The death of the two-reel short as a commercially successful product for independent studios put producers such as Mack Sennett out of business. Hal Roach moved Laurel and Hardy full-time into feature films after 1935, and halved his popular Our Gang films to one reel at the request of distributor Metro-Goldwyn-Mayer. Roach, who could no longer afford to produce shorts after 1938, sold out to MGM at that time.

After the 1930s, fewer shorts were made for theatrical release, most of which were one-reel long, like George O'Hanlon's Joe McDoakes shorts, and the animated shorts of studios like Leon Schlesinger Productions/Warner Bros. Cartoons, Walter Lantz and Fleischer/Famous Studios. These shorts and others were produced in-house by, or financed by, motion picture companies that either owned their own theater chains (for example, Loews Theatres) or forced theaters to take their shorts by selling them in the same unalterable package as their big-name features. This practice, called block booking, was declared illegal by the US Supreme Court, who also forced the theater chains to sell off their movie studios. By 1955, thanks to double features, the ban on block booking and the rise of television, the commercial live-action short was virtually dead, and the cartoon short was fading. Since the 1960s, short films have been largely reserved for independent filmmakers and special major-studio projects.

The Three Stooges shorts were the only major series of two-reelers to survive the double-feature system because they were issued by Columbia Pictures using block booking. They continued into the late-1950s, largely by reusing footage from previous series entries to reduce costs.

In the 1950s, television programming, including the telecasting of older short subjects, eclipsed the value of all but cartoons featuring well-loved characters. By the end of the 1960s, the cost of manufacturing outweighed the return, and short subjects effectively disappeared.