In the 1920s and 30’s the Hollywood studios owned most of the movie theatres in the world. They had a virtual ‘cradle-to-grave’ lock on both the creation and the exhibition of films. In other words they owned the industry, coming and going.
Because of this, the movie business was an increasingly competitive marketplace. There were many more studios then than there are now and the small, so-called ‘indies’ of their day had trouble staying alive let alone competing. Not that they couldn’t make their films, they just had nowhere to show them once they were completed.
This competitive oligopoly led to a few well-publicized breakout hits for some but more often than not these ‘hits’ were scattered throughout more consistent average fare for others less fortunate. To hedge their bets on fickle audience attitudes towards their films, the studios designed huge cinema palaces with velvet brocade on the walls, crystal chandeliers on the ceiling and plush (although tightly-packed) chairs on the floor. If you couldn’t beat the studio competition with the subject matter of the film at least you could give them a run for their money with grand spectacle and attract audiences based on the social interaction aspects.
Legions of psychologists were employed by the movie mavens in Hollywood just to advise the studio on the best colors for walls, how big should the screen be, viewing angles, seat height, how loud should the sound be, etc. One studio, MGM, actually went so far as to offer scholarships to its junior executives for Psych 101 night classes!
There wasn’t much competition for discretionary entertainment dollars in those days - radio was free and theatre was only in the big urban centers and catered solely to the elite. “Going to the movies” was a fairly new experience for people and it was relatively cheap, at least by pre-Depression-era consumers’ standards.
Some studio-owned theatre chains grew to immense proportions - thousands of theatres in some cases. Although the audiences probably didn’t care, those studios continued to reap huge profits from their theatres even though admission itself was inexpensive - such was the popularity of the medium.
Finally, the smaller production companies, in concert with ‘indie’ distributors and small theatre chains prevailed upon the American government to enforce the laws regarding monopolies and end studio ownership of the theatres. They succeeded. An ‘entertaining’ version of the separation of church and state, so to speak.
Why do I mention this…? Because the very same thing happened in television for exactly the same reasons more than thirty years later in 1970. How the instigation of Fin-Syn (I’ll describe what that was in the next chapter), and its eventual repeal, affected the business of television and especially its content, directly impacts the Internet today.
During the ‘salad days’ of television — the 1960s — the networks had an ownership lock on the programming, the broadcast signals and most of the TV stations nationwide that carried those signals. These TV stations were, for the most part, owned and operated (O&O) by the Big Three networks. This meant that the network brass could dictate to the O&Os what programming they could broadcast and when. Since these O&Os covered the vast majority of the populace through primarily urban centers, the smaller, independent stations could hardly compete.
So, the networks created the content and delivered the content to their own stations. Because they owned the content too they would only distribute (syndicate) it to other stations if and when it suited them and only with inflated syndication fees attached.
This situation was exacerbated by two other problems the smaller stations had to contend with.
One, the programming that was actually deemed ‘distributable’ by the networks was the “B” grade material, not the good stuff, not the programs that got the top ratings. CBS, for instance, refused to let either The Lucy Show or The Dick Van Dyke Show out of their sight. Lucille Ball and Dick Van Dyke were network-owned franchises worth millions in repeat advertising dollars. Why syndicate them, even at inflated rates, only to allow other TV stations, some of them potential rivals, to reap the benefits…? This was not just the thinking at the time; it was the practiced gospel.
Advertisers had a far greater influence over programming then than they do today. When The Dick Van Dyke Show debuted in the Fall of 1961, CBS wasn’t happy with its performance and cancelled it before the end of the season. Proctor and Gamble was the anchor advertiser. They loved the show and were so upset with the decision to remove it that they threatened to do likewise with their advertising… all of it, for the entire network. Since Proctor and Gamble were the underwriters for two of CBS’s highest rated afternoon soap operas — not to mention other programs scattered throughout prime time — CBS wisely relented and the show went on to run for six successful seasons.
As an interesting ‘historical’ note, Johnny Carson was actually hired for the lead role of ‘Rob Petrie’ but decided instead to replace Jack Paar on The Tonight Show thereby solidifying his place, and that of Dick Van Dyke, in television history.
The second problem was this: The networks owned the larger stations, true. But they also owned most of the smaller stations as well and controlled the vast majority of prime time space everywhere (7:30pm to 11:00pm). Where would these smaller stations run the syndicated shows even if they could get them…? They didn’t have access to prime time slots. The networks had it all. Period.
Enter, the FCC.