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MONEY BEHIND THE STRFEN ^M
jEjronp, 0Rtal)lis}i(Ml itst^lf in production l>y the jil)sor[)tion tirHt of the Metro and later of the (Joldwyn and Mayer units ; Fox, w)iil«? exj)andin<^ his theatre holdinj^'.s ent<'red prcMJuetion at a very earl\ period and .soon became one of the hirgesf producerw ; Kirnt National Distributors, now absorbed by Warner Bros., eoinineneed oh a defensive alliances of leading exhibitors aj^ainst the encroaelinwrits of l^aramount and, havinj^ ostablishod a country-wide distributing orji^anisation. first eontraetcMl with indejM'ndent producers for the auj)j)ly of feature fihns, and hiter estabhshed studios of their own. The prolonged stru^^le Ix'tween Paramount and l''irst National was probal)ly the most dratnatic asjH'ct of the industry during this phase of its history. Organised in I'.U? in reply to I'arartiount 's block-booking policy and hi<.^h nMitals, the First National was controlled by the oxocutivcs of some twenty-seven powerful t heatre circuits wlio extended their intiuence by granting Rub-francliises for the films distributed by them to other cinema profjrietors. Durinij; 11)10-21 tlunr organisation (Mnbraced some .'J,4(M) tlieatres in all parts of the country. In the production sphere, they actively attracted stars from their rival, even inducing Mary I'ickford to leave Zukor at a time when she was at the height of her fame. Zukor was, howcuer, able to meet this menace by production on a De Mille scale, while in the exhibition sphere, he met his opi)onents on their owii ground with a ruthless cinema acquisition camf)aign. He succeeded in acquiring controlling interests in the circuits of several of the First National shareholders themselves and was thus able to work against his rivals from within their own ranks. Only a Federal anti-trust prosecution prevented Zukor from absorbing F'irst National. But while this prosecution — as is invariably the case drawn over many years — caused him to alter his tactics, it did not affect the substance of his policy. It was the object of the prosecution to force Zukor to confine himself to either the production or the exhibition side of the film business. By making a formal separation of these two sides of his enterprises and organising each as a separate company, Zukor prepared himself to satisfy the letter of the law (although when the case was finally decided this demand had been abandoned). At the same time, however, Zukor continued the expansion policy with renewed vigour. First National received its final blow with the absorption by Zukor of its largest remaining circuit, the Katz-Balaban group. Samuel Katz, the head of this group was placed in charge of the Publix Corporation in which Zukor had merged all his theatre interests and a few years later First National lost their independence by the absorption of their last stronghold, the Stanley group, by Warner Bros. (1929).
It was this latter move that placed Warner Bros, among the leading companies in the industry. Their position had for a long time been a precarious one, until with Fox they acted as the pioneers for the introduction of sound (at first sound on disc) from 1925-6