Hollywood Studio Decline
As a result of the United States vs Paramount case, studios could no longer give a years worth of movies to a theatre, instead being forced to create films they were certain would do well. The result of this was that there was an increase in production values of a movie because there were less being produced.
Studios had to sign a consent decree, meaning they could no longer show films exclusively produced by them in theatres that they owned.
A TV For Every Family
There was an increasing amount of televisions in the homes of Americans, and its growth in popularity meant that there were fewer people going to theatres when they could stay at home and watch repeats of older films, meaning less money coming in.
The film industry was able to respond with longer, colour films but the growth of television continued and despite the decline in popularity of theatres gradually decreasing, studios were still unable to attract the large crowds the they had been used to in the decades prior.
In 1950, the number of American households with TVs was at just 3,880,000 (9%) but in 1960, the number increased to 45,750,000 (87.1%) and 55,130,000 (93.6%) by the release of Bonnie and Clyde in 1967. (Source: ‘The American Century’)
The Rise of Independent Cinema
The rising demand for films led to a surge in independent production
Popular stars moved away from contracts with major studios and increasingly worked with independent filmmakers while some would set up their own production companies.
These films could afford to take risks due to their low budget, granting them greater artistic expression.
Penn and Pals
Arthur Penn along with filmmakers such as John Cassavetes were inspired to create New Hollywood style films by the French New Wave. With Cassavetes using improvisation when shooting and using actors from his friends and family.
Aaron Bruce's Film Studies Blog 