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The Genius Of The System

Hollywood Filmmaking in the Studio Era

Henry Holt and Company

Universal: The System Takes Shape

The train ride West was aboard the Twentieth Century Limited. The year was 1920 and Carl Laemmle was en route from New York to Los Angeles in yet another effort to bring Universal's far-flung operations into a closer accord. Like most movie companies, Universal had its "home office" on one coast and its "factory" on the other, and as the stakes in the movie business steadily went up, there seemed to be more than just a continent separating the two. What Laemmle desperately needed was someone who understood the business interests of the New York office and could oversee operations at Universal City, his company's massive production facility outside Los Angeles.

Though Laemmle was president and founder of Universal Pictures, he wasn't the man for the job. He was a businessman and a showman, but he knew precious little about the actual making of films. In that sense Laemmle was a prototype of the American movie mogul, that rare breed of first- and second-generation immigrants, most of them Jews from Eastern Europe, who pioneered the film industry. Like William Fox and Adolph Zukor, Marcus Loew and the Warners, Laemmle got his start just after the turn of the century in the nickelodeon business in a major industrial city. And like the other moguls — the ones who survived, anyway — he eventually expanded into production, but his heart and his savvy were always at the "audience end" of the movie business, in marketing and sales.

Laemmle started in Chicago in 1905, building up a string of storefront theaters. Within two years he had his own distribution "exchange," the Laemmle Film Service. Both ventures were doing well until his supply of product was threatened in 1909 by the Motion Picture Patents Company — the so-called Trust controlled by Thomas Edison that demanded license fees on production and projection equipment. Laemmle defied the Trust by creating the Independent Motion Picture Company to produce his own pictures, and in 1912 he merged IMP with several other renegade outfits to form the Universal Film Manufacturing Company. By the early teens the Trust's power was waning and Laemmle had won sole control of Universal, and had sold off his theaters to concentrate on production and distribution. He consolidated production operations on a 230-acre ranch just north of Hollywood, California, where independents were colonizing to evade the Trust and to exploit the climate and real estate values, both of which were ideal for filmmaking. In March 1915 construction was completed on Universal City, a massive studio capable of turning out some 250 serials, shorts, newsreels, and low-cost feature films per year. The factory operation enhanced efficiency and productivity, but Laemmle was unable to find a satisfactory management setup. By 1920 over a dozen top executives had come and gone, and the three-man team now running Universal City were faring no better than their predecessors.

Thus Laemmle's trip West for an on-site evaluation and quite possibly another management change involving his traveling companions, Nat Ross and Irving Thalberg. Ross was a writer-director from Universal's modest New York studio whom Laemmle wanted to consult as he looked over the West Coast plant. Ross struck Laemmle as having executive potential, but if things didn't work out in the studio's front office he could always go back to directing. Irving Thalberg was quite another story. He clearly was executive material, and there was no telling how far he might go in the movie industry. Thalberg had joined Universal in 1918, barely out of high school, working as a $25-per-week secretary in the New York office. He was a quick study with remarkable instincts for the business, and soon he was working almost exclusively for Laemmle. Among Thalberg's duties was taking dictation as Laemmle screened and evaluated Universal's upcoming releases in his private projection room high atop the Mecca Building at 1600 Broadway. Before long Thalberg was not merely transcribing but was editing Laemmle's comments and providing commentary of his own.

It was during those screening sessions that Thalberg began to reckon the complex equation of filmmaking, with its curious melding of art and commerce, craft and technology, story and spectacle. Laemmle came to rely on Thalberg's insight, but he wondered if the youngster's talents were being squandered in New York. In the spring of 1920 Laemmle decided to find out. He planned to go abroad after sorting things out on the West Coast, and he really wouldn't need Thalberg while scouting talent in Europe and surveying Universal's vast foreign distribution network. Laemmle figured that Thalberg's time would be better spent at Universal City, learning production firsthand and perhaps contributing his own ideas. Once they got to California Laemmle looked over the plant, took a series of meetings with studio chief Isadore Bernstein and his two associates, and decided to stay with the present management setup. But he did install Thalberg and Ross in the front office as consultants and executives-in-training, though with no real authority over production operations.

Thalberg was awestruck with Universal City. It was a virtual world unto itself, a selfcontained municipality devoted exclusively to making motion pictures. There were restaurants and shops and even a police force, but most impressive were the production facilities. Universal's largest shooting stage was 65 feet by 300 feet — roughly the size of a football field — with another stage at 50 by 200 feet. Both were enclosed and electrically equipped; in fact, a dramatic moment during the studio's dedication in 1915 had been the activation of the electrical system by Thomas Edison, Laemmle's former nemesis, who supervised the wiring of the plant. Besides the enclosed and open-air stages, the street sets and "back lot" for location work, there were extensive auxiliary facilities, from film processing labs and cutting rooms to prop and costume shops, construction yards, and even a zoo to supply supporting players for some of Universal's more exotic productions.

Thalberg took to his new assignment, but as he immersed himself in the everyday production activities he steadily alienated the studio's management troika. Bernstein was particularly intolerant of this office boy who until a few weeks ago was living with his mother and had never been west of Jersey, let alone on a Hollywood movie lot. When Laemmle returned from Europe, Bernstein went back East to vent his spleen. Laemmle heard him out, consulted with various executives on both coasts, and made a series of key decisions. Nat Ross, who showed little promise in the front office, was put under contract as a staff director. Bernstein and his two associates were put in charge of the physical operations of the plant. And Irving Thalberg was given sole command of production at Universal City, answerable only to Carl Laemmle himself. Thalberg's weekly salary was boosted from $60 to $90, and Laemmle assured him that if things went well both his pay and his status would improve considerably.

At the outset Thalberg was little more than a studio-based functionary of Laemmle and the New York office. Laemmle spent a good deal of time at Universal City breaking in his new production chief, and the two were widely regarded as Hollywood's unlikeliest power brokers. Even studio personnel were amused when the aging mogul and the boyish executive prowled the lot. Thalberg was frail and delicate because of a sickly childhood and a chronic heart condition, but at five feet six he towered over "Uncle Carl," as the diminutive mogul was known to his employees. Laemmle's unabashed nepotism was legend — humorist Ogden Nash once quipped, "Uncle Carl Laemmle has a very large faemmle." Everyone at the company, including Thalberg himself, suspected that he was being groomed for membership in the Laemmle clan, since besides playing surrogate son at the studio he also was courting Carl's daughter, Rosabelle.

Thalberg's match with Rosabelle didn't take, and his rapport with Laemmle proved shortlived as well. Much has been made over the years of the clashes between Thalberg and Erich von Stroheim, Universal's headstrong director. But equally important were Thalberg's ongoing and steadily escalating battles with Carl Laemmle. Though Laemmle was the most affable and compassionate of movie czars, he was fiercely independent and self-assured. He went into production in defiance of the Trust, and in carving out his company's destiny he developed strong convictions about what it took to satisfy audiences and turn a profit. As Thalberg got a feel for production, he realized how much Universal City's operations and the company's general market strategy were shaped by those convictions.

Laemmle's strongest convictions — and his major differences with Thalberg — involved stars and "feature-length" films. (A feature in those early silent years was any movie with a running time of more than three reels, or about thirty minutes — a total that steadily expanded to eighty or ninety minutes by 1920.) Laemmle actually had promoted stars and features in his earlier days with IMP to distinguish his products from those of Edison, Biograph, and the other Trust-based companies. Those outfits had resisted features and big-name stars, reasoning that they were not cost-efficient from a production standpoint, they were too risky from a sales standpoint, and they compromised the producer's control. Laemmle may have shared those sentiments, but he was willing to subdue them while battling the Trust. He even helped advance the star system back in 1910 by recruiting the "Biograph Girl," Florence Lawrence, and aggressively publicizing her films. But once federal antitrust action and competition from independents eroded the Trust's power, Laemmle reverted to his earlier biases. "There is room at Universal," Laemmle asserted in a 1913 trade paper ad, "for every Showman who has got his bellyful of features, feature stars, and their attending evils." He softened a bit on features as they became more prevalent in the mid-teens, but not in his attitudes toward stars. In a 1915 advertisement, Laemmle extolled Universal as "the first producer to buck the star system — the ruinous practice that has been responsible for high-priced but low-grade features."

From his earliest years in production and distribution, Laemmle had been committed to what he termed a "scientifically balanced program" of shorts, newsreels, serials, and modest features. The Universal City plant was designed and equipped to roll out these program jobs like so many Model-T's off the assembly line. Unlike automobiles, though, motion pictures were expected to be different from one another. Laemmle was convinced that such distinctions could be minimized through a policy of "regulated difference," so long as certain production values were maintained. Once the production process and story formula were established for, say, Universal's five-reel westerns with Harry Carey, a competent filmmaker like Jack (later John) Ford could crank them out, often using the same footage for action scenes, with only routine adjustments in story and character. That strategy held through the war years, but by the late teens the marketplace was changing. Feature-length narrative films became the industry staple, and the most successful features were calculated star vehicles. This was underscored in 1919 when three of the biggest stars in Hollywood's silent era — Charles Chaplin, Mary Pickford, and Douglas Fairbanks — joined forces with producer-director D. W. Griffith to create United Artists. UA's sole function was to distribute its founders' high-class (and high-priced) features, enabling them to operate without the constraints of the emergent studio system. UA's stars produced their own pictures, which were targeted for the "first-run" market, where attendance and thus profit potential were greatest.

Universal had all but written off the first-run market by 1920. The downtown deluxe theaters that had been cropping up in big cities since the mid-teens seated thousands of moviegoers, and they developed exhibition practices that were altogether different from those of the "subsequent-run" houses. To exploit the vast numbers and the varied life-styles and work habits of their market, the big-city movie palaces ran A-class features at inflated prices virtually around the clock, except in peak business hours — primarily evenings and weekends — when they offered "presentations" that included not only a feature film but a stage act and full orchestral performances as well. What's more, a first-run theater might run a hit feature for weeks or even months at a time, as long as public interest held. Once the picture exhausted its first-run market, it worked its way through the subsequent-run circuits, playing to the same audiences that Laemmle went after in the first place. There Universal offered "program" fare ideal for an evening of family viewing: a three-hour package of shorts, newsreels, and low-grade features that changed weekly. Laemmle's decision to skew Universal's pictures away from the first-run market and toward independently owned neighborhood, small-town, and rural theaters had made sense in the past. It regulated both output and income, since there was less competition and a steady audience in these outlying theaters. But Thalberg doubted that such a strategy would hold up much longer. The nation was in the midst of an urban-industrial boom, and as the population shifted to big cities Universal was appealing to an ever-shrinking market while its competitors were adjusting to the changing marketplace. Studios like Fox and Metro were upgrading feature production and they also had begun to build, buy, or otherwise gain control of their own theater chains, concentrating on the first-run market. Likewise, major exhibition outfits like First National and Loew's Incorporated were expanding into feature production. Thalberg figured that Universal's only recourse was to get back into the theater business, which Laemmle had abandoned years earlier, and to accelerate feature production.

Laemmle appreciated Thalberg's concerns, but he advised his studio chief to concentrate on the supply side and let the New York office worry about marketing and sales. Thalberg's point, however, was that production and marketing were no longer distinct, that any notion of the "studio system" now reached far beyond the studio itself. He was concerned that as Universal's competitors merged their production, distribution, and exhibition operations into vertically integrated combines, they would consign nonintegrated companies to second-class status. Then even with Universal's solid production and distribution operations, Laemmle's resistance to A-class star vehicles and to theater acquisition would relegate Universal to an inferior — and eminently less profitable — position in the industry.

Universal didn't disdain features altogether, of course, but the majority of its features were "programmers," inexpensive five-reelers designed to top off an evening's viewing. These low-grade westerns, melodramas, and action pictures were dubbed Red Feather releases and underwent a disciplined production and marketing process. Universal's A-class Jewel releases, conversely, were longer-running star vehicles, often shot on location with period sets and costumes. They comprised no more than a half-dozen of the literally hundreds of films that the studio cranked out each year. Executives on both coasts tended to perceive the Jewels as being "outside the system," unfettered by the production and distribution policies governing Universal's lesser films. In fact, the Jewels were the most undisciplined and inefficient projects on the lot — or rather off the lot, which was where prestige filmmakers like Erich von Stroheim and Rupert Julian liked to work.

Thalberg was determined to change all that. Universal depended on a steady flow of product, and Thalberg felt that both the flow and the quality of all its products had to be controlled if Universal was to compete with the other industry powers. Universal City was often derided as Hollywood's consummate movie factory, and Thalberg was quite comfortable with the analogy. Like other modern industries that relied on mass production and mass merchandising, the cinema developed its own version of the assembly-line system with an appropriate division and subdivision of labor. The director was crucial to that process, and Thalberg saw no reason to limit the director's freedom and creative control over actual shooting, so long as he recognized the nature and limits of that authority. This wouldn't come easily for filmmakers like Stroheim and Julian, who considered themselves not just directors but also writers, editors, and producers. And in Stroheim's case, the problem was further complicated by his privileged relationship with Carl Laemmle, who was much impressed by Stroheim's continental airs and German accent, by his expert performance as the strutting, white-gloved autocrat, and by the glint of class and prestige that Stroheim brought to an otherwise declasse factory.

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Excerpted from The Genius Of The System by Thomas Schatz. Copyright © 1988 Thomas Schatz. Excerpted by permission of Henry Holt and Company.
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