On Friday a Federal Judge in Manhattan reversed a decision held since 1948 concerning the exhibition of motion pictures. The “Paramount Decrees” stemmed from a Supreme Court ruling that disallowed movie studios from owning their own theaters to. It also ended (or at least curtailed) the practice of “block booking,” in which a studio could force titles of less interest onto theaters if they also wanted something that was a more surefire hit.
Paramount was the primary defendant alongside MGM, Warner Bros., 20th Century Fox, RKO, comprising the “Big Five” of the era, with Columbia Pictures, Universal Pictures, and United Artists, known as the “Little Three.” The decrees are often cited as a significant turning point for the end of the classic studio system, allowing independent producers to compete for audience share and direct access to actors.
In today’s decision, Judge Analisa Torres said the Department of Justice’s arguments to end the decrees “serve[d] the public interest in free and unfettered competition.”
The DOJ suggested that current audience practices, which include not just multiplexes, but cable television, home video and the Internet have substantially changed viewership. Approximately half of the current screens are run by three chains, Regal, AMC, and Cinemark, and the DOJ argued that studios are not likely to become a risk to dominate movie theater ownership.
The National Association of Theatre Owners, many members of which represent smaller theaters, and the Independent Cinema Alliance were reportedly concerned about how the changes would alter competitiveness and movie diversity, and hoped that the block booking ban continues. A representative from the small chain Bow-Tie told Indiewire last year that they would be “disproportionately affected by the removal of block booking prohibitions, as we do not have as many screens to potentially spread out the major studio films we would be required to book in order to have access to the films our customers desire.”
In the current environment, the change has some suggesting that Disney may be interested in purchasing one of the theater chains, particularly now that the coronavirus pandemic has all but halted their earnings.
Disney already owns one theater, the restored Wurlitzer-enhanced El Capitan Theater in Hollywood, which shows Disney films, plays host to most Disney premieres, and is adjacent to a Disney studio store with an old fashioned soda fountain.
Netflix, who also has deep pockets, already has showcase theaters on both coasts: the jewel-box Paris in Manhattan and grand movie palace The Egyptian in Hollywood.
Amazon already owns Whole Foods, so access to snacks and popcorn ought to be a breeze.
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