The Coming of Sound

Douglas Gomery

• Publisher: Routledge
• Year: 2005
• eBook ISBN: 9781135923945
• Topic: Media & Performing Arts
• Subtopic: Film History & Criticism

The coming of sound to film was an event whose importance can hardly be overestimated; sound transformed not only the Hollywood film industry but all of world cinema as well. As economic and film historian Douglas Gomery explains, the business of film became not only bigger but much more complex. As sound spread its power, the talkies became an agent of economic and social change through the globe, extending America's reach in ways that had never before been imaginable. This is an essential work for anyone interested in early film, film history and economics, and the history of the American media.

CHAPTER 1
A Preview
Order and Profit, Not Chaos

I argue that previous historians have misled us; the transition to sound films was rapid, but speed of change does not necessarily connote disorder, chaos, or confusion. The Hollywood monopolists cooperated to eliminate all-important problems, and insure maximum profits and growth for themselves. Consolidation and merger, not panic or anarchy, should be the labels we use to characterize the switch to sound by the U.S. motion picture industry.

Cooperation was the order of the day. Paramount and Loew’s (and its production subsidiary MGM), the dominant companies, signed identical contracts—save for their inserted corporate titles—on the same day, May 11, 1928, in the same room, AT&T’s New York offices, and at the same time (an hour before then end of the business day). After months of bargaining with AT&T’s subsidiary, Western Electric’s newly formed subsidiary, Electrical Research Products Incorporated (ERPI), all other companies— save pioneers Warner Bros., Fox, and RCA’s Radio-Keith-Orpheum (RKO) —signed identical contracts. No chaos here.

If there is a date key to the coming of sound it is the May 11, 1928, cooperative signing—not the October 1927 premiere of The Jazz Singer. Once signed, the true coming of sound proceeded. Paramount and Loew’s moved to create sound features first; soon after came newsreels and shorts. Warner Bros. and Fox had led the way—but only temporarily. Paramount, Loew’s, and even RKO caught up within one year. Paramount’s conversion was typical: it released its first feature with a musical score in August of 1928, its first with talking sequences in September, and its first all-sound film in January of 1929. The majors distributed silent and sound versions of all films during the 1929—1930 season, and moved completely to full-sound features for the 1930—1931 season.

MGM trailed Paramount by one month; Universal and United Artists followed 3 months later at each stage. The only significant exception to this quick one-step transition was RKO. Because the merger that created RKO occurred in October of 1928, time was needed to establish basic operations. By September of 1929, RKO caught up with Paramount and the other majors. Independent producers lagged six months to a year behind even the slowest major company. The first all-talkie independent feature was not released until July of 1929, a year after Warner Bros. and seven months after Paramount. The independents continued to produce and release silent films well into 1930. The transition for the majors was rapid (about one year) and smooth. The independents trailed the majors at every point, and were seemingly undecided as to corporate strategy well into 1930.

For shorts and newsreels, the changeover was not as smooth or rapid; less profit was at stake. Only Warners and MGM initially moved into shorts. Consequently, there were opportunities for independent producers. Disney advanced significantly at this time. Fox led the way for sound newsreels. By the fall of 1929, Fox was releasing four different newsreels each week, and had seventy production units in the field. RKO, MGM, Paramount, and Universal followed and all-sound newsreels were commonplace by the spring of 1930. Small newsreel firms, such as Educational’s Kinograms, did not survive the conversion to sound.¹

The Hollywood monopoly capitalists pooled information during the diffusion of sound, and minimized all potential problems. The Academy of Motion Picture Arts and Sciences (hereafter referred to as the Academy) coordinated the collection and transmission of all knowledge to the major Hollywood studios. On May 2, 1928, when it became known that the majors would sign the recording license agreements, the Academy held its first educational seminar. As early as June 5, 1928, 20 committees were established to gather and distribute information, and to consult with physicists and speech experts from the University of Southern California and University of California at Los Angeles. During 1929 the Academy formalized its activities and set up a school in which to train studio personnel on the fundamentals and newest advances in sound technology. Nearly 600 employees enrolled in sessions supervised by Irving Thalberg of MGM. Elsewhere, the Academy set up a special committee to solve the technical problems an individual studio could not solve on its own: silencing lights and cameras, finding the best materials for sets and props, and improving release print quality. This committee, also supervised by Thalberg, worked for 12 months. It published the most significant findings and solutions in the Academy Technical Digest. In 1930, all reports were collected and published as a book.²

Individually, the majors took less than one year to plan and construct their new sound stages. The only setback came on January 16, 1929, when one of Paramount’s nearly completed sound stages burned to the ground. Paramount immediately initiated rebuilding operations, not even pausing for one day. The cost of the new Hollywood construction was enormous. Conservative estimates placed the investment at $23 million; others saw the total running closer to $50 million. All this came when the original studios, built over a 15-year period, were valued at only $65 million. Hollywood was not the only area that prospered. In order to minimize expenses for using Broadway, radio, and vaudeville talent, Paramount reopened its Long Island studio in July of 1928. During the summer of 1928, MGM, First National, Warner Bros., Universal, RKO, and Fox all activated studios in the New York City area. New York studios boomed throughout 1929 and into 1930. During a typical week, 10 features, and as many shorts, were in production. Paramount always led in activity; for example, in 1929 it produced over 30 percent of its output in New York.³

The distribution branch of the motion picture industry was the least affected by the coming of sound. The majors continued their dominance over national and international distribution. States’ rights distributors decreased in number as their operations became less profitable. The exchanges themselves became more careful in handling prints as any dirt, oil, or grease could severely distort the sound. There was one important change. Prior to the coming of sound, most films rented for a flat fee. Because revenues from silent films could not be used as a guide, distributors began to demand a percentage of box-office revenues supported by a minimum guarantee. The major producer-distributors would share in the excess profits if a film did well and be protected if it did not. Independent exhibitors vigorously protested for they did not wish to expose their accounts to constant surveillance by the majors. Still these independent exhibitors gave in quickly; they did not want to lose access to the highly profitable talkies. Producer-distributors then hired checkers to monitor audience size to guarantee accurate accounting.⁴

Immediate access to sound films increased the importance and profits of the theaters affiliated with the Hollywood major corporations, and accelerated the rate of disappearance of the independent house. Chains easily absorbed the additional costs of wiring, quickly substituted vaudeville acts recorded on film for live presentations, and lowered overall operating costs. In response, during the fall of 1929, smaller independents began to add vaudeville presentations to their silent film shows as a counter-programming strategy. This only helped for a short time. Moreover, the automobile caused great difficulty for independent theaters in small towns. Roads had improved during the 1920s and thus significant numbers of patrons could easily drive to nearby cities to large chain theaters. Independent exhibitors began to complain to their representatives in Congress: the majors were now even more of a trust than before. To head off adverse governmental action, the Motion Picture Producers and Distributors Association, the film industry’s trade association, appointed a committee to monitor complaints, arbitrate disputes, and even compensate certain theater owners. Overall, the committee did little except generate reams of public relations releases arguing how fair the current system really was.⁵

In Hollywood, the Academy mediated all labor disputes and kept all difficulties to a minimum. Most workers quietly prospered with the increase in business. Consider the case of the actors. As is well known, Hollywood raided Broadway for speaking talent; over four hundred stage actors and actresses moved to the West Coast in 1929. Most stage personnel were members of Actors Equity (hereafter referred to as Equity). Equity had attempted to organize silent film actors and actresses in 1924 and 1927, but failed. The producers, through the Association of Motion Picture Producers, continued to recognize the Academy as the sole bargaining unit. In January of 1929, however, as more and more stage performers migrated to Hollywood, Equity’s new president, Frank Gillmore, sent a questionnaire to all members; an overwhelming majority desired a new effort to unionize Hollywood’s actors and actresses. On June 4, 1929, the assault began. Gillmore proclaimed that from then on, Equity members would sign only Equity-approved contracts. No member would work on a film unless all other actors and actresses belonged to Equity. Most employment contracts expired in the summer months. Thus, Gillmore knew that if this action was successful, Hollywood would become a closed shop during the summer of 1929.⁶

Within 24 hours after the announcement, Fred W. Beetson, secretary of both the Hays Office and the Association of Motion Picture Producers, called a meeting of the production heads of all the major studios in Hollywood. After a four-hour session, Cecil B. DeMille, representing the producers, issued a statement defying Equity: “We will continue to engage artists for our productions only under the fair and just form of contracts which was approved by representatives of both producers and motion picture actors. We decline to be restricted as to the sources of our talent.”⁷

The producers knew that only one-tenth of all of Hollywood’s currently employed actors and actresses belonged to Equity. Quickly the producers rallied important stars to their side: Lionel Barrymore, John Gilbert, Norma Talmadge, and Marie Dressler publicly declared that they knew of no labor abuses in Hollywood. Moreover, the major studios continued to operate normally, trading personnel when needed, and postponing no films. In July, Ethel Barrymore, Equity’s vice president, persuaded Gillmore to meet with the producers. Gillmore demanded a partially closed shop. The producers offered only an open shop. On August 11, 1928, Barrymore released a statement to the press accusing Gillmore of misleading the membership. Barrymore felt that the producers offered a reasonable settlement. This split Equity’s leadership, and quickly Equity’s membership broke ranks. Large numbers of players began to sign standard Academy contracts. The labor unrest was over. Equity retreated to Broadway. The Screen Actors Guild would not come until the U.S. federal government encouraged unionization through the National Recovery Act starting late in 1933. There was no real problem during the coming of sound.⁸

The switch to sound happened so rapidly because of the high profits the major companies earned on their new investments. Costs increased but revenues rose much faster. Accurate data for specific grosses are unavailable, but all reports indicate that Warners’ The Singing Fool, released during September of 1928, grossed a record $5 million. Other new sound films did nearly as well and thus the majors’ profits reached new peaks. In 1929, Warners made over $14 million, Paramount $15 million, Loew’s $11 million, and Fox $9 million. Moreover, growth in profits was phenomenal. From 1928 through 1929 Warners’ profits grew an incredible 609 percent, Paramount 78 percent, and Fox 59 percent.

They used these new profits to acquire more theaters, and to stake position in the rival entertainment businesses. Here the actions of RCA and its subsidiary, RKO were best known. By 1930 RCA controlled two major radio networks (NBC Red and NBC Blue), a movie studio, the old Keith-Albee-Orpheum vaudeville theater chain, and the Victor Phonograph Company. So although RKO never achieved great profits in movie making, other operations provided considerable profits, and kept the corporation afloat.⁹

The transition to sound by the U.S. film industry monopolists was fast, orderly, and profitable. All adjustments were made in fifteen months. The Academy, the Association of Motion Picture Producers, and the Motion Picture Producers and Distributors Association coordinated the flow of information, and arbitrated nearly all disputes in quick fashion. Profits skyrocketed and the motion picture monopoly capitalists expanded, absorbed other firms, and concentrated and centralized power into four large units. Rather than confusion, these monopolists created more order by gaining control of the inputs to and outputs from their enterprise. The coming of sound facilitated this greater monopoly power, and shaped the structure of the U.S. film industry—a structure that survived both a depression and a world war well into the 1950s.

But we must start first with the industry as it was in 1925, as analyzed in the following chapter.

CHAPTER 2
The Preconditions for Innovation

Many inventors and businessmen had unsuccessfully attempted to link sound to movies prior 1925. All of the motion picture leaders in the 1920s, primarily former exhibitors like Adolph Zukor, Marcus Loew, and Carl Laemmle, knew of these attempts and failures. In addition, these entrepreneurs closely noted all changes in the state of industries that provided close substitutes and complements for movies. In the 1920s the structure, conduct, and performance of the radio, music, and vaudeville industries were so volatile that by the 1925—1926 motion picture season, the popular entertainment mix was significantly more complex than prior to World War I. Knowledge of this combination weighed heavily in all investment decisions any motion picture entrepreneur would make. Finally, the structure and conduct of the motion picture industry in 1925 also supplied crucially important data for any change within that industry.

The Motion Picture Industry

These three industries competed for the public’s entertainment dollar, but by 1925 the motion picture grossed more revenues than any of its competitors. Silent films with live sounds had become a billion dollar industry.

By 1925 the motion picture industry was clearly divided into three basic sectors: production, distribution, and exhibition.

Production of feature films, shorts, newsreels, and serials were centered principally in Hollywood, California. There was a three-tiered structure in production. On top were the “Big Two” producers: Famous-Players and MGM (the production branch of Loew’s), in that order.¹

After that came a group of five led by Fox and Universal, followed by Warner Bros. and Film Booking Office (FBO). United Artists fit into a special category with its small exclusive production. First National was also an exception as it was group of theater owners producing movies for their theaters. This set of exhibitors loosely banded together to make movies for their circuits.

But the trend—again led by Famous-Players—soon to be called by its distribution-exhibition arms Paramount-Publix (or simply Paramount), and Loew’s, took in the most revenues at the theater level and distribution level (nationally and internationally), and spent the most per feature film. They were vertically integrated, owning a strong position in production, distribution, and exhibition (theater ownership).²

All of these firms possessed national distribution. In the third category fell a large number of independent producers, all of which distributed regionally by what was called “states-rights.” In 1925, some 45 independents made an estimated 191 films. No one company created more than fifteen. The bigger companies fully dominated the most expensive features. The independents took a stronger position in short subjects. One—the Walt Disney Company—would survive by allying with a major studio until the 1950s when Walt finally went off on his own.³

In 1926 and early 1927 Loew’s/MGM and Paramount added newsreel and short film components to their production packages, either by beginning production themselves or contracting exclusively to distribute the production of others.⁴

Feature films still generated most of the profits, but the “Big Two”—led by Adolph Zukor and Nicholas Schenck—had come to realize they could gain extra monopoly profit by selling feature films, shorts, and newsreels as one package. The “Big Two” also dominated in terms of assets, sales, and profits. In assets, Famous-Players was almost twice the size of ...

Table of contents

• COVER PAGE
• TITLE PAGE
• COPYRIGHT PAGE
• ACKNOWLEDGMENTS
• PHOTOGRAPHS
• PREFACE: THE RESEARCH QUESTION, THE METHOD, AND THE DATA
• CHAPTER 1: A PREVIEW: ORDER AND PROFIT, NOT CHAOS
• CHAPTER 2: THE PRECONDITIONS FOR INNOVATION
• CHAPTER 3: THE WARNER BROS. INNOVATE SOUND
• CHAPTER 4: WILLIAM FOX INNOVATES SOUND
• CHAPTER 5: WARNERS’ BLOCKBUSTER: THE SINGING FOOL
• CHAPTER 6: PARAMOUNT AND LOEW’S WAIT, AND THEN MAKE THEIR DEAL
• CHAPTER 7: THE RISE OF RKO: THE FAILURE OF ALL OTHERS
• CHAPTER 8: THE DIFFUSION OF SOUND IN THE UNITED STATES
• CHAPTER 9: DIFFUSION OF SOUND THROUGHOUT THE WORLD
• CHAPTER 10: THE FORMATION OF THE STUDIO SYSTEM: MERGER MANIA
• CHAPTER 11: MOPPING UP THE LOOSE ENDS
• CHAPTER 12: THE COMING OF SOUND: A REINTERPRETATION
• ENDNOTES