The History of Hollywood: How It Became the Center of the Film Industry. It might be hard to imagine now, but at the turn of the 20th century, Hollywood was a quiet agricultural community. The question many film enthusiasts still ask is: Why did the film industry settle in Los Angeles, specifically Hollywood?
The answer is a combination of weather, distance, and legal freedom. In the early 1900s, filmmakers were escaping the stronghold of Thomas Edison’s Motion Picture Patents Company (MPPC), based on the East Coast. Edison’s firm aggressively enforced patent laws that limited creative and technical freedom.
California—being thousands of miles away—was not only safer legally but also ideal in terms of consistent natural light and diverse landscapes, perfect for shooting year-round. By 1910, film companies like Biograph began filming in California. One of the earliest major motion pictures shot entirely in Hollywood was In Old California (1910), directed by D. W. Griffith. That short film marked a pivotal moment, proving that Hollywood had the potential to become a film capital.
📍 Read more about the Edison Trust and its influence on early filmmakers in this Library of Congress article.
🏛️ The Rise of the Studio System
By the 1920s, Hollywood transformed into a full-fledged movie factory. This era saw the emergence of the Studio System, a method of film production where studios controlled every aspect of filmmaking—from writing and casting to distribution and exhibition.
The major studios that shaped this era were:
- Paramount Pictures
- Warner Bros.
- Metro-Goldwyn-Mayer (MGM)
- 20th Century Fox
- RKO Pictures
These were known as the “Big Five”, and they each owned their own theater chains, ensuring that their films were shown nationwide. Alongside them were the “Little Three”—Universal Pictures, Columbia Pictures, and United Artists—which had less control over exhibition but were still key players in shaping American cinema.
These companies created what’s now remembered as Golden Age Hollywood, producing hundreds of films a year and developing a stable of iconic stars through long-term contracts.
🔗 Explore the timeline of Hollywood studios in this American Film Institute resource.
🎥 Star Power: Creating a Dream Factory
By the 1920s and ’30s, the celebrity system became a core marketing tool. Studios manufactured fame by carefully crafting the public personas of actors like Greta Garbo, Clark Gable, Katharine Hepburn, and Humphrey Bogart.
But this wasn’t just about gossip and glamour. Star-driven films created brand loyalty. Audiences went to see “a Bogart movie” or “a Hepburn performance,” and the studios capitalized on that. This strategy built Hollywood’s global identity as the land of stars and dreams.
The marketing machine went beyond posters and trailers—stars appeared in magazines, newsreels, and radio broadcasts. The public’s obsession with their favorite actors solidified Hollywood’s cultural dominance well beyond U.S. borders.
📺 Want to explore how stars were made? Check out the Margaret Herrick Library archives.
🌍 Hollywood Goes Global
While other countries had vibrant film industries (Germany, France, Italy), Hollywood’s power rested in its global export. Especially after World War I, the U.S. became the dominant economic power, and with that came cultural exports—none more powerful than cinema.
Hollywood studios began distributing films internationally in the 1920s, using their vast resources to dub and subtitle content for markets abroad. The post-WWI economic turmoil in Europe allowed American studios to step in with big-budget productions, which local industries couldn’t match at the time.
This strategy established Hollywood as not just a national powerhouse, but the central hub of global filmmaking, setting trends in fashion, behavior, and storytelling that influenced audiences worldwide.
🔗 Read how Hollywood shaped global culture in this BBC Culture article.
🌟 The Golden Age of Hollywood: Glamour, Control, and Cultural Domination
By the 1930s, Hollywood had firmly established its golden throne in the global entertainment market. This period, widely known as the Golden Age of Hollywood, was defined by iconic films, rigid studio control, and mass production of content.
Each major studio specialized in certain genres:
- MGM delivered polished musicals and family-friendly dramas.
- Warner Bros. dominated crime and gangster films.
- Universal brought horror classics like Dracula and Frankenstein.
At the core of this system was vertical integration, where studios owned the production, distribution, and exhibition chains. This allowed them to control what movies were made, how they were shown, and who starred in them.
Iconic films like Gone with the Wind (1939), Casablanca (1942), and Citizen Kane (1941) were born during this period, and remain influential to this day.
🔗 Learn more about vertical integration in this Britannica article on the Studio System.
Hays Code: Morality on the Big Screen
Another defining feature of this era was censorship. Introduced in the 1930s, the Hays Code (named after Will H. Hays) strictly regulated the content of films, forbidding portrayals of sex, crime, interracial relationships, or criticism of religion and authority.
Studios conformed to these guidelines to avoid public backlash and ensure wide theatrical release. While restrictive, the Hays Code influenced filmmakers to find creative ways to suggest adult themes without violating the code, giving rise to legendary subtext and innuendo in films from the era.
🔗 Read the full Hays Code rules via the Motion Picture Production Code archive.
🪖 Hollywood During World War II
Propaganda and Patriotism
When the U.S. entered World War II in 1941, Hollywood didn’t hesitate to join the war effort. The government turned to studios to produce propaganda films, morale-boosters, and training videos. Stars like James Stewart, Clark Gable, and Carole Lombard actively supported war bonds and even enlisted.
Films such as Mrs. Miniver (1942), Casablanca (1942), and Sahara (1943) weren’t just entertainment—they shaped public opinion and reinforced national unity.
This era helped further solidify Hollywood’s cultural dominance. By aligning itself with American values and democratic ideals, the film industry became both a tool and symbol of national strength.
📚 Explore the role of cinema in wartime America through this National WWII Museum article.
📺 Enter Television: A New Challenger Appears
After the war, the entertainment landscape changed dramatically. By the 1950s, television entered American homes, offering free, convenient entertainment. Audiences who once went to the cinema weekly began staying home. This shift marked a major existential threat to Hollywood’s business model.
Studios fought back with innovations:
- Widescreen formats (e.g., CinemaScope)
- Technicolor productions
- 3D technology
- Epic blockbusters like The Ten Commandments (1956) and Ben-Hur (1959)
These techniques were designed to offer something that TV couldn’t: scale, spectacle, and immersive experience.
🔗 Dive into how Hollywood adapted to the TV threat in this Smithsonian Magazine article.
The Paramount Decision: Breaking the Studio System
In 1948, the U.S. Supreme Court issued a landmark ruling in United States v. Paramount Pictures, Inc., which forced major studios to divest their theater chains. This ruling effectively ended vertical integration and disrupted the total control studios had over the industry.
The ruling:
- Freed theaters to choose what films to show
- Encouraged independent production
- Decentralized power, allowing new voices and formats to emerge
It was a crucial turning point that eventually opened the doors for modern, director-driven cinema.
📄 Read more about the Paramount case in this U.S. Department of Justice history.
1960s–1980s: From Crisis to Artistic Renaissance
After the collapse of the studio system and the growing influence of television, Hollywood faced a creative and financial crisis in the 1960s. But from this chaos emerged a revolutionary movement that reshaped cinema forever: New Hollywood, also known as the American New Wave.
This era gave directors unprecedented creative control, allowing them to break traditional storytelling structures and explore deeper psychological and social themes. Inspired by European art cinema (like the French New Wave), American filmmakers challenged conventional norms and addressed taboo subjects, which resonated with the counterculture generation.
Influential Directors and Films
Some of the most groundbreaking names emerged during this period:
- Francis Ford Coppola – The Godfather trilogy
- Martin Scorsese – Taxi Driver, Raging Bull
- Stanley Kubrick – 2001: A Space Odyssey, A Clockwork Orange
- George Lucas – Star Wars
- Steven Spielberg – Jaws, E.T.
These directors not only revolutionized storytelling but also proved that intelligent, bold cinema could succeed at the box office.
💥 The Birth of the Blockbuster Era
Jaws and Star Wars Changed Everything
The release of Jaws in 1975, directed by a then-unknown Steven Spielberg, marked the arrival of the modern blockbuster. It was the first film to leverage nationwide marketing, wide release strategies, and cross-promotional merchandise.
Then came Star Wars in 1977, which became a cultural phenomenon, establishing Hollywood’s obsession with franchises, sequels, and merchandising.
These films:
- Showed that summer releases could dominate box offices
- Created the concept of the event movie
- Pushed Hollywood toward spectacle-driven, high-budget productions
🔗 Learn how Jaws redefined Hollywood in this article by The Guardian.
🏆 The Rise of the Oscars and Film Institutions
Building Prestige and Global Recognition
While the Oscars (Academy Awards) had existed since 1929, the post-New Hollywood period gave them new cultural significance. Winning Best Picture became a powerful way to boost a film’s visibility and box office. Films like The Deer Hunter (1978) and Amadeus (1984) solidified the Academy’s influence over cinematic prestige.
The formation of institutions like the American Film Institute (AFI) and Sundance Institute also began during this era. They played a key role in:
- Preserving cinematic heritage
- Encouraging new talent
- Hosting film festivals that spotlight independent creators
These organizations helped Hollywood become more global and diverse, setting the foundation for modern film education and curation.
🔗 See AFI’s list of top 100 films at the American Film Institute’s official site.
🌍 Internationalization of Hollywood
The World Watches Hollywood
By the 1980s, Hollywood had become the dominant force in global cinema. Thanks to advancements in home video (VHS), cable TV, and satellite broadcasting, American films reached households around the globe.
Hollywood began tailoring films for international audiences, leading to global box office dominance. Films like Titanic (1997), Jurassic Park (1993), and Independence Day (1996) grossed more overseas than domestically.
Studios also started collaborating with international production companies, casting foreign actors, and including multilingual content to appeal to broader markets.
🌐 Want to understand how Hollywood conquered the global market? Read this article by The Conversation.
