e star system and the studio system went hand in hand. American film companies developed the star system to a high degree, creating stars from those performers they favored, responding to the approval of the audience for certain personalities, and shaping their advertising around these stars. The European system was not so tightly developed, and stars emerged through the force of their personalities and the success of their films more than because they were created by any controlling studio. The star system had to change when the studio system came under fire. The move toward more independent production in the 1950s challenged aspects of the studio system, though the studio production system remained intact even as it continued to crumble in the face of political reaction, television, rising independent production, and the loss by the studios of their exhibition chains after the Paramount decree in 1949. The star system also declined during the course of the decade. Studios were forced to cut back on production because of the inroads made by television, inflation, and other problems, and expensive promotional campaigns were abandoned. Star contracts changed from long-term to short-term. Many stars went to simple profit-sharing options on individual films. Many of the stars of the era who had started under the old system worked more independently of the system than ever before. Under the star system, the definition of a studio was simpler--it was where the stars were under contract (Cook 442).
By 1929, the basic structure of the American film industry was clearly delineated. there were five dominant firms--Paramount, Loew's (MGM), Warner Bros., Fox, and RKO. These were the Big Five, and each owned substantial production facilities in Southern California. Beneath them were the Little Three--Universal, Columbia, and United Artists--which maintained only production and distribution units. The Big Five owned some 3,000 movi...