In the United States there are 17,500 movie theaters in operation, one for every 8,000 people. Out of a total U.S. population of 130 million, it is estimated that 55–60 million Americans go to the movies every week.
As more and more families move to the edges of the urban areas and become commuters, the Motion Picture Herald reports, “a substantial part of the future of motion picture exhibition lies in the suburbs.”
In response to the government’s antitrust campaign against Hollywood ‘s movie studios, the Justice Department and the Big Five studios hammer out a consent decree. Block booking of films will continue, but in blocks no larger than five films; trade shows and advanced screenings will be held for exhibitors; and finally, the major studios agree not to expand their holdings without federal approval.
Because of the 1940 consent decree’s restrictions on block booking, more pressure than ever is being put on film stars to sell pictures. The top five Hollywood stars in 1940 are: Mickey Rooney, Spencer Tracy, Clark Gable, Gene Autry and Tyrone Power.
A trend is beginning for movie producers, directors and stars to break away from long–term contracts with the major studios and either become freelance agents or start their own independent production companies. Distributed and usually financed by the major studios, these independent production companies provide the studios with a steady stream of needed “A” class pictures without requiring that the studios expand their facilities or their payrolls.
George H. Gallup creates the Audience Research Institute (ARI), (later called “Audience Research Incorporated”) , devoted exclusively to the study of the movie industry and its audience. ARI’s first client is RKO.
Charlie Chaplin releases “The Great Dictator”. This is the first film in which Chaplin’s character speaks dialogue, and the movie is a damning verdict on Fascism.
MGM releases “The Philadelphia Story”. Directed by George Cukor, and starring James Stewart and Katharine Hepburn, the film sets box–office records at Radio City Music Hall and is nominated for six Academy Awards, winning two.
Disney releases the sweeping, feature–length musical cartoon “Fantasia”. With the collaboration of Leopold Stokowski, Disney experiments with stereophonic sound.
20th Century–Fox releases “The Grapes of Wrath”. Directed by John Ford, and starring Henry Fonda and Jane Darwell, the film is nominated for 14 Academy Awards.
David O. Selznick releases “Rebecca”. Starring Laurence Olivier and Joan Fontaine, this is Alfred Hitchcock’s first American movie. It wins the Academy Award for “Outstanding Production”.