Consequences of GWTW’s success

After Gone With the Wind, in particular, production values at the prestige level would never be conceived of in quite the same terms. Nor would sales and marketing. Wind's blockbuster status held through the entire year, so Loew's sustained its exclusive release strategy, booking the movie only in cities of 100,000 persons and up, and in theaters seating at least 850. Exhibitors continued to charge $.70 at the door--two to three times the going rate--and Loew's, in turn, charged the exhibitors 70 percent of the box-office revenues, twice the usual fee for a top feature, which Loew's then split with Selznick. The resulting profits for SIP and Loew's were staggering. By late summer, when it finally went into widespread release, Wind had grossed $20 million.

In 1940 SIP had only three pictures in release--Wind, Rebecca, and Intermezzo--while the five major studios along with Columbia and Universal were releasing roughly one feature per week. But none of those massive production companies took in anywhere near the $10 million in net profits that Selznick International earned that year. Only MGM, at $8.7 million, was even close, and half of its profits came from the deal with SIP to distribute Wind.

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Selznick's commercial and critical success in 1939-40 put him on top of the industry, but the two pictures that carried him there took a heavy toll. The enormous effort he put into Wind and Rebecca left him physically, mentally, and emotionally spent, and the two pictures did in SIP as well. As the profits from Wind and Rebecca poured in, it became evident that the company was the victim of its own success. Without either a massive facility or a full program of productions, the profits could not be amortized, reinvested, or otherwise defrayed, so the tax bite was enormous--especially for Selznick and Jock Whitney, whose incomes in 1940 threatened to reach about $4 million apiece. In August of that year the major stockholders in SIP decided to dissolve the company, sell each other portions of the assets, and let the profits be taxed as capital gains rather than personal or corporate income. Selznick and Whitney retained their interest in Wind (44 percent and 48 percent respectively) and made plans to rerelease it periodically.

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Besides doing in SIP and redefining the limits of prestige and profitability in Hollywood filmmaking, Wind and Rebecca also marked something of a watershed in terms of individual power and initiative. Selznick's success with SIP signaled the arrival of the independent producer as a dominant force in the industry. Filmmakers like Sam Goldwyn and Walt Disney had paved the way and would continue to push the limits-with pictures like Fantasia, for example, which Disney then had in production. The success of their pictures contributed to Hollywood's golden age, but they also indicated an important shift in its balance of power. . . . Selznick and Hitchcock were proving that the producer and director could break free, if not from the system at large, at least from direct studio control. That freedom enabled them to create some of the studio era's greatest pictures, while it also heralded the system's ultimate disintegration.

Thomas Schatz, The Genius of the System (1996), 292-94

NB: marginal tax rate in 1940 on incomes above $2 million was roughly 78%