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History of Universal Studios
The founder of Universal was Carl Laemmle, a German Jewish immigrant from Laupheim who settled in Oshkosh, Wisconsin, where he managed a clothing store. On a 1905 buying trip to Chicago, Illinois, he was struck by the popularity of nickelodeons. One story has Laemmle watching a box office for hours, counting patrons and calculating the take for the day. Within weeks of his Chicago trip, he gave up dry goods to buy the first of several nickelodeons. For Laemmle and other such entrepreneurs, the creation in 1908 of the Edison-backed Motion Picture Trust meant that exhibitors were expected to pay fees for any Trust-produced film they showed. On the basis of Edison's patent on the electric motor used in cameras and projectors, along with other patents, the Trust collected fees on all aspects of movie production and exhibition, and attempted to enforce a monopoly on distribution. It was believed that the productions were meant to be used for another company but they turned it down.
Soon Laemmle and other disgruntled Nickelodeon owners decided to avoid paying Edison by producing their own pictures. In June 1909, Laemmle started the Yankee Film Company with partners Abe and Julius Stern. That company quickly evolved into the Independent Moving Pictures Company (IMP). Laemmle broke with Edison's custom of refusing to give billing and screen credits to performers. By naming the movie stars, he was able to attract many of the leading players of the time, contributing to the creation of the star system. In 1910, he actively promoted Florence Lawrence, formerly known as "The Biograph Girl," and actor King Baggot, in what may be the first instance of a studio using stars in its marketing.
On June 8, 1912, Laemmle merged IMP with eight smaller companies to form the Universal Film Manufacturing Company—the first appearance of the word "universal" in the organization's name. Laemmle, as president, was the primary figure in a partnership that included Mark Dintenfass, Charles Baumann, Adam Kessel, and Pat Powers. Eventually all would be bought out by Laemmle. Baumann and Kessel later partnered with Mack Sennett for their highly successful Keystone Film Company. The new Universal studio was a horizontally integrated company, with both movie production and distribution capacity (the company lacked a major circuit of exhibition venues, ownership of which would become a central element of film industry integration in the following decade). The company was incorporated as Universal Pictures Company, Inc. in 1925.
Following the westward trend of the industry, by the end of 1912 the company was focusing its production efforts in the Hollywood area. Its first logo was an Earth with a Saturn-like ring and the text in a bold Kentucky font. In later years it was replaced by a filmed 3-D model, leading ultimately to today's logo which uses CGI animation. In 1915, Laemmle opened the world's largest motion picture production facility, Universal City Studios, on a 230-acre (0.9-km²) converted farm just over the Cahuenga Pass from Hollywood. Studio management now became the third facet of Universal's operations, with the studio incorporated as a distinct subsidiary organization. Unlike other movie moguls, Laemmle opened his studio to tourists. Universal became the biggest studio in Hollywood, and remained so for a decade. However, it sought an audience mostly in small towns, producing mostly inexpensive melodramas westerns, and serials.
Despite Laemmle's role as an innovator, he was an extremely cautious studio chief. Unlike rivals Adolph Zukor, William Fox, and Marcus Loew, Laemmle chose not to develop a theater chain. He also financed all of his own films, refusing to take on debt. This policy nearly bankrupted the studio when actor-director Erich von Stroheim insisted on excessively lavish production values for his films Foolish Wives and Blind Husbands, but Universal shrewdly got some of its money back by launching a sensational ad campaign that attracted moviegoers. Character actor Lon Chaney became a huge drawing card for Universal in the 1920s, appearing steadily in dramas. His two biggest hits for Universal were The Hunchback of Notre Dame (1923) and The Phantom of the Opera (1925). During this period Laemmle entrusted most of the production policy decisions to Irving Thalberg. Thalberg had been Laemmle's personal secretary, and Laemmle was impressed by Thalberg's cogent observations of how efficiently the studio could be operated. Promoted to studio chief, Thalberg was giving Universal's product a touch of class, something it seldom had during the silent era.
Louis B. Mayer lured Thalberg away from Universal with a promise of better pay. Without his guidance Universal became a second-tier studio, and would remain so for several decades.
In 1926, Universal opened a production unit in Germany, Deutsche Universal-Film AG, under the direction of Joe Pasternak. This unit produced three to four films per year until 1936, migrating to Hungary and then Austria in the face of Hitler's increasing domination of central Europe. With the advent of sound, these productions were made in the German language or, occasionally, Hungarian or Polish. In the U.S., Universal Pictures did not distribute any of this subsidiary's films, but at least some of them were exhibited through other, independent, foreign-language film distributors based in New York, without benefit of English subtitles. Nazi persecution and a change in ownership for the parent Universal Pictures organization resulted in the dissolution of this subsidiary.
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