Some of the significant factors that contributed to the downfall of the studio system were the generational shift, reformation of the content regulations and the financial insecurities in Hollywood (McLean, 2009). This situation resulted in the incorporation of the Hollywood studies in different entertainment companies that bring significant change in the operations of Hollywood entertainment industry. The operations of the Hollywood changed and divided in creative departments, corporation, executives, and skilled minds. The new critical and scholarly circles were the main factors that gave rise to “New Hollywood” (McLean, 2009).
The United States was the country that came out of the war and was stronger than ever. While most of the Europe was lying in the ruins of war, America had become the most powerful and richest nation of the world. America was also “in the midst of an economic boom and alone possessing the most powerful weapon on earth, the atom bomb” (Kokonis, 2009, p. 174). However, there were also some significant problems after war. The post war crisis in America had affected the film industry (Williams and Hammond, 2006). There was the decline in the theatre admission since late 1940s, which turned out to be a persistent nightmare for the studio owners in 1950s (Williams and Hammond, 2006).
The Hollywood has started losing its homogenized audiences because of the boom in the television industry. People started preferring to stay at home for entertainment. TV was not the only reason, but the other two reasons were “suburbanization and baby-booming” (Kokonis, 2009, p. 176). The radical sociological change in the post war era became the problem for the America film industry. Change was the most significant need. The period from late 1960s and 1970s is considered as the New Hollywood, as this period paved the path for experimentation and integration of new approaches to make the film industry.
The new generation of the film directors and producers were able to express their ideas and new approaches though their films. The classical cinema was rapidly losing all its money and studios were being sold out due to financial loses. Lewis (2007) stated that “Studios were merely making films for commercial success, yet for directors of Old Hollywood, such as Alfred Hitchcock, Howard Hawks, John Ford, Orson Welles, and Charlie Chaplin (who were able to make their art despite Hollywood’s satisfaction) wanted to engage youth” (p.14). The New Hollywood was also thought to be new because it was not only focus on engaging the young generation of film makers but also encouraged them to take part in high profit commercialization.
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