In 1946, director Frank Capra had an extra pep in his step. With World War II in the rearview mirror and shooting underway on his new movie It’s a Wonderful Life, Capra wanted to do a little boasting about the exciting future of Hollywood cinema. Per the Mark Harris book Five Came Back: A Story of Hollywood and the Second World War, Capra penned a piece for The New York Times in which he predicted that audiences would soon notice a discernible change in the quality of Hollywood movies. “The reason behind this,” Capra explained, “is [that] experienced filmmakers…[are] willing to gamble their hard-earned savings to gain independence.” Capra was betting big on his independent production company, Liberty Films (which was footing the bill on It’s a Wonderful Life) to open up new doors for the kind of films he and others could direct free of the clutches of major studios.
In 1994, Steven Spielberg, Jeffrey Katzenberg, and David Geffen made a splashy announcement that they were joining forces to create a new movie studio. This outfit, which would later be called DreamWorks SKG, was bursting with potential. Spielberg was one of the most acclaimed and lucrative directors in history, while Katzenberg guided Walt Disney Animation Studios into a renaissance. DreamWorks SKG had the potential to offer untold creative freedom to directors and deliver the kind of movies that major studios just wouldn’t touch. Liberty Films would be sold off to Paramount Pictures by the end of the 1940s. DreamWorks SKG would get acquired by Paramount Pictures in early 2006. Neither studio made it, nor did countless other attempts to create new independent movie studios. Liberty Films was a harbinger of the future, of the relentless difficulties facing any new movie studio that wants to offer something different.
Disney, Universal Pictures, and Warner Bros. Are Among the Top Studios
The theatrical American movie scene is dominated by a handful of companies known as “the major studios.” The five outfits comprising this group are Universal Pictures, Columbia Pictures, Warner Bros. Pictures, Paramount Pictures, and Walt Disney Pictures (20th Century Fox was the sixth major studio until it was absorbed into Disney). It’s staggering to consider just how long-running these dominant studios are. Universal Pictures was founded in 1912, Warner Bros. Pictures was created in 1923, and Disney began distributing its own works in 1953. These companies have been around for a long time and in the process have amassed a massive library of titles.
That kind of significant library has been a key reason these companies have stayed “the major studios” for so long. When times get rough and a streak of box office flops hit a studio’s bottom line, Paramount and Columbia can turn to revenue from vintage movies to help keep things afloat. Granted, being an older studio that’s existed since the earliest days of mainstream cinema isn’t entirely enough to keep any company afloat, as MGM and United Artists can attest. But in many cases, having over 100 years of movies to draw from for various forms of post-theatrical release profit has helped these five companies endure as constant fixtures of the American movie scene.
That kind of revenue is important because it only gets more and more expensive each year to make new theatrical movies. In 2015, Warner Bros. Pictures spent $30.6 million alone on TV commercials promoting Entourage: The Movie and another $39.3 million on commercials for the Liam Neeson action film Run All Night. Those are sizable costs before one dives into the amount of cash spent on other parts of the movie ad campaigns or the costs of the movies themselves. All that coin is chump change for a studio as massive as Warner Bros. Pictures. But for newbie studios like DreamWorks SKG, Relativity Media, or Aviron Pictures, it’s incredibly difficult to launch those kinds of costly marketing campaigns for just one movie, let alone the average 10 or 12 movies somebody like Paramount launches in a normal year. Those financial problems plaguing independent movie studios have only grown in the modern world, but they’re nothing new. Just ask Liberty Films.
‘It’s a Wonderful Life’ Ignited Liberty Films’ Downfall
Moving back to the 1940s, Liberty Films, circa. 1945, was full of grit, spit, and vigor. In August 1945, the studio announced that its works would be distributed by RKO, with the RKO Lot also being the home for where many of its films would be shot. This deal also revealed that Liberty Pictures was planning to make nine films to be released by RKO. This deal mirrors later partnerships that independent studios like Lucasfilm, DreamWorks Animation, or even FilmDistrict would engage in with larger studios. These outfits would own the underlying copyright of their projects, and studios with bigger pockets would just help mount costly promotional pushes for these productions in exchange for a portion of their box office returns.
Per Five Came Back, Capra’s initial ambition for the very first Liberty Films production was to deliver a remake of a comedy he helmed back in 1934 called Broadway Bill. Rights issues led to him taking on It’s a Wonderful Life as the very first Liberty Films project instead. Today, It’s a Wonderful Life is a beloved classic, a Christmastime staple held up as one of Capra’s most enduring and beloved works. But during its production, It’s a Wonderful Life was a contentious project. Chiefly, the movie had a sizeable $3.1 million budget, a costly haul for a movie back in 1946. For comparison’s sake, Gone with the Wind cost only $800,000 more seven years prior and that was a much more expansive romantic epic.
With such hefty costs at its back, it’s no wonder the film failed to turn a profit in its initial theatrical release. That was deadly for Liberty Films, a company that desperately needed every single movie to be a hit right out of the gate. Instead, it now had to contend with the losses of It’s a Wonderful Life in addition to the ongoing struggles of getting a consistent slate of movies out to the public. Much like how the costly failure of The Golden Compass heralded the end of New Line Cinema and Heaven’s Gate ushered in the collapse of United Artists, It’s a Wonderful Life helped to spur the demise of Liberty Films. Per Five Came Back, Liberty Films would be sold to Paramount Pictures by 1948. Capra was miserable over selling a studio near and dear to his heart, but it was the only way to regain some financial stability for himself and the other men who’d put so much cash into this studio. That same year, the second and last Liberty Films title, State of the Union, would hit theaters. With its release, Liberty Films was now dead in the water.
We Need More Outfits Like Liberty Films
There’s a reason Capra’s sentiments in that column waxing poetic about the virtues of Liberty Films feel so relevant in the modern world. Independent film producers are necessary and downright essential to cut through the clutter of mainstream American cinema. Studio films are not inherently bad, but they’re often titles produced to reinforce the status quo and just serve audiences more of what they’ve seen before. For every Mad Max: Fury Road that Warner Bros. put out in 2015, it also put out titles like Hot Pursuit and Get Hard that hammered home various forms of “othering” of members of the LGBTQIA+ community. This was already a problem in the 1940s. One can only imagine how bad this issue has become in a modern monopolistic cinematic landscape where Disney can buy 20th Century Fox without any consequences.
This tragically enduring status quo just underscores the necessity of independent studios. Would any major studio in the 1940s have taken on a chance on the complicated tone of It’s a Wonderful Life? Shifting to the modern world, would any studio beyond independent financier Annapurna Pictures have given Paul Thomas Anderson the money to make The Master? Even Open Road Films, a studio more well-known for unleashing The Nut Job on the world, was still responsible for distributing the challenging drama Spotlight. A fascinating paradox is at play with these studios. Their lack of extensive stockholders and big corporate owners means they have the flexibility to take a chance on riskier titles. However, that lack of financial security means they also rarely last long.
Despite the Financial Woes, ‘It’s A Wonderful Life’ Is a Christmas Classic
The innate financial precariousness of independent studios, how quickly the costs of producing and releasing new movies catch up with these outfits, and even how often they end up absorbed into larger major studios, were apparent in the struggles of Liberty Films. However, they’re also factors all too familiar with modern stabs at independent film studios like STX Entertainment, Relativity Media, DreamWorks SKG, and countless others. All of these companies were attempting to respond to creative stagnancy in mainstream cinema by offering fresh titles that the major studios won’t touch. All of these outfits were also capsized by uber-costly projects and the innately expensive nature of releasing movies in North America. In some ways, the game is rigged from the get-go in favor of the major studios. How could any newbie studio like Aviron Pictures hope to conjure up the massive marketing dollars Warner Bros. and Universal can just conjure up on demand?
If there’s any consolation here, it’s that the art Liberty Films and other independent studios produced has gone on to have extremely long shelf lives. It’s a Wonderful Life is now a part of many people’s holiday season traditions. Meanwhile, Annapurna’s ambitions of being a standalone distributor are dead, but its titles like Sorry to Bother You and If Beale Street Could Talk still garner new fans each year. Even a studio that sounds like a fake film studio from a sitcom, CBS Films, distributed the enduring modern classic Inside Llewyn Davis. By producing art that leaves an impact on people, Liberty Films and other independent studios have managed to, in their own way, survive and even thrive. Even if these studios didn’t last long, their essentiality is seen by how impactful long-term many of their releases were. In other words, these are just the kinds of quality, unexpected films that Capra was hoping Liberty Films would make in that fateful New York Times op-ed.
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