Where would California be without the movie business? Where would "the industry" be without California?
From its earliest days, Hollywood has reigned as California's most glamorous industry. Motion Picture Magazine / Wikimedia Commons Public Domain
In Southern California, simply drop a reference to “the industry” and people get it. California is closely identified with numerous industries—technology, defense, agriculture, oil and others—but only one industry is so intimately connected to the state that it doesn’t even need to be named. That industry is, of course, the movie and television business, better known by its synecdoche: Hollywood.
Today, Hollywood is one of the largest industries in California, generating $226 billion in annual sales as of 2020, according to a Motion Picture Association report, based on stats from the federal Bureau of Labor Statistics.
Hollywood, however, was once nothing but the name of a small city created out of a large swath of agricultural land at the base of the Santa Monica Mountains known as Cahuenga Valley. In 1887 a shoemaker-turned-real-estate developer named Harvey Wilcox bought a 150-acre tract and filed a subdivision plan with the Los Angeles County Recorder’s Office, giving the upstart community the name “Hollywood.”
Oddly enough, considering what the region later became, the devout Christian Wilcox envisioned his new community as an oasis of piety where alcoholic drinks were banished and land grants for churches were free. But his dream of a teetotaling utopia died with him in 1891. A competing developer, Hobart Johnstone “H.J.” Whitley, took over, developing a hotel, markets, a bank, and numerous other upscale businesses—while also successfully pressuring the county to install essential infrastructure such as an electrical grid and streetcar system, as well as a main thoroughfare through the area that became known as Sunset Boulevard.
The Movie Business Goes Hollywood
Whitley had his eye on another type of business that had recently arisen on the East Coast in the wake of Thomas Edison’s invention of the Kinetograph, the first motion picture camera. The landmark invention was actually the creation of Edison’s assistant, William Kennedy Dickson, but Edison registered the patent in his own name. And in so doing, the famed inventor and entrepreneur inadvertently helped create California’s movie industry.
Edison formed a cartel that included a separate company created by Dickson, Biograph Pictures, as well as the primary producer of motion picture film, the Eastman Kodak company. Edison’s cartel, the Motion Picture Patents Company, produced movies and more importantly, aggressively pursued legal action against anyone else who wanted to get into the moviemaking business.
Edison’s cartel slapped one fledgling company, known as Universal Studios, with 289 patent and copyright infringement lawsuits. Nor was his bullying of other film producers limited to the courtroom. Edison was reportedly not above sending paid goons to crack skulls and break legs when he wanted rival productions shut down.
There were other reasons for moving to Southern California—obviously the weather allowed movies to be made year-round. But mostly, moviemakers were desperate to get as far away as they could from Edison. Out west in Hollywood, Whitley was ready to welcome them. He enticed the first studios to relocate there in 1911, a year after Hollywood merged with the city to the east, Los Angeles, and by 1920 the combined city was the global epicenter of the movie business. Almost all of the movies made in the United States were filmed and produced there, and 80 percent of all revenue from movies around the world poured into the industry now known simply as “Hollywood.”
It helped that California courts were much friendlier to the independent producers who had relocated to their state than they were to Edison and his cabal of patent-hoarders. In 1915, federal courts followed suit. In the case United States vs. Motion Picture Patents Company, a U.S. District Court in Maryland ruled that Edison and his cartel went way too far in enforcing their patents, and had used the tactic to “as a weapon to disable a rival contestant, or to drive him from the field,” rather than simply to prevent infringement.
Rise of the Moguls
Hollywood built itself from scratch. In those early days, entrepreneurial energy and a certain type of ruthlessness were all it took to make it big in the industry. Unlike many traditional businesses on the East Coast and in California, Hollywood was wide open to immigrants and especially to Jewish immigrants—a group that played an essential role in building the Hollywood system that evolved into the multi-billion-dollar cash machine that it is today.
It’s become a particularly noxious anti-Semitic trope to say that “the Jews run Hollywood.” While that statement is clearly just bigotry, it is true that many of the most important and powerful founders of the Hollywood system were Jewish immigrants from eastern Europe–and there are very specific and valid reasons for that.
Endemic anti-Semitism in Europe prevented Jewish people from holding positions in industries, labor guilds and professions. What was open to Jews were less “respectable” occupations that were considered beneath the supposed dignity of Christians, so Jewish Europeans flooded this supposedly shady sector of the economy as their only way to make a living. Among those out-of-the-mainstream fields was entertainment.
When they emigrated to the United States to escape this all-consuming anti-Semitic oppression, Jews sadly found little improvement in the situation. The discrimination may have been less flagrant, but they remained closed off from Christian-dominated jobs. The so-called legitimate theater was, in that era, one of those industries that did not exactly welcome Jewish immigrants (or any Jews at all). So they turned to vaudeville, a bawdy, outrageous type of lowbrow entertainment that had been created mainly to ridicule Jews and other Immigrants. A common early vaudeville character was the “stage Jew,” a non-Jewish actor usually wearing a large, fake nose and speaking in a wildly exaggerated “Yiddish” accent, singing songs that employed cruel and offensive stereotypes of Jewish people for laughs.
But because vaudeville was looked down upon by most of Christian society as vulgar and cheap, Jews were able to get a foothold in the business and eventually came to dominate it with their own brand of comedy and music. Such entertainment superstars of the early 20th century as the Marx Brothers, Fanny Brice (later immortalized in the Broadway musical Funny Girl) and Jack Benny (real name: Benjamin Kublesky), among many others, were all Jewish and all got their starts as vaudeville performers.
The ownership and operation of vaudeville theaters was also open to Jews. That’s where four Jewish immigrant brothers from Poland, whose family name was Wonskolaser but who Americanized it to “Warner,” got their start before going on to found Warner Bros. Studios.
The garment industry was another field looked down upon by "respectable" society, where Jewish entrepreneurs were able to make their mark. Some then moved from there into the movie business. Like vaudeville, the garment business required aggressive salesmanship and hard-nosed business sense, both qualities essential to the new movie business. Samuel Goldwyn and William Fox both founded movie studios in Los Angeles after working in the New York garment business.
There were of course non-Jewish movie moguls as well. Walt Disney, a Congregationalist Christian, was perhaps most notable among them. Mack Sennett, an Irish Catholic created the iconic “Keystone Kops,” named for his own Keystone Studios. Sennett started out working for director-turned-mogul D.W. Griffith, a Methodist Christian, whose 1915 epic Birth of a Nation was one of the most cinematically innovative films of early Hollywood—but is mainly remembered for its violent racism, serving essentially as propaganda for the Ku Klux Klan.
The Grip of the Studio System
Those early moguls continued to rule Hollywood with an iron hand through most of the industry’s “Golden Age,” a somewhat vaguely defined period that historians generally date from the early 1930s to the late 1940s, though some don’t see it ending until the early 1960s.
The era saw the formation and domination of the “studio system,” under which five major Hollywood studios, three smaller ones, and two much smaller ones, ruled the industry and controlled all significant commercial film production in the United States. The “Big Five” were Metro-Goldwyn Mayer—better known by its initials MGM and by the roaring lion that opened all of its films—Paramount Pictures, Fox Film Corporation (which merged with another company in 1935 to become 20th Century Fox), Warner Bros and RKO.
The “Little Three” were Universal Pictures, Columbia, and United Artists. These were actually quite large studios, but unlike the Big Five (with the exception of RKO) they did not own their own theater chains and therefore could not rigidly control distribution as well as production of their films.
Then came the small studios known as “Poverty Row,” Republic Pictures—which churned out low-budget westerns starring then-young actors such as John Wayne, Gene Autry and Roy Rogers—and Monogram Pictures, perhaps best known for producing at least 40 movies featuring the rather stereotypically Chinese fictional detective Charlie Chan, who was played exclusively by white actors.
Under the studio system, the studios controlled every aspect of movie production and kept actors, even the biggest stars of their era, under contracts that paid them salaries regardless of how many pictures they made or how well those movies did at the box office. The same held true for directors, screenwriters, producers and everyone else involved in moviemaking. Studios filmed most movies on their own lots, confining all aspects of production to one place. “On location” filming was a rarity.
Most importantly, however, the studios controlled distribution by owning their own movie theaters, making sure that all of the studio films reached the public, and anyone else’s product was shut out. Even independent movie theaters had to cope with a studio practice known as “block booking,” in which theaters that wanted to book a profitable studio blockbuster were required to also screen lesser films—all at prices dictated by the studios.
The total grip of the studio system was finally broken in 1948, in the Supreme Court case United States v. Paramount Pictures, Inc. The court ruled that the studios operated as a monopolistic cartel. Similar to the 1915 case breaking Edison’s intimidation of his competitors by wielding his patents, the court ruled that the studios ownership of copyrights to their films “did not entitle them to conspire with each other to fix uniform prices of admission to be charged by exhibitors,” and that “a copyright may no more be used than a patent to deter competition between rivals in the exploitation of their licenses.”
The studio system which built Hollywood into a $2 billion industry by 1940 (about $42 billion in 2022 terms) was effectively over. But Hollywood was far from done.
Hollywood Goes Corporate
Shortly after the 1948 Supreme Court decision, another new development drove a nail into the studio system’s coffin. That was television. By allowing people to view movie-like entertainment without leaving their homes, television was well suited to the suburban sprawl overtaking American life in the 1950s. As people moved away from urban centers, movie theaters became more inconvenient to access. In 1940, an average of 80 million Americans bought movie tickets every week. By 1960, that number was halved—obviously a disaster for Hollywood.
Hollywood had to change, and change it did, as the hard-charging Jewish immigrant moguls receded into history and giant, multinational corporations moved in. Today, six corporate entities dominate both film and television production: Disney, which in 2019 bought 20th Century Fox; Universal, owned since 2011 by the internet and cable TV company Comcast; Paramount, owned since 1994 by the media conglomerate Viacom; Warner Bros, which has been through a series of owners in recent decades and in 2022 merged with Discovery (owner of a conglomerate of cable TV channels); Sony, owned by the Japanese technology and entertainment megacorporation of the same name; and Netflix, the online streaming powerhouse which started in 1998 as a DVD rent-by-mail outlet.
The corporations have solved the problem of television by the simple solution of owning TV networks as well as movie studios. Disney owns the ABC network, most of the TV shows once owned by Fox, as well as the FX network of cable channels. Disney also owns its own streaming service, Disney+, as well as Hulu, another streaming competitor to Netflix.
Viacom owns CBS and its related streaming service Paramount+. Comcast owns the NBC network in addition to Universal Studios, and Warner/Discovery owns the subscription cable network HBO and its streaming counterpart, HBO Max.
Hollywood’s Place in California Today
What this means for California is hard to calculate, but it means a lot, economically. By allowing film and TV productions a 20 percent tax credit, the state says that from 2015 to 2020 it generated almost $22 billion for the state’s economy, the equivalent of $24 in economic activity for every single dollar invested, according to a 2022 study commissioned by the state film commission and carried out by the Los Angeles Economic Development Corporation.
The Motion Picture Association—a business lobbying group that represents the six major Hollywood corporations—compiled a report in 2022 stating that the industry is responsible for 186,720 jobs in California, pumping more than $30 billion into the state’s economy in the form of wages for those workers.
Perhaps more important than the money, however, is the cultural impact of Hollywood. For better or worse, the images and stories that emerge from California’s film and television industry mold how Americans see their country, the world, and themselves. But because Hollywood is a business that, like any business, pursues profits before anything else, those images and narratives often do not reflect everyday reality, instead remolding the experience of life into escapist fantasies.
“Hollywood trades in the spectacular, the dramatic, the titillating,” wrote University of Oregon Cinema Studies Professor Priscilla Peña Ovalle, in a 2015 essay. “Even romantic comedies usually elevate the ‘everyday’ business of love with fantasies of wealth.”
Hollywood Narratives Shape the World
Movies often divide people, or even animals, into exaggerated caricatures of good and evil. In an essay for Film Inquiry magazine, film scholar Samuel James noted how the 1975 blockbuster Jaws portrayed a great white shark as a “monstrous villain, instead of a natural underwater creature,” and “changed our perception of sharks.” In fact, Jaws created a perception of all non-human creatures as potentially evil rather than simply as beings who share the natural world with people.
Movies can do the same with people. Griffith’s Birth of a Nation, mentioned above, portrayed Black people as inherently villainous and responsible for the South’s defeat in the Civil War at a time when that war and the deep resentments it created were fresh in the American mind and Black people, though no longer enslaved, continued to live under the oppressive Jim Crow system of discrimantory laws.
The film quite literally put Black Americans in further danger by reigniting what was then the largely defunct Ku Klux Klan. The moribund KKK revived itself by rallying around the movie, which depicted Klansmen—who today would be accurately described as domestic terrorists—as chivalrous heroes.
Birth of a Nation is a particularly horrifying example, but the stories that California’s movie industry creates and sends out to the world are always powerful.
“Movies create the cultural narratives that quietly control our society. The images and messages we see on-screen inform our understanding of the world, and critically, they tell us how we should show up as individuals,” wrote Katica Roy, founder of the gender-equity think tank Pipeline. “How should we behave? What’s acceptable for me? What’s not?”
Hollywood may not be the single largest industry in California, but its product—stories, narratives, dreams—makes it the most influential, because it not only provides jobs and revenue, it shapes the way we see ourselves.
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