The Paramount Decision, also known as the Paramount Consent Decrees, has been in place since the 1940s after the U.S. Supreme Court set a legal precedent in United States v. Paramount. It was a ruling that shaped the film industry by barring major studios from practicing vertical integration.
During the studio system era of classic Hollywood, vertical integration occurred when major studios controlled all facets of the film industry; a film’s production, distribution and exhibition were all under the same umbrella. Eventually, the government decided to step in and say that studios were no longer allowed to have a stake in the exhibition, citing antitrust laws.
A New York federal judge’s ruling to overturn the Paramount decision has allowed studios to practice a new form of vertical integration.
With changing technology, U.S. District Court Judge Analisa Torres said that the precedent should be reviewed.
“Given this changing marketplace, 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,” Torres said in an opinion.
However, she could not be more wrong, especially considering the growing abundance of streaming services; each touting their exclusive content from the parent company by which they’re owned.
It started in 2020 with the overturning of the Paramount precedent and has continued with Warner Bros. announcing that each of their 2021 films would be released on their streaming service, HBO Max, earlier this year.
The announcement was a shocking response to the changing landscape that is the exhibition industry in the wake of COVID-19. Some of the theater chains have managed to survive, but the independent theaters never stood a chance. The Arclight in Hollywood was one of the theaters that never reopened.
Even more shocking was the way in which the studios took advantage of the changing landscape and seized the opportunity to regain control of exhibition. It was a decision that alienated filmmakers like Christopher Nolan, who strongly believes in the experience of seeing a film in its intended format – the big screen.
Nolan was so opposed to the idea of the practice, he ended his longtime partnership with Warner Bros. and is making his next film, “Oppenheimer,” with Universal. While each studio was finding new ways to exhibit their new films on their streaming services, movie theater chains like AMC fought back by announcing they would not be releasing any films from Universal after seeing their financial success releasing “Trolls World Tour” on-demand last year.
It was a move that ended up being more profitable for Universal than their theatrical release of the previous “Trolls.” With AMC up in arms, they ended up compromising with Universal on an exclusive release window before the studio was allowed to release the film on streaming or on-demand.
Exclusive content has been the major appeal for gaining an audience for a while now, but it is the simultaneous release of new films alongside theatrical releases that are keeping people at home instead of visiting movie theaters.
While giving this choice to consumers is tactful considering the uncertainty of the pandemic, this practice could very well be the death of the already struggling exhibition industry and gives the studios exclusivity that can ultimately hurt exhibitors.
It remains to be seen if the movie-going experience will ever return to normal but allowing these major studios – which are becoming less in numbers due to being bought out by one another – is setting a dangerous precedent for the future of the industry as a whole.
With the shrinking number of studios, not only are independent theaters suffering but so are the storytellers who have fewer outlets to tell diverse stories.
The government needs to once again step in and break up these multi-media conglomerates that are few in number and, by definition, anti-competition. If not, companies like Disney may truly own everything at some point as they have already drawn in numerous other studios, like 20th Century Fox.
Vertical integration is unfair to storytellers, exhibitors and fans alike.