"The Independent Producer"

By Donald M. Nelson, 1947

The following article was written by the president of SIMPP at a time when independent production had peaked following World War II. This was written at a difficult time for the independent movement, as the film recession in the late 1940s sent many new independents back into the studio system, and many predicted the independent boom would fizzle. Donald Nelson offers a valuable look into the role of the independent producer in old Hollywood, and presents an interesting historical overview beginning with the father of the independent movement D. W. Griffith. The article also has an unofficial list of top grossing movies; six of the ten all-time champs are independent films.

"A poor juggler once joined a monastic order—so the story goes—and grew very sad because he had none of the talents with which his learned brother friars so easily and obviously won the friendship of God. Finally, he determined to make an offering of the only thing he had, his skill at juggling. The friars were horrified to find him on his knees performing his lowly art before the altar in the chapel. They were about to stop him when they beheld an apparition of the Virgin Mary looking on and apparently accepting the homage of the juggler with maternal approval.

It's an apocryphal story, of course, but I have always been fond of it because it illustrates so well one of the truly remarkable things about human nature, which Shakespeare put very adroitly into the advice of Polonius to Laertes and Ophelia: "To thine own self be true, and it must follow, as the night the day, thou canst not then be false to any man."

FREE ENTERPRISE IN HOLLYWOOD

The fact of the overwhelming human yearning for individual integrity in every walk of life—the desire for expression of one's own talents, whatever they are, because they are one's own—constitutes for me the most important single factor in the remarkable Hollywood phenomenon which we know as the independent producer of motion pictures. From the men who make the low-budget "quickies" costing barely a few thousand dollars, to the men who make the most expensive of productions running into millions of dollars, there is apparent this single common denominator: a fierce love of freedom of expression which here in America translates itself into the great system of economy known as freedom of enterprise.

I found the phenomenon of independent production fascinating long before I accepted, in June 1945, the invitation of a committee representing the Society of Independent Motion Picture Producers[1] to serve as their president. As a businessman and a merchandiser, I have always believed that one of the principal factors in the overwhelming success of the American economy has been the factor of individual freedom as expressed by the man who is the true cornerstone of free enterprise, the small businessman of America. During the war I had some opportunity to study the methods and the techniques of independent production in Hollywood. I soon became convinced that there was the closest spiritual and economic affinity between the small manufacturer and the small merchant on the one hand, and the independent producer on the other hand.

Nunnally Johnson

Spiritually, this affinity finds its expression in the increasing number of actors, writers, directors, and producers who have left the protective, and often stultifying, arms of the large business combines known as the major studios to go into production on their own. Nunnally Johnson, one of the most capable of Hollywood writers, tries to express it this way: "There is a difference when you are completely on your own. It's hard to explain except as a sort of personal satisfaction in being able to follow the thing all the way through."

In brief, the spiritual advantage to independent production is the opportunity for full artistic expression with the full risk of failure or success which such venture implies. Economically, the rewards of success are great. I am told, for instance, that "Arabian Nights," in which Walter Wanger invested $900,000, returned the distributor $4 million and netted Mr. Wanger $1,241,000. The consequences of failure are commensurate. The road to Hollywood success is literally strewn with the career bones of those who failed to make the grade. The profit motive, of course, is as strong in Hollywood as it is anywhere else in the world. I do not believe that it is the sole or even the dominant motive, no matter how welcome or great the financial return. Time magazine once offered this interesting analysis, which I believe approaches the truth, since rare is the human being who is all-idealist and equally rare the one who is all-materialist. Time reported on November 5, 1945:

For years the major studios, by controlling distribution, had been able to force exhibitors to take four or five grade B pictures for one star-studded hit. To many a Hollywood artist, this situation was intolerable; they wanted to make better pictures. Led by such stalwarts as Nunnally Johnson, Fox's highest paid writer ($3,500 a week), the gilded slaves quit to start their own corporations.

FORGOTTEN HERITAGE

A study of independent motion picture production discloses that the independent has been a factor in Hollywood since the birth of the industry. Indeed, it would not be too facetious to say that all producers at the very outset were independents, but who, as they grew in stature and power, yielded to the almost universal human weakness of attempting to seize almost universal power over the sphere of their activity. I recall hearing a conversation between a businessman and one of the truly big men of Hollywood, one of a family of immigrants, who came to the United States penniless and built an amazing motion picture empire. The discussion centered around the merits of the present system. The businessman was trying to point out how the system had to be changed to give the independent producers free access to the market. The screen magnate was unconvinced. Finally, the businessman brought home a point I shall never forget: “You came to this country a poor immigrant boy from Europe, didn’t you?” he asked. "All you wanted was a chance to prove your worth in a free and open competition. You got that chance and you made good. Now, would you deny that same chance to other boys like yourself?" The motion picture executive went away thoughtfully silent. The chance for self-expression in free competition, regulated by one's own ability, and by well-defined rules essential to any harmonious and healthy society (laws intended to keep the markets free and open from monopoly), has been one of the factors of environment in which independent production has always flourished. It is true, of course, that the condition of the box office has been of great importance. It takes a hardy, if not a foolhardy, person to stay out in the open during a severe storm. There have been times of business recession when few independents ventured into picture production. There have been times of great plenty when the number of such venturers was legion.[2]

Although I believe that a real affinity exists, both in spirit and in economic structure, between the small businessman and the independent producer, I am mindful of the fact that many of the independent producers of Hollywood are no more small than some of the independent manufacturers and merchants operating under our economy. The annual production of David O. Selznick runs into eight figures (released 1947 estimate: $12 million), and Samuel Goldwyn's is not far behind. The annual budget of nearly everyone of the 25 members who comprise the Society of Independent Motion Picture Producers will not drop below seven figures then he is in production. The classification of “small business” fits them (as well as other independents) because they are small in relation to the so-called “majors” like Metro-Goldwyn-Mayer, Twentieth Century-Fox, or Warner Brothers. For instance, the economic power of all of the members of all of the members of the Society together may not exceed that wielded by M-G-M alone. There are, however, other characteristic and more specific differences. An independent producer may be defined as one who finances his own pictures and owns no distributing company or theaters where he may exhibit his pictures.

The so-called majors are the large combines which attempt to control every phase of the economic life of a picture, from its birth on the sound stages to the actual delivery to the consumer. In fact, the interests of the majors in the exhibition of pictures have grown so enormous that in many cases the profits from ownership or control of theaters exceed their profits from production. The extent to which this control affects the independent producer (and the independent theater owner, as well as the public) is so marked that the United States Government has taken official cognizance of it in a manner which will be discussed later. Here it should be noted that the independent producer has exercised the same salutary effect on the motion picture industry since its inception that the small businessman has exercised in stimulating competition, therefore benefiting the consumer through price, quality of product, and efficiency in production and distribution.

The facts of the independents' contributions to the motion picture industry are almost incredible in the light of their share of the box-office returns. The 1946 income of the industry was over $1 billion.[3] It would be reasonable to estimate that about one-tenth, or $100 million, was the gross income of independents. (Some authorities believe the share of the independents may run as high as one-eighth, or $125 million.) Although the production of the independents and the majors are in the ratio of one to ten, six of the ten greatest box-office pictures of all time were made by independent producers.[4]

AWARDS WON BY INDEPENDENT PRODUCERS

The greatest distinction that can be conferred on a Hollywood motion picture is its selection by the Academy of Motion Picture Arts and Sciences as the picture of the year. This is a democratic procedure in which seventeen hundred members of the academy cast secret ballots for carefully screened nominees, the results then being tabulated with equal secrecy by a competent certified public accounting firm in Los Angeles. Of the last seven Academy Award pictures, three were made by independents.[5] The record for the highest number of Academy Awards—eight out of 18 possible awards—given to any one picture is held by an independent, David O. Selznick, for "Gone With the Wind." An independent, Samuel Goldwyn, is tied with Leo McCarey [6] for the second highest record, seven out of 25 possible awards.[7]

The highest and most coveted award in Hollywood is the Irving M. Thalberg Memorial Award which is presented by the Academy of Motion Picture Arts and Sciences to a producer for merit so exceptional that the presentation is not made on an annual basis but only in years when the Academy Board of Governors believes it is deserved. Only six men in Hollywood history have been judged worthy of this Thalberg "Oscar." Of the six, three were independents.[8]

Cecil B. DeMille, who operated as an independent studio and semi-independent production company at Paramount. (Aberdeen collection).  To purchase Aberdeen photos for reprint purposes click here.

PIONEERS IN THE INDUSTRY

The Academy of Motion Picture Arts and Sciences, arbiter elegantiae of the film world, owes much of the motivation for its birth to the leading independents of the day. Douglas Fairbanks, Sr., was its first president. Mary Pickford and Cecil B. de Mille were among the founders. Both Miss Pickford and Mr. de Mille are still among the most active independents in Hollywood. The de Mille claim might be open to challenge as he produces for Paramount, a major, but he has always been a true independent in spirit. To Fairbanks, Sr., the industry owes both a technical and spiritual debt. He did a great deal to revolutionize early picture techniques with film like "Robin Hood." At the same time, he helped Hollywood gain increasing stature abroad. In 1921 he toured Europe and Africa with Mary Pickford on what was the forerunner of all good-will tours by American film celebrities. They were acclaimed, literally, by millions of ardent fans. In 1939 the Academy of Motion Picture Arts and Sciences took cognizance of the industry's debt to Fairbanks with a special commemorative award.

The effect of such independents as Fairbanks on the foreign distribution of American films cannot be overemphasized. Before the war, 40 per cent of the gross income of the American screen came from overseas exhibition. The popularity abroad of such stars as Fairbanks and Miss Pickford and the popularity of the pictures they produced were most instrumental in creating the foreign appetite for American film fare.

D. W. Griffith, photo taken while operating as an independent producer for the Mutual Film Corp. (Aberdeen Collection).  To purchase Aberdeen photos for reprint purposes click here.

A giant among such popularizers in the early days was another independent, D. W. Griffith. The story of D. W. Griffith and his venture into independent production in 1916 with "The Clansman," better known as "The Birth of a Nation," is especially interesting because of world film competition today, when quota restrictions are being applied against the American product, and British films are attempting to challenge American leadership on a global basis. In the days of Griffith, French and Italian pictures were assuming world leadership, and presented a threat to the infant American industry. Hollywood frowned on stories with American history themes and favored either foreign films or stories with a foreign background. When, therefore, Griffith proposed to produce a picture dealing with the American Civil War, he was confronted with immediate opposition. Some leaders of the industry, who, according to competent authorities, even in 1914 showed a tendency toward “creative standardization,” went so far as to try to block both the production and the distribution of “The Birth of a Nation” on a road-show basis at two-dollar admissions, Griffith succeeded beyond the expectations of his own associates. The picture made money; but it did far more. It gave the American film a new dignity and prestige soon was reflected in the world market, a benefit in which the industry has been sharing to this day.

Another remarkable and revolutionary effect on world acceptance of the American motion picture—one might also say on world friendship toward the American people—was made by Walt Disney. The creation of an entirely new and unusual medium of art, the film cartoon, has been a Disney creation of which independents are justifiably proud. The friendly animation of such characters as Mickey Mouse and Donald Duck and the beautiful fantasy of “Snow White” and “Fantasia” have revealed to the world a side of America which people of all languages have taken to heart. Recently Disney has pushed the cultural frontiers of America even farther by penetrating for the first time the native Hindu market with a special version of “Bambi,” in which even the music is dubbed in Hindustani. Disney’s rewards from the industry have been many. In 1931 he received a special Academy Award for the creation of Mickey Mouse. In 1938 the Academy conferred special honors on “Snow White and the Seven Dwarfs,” calling it “a significant screen innovation which has charmed millions and pioneered a great new entertainment field for the motion picture cartoon.” In 1941 a special Academy Award was presented to Disney for “outstanding contribution to the advancement of the use of sound in motion pictures through the production of ‘Fantasia.’ ” That same year Disney won the coveted Irving M. Thalberg Award.

The contributions to the industry of other independents have been noteworthy. An in dependent, Charlie Chaplin, created a new technique of film writing, a brilliant method of dissolves and fade-outs, in “The Woman of Paris”; and regardless of the side on which an observer finds himself in the controversy over the new Chaplin picture, "Monsieur Verdoux," it cannot be denied that there is an independence of spirit and a daring exhibited here by an artist who stakes a high artistic reputation on the outcome of an experimental film. One of the most interesting stories in the industry of a remarkable transformation from artist to business executive relates to another independent, a pioneer in the industry and long-time partner of Mr. Chaplin. Miss Mary Pickford was the first motion picture actress to attain world acclaim for her superb artistry. To the best of my knowledge, she is the only woman artist who has achieved greatness in the arts, and who has gone on to greatness in the world of business and finance. It was Miss Pickford who, with Douglas Fairbanks, was instrumental in organizing United Artists Corporation, which has served as the major releasing agency for the pictures of independent producers. The names Goldwyn and Selznick are among the most distinguished in Hollywood. The biggest of the majors, MetroGoldwyn-Mayer, still bears the imprint of Goldwyn in its very name.[9] It is a most eloquent tribute to Mr. Goldwyn's genius that he is probably best known in Hollywood as the producer who has never made an inferior picture.[10]

The first independent film company ever run by a Selznick was the Clara Kimball Young Film Corporation. Lewis J. Selznick, President and General Manager. (Aberdeen Collection).  To purchase Aberdeen photos for reprint purposes click here.

The Selznicks have been a factor in Hollywood for over 30 years. The late Lewis J. Selznick, father of David and Myron, was one of the founders of Universal and the founder of Republic Pictures. As early as 1916, he formed an independent company for Clara Kimball Young. What gives significance to these historical facts is the parallel they offer between father and son and the independent strain which they bring to light in the Selznick blood. David, already qualified by virtue of production standards as one of the great artists of the industry, exhibits equally great business ability and initiative. When he parted company in 1946 with United Artists Corporation, in which he held a partnership with Charlie Chaplin and Mary Pickford, he was faced with the tremendous problem of marketing the costliest picture he ever made—"Duel in the Sun," the production plus advertising costs of which were $7 million. The Selznick answer to the problem was as dramatic as the man. Instead of begging one of the majors for their distribution facilities, he hired one of the best distribution men in the country, Neil Agnew, and formed his own company, which he called S.R.O. after the old symbol of box-office success (Standing Room Only). Not content with thus creating a new high-gear distributing company in a suicidally competitive field, Selznick displayed further daring in launching an experiment in mass exhibition by simultaneous showings of "Duel in the Sun" in cities throughout the United States.[11] In six months box-office receipts equaled $9 million, so that in the domestic market alone, Selznick, starting from scratch in distribution, not only made up the cost of "The Duel" but actually exceeded it by $2 million.[12] Men like Selznick and Goldwyn have been among those who have spearheaded the independents of Hollywood. Others included Sol Lesser, who formed his first independent producing company in 1916 and is still making quality pictures under his own banner, and Hal Roach, whose comedies were among the best and the earliest on the screen but who is still experimenting with new formats, his newest and most talked-about venture being comedies of "novelette" lengths, in color.

Sol Lesser - independent filmmaker who at various times in his career served as indy producer, distributor, and exhibitor.

A RESPECTABLE BUSINESS

Show business today is a respectable business. Now that the American people are paying over a billion dollars a year to live vicariously in the make-believe world of the cinema, there can be no doubt that "there's no business like show business" to either Wall Street or Main Street. As recently as 1919, however, A. H. Giannini, founder of the Bank of America, was scoffed at by fellow bankers for making a film loan. Giannini answered that he considered his film loan better than the Liberty Loan. In three months he was paid back. The picture which Giannini had risked $500,000 to market through First National was "The Kid." It featured a funny little man with a moustache, a cane, baggy pants, and oversized shoes, the man who also produced it. His name was Charlie Chaplin! Today, of course, banks are the chief source of film financing for the independents. They will lend so-called "first money" to any legitimate movie maker, thereby covering 60 to 70 per cent of the cost of a picture, at a rate of 5 or 6 per cent, depending on the nature of the risk. The "collateral" required by a bank includes a good story, commitments from one or more stars for the principal roles, a competent director, a studio where the picture can be shot, and a contract for the release of the picture with a good distributing company. Banks like the Bank of America and the Security First National, which are among the principal film backers, consider the independents a good risk.

The original lobby card from the first Charlie Chaplin feature film "The Kid" (distributed by First National): "six reels of joy."

LARGE-STUDIO MONOPOLY

If there are risks in independent production, there are also advantages. The independent producer is far more flexible than the major studio. It is this factor of adaptability which ensures his survival against odds that often appear impossible. It is not unusual to see every box-office drop accompanied by a flurry of rumors that the independent producer is finished and running for the cover of the major studios. There is no doubt, of course, that in times of severe recession the number of independents is reduced. This is true of small business anywhere. But through all the box-office cycles of Hollywood history, the independent producer has not only survived, but prospered. It could almost be said that the most surprising factor in the life of the independent is his success under conditions that are often more favorable to extinction. For example, while wartime boom conditions brought large returns to producers of motion pictures and encouraged many Hollywood people to launch their own independent production companies, it is also true that this happened in a market almost entirely dominated by the major studio combines in a manner most unfavorable to the independent producer. The best theaters in the best show towns were, and still are, under control of the majors. Over a long period of years these big studios expanded their vast show-world empires to include every phase of the show business from the productions to the distribution and exhibition of films.

The independents were forced to the painful realization that, no matter how well their pictures were made, they were not getting a fair chance to place them before the public. By a system of cross-licensing, under which one major studio would agree to show the pictures of another in theaters under its ownership or control, and by other trade methods which the Federal court has since held illegal, the large Hollywood combines managed to acquire a monopolistic control over a vast part of the industry.

Fortunately for the independents and for the theatergoing public, the maneuvers of the major studios aroused the interest of the United States Government. The Department of Justice spent years gathering evidence before bringing court action which charged the majors with monopoly of the motion picture market and conspiracy in restraint of trade in violation of the Sherman Antitrust Act.

The purpose of the suit was to open the film market to free competition by removing the artificial restrictions which the majors imposed on it in their own interests. The Government sought to accomplish this by drastic changes in marketing practices and by complete divorcement of theater ownership from the production of pictures. The legal battle was fought before the statutory Federal court in New York.[13] The court upheld the Department of Justice in charging the defendants[14] with combining and conspiring to restrain trade and commerce by concertedly engaging in practices that violated the antitrust laws. It declined, however, to apply the principal remedy recommended by the Government, the divorcement of theaters, on grounds that it was too drastic. The Government, thereupon, appealed to the Supreme Court of the United States. The majors also appealed from the decree, which ordered revolutionary changes in their business and marketing practices. What is probably the most critical battle in history for the independent producer (and the independent exhibitor) of motion pictures is now joined before the highest legal authority in the land. On the decision of the Supreme Court hinges much of the future of the independent producer and, therefore, of the American motion picture.

FUTURE CHALLENGE

It is apparent that since the days of D. W. Griffith the independent producer has been a chief factor in imposing upon the industry certain competitive standards which have raised the quality of the American motion picture. One of the chief criticisms leveled against the American motion picture throughout the world today is that it lacks quality. At the recent World Film Festival held at Brussels, critics conspicuously passed over the pictures of the majors and singled out for praise a picture made by an independent—"The Best Years of Our Lives," produced by Samuel Goldwyn. The major producers themselves recognize the fact that the quality of the American picture must be improved if they are to meet successfully the growing competition from foreign films. A leading spokesman for domestic exhibitors stated the problem clearly when he said in Hollywood recently that only good pictures will payoff at the box office.

Small business often forces big business into competition in price and design which ultimately benefits the competitors and the public alike. Such competition brings on the market new materials, new products, and new methods. This comes about through the zest, the initiative, and the originality of the small businessmen. These dominant qualities of small business are characteristic of the independent producer. They are qualities which are vital to Hollywood if it is to meet, with artistic credit and financial success, the competition of increasingly better pictures from abroad.

Donald M. Nelson is president of the Society of Independent Motion Picture Producers, Hollywood, California. He served as executive vice-president and chairman of the executive committee of Sears, Roebuck & Co. from 1939 to 1942, resigning from that position to become chairman of the War Production Board in Washington.

FOOTNOTES:

[Footnote 1] SIMPP members as of October 1, 1947:

Constance Bennett, Benedict Bogeaus, Sidney Buchman, William Cagney, California Pictures (Howard Hughes), Charles Chaplin, Bing Crosby, Walt Disney, Federal Films (Boris Morros, William Le Baron), Edward A. Golden, Samuel Goldwyn, Sol Lesser, Jules Levey, Seymour Nebenzal, Mary Pickford, Rainbow Productions (Leo McCarey), Hal Roach, Charles R. Rogers, Edward Small, Andrew Stone, Story Productions (Armand S. Deutsch), Hunt Stromberg, United Artists, Vanguard Films (David O. Selznick), and Walter Wanger.

[Footnote 2] The number of independent producers in Hollywood has been variously estimated by semiofficial sources, such as trade papers, from 30 in prewar days to 150 and over during the peak box-office year of 1946. I would say that the truth lay somewhere in between. For example, our Society in 1946 averaged 25 members. Another independent group counted about 36. Allowing for other unattached independents, I doubt if the most liberal estimate of real independents could place the total at over 100.

[Footnote 3] U. S. Department of Commerce estimate was $1,130,000,000.

[Footnote 4] "The Birth of a Nation" (D. W. Griffith), "Gone With the Wind" (David O. Selznick), "The Best Years of Our Lives" (Samuel Goldwyn), "Duel in the Sun" (David O. Selznick), "The Bells of St. Mary's" (Leo McCarey), and "Snow White and the Seven Dwarfs" (Walt Disney).

[Footnote 5] David O. Selznick, 1939, "Gone With the Wind"; David O. Selznick, 1940, "Rebecca"; Samuel Goldwyn, 1946, "The Best Years of Our Lives."

[Footnote 6] Mr. McCarey, at the time he made "Going My Way," was producing on the Paramount lot. He since has become an independent and made "The Bells of St. Mary's" under his new firm name of Rainbow Productions. He is a member of SIMPP.

[Footnote 7] Mr. Goldwyn's picture was "The Best Years of Our Lives"; Mr. McCarey's "Going My Way." In addition, Mr. Goldwyn received that year the Irving M. Thalberg Award, and a special "Oscar" was presented to a member of the "Best Years" cast, Harold Russell. The statements in Mr. Goldwyn's advertisements laying claim to nine Academy Awards are therefore correct, although not by Academy standards, which do not recognize the Thalberg Award or any special award as going to a picture.

[Footnote 8] David O. Selznick, 1939 (year of "Gone With the Wind"); Walt Disney, 1941 (year of "Fantasia"); Samuel Goldwyn, 1946 (year of "The Best Years of Our Lives").

[Footnote 9] M-G-M's "The Yearling" was one of the spirited competitors of Goldwyn's "The Best Years of Our Lives" for the 1946 Academy Award. Goldwyn himself was never a member of M-G-M, though his name is identified with the studio.

[Footnote 10] So zealous is Samuel Goldwyn to safeguard his reputation for quality that he recently scrapped the entire early footage of "The Bishop's Wife" because he felt the material on film was below his standard. The decision cost him $800,000!

[Footnote 11] The mass technique had been successfully employed in many cities, like Dallas, Texas, by Howard Hughes for the showing of "The Outlaw," but Selznick advanced it to the perfection of an art. M-G-M later staged simultaneous showings of "The Hucksters" in approximately a thousand "situations" (theaters).

[Footnote 12] This figure, however, must not be taken to represent net profit. Out of it must come distribution costs, taxes, and so forth.

[Footnote 13] United States of America v. Paramount et al.

[Footnote 14] Paramount, Loew's, Inc. (M-G-M), Twentieth Century-Fox, RKO, Warner Brothers, Columbia, Universal, and United Artists. The last-named was involved in the distribution aspects of the case only. United Artists neither produces pictures nor owns theaters.

SOURCES:

Donald M. Nelson, “The Independent Producer,” The Anna1s of the American Academy of Political and Social Sciences, 254 (November 1947), pp. 49-57.

See Bibliography.