Since the early days of film, studios have been used for shooting because it was convenient for production companies and, of course, less costly. These studios eliminated the need for location scouting and transportation for actors and crew. It also set up a central location for all production, which made monitoring multiple "in-production" films much simpler.
Most importantly, however, was the centralization of actors. Since multiple films could be shot in a studio, the big stars could, in a sense, roam. A name like John Wayne or Humphrey Bogart could be in multiple films per year since each set was in the same studio as that of another film. Because of this, many studios became genre based. Instead of a studio making westerns and gangster films, they would choose one, find a big star, and practically build the studio around them. For example, because each was shot in the same general area, John Wayne was able to be in eleven films in 1933, a feat nearly insurmountable by modern actors and actresses. Wayne had to do very little traveling, and could just step in, play the part, and move on to the next picture. This allowed a production company to make more films per year and thus increase their overall profits.
http://www.imdb.com/name/nm0000078/
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