In the early 1900s, the MPPC was dominating the film industry. Around 1912, more independent films were being created and the celebrities in these films began demanding for higher salaries and even started to produce on their own.
A producer named Carl Laemmle was determined to start his own company, and in 1915 he opened Universal City, which was a studio located north of Hollywood. In 1914, W.W. Hodkinson combined 11 studios in order to form Paramount, which was the first company dedicated only to feature films. The Jesse L. Lasky Feature Play Company was also created in 1914. Adolf Zukor eventually took over Paramount, and the contributions he made were a major part of combining small American producers with larger film companies.
Paramount was soon controlling celebrities such as Gloria Swanson, Mary Pickford, and Douglas Fairbanks. They also controlled top directors like D.W. Griffith, Mack Sennett, and De Mille. In 1913, Sam, Jack, and Harry Warner formed the Warner Bros. By 1918, they began producing their own films. William Fox formed the Fox Film Corporation, later renamed 20th-Century Fox. Then, in 1924, MGM was created, composed of three smaller companies (Metro, Goldwyn, and Mayer).
Paramount was definitely monopolizing the film industry, producing about 100 features a year, and requiring that theatres showed all of them. Soon, an uprising of smaller exhibitors came about, and organized the First National Exhibitors Circuit. They supplied many films to different theatres across the nation. In response to this threat, Zukor began to purchase theatres for his own company in 1919.
Vertical integration was an important factor that contributed to Hollywood's growing power. In conclusion, no other country developed a studio system that was stronger than the United States.