(2). These would include collective bargaining for labour, and the introduction of a minimum wage an a maximum of hours worked. Form these seeds grew the oligopolistic control operated by the studios which came to be known as the "Big Five?.
On November 27th, 1933, the code of Fair Competition for the Motion Picture Industry, was passed into law. This would benefit the five major studiosParamount, Loews Inc. (MGM), Twentieth Century-Fox, RKO and Warner Brothers. They would come to dominate the industry by dint of vertical integration. Not only were they the largest film producers, but there control came from owning profitable exhibition circuits and over more than seventy per cent of first-run theatres in the major cities. By having access to these plum sites their position was strengthened to the point of being unchallangeable from smaller concerns. Their position as distributors was equally formidable amongst independent exhibitors, who were now forced to accept what the majors offered as a package in order to screen the more popular money-spinning films.
The powerful studio heads (see footnote ) saw exhibition as the key to profit and control. Exhibiting each other's product, as well as those of the "Little Three?(Columbia, Universal and United Artists), was to each others advantage. Due to the expansion of theatre construction, each individual company could not expect to produce enough films to limit, for example, Fox material solely for Fox cinemas; therefore, this willingness to exhibit each other's product merely increased the profits and power. The "Big Five? courtesy of vertical integration, produced a film, distributed it, and controlled the exhibition. Five per cent of profits came from production, one per cent from distribution, while the rest was generated by exhibition. It is little wonder why the studio moguls placed so much importance on the latter.
Such was the major domination over the independent exhibitors that were able to control what was shown by "zoning?and "blind/block booking? In order to maintain a high profit motive, the majors insisted on certain films to be only shown in particular areas, or "zones? for a specified time.