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Interestingly, it was a huge, Ishtar-level flop when it premiered. It was a fairly expensive movie to make, with the star-power involved, and it wasn't very well-received.
The reason it has become such an institution is precisely because of its failure at the box office. In the early days of television, there was a lack of Christmas-related programming (imagine THAT!!), and "It's a Wonderful Life" was unbelievably cheap to license and broadcast. It had big stars and a Christmas theme, so it became cheap programming to air during the Holidays, and it soon became a tradition.
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