A few things that began in 1948 carried over into 1949. Perhaps most critically to the motion picture industry was the fact that the recent presidential election had been telecast, for the first time in history. This meant television was no fad; its immediacy and direct impact on audiences could not be ignored and as more broadcast stations sprang up around the country, TV would undoubtedly cut into the movie business.
Ticket sales had been averaging around 90 million per week, but in the new year, movie attendance dropped down to 62 million. Eventually, it climbed back up to around 70 million where it stayed. The studio bosses knew they were facing an uncertain time. Some like Hal Roach decided the future was in television, and they quickly began to transition over to television production.
Meanwhile, Floyd Odlum of RKO decided it was time to get out of the picture business altogether. He put the studio up for sale, with the most serious offer coming from independent producer Howard Hughes. For the past several years, Hughes had experienced great difficulty getting his condemned western THE OUTLAW distributed, and he felt that if he bought RKO he could ensure that his movies would be played. But when Hughes assumed control of RKO, he had very little regard for its history or its film library. He quickly alienated producer Dore Schary who soon left for MGM. And more than half the executive staff had exited by 1949, in what amounted to a huge shake-up. The studio would never be the same again; Hughes’ purchase signaled the beginning of a long death for RKO.
Across town, United Artists was going through its own upheaval. UA was dealing with a severe budget crisis, and many of their more prestigious independent producers were bailing. Roach was heading into television, while others like John Ford and James Cagney were going back to work for major studios. Another problem was that some of the product UA turned out in the late 40s began to seem outdated, since the postwar trend had been towards social realism. The conservative escapist entertainment that UA produced wasn’t selling.
At this time, David Loew had set up a company with John Garfield called Enterprise Studios, which leaned toward producing more socially conscious films. The venture attracted people like Robert Rossen, Robert Aldrich and Abraham Polonsky. Of course, many of these people would soon be blacklisted, but for a time in the late 40s, this group prospered and turned out some of the best progressive cinema Hollywood ever made– films like BODY AND SOUL and FORCE OF EVIL, both with Garfield in starring roles.
While this was going on, there was a changing of the guard at some of the major studios. Longtime stars were finding that their contracts were not being renewed. And some, such as Bette Davis, left their home studios after arguments over the scripts being offered. Davis had been with Warner Brothers for 18 years. Meanwhile, producer Henry Blanke refused to leave Warners, because he had a 25 year contract at $5000 per week. But with television cutting into the movie business, Jack Warner was eager to save money and get rid of Blanke, who was very expensive at this point. During the standoff with Warner, Blanke would only visit the studio with his lawyers.