Despite Laemmle’s and Fox’s success, it became clear that the newly budding film industry wasn’t going to be taken as seriously as other business investments. In fact, despite Hollywood producing and distributing films, all around the country, even the most audacious banks didn’t want to side with film producers. So a man by the name of W. W. Hodkinson decided to set up a system where both distributors and producers would get a “fair” amount of revenue, from the sales of their films. Thus Paramount Pictures was born.
As the company grew into the role of distribution, many producers became reluctant to join such an overpriced relationship. Paramount Pictures demanded at least 35% of the box office, even as 25% of the film’s budget came towards distribution. In short, the producers got the short end of the stick.
Time for a Takeover
Amongst the outraged producers were Adolph Zukor and Jesse Lasky. They felt so cheated that they decided to secretly buy up stocks from Paramount, in order to gain control over what would have been a very expensive investment. Soon, Zukor had enough power to successfully remove Hodkinson, two years after founding the company.
Now Zukor had the reins, appointed a new candidate as president of the distribution company, and became known as the “United States Steel Corp. of the Motion Pictures Industry”. After that, both Zukor and Lasky could finally concentrate on their new production company Famous Players-Lasky. However, their peace was short-lived. One of their partners, a man called Samuel Goldfish, had ferocious energy that rivaled Zukor’s megalomania. The tension between the two grew so high, that Zukor eventually gave an ultimatum for Lasky, “either Goldfish must leave the company or Zukor would”.
Torn between the two, Lasky eventually chose to side with Zukor and the company thrived once more, with Zukor in New York running the company’s finances.
New Faces and Bigger Pictures
With the merger and the now stable company, Zukor signed up as many stars as he could. He even managed to sign up Fatty Arbuckle, William S. Hart, and Douglas Fairbanks, and with their names plastered to posters for Paramount’s films, the rate of production increased by 100 features per year. It seemed life was back on track for Paramount, and its employees.
However, the stable bliss of the company didn’t last long. With the growing influence of First National in 1919, the early stars of Paramount began to leave. Names like Mary Pickford, John Barrymore, and Marguerite Clark fell from the company, and Zukor had to find a way to replace them.
Luckily, he bought up film theatres in the early 1920s. These chains of cinemas continued to expand, even into the late 1920s. Even the quality of Paramount’s features began to improve, and the company now focused on the quality of their films, rather than the quantity. However, despite the profits of the company, there was an even greater threat to their power. The formation of a new challenger in 1924 began to challenge the rule of Paramount Pictures, as the head of the Hollywood film industry. This new challenger was called MGM Studios.
Relocation and Restructure
In the end, it was clear that the company needed new eyes and better equipment. So they relocated from their studios at Sunset and Vine, to Marathon Street. They rehired B.P. Schulberg as a new studio boss, and the company began to improve the quality of their films.
Now with Schulberg at the helm, Paramount Pictures became even bigger than before. He had hired names such as Josef von Sternberg, Ernst Lubitsch, Rouben Mamoulian and William Wellman. In fact, their first picture Wings won the first-ever Best Picture Oscar. With the award, Paramount saw more and more improvements in their pictures and was even one of the first major studios to adopt sound, thanks to Schulberg once again.
The Great Bankruptcy
Although the company soared higher above everyone else, there was an ever alarming presence of debt as Hollywood’s Golden Age began to die out. In 1932, both Jesse Lasky and Schulberg were forced out of the empire they had fought so hard to build. Zukor, on the other hand, stayed on, but he was forced into the role of chairman, losing much of his power, to the younger, fresher faces that worked for him.
In the following years, Paramount couldn’t recover and so in the early part of 1933, they filed for bankruptcy. Although a few hits managed to keep them afloat, it wasn’t enough to get Paramount back on its feet. Thus the company decided to reorganize itself, in 1935. Soon Paramount recovered, churning out Western hits and popular epics in the late 1930s and 1940s.
Where Are They Now?
Unlike its competitors, Paramount couldn’t transition into the TV industry, as smoothly as it did into sound filmmaking. Even today, there aren’t as many Paramount Pictures shows as their rivals. Thus, their reliance on feature films themselves is rather telling. However, it is not a testament to their success. With the help of Viacom, Paramount was able to purchase CBS, one of America’s leading channels in TV. So it is not yet known whether or not Paramount might just break into the TV business. After all, they did manage to take over America’s biggest movie industries before, what’s keeping them from doing it again?