In 1940 Cavalcanti left the Crown Film Unit to become an associate producer and director at Ealing Studios. That such a key figure of the British documentary movement could operate within one of the country's emerging commercial production companies reinforces the influence that documentary realism was to have on the future of British cinema. After taking over as head of Ealing in 1938, Balcon had brought in a number of documentary filmmakers as part of his attempt to have the studio make films that would more accurately reflect the national character than had been the case before. Ealing was one of only three pre-war British studios to continue operating during the war, along with Korda's London Studios and Gainsborough. All three studios made films supporting the war effort and reinforcing a sense of community, largely through representing the lives of ordinary Britons in wartime. The film that perhaps best embodied this approach is the aptly titled Gainsborough production Millions Like Us (1943), scripted and directed by Launder and Gilliat. The film focuses primarily on a group of ordinary women who take wartime work in an airplane factory. The film employs numerous conventions drawn from documentary traditions and points to the increasing significance of social realism as a hallmark of British film. The importance of community and the everyday is also evident in Cavalcanti's Ealing film, Went the Day Well? (1942), in which a small Oxfordshire village is infiltrated by Nazis before the villagers realize it and strike back. The film's incorporation of idealized aspects of everyday village life, alongside moments of action and violence, reinforces the manner in which national character was being reflected.
While the turn toward realism is a significant aspect of British cinema in this period, it was not the only option pursued by producers or favored by audiences. It has been argued that critics championed realism, and hence it was films that corresponded to realist ideals that received the most critical acclaim, particularly in discussions related to a national cinema, both at the time and among the subsequent generation of scholars and critics. For filmgoers, though, the consensus was not so clear: Gainsborough made numerous popular escapist melodramas in this period. The theatricality favored by Korda in the 1930s had not entirely disappeared following the slump of the late 1930s. While the Gainsborough melodramas were frequently derided as too far-fetched, with settings either in exotic locales or a "fantasy" past, they did have a particular appeal for audiences, especially the female audience for which the war had brought a new
Key purveyors of such artifice were Michael Powell (1905–1990) and his collaborator Emeric Pressburger (1902–1988). Powell had already directed a number of quota quickies and low-budget features before first collaborating with Pressburger in 1939. While their early wartime propaganda features, such as 49th Parallel (1941), set in Canada and starring Laurence Olivier, helped establish their reputation, it was the more lavish spectacles they created for their own production company, The Archers, that truly made the pair vital figures in British cinema. The mysterious and spiritual A Canterbury Tale (1944), in which a group of modern-day pilgrims makes its way to Canterbury cathedral against the backdrop of World War II, demonstrated the pair's willingness to push boundaries both narratively and visually. In Black Narcissus (1947) and The Red Shoes (1948), Powell and Pressburger operated even more concretely within an expressionist mode of cinema; the former film was a sensual melodrama set in the Himalayas, while the latter was set in the world of ballet, where an ambitious young ballerina is torn between love and ambition.
Other "quality" films of the era reflected this dynamic between realist and expressionist modes of cinema. For example, a film that seems, at first glance, to be a "heritage" costume drama is Laurence Olivier's Henry V (1944), which uses the Shakespearean play to create a propaganda film. Henry's leadership of an English army defeating a European foe after crossing the English Channel had obvious parallels to events of the day, particularly the Normandy campaign. The film itself is dedicated "To the Commandos and Airborne Troops of Great Britain," making the ties even more explicit. Yet this Technicolor extravaganza also works well as a form of popular entertainment and taps quite effectively into the aspects of heritage Britain mined by Korda a decade earlier.
Henry V was produced by Two Cities films, a company that had come into being in 1937 and was guided by an Italian, Filippo Del Giudice. Not unlike the Hungarian-born Korda, Del Giudice was a non-Briton spearheading a company that primarily focused on making quintessentially British films. In order to secure adequate financing for the ambitious Henry V , Del Giudice allowed the Rank Organisation to obtain a controlling interest in Two Cities. It was one of numerous acquisitions made by the ever-expanding Rank company. The Rank Organisation, under the leadership of its founder J. Arthur Rank, was the dominant British film company throughout much of the 1930s, 1940s, 1950s, and into the 1960s. By 1946 Rank's holdings included five studios, a number of production companies, a distribution arm, and more than 650 cinemas. Rank's vertical integration gave it a position of prominence in Britain comparable to the Hollywood majors in the US. Among the production companies that Rank acquired was Gainsborough in 1936. For the first decade Gainsborough was run relatively autonomously, but starting in 1946 Rank intervened more directly in the operations at the studio, and it slowly lost its autonomy as the Rank Organisation's consolidation began to point to an era where making films with wide appeal, rather than innovative films, would become an increasingly dominant trend.