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Why did Hollywood studios shift from long-term employment to project-based film crews after the 1940s?

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Director Steven Spielberg and camera operator Michael Chapman film next to a large mechanical shark on the set of the 1975 movie Jaws. — motion-picture technology Director Steven Spielberg holding the movie camera, assisted by camera operator Michael Chapman, during the filming of *Jaws* (1975).

Following the 1940s, Hollywood studios shifted away from the traditional studio system—which relied on exclusive, long-term contracts for actors and in-house crews—toward project-based production due to a combination of economic and legal pressures.1

The primary catalyst was the 1948 Paramount decrees, a Supreme Court ruling that forced major studios to divest their theater chains. This ended the studios' vertically integrated control over production, distribution, and exhibition, removing the guaranteed revenue streams that had previously supported large, permanent staffs.231

Simultaneously, the rise of television significantly eroded theater attendance, leading to a decline in studio profits. As income shrank, maintaining vast studio lots and salaried personnel became a financial liability. Furthermore, rising labor costs and increased income taxes made the traditional salaried model less viable for filmmakers. Consequently, studios began to favor "runaway" productions—filming on location or abroad to reduce costs—and increasingly relied on independent producers and freelance crews hired on a project-by-project basis.234