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A studio system is a method of filmmaking wherein the production and distribution of films is dominated by a small number of large movie studios. It is most often used in reference to Hollywood motion picture studios during the early years of the Golden Age of Hollywood from 1927 (the introduction of sound motion pictures) to 1948 (the beginning of the demise of the studio system), wherein studios produced films primarily on their own filmmaking lots with creative personnel under often long-term contract, and dominated exhibition through vertical integration, i.e., the ownership or effective control of distributors and exhibition, guaranteeing additional sales of films through manipulative booking techniques such as block booking.
During the Hollywood Golden Age, eight companies constituted the major studios that promulgated the Hollywood studio system. Of these eight, five were fully integrated conglomerates known as the original Big Five, combining ownership of a production studio, distribution division, and substantial theater chain, and contracting with performers and filmmaking personnel: Metro-Goldwyn-Mayer (owned by Loews Incorporated, owner of America's largest theater chain), Paramount Pictures, Warner Bros., 20th Century-Fox (later renamed 20th Century Studios after its Disney acquisition brought back the Big Five for the first time since then), and RKO Radio Pictures (the last of these five, which emerged in 1928). Also at this time, two of the Little Three major-minors (Columbia Pictures and Universal Pictures) were similarly organized, though without more than small theater circuits, and the third (United Artists) owned a small number of theaters and had access to two production facilities owned by members of its controlling partnership group, but it functioned primarily as a backer-distributor, financing independent productions and releasing their films.
The studio system was challenged under the antitrust laws in a 1948 Supreme Court ruling which sought to separate production from the distribution and exhibition and ended such practices, thereby hastening the end of the studio system. By 1954, with television competing for audience and the last of the operational links between a major production studio and theater chain broken, the historic era of the studio system was over.