Movie Studios May Be Allowed To Own Their Own Movie Theaters For the First Time Since 1948
It might not get as much attention on most film websites today as Alan Moore bashing superhero movies, or the Russo brothers defending superhero movies, or the ghost of John Ford rising from the grave to swear an oath of vengeance against superhero movies, but in a few years we might look back at this next item as the single most important movie news story of 2019.
According to the Financial Times, the Department of Justice is looking to terminate one of the key rules that has governed how films are distributed since 1948. That was the year of the ruling that created the so-called “Paramount Decrees,” which effectively forced the movie studios — which until then owned their own movie theaters, where they were able to distribute their own films — to divest themselves of that business because of the negative effect such vertical integration had on competitive business practices.
The rules have stood since then — but now may finally change, with the government announcing it will “ask a federal court in New York this week to unwind the rules in their entirety, with a two-year sunset period on sections dealing with block booking and circuit dealing, which is selling licenses to an entire chain, rather than on a theatre-by-theatre basis.” Chief of the Department of Justice’s antitrust division, Makan Delrahim, told an American Bar Association conference “We cannot pretend that the business of film distribution and exhibition remains the same as it was 80 years ago.”
Still, the implications of overturning the Paramount Decrees could be far-reaching. You’d need someone with a legal background to fully explain all the changes it could cause. But most fundamentally and perhaps most importantly, it would clear the way for movie studios to own their own theaters again. Netflix could create (or buy) their own chain of theaters to play just Netflix movies, which would help them expand their business, make directors who want to work for them but also want their movies shown on big screens happy, and help them get around theater owners who are fighting to maintain the current exclusive windows between films premiering in theaters and heading to streaming. Or Disney could build (or buy) their own theaters to exclusively play its blockbusters, so it didn’t have to share the revenue from Avengers: Endgame with anyone.
These changes would be at least two years off, and perhaps many more years after that. But when the Paramount Decrees went into effect in 1948 they essentially ended the Hollywood studio system as it existed since its inception. It was one of the most important legal cases in the history of movies. So eliminating them could bring about similarly enormous change.
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