The Rules That Governed Movie Theaters and Studios For 70 Years Were Just Changed
Since the late 1940s, major studios have been barred from owning their own theaters because of what became known as the “Paramount Consent Decree,” the result of an antitrust lawsuit brought by the U.S. government. At the time, studios released many of their movies in theater chains they owned. They also employed a practice called “block booking,” where they would bundle and sell large packages of films together to theaters, with the idea that if you wanted to show the equivalent of a 1940s blockbuster, you had to agree to also show 10 other less-desirable movies from the same studio.
The consent decree outlawed or modified almost all of these practices. Studios divested themselves of their theaters, and block booking, at least on the scale that used to exist, was barred. Those rules were held in place until today, when a judge granted a motion by the Department of Justice to end the rules and permit all of the outlawed practices.
The Court finds that it is unlikely that the remaining Defendants would collude to once again limit their film distribution to a select group of theaters in the absence of the Decrees and, finds, therefore, that termination is in the public interest,
It is difficult to say exactly how the end of the Paramount decree will affect movie theaters; thanks to the pandemic pretty much every single aspect of the theatrical industry is in turmoil right now. Still, the decision clears the way for any studio to purchase a chain of theaters — Netflix, for example, could purchase Cinemark, then decide to only show Netflix movies — and it also makes it perfectly acceptable for a production company to force a theater to agree to show their entire slate of movies rather than one or two. With theaters already in precarious financial condition because of the coronavirus, this decision may well pave the way for the end of the theater industry as we’ve known it during our lifetimes.
Gallery – Why We Miss Movie Theaters So Much Right Now: