The mediocrity of millions of dollars was the backbone of Hollywood.  While many today refer to the May Court`s decision, in reality, it was Hughes` agreement with the federal government – signed on November 8, 1948 – that really sounded the death knell for Hollywood`s golden age. Paramount quickly capitulated and entered in February after a similar order of approval. The studio, which had been fighting divorce for so long, was the first big one to rise prematurely and finalize the sale on December 31, 1949. At that time, there were 19,000 theaters in the United States.  In addition, foreign sales would decrease significantly. At that time, silent films were easily sold abroad. But the dialogues were another story. The dubbing of a foreign language was still conceived as a project that would take place in the near future. If studios accepted sound, this would also apply to musicians who have found employment in cinemas because they would have to be fired. For all these reasons, Hollywood hoped that The Sound would be a simple thing, but five major studios decided to take action.
Under the 1930 Paris Agreement, 25% of the UK market was reserved for Tobis sound film equipment, while 75% was owned by American companies. But Tobis encountered technical difficulties because it had allied itself with the small British Phototone and could not exploit its market share. Several British companies offered cheaper sound outfits, but these allowed poor reproduction. The British company Thomson-Houston (a subsidiary of General Electric) introduced reliable equipment in 1930, but ranked third behind the two American companies in terms of the number of cable theaters. Until 1933, all but the smallest British cinemas were capable of reproducing sound. It all starts with what will always be called the Big Five Studios. These were five major film studios responsible for the classic Hollywood system. These included Metro-Goldwyn-Mayer, Warner Bros., Paramount, Fox and RKO. All were “vertically integrated”, meaning that production, distribution and exhibition were managed “in-house”. Since each company`s cinemas would have to show films from other companies, the absence of common standards would harm society. In February 1927, they signed the agreement of the Big Five and undertook to act together in a doping system that proved beneficial.
The two main options were the Western Electric Sound-on-Disc and the RCA film sound system. By 1928, Western Electric also had film technology – and offered cheaper contracts. The Big Five opted for the Western Electric System. But behind the scenes of the RKO, long the most financially fragile of the conglomerates, the court`s decision was seen as a development that could be used to the studio`s benefit. The same month the decision was made, multimillionaire Howard Hughes acquired a majority stake in the company. When RKO controlled the fewest cinemas in the big five, Hughes decided that the appearance of a domino divorce effect could help put his studio on an equal footing with its competitors. Hughes has told the federal government that it intends to issue a licensing order requiring the cessation of its film operations. Under the terms of the agreement, Hughes divided his studio into two entities, RKO Pictures Corporation and RKO Theatres Corporation, and committed to sell his shares in both companies on a certain date. Hughes` decision to admit the divorce undermined the lawyers` argument for the rest of the Big Five that such separations were not feasible. One of the techniques used to support the studio system was block reservation, a system where several films were sold in a cinema. The Majors (“Big Five” and “Little Three”): Between 1930 and 1948, the 8 Majors controlled 95% of the films exhibited in the United States: a true oligopoly Such a unit – five films were standard for most of the 1940s – usually contained only one particularly remarkable film, the rest being a mixture of low-budget A-images and B films.  As Life magazine wrote in a 1957 retrospective on the studio system, “It was not good entertainment and it was not art and it was not art, and most of the films produced had uniform mediocrity, but they were also uniformly profitable.
In addition, sales abroad would suffer a drastic decline. At that time, silent films were easily sold abroad. The dialogues, however, were another story. The synchronization of a foreign language was still conceived as a project that would take place in the near future. If studios adopted Sound, it would also affect musicians who find jobs in cinemas because they would have to be fired. For all these reasons, Hollywood essentially hoped that the sound would be a mere temporary novelty, but five major studios decided to take action. After the 1930 Paris Agreement, 25% of the UK market was reserved for sound film versions of Tobis, while 75% was owned by American companies. But Tobis encountered technical difficulties because it had allied itself with the small British Phototone and had not been able to exploit its market share.