The most reliable Christmas film in the English-speaking world was a commercial failure. It didn’t recover its costs, it ended the independent production company its director had staked everything on, and within a few years it was effectively gone. What brought it back was a paperwork error.
I find that history more satisfying than any comeback story Hollywood could have written for itself. A studio lost money, a director lost his company, somebody botched a renewal form, and the audience got the film anyway. I think it’s the best American Christmas film ever made, and it got there with no help at all from the people whose job was to protect it.
Did It’s a Wonderful Life lose money?
Yes, and by a wide margin for a film of its scale.
It was expensive. The production built a serious town set, ran long, and used a large cast. Against those costs it took considerably less at the box office than it needed, and the studio recorded a significant loss on it.
It wasn’t ignored. It received several Academy Award nominations, including for best picture and best director, and won none of them. That combination, respectable notices and poor returns, is the worst possible outcome for a film, because it removes both the commercial argument and the consolation.
The immediate consequence fell on Liberty Films, the independent company Frank Capra had formed with other directors after the war to escape studio control. This was its first release. The company didn’t survive long afterward and was sold, and Capra spent the rest of his career working for other people.
Why did audiences not take to it in 1946?
Timing, mostly, and that the film is much darker than its reputation.
Postwar American audiences in late 1946 weren’t obviously in the market for a story about a man whose life has systematically failed to happen. The film denies its protagonist every ambition he states in the first act. He doesn’t travel, doesn’t build things, doesn’t leave, and watches everyone around him do what he intended to.
The sequence people remember is the last fifteen minutes.
Before that come two hours of accumulating disappointment ending in a man on a bridge in the snow, and the studio’s own marketing struggled with how to describe that. I don’t blame the marketing department much. Selling a Christmas picture about a man who thinks his family would be better off without him would have defeated anybody.
The release date didn’t help either. It opened at the very end of 1946 in a compressed run to qualify for awards. That put it into a crowded season without the platform a slow rollout would have given it.
Was the film investigated by the FBI?
It appeared in an internal memorandum on communist influence in the film industry, and the reasoning is worth knowing because it’s so thin.
The complaint was that the film demonized bankers by making the villain a rich financier, and that this was a recognizable technique for discrediting figures who represent capitalism. The memo treated the portrayal of a wealthy man as a heartless antagonist as evidence of political intent.
Nothing came of it, and the document is mostly interesting as a demonstration of how the period’s suspicion worked. A film about a larger financial interest squeezing a small-town building and loan read to somebody as an argument instead of a plot.
That memo is a disgrace. Somebody on the government payroll watched a story about a decent man standing up to a greedy financier and saw a threat to the country. Reading like that wrecked real careers in those years, and in this case it was built on nothing at all.
Capra himself was a conservative and had made propaganda films for the American war effort. That makes the suspicion more absurd instead of less.
How did a lapsed copyright save the film?
Under the copyright law of the period, protection had to be renewed after an initial term. In 1974 the renewal for this film wasn’t filed correctly, and the picture fell into what was widely treated as the public domain.
The effect was immediate and enormous. Television stations could broadcast it without paying for the rights, and stations programming the Christmas period need cheap content that suits the season. They ran it constantly, on multiple channels, sometimes several times in a single December. An entire generation encountered the film that way. Not as a title somebody chose, but as the thing that was on, repeatedly, until it became part of the furniture of the season.
That’s a completely different mechanism from how films normally become classics. There was no reissue campaign, no critical rehabilitation leading the way, and no studio decision. The film became permanent because it was free.
The situation was later contested. A Supreme Court decision concerning derivative rights in underlying material gave the rights holders a basis to reassert control, and the film returned to licensed broadcast with a limited number of airings each year. The saturation period had already done its work.
What was It’s a Wonderful Life based on?
A short story that its author couldn’t sell, which he eventually printed himself as a Christmas card. Philip Van Doren Stern wrote a piece of a few thousand words about a man who wishes he’d never been born, failed to place it with magazines, and had two hundred copies produced to send to friends and family in 1943. One reached a producer, and the film rights were bought for a modest sum.
Several writers then worked on adapting it, and the screenplay went through multiple hands before Capra took it on. The finished film keeps the central conceit and very little else, since the source is far too short to sustain a feature.
For a writer that history is worth holding onto. The most durable Christmas film of the century began as an unsellable short story distributed as a card, and the thing that made it work was one strong central premise that survived every rewrite.
Why does the film work despite the sentiment?
Because it builds toward the ending across two hours of refusing to give it.
The structural achievement is that every disappointment is concrete and cumulative. He gives up the trip, then the college place, then the honeymoon money, then the business he wanted. Each is a small, plausible sacrifice made for a good reason, and none of them feels like a plot device at the time. By the bridge, the audience has been counting for two hours. The reversal lands for that reason: the emotion isn’t manufactured in the final scene, it’s released there. The other thing it does correctly is give the villain a real argument. He’s not wrong about the building and loan’s finances, and the film lets him be competent. That makes the pressure real instead of decorative. I wish more writers understood that one. A villain who’s just cruel gives the hero nothing to push against. This one is right about the numbers, so George has to beat an argument as well as a man, and that’s much harder to write and far more satisfying to watch. The alternate-reality sequence is also much harsher than people remember. The town is a detailed and unpleasant place, and the film commits to that instead of softening it.
What did Capra himself think of it?
He called it his favorite of everything he made, and said so repeatedly for the rest of his life.
That’s unusual. Directors generally name a film that was underrated or one they had the most control over, and he’d made several enormous hits before the war that would have been the safer answer. He picked the one that failed.
His stated reason was that it contained what he wanted to say, and the war is the context for that. He’d spent the conflict producing documentary and propaganda films for the American government, working with real footage of what had happened in Europe, and came home to make a film about whether one ordinary life in a small town amounts to anything.
James Stewart had a comparable war. He flew combat missions over Germany, came back changed, and this was his first film afterward. He reportedly considered not returning to acting at all.
Both men were making something about whether an ordinary life is worth the living, immediately after several years of evidence to the contrary, and that’s visible on screen in a way the marketing could never have captured.
Is the film as sentimental as its reputation?
No, and the reputation is a product of how people encountered it.
A film seen in fragments across a December, half-watched while doing something else, gets remembered by its most quotable moments. The bell, the crowd in the living room, the closing line. Those are the parts that survive partial attention, and they’re the softest parts of the picture. Watched from the start, it’s closer to a study of a thwarted man. The protagonist is short-tempered, resentful and occasionally cruel to the people who love him. There’s a scene where he frightens his own children, and the film doesn’t excuse it.
The alternate-reality section is bleak. Not a sadder town, a coarsened one, and the film is willing to show his own family failing to recognize him with real fear instead of a soft dissolve.
I think the people who sneer at this film as syrup haven’t sat through it. It’s a story about a man who’s furious at his own life, and it doesn’t look away from how ugly that fury gets inside his own house.
That gap between the film and its reputation matters for anyone who has dismissed it unseen. The version most people carry is a compilation of its final reel.
What can writers learn from It’s a Wonderful Life?
Three things.
Set up the ending by withholding it. The emotional payoff people remember is the product of two hours of denial, and the same scene placed after ninety minutes of general goodwill would be worthless.
Make the sacrifices specific. Not a man who gives up his dreams, but a man who gives up this trip, that college place, this exact sum of money on this day. Specificity is what the audience counts. Understand that reception isn’t quality. A film that lost money, ruined a company, won nothing and was flagged as subversive is now the most watched Christmas story in the language. The verdict at release told you almost nothing.
That last lesson is the one I’d want every discouraged writer to hold onto. The industry’s first verdict on this film was wrong about the money, wrong about the awards and wrong about the politics, and Capra paid for those mistakes with his company. The audience decided later, and the audience got it right.
For more on the seasonal material, I’ve written about the Christmas ghost story tradition and the twelve days of Christmas, and the film itself is reviewed at It’s a Wonderful Life (1946).
