Somehow, the early, early episodes of Happy Days felt more like a genuine, intimate period piece show (overtime, it seemed a bit apparent that the producers were getting more and more lazy regarding the time period) prior to them using three cameras and shooting in front of a live studio audience. It was as if the producers and/or the network completely sold out in hopes of making it more accessible to audiences' tastes/sitcom expectations at the time.

It was as if the producers and/or the network completely sold out in hopes of making it more accessible to audiences' tastes/sitcom expectations at the time.
And it worked. That's when the show really took off.

And it really took off when they made Fonzie the central character and moved him into the Cunningham's garage apartment. They could have still done that and kept it a one camera show and kept the 50's styles.

Somehow, the early, early episodes of Happy Days felt more like a genuine, intimate period piece show (overtime, it seemed a bit apparent that the producers were getting more and more lazy regarding the time period) prior to them using three cameras and shooting in front of a live studio audience. It was as if the producers and/or the network completely sold out in hopes of making it more accessible to audiences' tastes/sitcom expectations at the time.

You're probably right, TMC. But the fact is that while the ratings were decent in the first season, they began to slide in the second and they needed a fresh approach to try and save the show from imminent cancellation.

They did a test episode live before an audience towards the end of season two and obviously they liked the results, because the one camera/no audience approach was abandoned beginning with season three and shortly afterwards, the show took off in the ratings and became the show to watch back then!

it was Gary Marshall who decided on the multi-camera/live audience approach. He had done it earlier with "THE ODD COUPLE" and propelled that show in the ratings.

By the mid-1970s, most shows were no longer doing the one-camera laugh track system. With "All in the Family", which shot before a live audience, it changed the face of sitcom production in the 1970s. Although shot before a live audience, "Happy Days" and "Laverne & Shirley" continued to use a laugh track combined with live audience responses.

And it worked. That's when the show really took off.

When Happy Days became a "live in front of a studio audience" show it more or less, slowly became a parody of itself or its premise. It felt like I was watching a broad play about life in the 1950s-'60 than actually feeling like I was there (like a TV version of American Graffiti). The actors had to play to the audience rather than each other. I find it odd that most people believe that the episode where the Fonz jumps the shark was the first tell tale sign that the show was going downhill.