A huge factor of the studio system is the process of vertical integration. The studio system refers to the way in which the major movie studios of the 1920s through the 1950s produced all films through their own means, and an important aspect of making this possible is the idea behind vertical integration, which was employed by these major movie studios. Vertical integration meant that the studios controlled all aspects of production, from creation to distribution.
This particular aspect didn't have a large impact on the kinds of films the studio made, not the way the star system did, but it did have its minor impacts. The studios could make the films they truly desired to make, because they didn't have to rely on outside sources for help with the writing or shooting of the film. Everything was at the discretion of the studio heads.
For example, Fox Film Corporation in the 1920s, '30s, '40s, and '50s, owned its own production studio, where the films were thought of, written, and produced, its own distribution division, which created copies of the film, and its own theater chain, where the films were shown to audiences. By owning all of these different aspects of the filmmaking process, Fox was able to maximize its profits because they didn't have to pay any outside companies for services. Since profits were the main goal of the studio system, its clear that vertical integration was a key piece in making the studio system effective.
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