At the nadir of the Depression in 1931, the controlling shareholder of Australasian Films forced the company into liquidation. Immediately, the managing director, Stuart Doyle, formed a new company, Greater Union Theatres, and the following year he created Australia's most financially successful studio, Cinesound Productions, under the supervision of Ken G. Hall (1901–1994). Beginning with On Our Selection , Hall produced, directed, and was often the writer of seventeen films between 1932 and 1940, which was Cinesound's total output except for one film, Come Up Smiling (renamed Ants in His Pants after it was previewed in Hobart in 1939), and even in this film, Hall's influence was evident, as it was based on his script (under the pseudonym John Addison Chancellor). Every Cinesound production was profitable, although Strike Me Lucky (1934), starring Australia's most popular stage and radio comedian, Roy Rene (1892–1954), only recovered its costs some time after its initial release.

Hall, who visited Hollywood in 1925 to observe film production techniques, modeled Cinesound on the Hollywood studio system. He tried to minimize the chances of failure with a formula that emphasized the "Australianness" of Cinesound Productions through dialogue and settings within a narrative structure that appealed to audiences familiar with Hollywood films. The most successful Cinesound productions were the series of "Dad 'n' Dave" films starring Bert Bailey (1868–1953) as Dad Rudd and Fred MacDonald (1895–1968) as his slow-witted son, Dave. Loosely based on the characters created by Steele Rudd (1868–1935), Hall directed On Our Selection , Grandad Rudd (1935), Dad and Dave Come to Town (1938), and Dad Rudd MP (1940), Cinesound's last production. Hall's versatility also included a wide range of genres from society melodramas ( The Silence of Dean Maitland , 1934, and Broken Melody , 1938), to adventure melodramas ( Orphan of the Wilderness , 1936; Thoroughbred , 1936; Lovers and Luggers , 1937; Tall Timbers , 1937), and musicals ( Gone to the Dogs , 1939) as well as various forms of comedy ( It Isn't Done , 1937, Let George Do It , 1938). In 1938 he persuaded Cecil Kellaway (1893–1973) to return to Australia from Hollywood, where he had a contract with RKO, for one of his best films, Mr. Chedworth Steps Out (1939). Kellaway plays George Chedworth, a likeable family man victimized by a pretentious wife, ungrateful employers, and a son (Peter Finch) addicted to gambling. This gentle melodrama combined comedy with a subtle critique of Australian middle-class family life in the late 1930s.

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