The Beginning of the End

Even though the company was doing well by this time, the movie business was changing.  American Film Co. had trouble keeping up with it. Though American Film Co. had banner years of success between 1912 and 1916, the next several years were a struggle and the Flying A would not survive.

There were several reasons for American's demise, all of which created a perfect storm that the American Film Company was never able to recover from.  It was never a matter of reception by the film going population.  In fact the public loved the Flying A movies, they were well received.  The problems were strictly business, the same problems that many of the early movie makers suffered from.

There were Several Reasons American Struggled

A large percentage of American's revenue came from overseas sales through their London distribution office, who sold American's movies all over Europe.  War broke out in Europe in 1914 and  WWI saw the beginning of the end of movie distribution all over Britain and the Continent.  The American Film Co. was not the only victim of this, but because a disproportionately large share of  the company's revenue came from European sales, and the market began disappearing, a slide began that accelerated throughout the war years and they were never able to recover.

Second, the domestic audience was clamoring for longer feature length movies, like Hollywood was beginning to produce.  The company had only made short films up to this time for the small, independent theater market.  Their transition to features was difficult.  One reel movies, with as many as 10 or more shooting simultaneously, allowed Flying A to turn out a lot of easily sellable product that the Mutual Exchange had, up to that point,  a ready market for.  Feature films took longer to make, and were far more expensive, as much as fifteen times the cost of the one reelers.  Because they were shooting fewer movies (only 2 or 3 at a time), many Flying A actors and crew fled to Hollywood looking for steady work, leaving the Santa Barbara studio without their best talent.  Revenue was down, costs skyrocketed.  Profits suffered.  Plus, isolated in Santa Barbara, American found itself outside the mainstream places like Hollywood, Edendale, Fort Lee, and New York, so they had trouble attracting adequate talent and had few local film making business resources to draw from. 

The third reason they struggled was distribution.  Their distributor, Mutual Film Co., was at its peak distributing the one and two reel product of several small, independent film companies.  As Mutual and American shared ownership American had regular distribution for as much as they could turn out, as fast as they could turn it out.  However, a 1915 internal dispute within Mutual forced out the company  President, Harry Aitkin.  Aitkin, one of American's owners, also had ownership interests in other studios.  Mutual installed of another American Film owner, John Freuler, as the new president.  Aitkin formed a competing company (Triangle Pictures) taking some of Mutuals best producers with it and Mutual emerged in a much weakened position.  It was not up to the task of giving American's Flying A the support it needed for feature distribution.   Within three years, in 1918, Mutual folded.

In 1918 Samuel Hutchinson and American Film established a relationship with a new distributor, Pathé Exchange.  Pathé, one of the oldest and largest film distribution companies, did not provide the same high level of support that Mutual did.  Hutchinson felt it did not give American the same attention it gave its other production companies.  American's movies were costing more to produce and were being shown in fewer and fewer places.  Profits were down.  While many studios entered into contracts with a variety of distributors, American's eggs were all in the Pathé basket, and their distributor was not adequately selling the American Film Co. product.

The Decline Continues

In 1917, Flying A let go a large number of its employees who went to Hollywood to continue their careers.  They tried to continue with an ambitious schedule of features, but in 1918 and 1919 its best remaining talent, including their long time major star, Mary Miles Minter, and future Oscar nominated director, Henry King, left the company for greener pastures in Hollywood, leaving them without the talent to produce the quality product they needed and falling well short of their goals. 

In 1920 production stopped altogether at the Flying A, the gates were closed.  All the remaining employees moved on.  They managed to live another year on their backlog of unreleased features and by reissuing older short movies.  Though it announced new productions for 1921, the company closed and never shot another film.

The studio was torn down in 1948.