Last week, we covered the first twenty years of RKO Radio Pictures. I recommend reading that article first, and join me back here once you’ve finished. All good? Awesome! Let’s dive into RKO’s last 17 years, starting with some of their biggest flops…
RKO’s golden child- Orson Welles’ Citizen Kane (1941)- proved to be the turning point in the studio’s history. While the film continues to be regarded as the “Greatest Film of All Time”, it lost the studio money; Welles’ two other projects with RKO were both hugely financial drains on the studio. Citizen Kane was an overall gamechanger for the film industry and revolutionized the way films could be shot, combining documentary-style filming with film noir styles, and adding negative commentary against William Randolph Hearst Sr. and his newspaper, the New York Journal, infamous for publishing yellow journalism. When Welles’ last project with RKO was canned, a film three-part collection of Latin American stories, he left the studio. It would take a change of leadership- again- to help RKO get back on its’ feet after the past year of financial losses, and Charles Koerner was the man for the job. Koerner was a business man, the former head of the RKO theater chain, and his plans for the studio were drastic but necessary, and proved fruitful almost immediately. For the first time in the studio’s history, it’s finances were finally stabilized, although RKO never lost its drive for expansion and experimentation, and invested more money into even more studio lots and contracting more stars for movies.
It was during this Wartime Era that RKO started to freelance contract stars with other studios. Prior to this, actors and actresses had been contracted with one studio at a time, being forced into roles to fulfill a pre-established quota by the higher-ups. Now studios found success in a “Pay or Play” system, borrowing each other’s stars with specific conditions set in place, so actors wouldn’t feel as restrained. These shorter contracts (referred to “loaning” a star) also helped cut the prices of more expensive extended contracts- RKO produced films starring Golden Era icons, using this method, such as Bing Cosby, John Wayne, Henry Fonda, and Randolph Scott. Film noir began to seep into the directing styles, already lending itself to a more cheaper production, leading to more detective and drama films coming out of the studio. This era also had Orson Welles’ tentative return as director and actor under RKO, releasing one of his few financial successes, and his first film noir, The Stranger (1946).
1946 was a wild year for RKO Pictures, and the entirety of Golden Era Hollywood, and it only got worse through the next four years. Legal issues began to threaten the legitimateness of Hollywood Studio’s business practices. RKO was challenged in Bigelow v. RKO Radio Pictures, Inc., which argued the fairness of having first- and second-run theaters. Essentially, since RKO had stock in theaters, those theaters could play RKO’s films first (in a “first run”), and then a couple weeks later, competitor theaters would be able to play the films (in a “second run”). As result, the first-run theaters would get the most finanical pay from their earlier showings and the second-run theaters would lose money. However, no agreement could be made and the practice, while seen as illegal, was not instated as such until later that year. In December 1946, RKO Pictures produced and distributed Frank Capra’s It’s a Wonderful Life. Now regarded as a Christmas classic, this film was so much of a financial flop that it not only cost RKO more than half a million dollars, it forced Liberty Films- which had produced the film- to be bought up by Paramount Studios to avoid bank foreclosures. It’s the only movie- in my opinion- that could rival the stay power and cultural impact as Citizen Kane from the Golden Age. To make up for RKO’s losses from this film, the studio buckled down on their productions of B-movies, with smaller budgets and lesser known actors playing key roles. The majority of the films from this period were Westerns, starring Tim Holt as the lead cowboy, and more dramadies, often leaning more heavily on the “comedy” aspects. McCarthyism swept through Hollywood, dethroning and blacklisting many actors, actresses, directors, producers, and other talents for possibly identifying as Communist. RKO’s top two talents, Edward Dmytryk and Adrien Scott found themselves on this list; Dmytryk would become one of HUAC’s biggest rats, saving his career but destroying many others in the film industry. Hollywood studios experienced a profit loss of 27% between 1946 and 1947, caused by the above issues and the newly widespread availability of television. When Odlum, one of the original founders of RKO decided to sell his stocks, the studio’s downfall was becoming increasingly imminent.
In 1948, leadership within the studio changed hands again, to Howard Hughes. Of all of RKO’s leaders through the years, Hughes proved to be the most destructive and debilitating to the studio. He laid off 3/4th of the studio’s work force, paused production on features for six months as he went through all of the scripts, cancelling or shelving anything that might have a communist agenda or allude to some other ideology. Other studios suffered this year due to the McCarthyism sweeping the industry, but Hughes’ heavy fist and controlling management styles reduced RKO’s profits by 90%. Hughes would continue to rule the studio under extreme anti-communist ideals, reducing the work force further, and productions on in-house films came to a crawl. In 1952, Hughes divided RKO’s production and distribution company, and the theater chain, into two separate businesses. Walt Disney Pictures, whose shorts and feature films had been distributed by RKO Pictures, cut their contracts short and formed Buena Vista as their in-house distribution company. By 1955, Hughes’ mark on the company would forever be stained when he sold what remained of it to General Tire and Rubber Company- for a mere $25 million (approximately $280,634,328.36 in 2023 money); Hughes would pocket $18 million of that amount by selling his personal assets.
And with this sale to General Tire and Rubber Company, RKO Radio Pictures would be changed forever. General Tire had previously obtained the Yankee Network, Don Lee Broadcasting System, and Bamberger Broadcasting Services; RKO would return to its’ broadcasting roots… but instead of broadcasting through radio, the General Tire focused on television. With an already lengthy catalogue from RKO, General Tire could pad out a schedule for their newly established television stations, even allowing other stations to purchase the rights to show some of RKO’s films, in the aptly named “MovieTime USA” deal. This meant some of RKO’s lesser known films could be viewed and enjoyed by more people, and films like Capra’s It’s a Wonderful Life and Welles’ Citizen Kane could finally be recognized and regarded as classics. A dozen or so b-movies were made between 1956 and 1957, but nothing notable and none pulled in enough profits.
By Spring 1956, RKO Pathé was officially shut down, and by January 1957, RKO Radio Pictures and all of its’ domestic and international distribution offices closed their doors for the last time. The last releases were distributed by Universal, and all of the studio lots owned by RKO were sold off, except for their plot on the Culver City facilities. This backlot would be sold to Desilu Productions, owned by Desi Arnaz and Lucille Ball; when Desilu Productions was purchased by Gulf and Western Industries in 1967, the backlot became an independent production facility. RKO’s Hollywood backlot was absorbed into Paramount. In 1958, RKO announced that they would remain as a financial backer for independently produced films, only backing around half a dozen. Any of the remaining RKO theaters were also sold off, and by 1971, the studio’s mark on Hollywood and the film industry was permanently erased.
RKO would eventually come back, for a short stint in the last two years of the 1950s, releasing the films that had been finished while the studio was still standing; and then in the late 1980s-2010s, releasing low budget action flicks, direct-to-television movies, and remakes of their forgotten catalogue, often with the assistance of a much larger studio. Their last film to be released with RKO’s contributions was 2015’s Barely Lethal, their only coproduction with A24 and a financial and critic flop.
RKO Radio Pictures was an interesting studio to research, and I enjoyed really diving deep into the production and distribution side of this studio. None of the previous studios covered in this series, nor with any studios coming up, will have distributed more films than they actually produced, but it’s what kept RKO afloat during the 1930s through the 1940s. RKO pushed for ingenuity, accepting young, unexperienced film makers and stars into the film industry, and always aimed for the next big thing- in radio, film, television. This environment helped create the most mod-podge group of Hollywood’s Golden Era stars, but it also caused it’s biggest downfall- attracting the attention of Howard Hughes. If Hughes didn’t get involved with RKO Radio Pictures, the studio might still be around. His anti-communist ideas, kicking out anyone suspected of being a communist, destroyed the studio in the seven years he was in control. RKO could just never get the hang of handling their finances, instead preferring to invest in the next big project, the next big star, the next big director… until the money ran out. Yet, their most recognizable and impactful films from their catalogue contributed to their collapse- an oxymoron that not many studios can claim. And while it had some truly remarkable classics in its past, RKO Radio Pictures will never rise again, out of the ashes- although it repeatedly tries to, into modern day.
Disclaimer: Some of the films created in this era may depict outdated and harmful stereotypes, messages, and storylines.
RKO Films Available at WPPL:
The Stranger (1946)- Available on DVD
It’s a Wonderful Life (1946)- Available on Blu-ray, DVD, and 4K Blu-Ray
Barely Lethal (2015) – Available on Blu-ray and DVD
RKO Picture’s official website (https://rko.com/; https://rko.com/history-2/)
Encyclopedia.com – “RKO Radio Pictures” (https://www.encyclopedia.com/arts/encyclopedias-almanacs-transcripts-and-maps/rko-radio-pictures)