. Eastman Kodak, which owned the patent on raw film stock, sold stock only to other members. Since MPPC had control of patents on motion picture cameras, only its own studios were able to film. Similarly, the MPPC with its deals with distributors and theatres, decided who screened their films and where.

    Independent filmmakers responded by moving their operations to the small suburb of Hollywood to the west of Los Angeles. This was not done without a reason – it was on the other coast, far away from Edison’s home town of New Jersey. The Hollywood area came under the purview of the Ninth Circuit Court of Appeals, based in San Francisco. It was averse to enforcing patent claims. There were other reasons for selecting this location. Southern California had a beautiful year-round weather and varied countryside; its topography, semi-arid climate and widespread irrigation gave its landscapes the ability to offer motion picture shooting scenes set in deserts, jungles and great mountains.

    The beginning of the decline of the MPPC coincided with the growth of Hollywood. In fact, it started soon after the cartel was formed. In 1911, Eastman Kodak modified its exclusive contract with the MPPC, and allowed Kodak to sell its raw film stock. The immediate fallout was the the number of theaters exhibiting independent films grew by 33 per cent within twelve months.

    The MPPC also overestimated its power of influence. Its practice of using detectives to investigate patent infringements, and of obtaining injunctions against the infringers, was outpaced by the dynamic rise of new companies in diverse locations. The MPPC was hamstrung with Edison’s aversion for longer films. It took the MPPC players four years to come up with their feature films. By this time, independent filmmakers had released hundreds.

    With the outbreak of World War I, Europe was cut off from the MPPC. The war hit it more than the independents who mostly made Westerns for an American audience. As revenues dipped, the final nail in the MPPC’s coffin was struck by a federal court which ruled that the organisation had gone “far beyond what was necessary to protect the use of patents or the monopoly which went with them.” The big bully was finally cut down to size.

    The independents, meanwhile, were on a roll. Their feature films generated more interest among filmgoers than the two-reel, fifteen minute narratives of the MPPC did. They were all over the magazines, and each film was a unique product that was heavily advertised. Gradually, the independents no longer remained independents – they became a system. This system did precisely what the MPPC had failed to do – have total control over the industry to produce, distribute and exhibit films. We will be calling it the Hollywood Studio System.

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