While sources agree that Famous Players Film Company was founded in 1912, they disagree as to the exact date when it was founded. Wikipedia and several other sources give the date as 8 May 1912, which would make today Paramount's 100th anniversary. In their chronology of Paramount Pictures, TheStudioTour.Com gives 7 June 1912 as the date that Famous Players was founded. At least two books, Early American Cinema and The American Film Industry: A Historical Dictionary, both by Anthony Slide, give 1 June 1912 as the date that Famous Players Film Company was founded. Regardless, Famous Players Film Company was clearly in existence by 12 July 1912. It was on that date that the first film distributed by the company, Les Amours de la reine Élisabeth starring Sarah Bernhardt, premiered in New York City (here I must point out that issues of Variety make it clear the film was distributed by Famous Players).
While sources might disagree on the date that Paramount was founded, all of them agree that its founder was Adolph Zukor. Mr. Zukor was born on 7 January 1873 in Ricse, Hungary. He was sixteen years old when he emigrated to the United States. In New York City he stayed with a friend of his mother and later a cousin. He took a job working in an upholstery shop, at which he worked only briefly before a friend got him an apprenticeship at a furrier. He remained with the furrier for two years before he struck out on his own. Adolph Zukor would eventually move to Chicago where he would continue to work in the fur trade there, first one of the partners in the Novelty Fur Company and later as one of the partners of Kohn and Company.
Adolph Zukor did not remain with Loew's for long. In 1912 he left the company to form Famous Players Film Company with theatrical producer David Frohman. Sources vary as to the extent of his involvement with Les Amours de la reine Élisabeth. Some sources state that he helped finance the film. Other sources indicate that he merely purchased the American rights to distribute the film. What is clear is that Famous Players Film Company did indeed distribute the film, making it the first film ever distributed by what would become Paramount Pictures. It would not be long before Famous Players Film Company would begin producing its own films. Its very first production was the very first adaptation of The Prisoner of Zenda, released in 1913. It was followed by productions of adaptations of Tess of the D'Urbervilles and The Count of Monte Cristo, as well as original films.
Even in 1913 and 1914, before it became Paramount Pictures, Famous Players Film Company stood apart from other motion picture companies. First, while Carl Laemmle's Independent Moving Pictures Company (one of the companies that would form Universal) was the first to credit its stars and use them to promote films, Famous Players Film Company may have been the first to place an emphasis on its stars. Famous Players Film Company's featured such famous theatrical stars as James O'Neil, John Barrymore, Minnie Maddern Fiske, and Lily Langtry. The list of Hollywood legends who worked for Famous Players Film Company was a long one: Mary Pickford, Douglas Fairbanks, Rudolph Valentino, Gloria Swanson, Wallace Reid, and many others.
Second, Famous Players Film Company was the first American company to place an emphasis on feature films. Even before the formation of the company Adolph Zukor was convinced that the future of motion picture lie in the production of feature films. Unfortunately, in 1912 the patents on cameras and projectors were controlled by the Motion Picture Patents Company or MPCC (the MPCC, also known as the Edison Trust), a trust of the major film companies in the United States. Having control of the various patents on the technology needed for film making, the MPCC virtually controlled the movie industry at the time. Sadly, despite the success of feature films in Europe, the MPCC demanded American movie makers continue making one reel films that were ten to twelve minutes in length at the most. Fortunately, Daniel Frohman was able to convince Thomas Edison, the head of the MPCC, to let Adolph Zukor use cameras to make feature films. Famous Players Film Company's features would prove very successful and, as history shows, eventually the feature film would come to dominate the movie industry.
While Adolph Zukor was among the first Americans to produce feature films, he was by no means the only one who saw that the future of motion pictures was in features. Jesse L. Lasky was born in San Francisco, Californian in 1880. Jesse L. Lasky was a cornetist who had a career in vaudeville. Eventually Jesse L. Lasky would shift from performing on stage to collaborating on operettas with Cecil B. DeMille. It was in 1910 that Mr. Lasky's sister, Blanche (with whom he had performed in vaudeville) married a man named Samuel Goldfish, who would gain lasting fame under the name Samuel Goldwyn. Even in the early teens Mr. Goldfish was fascinated by film and began a campaign to get his brother in law, vaudeville producer Jesse L. Lasky, into the movie making business. In the end Mr. Goldfish won Mr. Lasky over and in 1913 Jesse L. Lasky, Samuel Goldfish, Cecil B. DeMille, and Arthur Friend founded the Jesse L. Lasky Feature Play Company. The company's goal was to produce feature films.
The first movie produced by the Jesse L. Lasky Feature Play Company would be an adaptation of the play The Squaw Man by Edwin Milton Royle. The film was co-directed by Oscar Apfel and Cecil B. DeMille. After finding Flagstaff, Arizona unacceptable for shooting the film, Cecil B. DeMille and Jesse L. Lasky leased a barn on the corner of Selma and Vine Streets in Hollywood, California. While several shorts had already been shot in Hollywood, The Squaw Man then became the first feature film shot in the Hollywood area, as well as Cecil B. Demille's motion picture debut. The Squaw Man proved to be a hit. The Jesse L. Lasky Feature Play Company would have further success with such films as Brewster's Millions (1914), and an adaptation of The Virginian (1914).
While Adolph Zukor and Jesse L. Lasky were revolutionising motion pictures by producing feature films, a man named W. W. Hodkinson would found the company that would eventually give Paramount its name. W. W. Hodkinson was a theatre owner who went to work for the General Film Company, an early West Coast motion picture distributor. It was on 8 May 1911 that Mr. Hodkinson merged eleven different distribution companies to form the Paramount Pictures Corporation. Not only would Paramount Pictures Corporation give Paramount its name, but it would also give the company its logo. Upon thinking of the name, Mr. Hodkinson sketched a mountain to which he later added a circlet of stars. Although it has changed slightly over time, the basic Paramount logo is still more or less the same. Paramount Pictures Corporation was the first successful, nationwide distributor of films in the United States. Aside from being truly nationwide, Paramount Pictures Corporation also differed from other distributors in another way--it would only distribute feature films.
Both Famous Players Film Company and the Jesse L. Lasky Feature Play Company would distribute their movies through Paramount Pictures Corporation. Unfortunately, W. W. Hodkinson and Jesse L. Lasky would not get along. Mr. Lasky would begin buying shares of Paramount Pictures Corporation until he controlled the company. As a result, W. W. Hodkinson would be voted out as president of the very corporation he had founded. It was that same year, on 28 September 1916, that Famous Players Film Company and the Jesse L. Lasky Feature Play Company merged to form Famous Players-Lasky Corporation. Paramount Pictures Corporation was part of the company.
Famous Players-Lasky Corporation would see changes almost immediately. No longer president of the company he founded, W. W. Hodkinson sold his shares to theatre owner S. A. Lynch. Samuel Goldfish had been named the chairman of the board of Famous Players-Lasky Corporation, but soon came to regret it. He found himself constantly at odds with the company's president, Adolph Zukor. Samuel Goldfish resigned as chairman of the board in 1916, although he kept his stock in the company and remained a member of its board of directors. Mr. Goldfish then founded Goldwyn Pictures with Edgar and Archibald Selwyn. It would not be long before he changed his name legally to Samuel Goldwyn. Goldwyn Pictures would be acquired by Marcus Loew in 1924 and merged with Metro Pictures to form Metro-Goldwyn-Mayer, better known as MGM. Although his company was one of the building blocks of MGM, Samuel Goldwyn never worked there.
By the late teens Famous Players-Lasky Corporation was easily one of the most powerful, if not the most powerful studios in the United States. The majority of the most popular stars were all under contract to Famous Players-Lasky Corporation, including Mary Pickford, Douglas Fairbanks, Margeurite Clark, William S. Hart, and Wallace Reid. It was because of this that Famous Players-Lasky Corporation was able to create the practice of block booking. Block booking was essentially a system by which a theatre would have to buy blocks of films, both the big features starring well known stars as well as lesser films. To varying degrees the other studios would also take up block booking, to the point that it became common practice in the Thirties.
The practice of block booking would run Famous Players-Lasky Corporation into trouble with the First National Exhibitions Circuit, an association of independent theatre owners. First National consisted of some of the biggest first run theatre chains in the United States, about 596 theatres in all nationwide. First National disagreed with the practice of block booking, which often required theatres to buy large blocks of films, some of which might not have even been produced yet. First National then threatened a boycott of Famous Players-Lasky Corporation. The answer to this problem for Famous Players-Lasky Corporation was simply to buy its own theatres.
As early as 1921 Famous Players-Lasky Corporation was the most powerful company in the motion picture industry. It should not come as a surprise then that the Federal Trade Commission on 30 August 1921 charged the company with restraint of trade due to the practice of block booking and also charged that it used theatre acquisition as a means of forcing theatre operators into accepting block booking deals. The FTC described Famous Players-Lasky Corporation as "...largest concern in the motion picture industry and the biggest theater owner in the world." In 1927 the FTC concluded that block booking was an unfair practice. It issued a cease and desist order to Famous Players-Lasky Corporation with regards to block booking and ordered the company to reform its policies regarding theatre acquisition. In the end Famous Players-Lasky Corporation did not comply with the FTC's orders, an action that would eventually lead to the Federal government taking further action against Paramount.
Unfortunately, Paramount's fortunes would change due to the Great Depression and the coming of sound to film. On 29 October 1929 the United States stock market collapsed. This was disastrous for Paramount, who in the coming years would lose money due to a stock redemption arrangement with theatres, by which Paramount had to pay the full original price for stocks that were now worth much less. This was complicated by the fact that theatre attendance dropped in the early Thirties. As more and more people became unemployed, more and more people could not afford to go to the movies. Worse yet, in order to compete with the other studios, Paramount had to make the conversion to sound in both its studios and theatres. Conversion to sound was extremely costly. Despite seeing successes at the box office (such as Mae West's early films), Paramount continued to lose money and in 1933 was forced to declare bankruptcy.
Unfortunately for Paramount, the business practices it had innovated in the 1910's, practices soon adopted by the other studios, would soon come back to haunt it. In 1938 the Department of Justice filed a lawsuit against Paramount and the other major studios because of block booking and other unfair trade practices. The lawsuit would be settled in 1940 with a consent decree that allowed the government to revive the lawsuit if they thought it necessary. According to the consent decree the studios could no longer block book short subjects along with feature films (although they could still block book a maximum of five feature films at a time), and they could not force exhibitors to book films that they had not seen. In 1943 the government decided that there had not been sufficient progress on the part of the studios and reinstated the lawsuit. It went to court in 1945.
In the end the case, known as United States v. Paramount Pictures, Inc., would go to the Supreme Court. The case was decided on 3 May 1948. Unfortunately for Paramount and the other major Hollywood studios, the verdict went against them. Not only did the Supreme Court's decision bring an end to such practices as block booking, but it also forced the studios to divest themselves of their theatre chains. United States v. Paramount Pictures, Inc. would effectively bring an end to the studio system, a system Paramount had largely helped to create.
As a result of the Supreme Court's decision in United States v. Paramount Pictures, Inc., Paramount Pictures Corporation would be divided into two companies. Paramount Pictures Corporation would continue as a motion picture production and distribution company. United Paramount Theatres was created from the chain of 1500 theatres Paramount had amassed over the years. The only theatres Paramount Pictures retained were those belonging to the Famous Players Theatres (Canada). Located in Canada and unaffected by the Supreme Court decision, they continued to be owned by Paramount Pictures until it was sold to Cineplex Odeon Corporation in 2006.
In the Fifties it would appear that Paramount Pictures was no worse for wear in losing their theatre chains. Throughout the Fifties Paramount released films that were both financially successful and acclaimed, including When Worlds Collide (1951), The Greatest Show on Earth (1952), Shane (1953), Stalag 17 (1953), Sabrina (1954), The Court Jester (1956), and The Ten Commandments (1956). While Paramount may have appeared to audiences to have been doing well in the Fifties, in truth with the Supreme Court's decision in United States v. Paramount Pictures, Inc. Paramount Pictures went into a decline that continued well into the Sixties.