Desilu Studios was home to I Love Lucy, and additionally, such hit television series as Star Trek, The Andy Griffith Show, Mission: Impossible, The Untouchables, Mannix, The Lucy Show, I Spy, The Dick Van Dyke Show and Hogan's Heroes.
Arnaz had two brilliant insights into the nature of the collaboration between the motion picture studio and network television. Arnaz was the first to recognize that the content of television broadcasting should be separated from the technology structure of the television studio, and its production technologies. Second, Arnaz was really the first producer of entertainment content for television who realized that all television (local and national broadcasting) would have a continuing and subsequent need for his (Desilu’s) products in the present, and into the future. That is, entertainment programming was not like the evening news or a baseball game. Such programming should be thought of like a book or a work of music; to be enjoyed by both present and future generations as the original and unique work of an author who owns (so long as the copyright is not allowed to expire) the exclusive right to the fruits of authorship of the intellectual work.
To this end, Desilu began the creation of its productions using conventional film studio materials, production and processing techniques. The use of these materials and techniques meant that the 35mm negatives (the source material for copyright purposes) were immediately available for production and distribution of prints when the Lucy series went into syndication at local stations around the country. As such there are no “lost” episodes of programs, or programs recorded by kinescope from the television broadcast.
By using conventional Hollywood filming and production techniques the content and quality of Desilu productions was immediately of high quality and was easily adaptable to different forms comedy or drama, indoor sets, outdoor sets, or special effects. Furthermore, this process of television content creation, using a conventional motion picture production facility to create a 35mm film which is then broadcast over television, remains the standard model by which virtually all broadcast and cable television productions or entertainment content are created to the present day.
Desilu soon outgrew their first space and in 1954 bought their own studio: the Motion Picture Center on Cahuenga Boulevard in Hollywood, at the site of what is now the Ren-Mar rental studio; most of I Love Lucy was filmed there. In late 1957 (taking possession in 1958), the company also bought the RKO Pictures properties, including its main lot in Culver City, with the backlot known as Forty Acres, and another lot on Gower Street in Hollywood. These acquisitions gave the Ball-Arnaz TV empire a total of 33 sound stages — four more than Metro-Goldwyn-Mayer and eleven more than Twentieth Century-Fox had in 1957.
Much of the studio's early success can be traced to Arnaz's unusual business style in his role as producer of I Love Lucy. For example, lacking formal business training, Arnaz knew nothing of amortization, and often included all the costs incurred by the production into the first episode of a season, rather than spreading them across the projected number of episodes in the year. As a result, by the end of the season, episodes would be nearly entirely paid for, and would come in at preposterously low figures. In addition, Arnaz took the unprecedented step of buying the episodes of I Love Lucy for an astoundingly low cost from CBS, realizing, as the network did not, the potential of the rerun.
The studio's initial attempt to become involved in film production was the 1956 film Forever, Darling, Arnaz and Ball's follow-up to their highly successful The Long, Long Trailer (1954), but it failed at the box office. It was produced at Desilu, but under the banner of Zanra Productions, "Arnaz" spelled backward. Most subsequent attempts to bring projects to the big screen were aborted, until Yours, Mine and Ours (with Ball and Henry Fonda) in 1968. This film was a critical and financial success.
Another Desilu loss was Carol Burnett, who declined to star in a sitcom for the studio in favor of a weekly variety show that ultimately lasted eleven seasons. (Burnett and Ball, however, remained close friends, often guest-starring on one another's series.) Pilots for a comedy with Carol Channing and an adventure series with Rory Calhoun were shot but never sold. Arnaz was determined to create a law drama entitled Without Consent, with Spencer Tracy as a defense attorney, but after several attempts at developing a suitable script failed, the project was scrubbed.
In 1960, Desi Arnaz sold the pre-1960s shows to CBS. Contrary to popular belief, Desi Arnaz did not sell his share of Desilu due to his divorce with Lucille Ball. Since Desilu had already begun producing Ball's follow-up series The Lucy Show by that point, it was decided that Ball should be the one to assume full ownership. In 1962, Arnaz resigned as president and sold his holdings to Ball, who succeeded him as president. This made her the first woman to head a major studio, and one of the most powerful women in Hollywood at the time. Ball later founded Desilu Sales, Inc (now part of CBS Television Distribution).
For a number of years, Ball served as President and Chief Executive Officer of Desilu, while at the same time starring in her own weekly series. Eventually tiring of the stress, in 1967, Ball sold the company to Gulf+Western, which merged it with its other production company, (and Desilu's next-door neighbor), Paramount Pictures and renamed it Paramount Television, (now called CBS Paramount Television), around December 1967. As a result, Desilu's three series on television at the time, , I Spy, and Star Trek changed packagers to Paramount.
Desilu/Paramount TV's holdings are currently owned by CBS Corporation, incidentally the eventual owner of the pre-1960s shows. Desilu Productions Inc. was reincorporated in Delaware in 1967, and still exists as a legal entity.
After the sale of Desilu, Ball formed, with then-husband Gary Morton, Lucille Ball Productions to produce her next show, Here's Lucy, the first season of which was co-produced by Paramount Television. PTV sold its share after the first season and Ball later sold syndication rights to Telepictures, later merged into Warner Bros. Domestic Television Distribution.