Around the year 1910 a number of film companies set up business in and around the small suburb of Hollywood to the west of Los Angeles. Within a decade, the system they created came to dominate the cinema, not only in the United States but throughout the world. By concentrating production into vast factory-like studios, and by vertically integrating all aspects of the business, from production to publicity to distribution to exhibition, they created a model system-the 'studio system'-which other countries had to imitate in order to compete. But attempts at imitating the American system were only partially successful, and by 1925 it was the ' Hollywood' system, rather than the studio system as such, which dominated the market from Britain to Bengal, from South Africa to Norway and Sweden. By that time, Hollywood had not only seized control of the majority of world markets but had made its products and its stars, such as Charlie Chaplin and Mary Pickford, the most famous cultural icons in the world.
Throughout the period of its inexorable rise, Hollywood fashioned the tools of modern business, from economics of scale to vertical integration, to give it the edge over all possible competitors. It developed cost-effective methods of production, extended the market for its product to cover the entire globe, and ensured the flow of films from producer to consumer by acquiring ownership of key theatres in major cities, not just in the United States but in other countries as well. European nations tried various protectionist measures, such as special taxes, tariffs, quotas, and even boycotts, to keep Hollywood's domination at bay, but to no avail. Although the Japanese market remained hard to penetrate, and the Soviet Union was able to close its frontiers against foreign imports in the mid-1920s, as far as the rest of the world was concerned it was only a matter of time before the Hollywood film became standard fare on the nation's screens.
The emergence of Hollywood as the centre of this allpowerful industry can be found in the failures of the Motion Picture Patents Company's attempt to monopolize the film business. This was a combination of ten leading American and European producers of movies and manufacturers of cameras and projectors, who in 1908 combined to form a 'Trust' to inflate the prices of equipment they alone could manufacture. The Trust pooled patents and made thousands of short films. Only co-operating companies, licensed by the Trust, could manufacture 'legal' films and film equipment. The Trust extracted profits by charging for use of its patents. To use a projector legally an exhibitor needed to hand over a few dollars; to make movies, producers paid more.
However, the Trust found it difficult to maintain control, and in the space of half a dozen years ( 1909-14) independents such as Carl Laemmle and William Fox rose in opposition to the Trust, sowing the seeds of what we now know as Hollywood. Adolph Zukor put together Paramount; Marcus Loew created what was to become MGM; William Fox fashioned his movie empire.
These and other independent exhibitors and moviemakers differentiated their products, making longer and more complicated narratives while the Trust tended to stick with two-reel, fifteen-minute stories. The independents raided pulp magazines, public domain novels, and successful plays for plots. Westerns supplied the most popular of these 'new' movie genres and helped spark interest in shooting on location 'out West'. In time the independents found their home in southern California, 2,000 miles away from the New York headquarters of the Trust and, with its temperate climate, cheap land, and lack of unions, an ideal place to make their new low-cost 'feature-length' motion pictures.
By 1912 the independents were producing enough films to fill theatrical bills. Each movie became a unique product, heavily advertised. With more than 20,000 cinemas open in the USA by 1920, the ever-increasing number of feature-length 'photoplays' easily found an audience. Distribution into foreign markets proved a bonus; in this era of the silent cinema, specialists quickly translated intertitles, and produced foreign versions for minimal added production costs.
The independents also began to take control of exhibition in the USA. They did not attempt to buy up all the 20,000 existing movie houses, concentrating instead on the new movie palaces in the largest cities. By 1920 these 2,000 picture palaces, showing exclusive first-runs, were capturing over three-quarters of the revenue of the average film. From these chains of movie palaces from New York City to Chicago to Los Angeles, the major Hollywood