Fact Finder - Movies

While Hollywood is known for glamour, its modern structure was forged in the crisis of the 1918 Spanish Flu pandemic. As the virus spread, nearly 90% of movie theaters across the U.S. were forced to close. Independent theater owners, who relied on weekly ticket sales to pay film rental fees, faced immediate bankruptcy. Seizing the opportunity, Adolph Zukor (founder of Paramount) and other wealthy producers used Wall Street backing to buy up hundreds of these struggling independent theaters at a fraction of their value. This consolidation allowed a handful of major companies to control the entire process: they produced the films, distributed them, and now owned the theaters where they were shown. This birthed the 'Studio System'—a vertical monopoly that dominated Hollywood for the next 30 years until the Supreme Court finally dismantled it in 1948.