From Silents to Studio' Golden Years

Movie studios were not prepared to accept sound at first because they felt like it would be a passing fad, would not be liked by audiences, was too expensive to implement everywhere, etc. It became more mainstream when Warner Brothers made the “talkie” The Jazz Singer. It instantly became a major hit, and Warner Bros started to make more sound films. Then most studios followed suit. 

As an immediate effect, many actors were fired as they couldn't fit their voices to the characters they were portraying, and many sound producers went out of business as films only had to have sound recorded one time.

Some of the downsides of the inclusion of sound include scenes being very bland and staying in the same place, as the camera couldn't move without making noise and microphones were usually placed as a prop between two characters, so they would lean over it menacingly. 

The studio years followed this. In this era studios formed a sort of monopoly over film, and shut everyone else out of the industry. On the plus side, nearly everyone could watch a movie, and studios were dedicated to designing well done sets for their films. On the downside, it was hard for people who weren’t part of studio’s to exhibit their films to the public and actors were bound by extremely restrictive contracts.

Outside links: http://cybercollege.com/frtv/frtv003.htm