Exhibition And The Classic Hollywood System

One reason that the major studios could attain virtually monopolistic control over the film industry is that they developed several business strategies during the 1910s and 1920s that all in some way constrained the independent exhibitor's freedom in booking films. These strategies continued to play a central role in film exhibition until the end of the 1940s. Perhaps most important was the run-zone-clearance system, which enabled the "Big Five'' major studios (MGM, Paramount, RKO, Warner Bros., and Twentieth Century Fox) to control the distribution of the films they produced. This system was designed to guarantee that films were circulated so as to ensure broad exhibition and to bring in maximum profits to the parent company. The national exhibition market (especially the urban market) in the United States was divided into geographical zones. In each zone, films moved consecutively from first-run through several intermediate steps (second-run, third-run, and so on) to finalrun venues. Ticket prices tended to drop with each run. There was, in addition, a "clearance" time between runs, which meant that moviegoers could expect to wait months or up to a year after a film premiered at a downtown picture palace before it reached a neighborhood theater or a small-town venue. By privileging their own theaters and organizing distribution according to the run-zone-clearance system, the Big Five assured their dominance of the American motion picture industry.

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