The DOJ Could Change the Way Movies Are Released (Again)

Maybe you remember this from a film history class, but in 1948 there was a landmark case United States v. Paramount Pictures Inc., that stopped movie studios to force theatrical chains into "block booking."

The case made its way to the U.S. Supreme Court, and they ruled against the practice and other "block" practices that favored film studios. The leading the plaintiff Paramount Pictures. Over the next few years and into the 1950s "block booking" was canceled all over Hollywood. 

It was an antitrust case that changed the Hollywood landscape forever. We'll get into why shortly. 

Now the Department of Justice is looking to end those laws. 

According to the New York Times, Makan Delrahim, head of the Justice Department's Antitrust Division, said the Justice Department would file this week to ask a federal court in the Southern District of New York to terminate the decrees.

So... what does that mean for creatives, audiences, and theaters? It could mean a lot of things...

What exactly were things like before United States v. Paramount? 

Before the consent decrees, movie studios sold distributors "blocks" of movies. 

Let's use current movies to explain this idea. Under the "block" sales, if you were a theater who wanted to show Avengers, Disney might also require you to hold some screens for movies like Maleficent or other titles. 

The idea is that Disney knows an Avengers movie will be popular and thus rake in the money, but less popular titles like Maleficient might not be, so by guaranteeing them screens to show on they can bolster their own profits. 

This could be a big hit to smaller chains or independents with only so many screens. 

The consent decrees also made it so Studios could no longer own theaters. So with the decrees gone, Universal can buy up theater chains and only show Universal movies. 

That means they can charge anything they want for tickets as well. Higher for blockbusters and lower for indies. 

The same goes for streamers like Netflix and Hulu. 

They could open brick and mortar places if they want to run theatrical campaigns for their movies like Roma. Especially qualifying campaigns for the Academy Awards. 

But all of this is intensified by the fact that studios already own streaming services. 

If studios develop the material, own the production process, and own the theaters and streaming platforms we're talking about a return to the studio system. Indie projects will be the ones to suffer, because why would the big players be interested in getting audiences to anything but the projects they own? 

When trying to repeal these laws, Makan Delrahim proposed a two-year "sunset period."

He told the New York Times, 

"The sunset period will allow the defendants and movie theaters a period of transition to adjust to any licensing proposals that seek to change the theater-by-theater and film-by-film licensing structure currently mandated by the decrees."

For what it's worth, The National Association of Theater Owners, which represents movie theater companies with 33,000 screens in the United States, urged the department to stop the return to block booking. 

The worry is that they'll be hamstrung by theater chains forcing titles and screens on them, or they'll have marquee titles pulled away and show at places only owned by studios. 

These worries have yet to be addressed. 

The last time they were, the Supreme Court said they were unlawful. But times change. 

This is going to be a wild ride.