Vertical integration in studio system

The term "vertical integration" in the studio system refers to the structure of the market that is integrated (not independent) at various important levels. In the case of the film industry, the studio system established the market where the studio has production facilities, distribution places and theaters. In other words, the studio controls all aspects of the market from production to display, from top to bottom. "Vertical integration" began in the 1910's and inspired the postwar integrated studio system as a domestic distribution company such as Paramount and as a production company such as Famous Players and Lask.

The development of Hollywood's studio system is the organization's response to the introduction and improvement of full-length feature films. Because of advanced expertise and vertical integration, the studio system is different from the structure and method of old movie production. Increased execution time and strong interest in the narrative structure of feature films brought the ability to respond to new aesthetic aspects as the early movie industry grew rapidly. The studio system creates technology to promote these challenges and promotes the process of creating the necessary skills.

When MPPC had problems, the Hollywood independents were busy setting up new film production, distribution and exhibition systems. Production companies grew into studio, distribution department, theater, vertical integration company group with personnel agreement, and made the "studio system" a reality. 20th Century Fox, Metro - Goldwyn - Meyer, Paramount Pictures, RKO Pictures, Warner Brothers are leaders in this industry. Columbia Pictures, United Artist, Universal Picture: Under these "Big Five" majors is the "Little Three" major. Everyone else is part of "Poverty Row". Struggling to survive, often putting their resources into B-movie content.