In what way did the Studio System maximize profits?

The Studio System maximized profits primarily by controlling distribution and exhibition. This control allowed studios to manage not only the production of films but also how and where they were shown to audiences. By owning the theaters and having exclusive distribution rights, studios could ensure that their films reached a broad audience, maximizing ticket sales and profitability.

This dominance in the marketplace helped studios create a stable revenue model, as they could dictate terms, regulate release schedules, and limit competition by restricting access to their films for rival theaters. This vertical integration—where a single company controlled multiple aspects of film production, distribution, and exhibition—ensured that studios could capitalize on their investments in film production effectively, reinforcing their profitability and market power during the height of the Studio System era.

In contrast, while reducing production costs and limiting the types of films produced could also play a role in profit maximization, they do not encapsulate the broader strategy of market control that the Studio System utilized. Focusing solely on foreign films was not representative of the Studio System, which produced a diverse array of content for domestic audiences.