The Hollywood Studio System refers to a period concurrent to the Golden Age of Hollywood, describing the dominating presence of major hollywood studios and their influence in filmmaking at the time. Specifically, it encompasses the “Big 5”: Paramount, RKO, MGM, Warner Brothers, and Fox, and the “Little 3”: Universal, United Artists, and Columbia.
These major studios were able to maintain their profits by vertically integrating the entire movie process into their companies, from production to exhibition. By doing so, studios were able to hire a crew, actors and directors on a contract as opposed to a film by film basis.
To further ensure profit from all their movies, studios sold their feature films in blocks to theater chains they didn’t own. This practice of block-booking several low budget movies with an ‘A’ budget feature safeguarded the studios from losing money.
Eventually, the studio system crumbled due to several factors, most notably United States vs. Paramount in 1948 that banned block booking and diminished their ability to monopolize the entire movie making process.