Responding to growing concerns over the increasing American dominance of the domestic market for films in Britain, Parliament in 1927 passed the Cinematograph Films Act, the first government intervention aimed at protecting the British film industry. The passage of this legislation was linked to the development of a growing cinema culture in Great Britain, which was also expressed through the founding of The Film Society in London in 1925 and the growing critical attention paid to film in the print media, including the specialist film magazine Close Up, which first appeared in 1927. The Act introduced a quota mandating a minimum allotment of screen time to British films that began at 5 percent in 1927 and was to rise to 20 percent by 1936.
The immediate effect of the legislation was a sharp rise in the number of British production companies, including British International Pictures, founded by John Maxwell as part of the vertically integrated Associated British Picture Corporation (ABPC) and the Gaumont-British Picture Corporation (GBPC), which merged a number of distribution, production, and exhibition companies under the auspices of Isidore Ostrer. The majority of the new companies floundered because their output was largely of inferior quality. The arrival of sound further hastened their demise. British International succeeded, as its Elstree studio was an early adopter of sound recording equipment. The larger company (ABPC) also controlled ABC Cinemas, a major British chain, guaranteeing itself an exhibition outlet for its productions. Gaumont-British survived because it too held extensive exhibition interests, and also because of a deal that Ostrer had struck with American producer William Fox, although the company remained under British control. This retention of control was not always the case in the industry. Significantly, the quota applied to films that were produced by a company constituted in the British Empire rather than specifically British-controlled companies. This led to the development of ''quota quickies,'' films that satisfied the basic requirements of the quota system but that did not require large investment; these were frequently made by subsidiaries of the existing American majors, either within Britain or in some cases in Canada. While many critics have dismissed the bulk of these quota quickies, there is no doubt that they resulted in a boom in British cinema production. In fact, exhibitors regularly exceeded the quota requirements that had been established.
The era saw the development of a viable and sustainable film culture in Britain. Numerous key figures emerged at this time, figures who would continue to be influential in British cinema in the ensuing decades. Gaumont-British had joined forces with Gainsborough Studios in 1927 and Gainsborough co-founder Michael Balcon (1896-1977) became head of production for both companies. Gaumont-British focused on the ''quality'' films, while Gainsborough was to create works with more popular appeal. Among the directors who had worked under Balcon at Gainsborough was Alfred Hitchcock (1899-1980). Hitchcock had his start in the film industry working on design and creating titles for the London office of the American firm Famous Players-Lasky (later Paramount). When the firm left London, Hitchcock moved to Gainsborough, where he was exposed to its German-based productions through the company's ties to Ufa. As part of his work for Gainsborough, Hitchcock was on the set of F. W. Murnau's The Last Laugh (1924), and the influence of German expressionism is evident in his early British work, including The Lodger
Hitchcock directed Britain's first feature-length sound film, Blackmail (1929). He actually shot two simultaneous versions of the film—one with sound, the other silent, as many theaters were not yet equipped with sound technology. The film was made for British International Pictures, which had lured Hitchcock away from Gainsborough with a large contract, expecting that Hitchcock would shoot only a portion in sound, but the director instead shot most of the film in sound. The film was a huge critical and commercial success, with even Close Up, whose critics were so often harshly critical of British film, willing to offer praise. Following his association with British International Pictures, Hitchcock returned to his working relationship with Balcon, making, among other films, The Man Who Knew Too Much (1934) and The 39 Steps (1935) for Gaumont-British. After Balcon left to become head of production at MGM-British, Hitchcock made The Lady Vanishes (1938) for Gainsborough, though the film was commissioned by MGM. The latter film was the third screenplay written by Frank Launder (1906-1997) and Sidney Gilliat (1908-1994), who would continue to be significant contributors to British cinema in writing, directing, and producing well into the 1970s.
Gaumont-British and Gainsborough aided the careers of other significant figures within British cinema. Among these were the directors Anthony Asquith (19021968) and Victor Saville (1895-1979). As a founding
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