Paramount Consent Decrees: How Streaming is Helping Movie Studios Today, Maybe

Back in 1948, the U.S. Supreme Court created ‘Paramount Consent Decrees,’ which provided a legal obstacle from film studios owning movie theaters. Essentially, this gives a production house an advantage over sales and publicity over that production house, since the other doesn’t have the coin to own a movie theater chain.

And since the Supreme Court debated antitrust laws and monopolies afoot by film studios in United States vs. Paramount Pictures, movie theaters have been independently owned. Those days are officially over and studio powerhouses like Warner Bros., Universal, and even Paramount has streaming to thank for it.

According to The Hollywood Reporter, U.S. District Court Judge Analisa Torres put the kibosh on the decades-long Paramount Consent Decrees by granting a motion by the U.S. Department of Justice. (This is about antitrust, which is why they were involved.)

Apparently, Judge Torres had a considerable amount to say about the now-defunct Paramount Consent Decrees because she wrote 17 pages on the ruling!

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.

U.S. District Court Judge Analisa Torres

How Streaming Ended Paramount Consent Decrees

Paramount Consent Decrees are over and now movie theaters will change for good.
Source: Getty Images

Everything, at some point, needs to be regulated to prevent the big dogs from owning all those little puppies. In 1948, that’s what happened for the movie theater business. There used to be theaters aligned down the street (pictured above), each one offering a different film feature.

Imagine if the Walt Disney Co. owned all three of those movie theaters — Marvel on one, Star Wars on two, and Pixar on three. Meanwhile, anything A24 has to offer will be shunned and never seen. That’s why the Supreme Court stepped in.

Ending the Paramount Consent Decrees has been a long time coming, actually with the current beleaguered administration. Under Trump’s DOJ, Assistant Attorney General Makan Delrahim first moved to terminate the decrees in November 2019, saying that “the horizontal conspiracy — the original violation animating the decrees — has been stopped.”

And that’s where Netflix, Hulu, AppleTV+, and Amazon Prime come in.

None of the internet streaming companies—Netflix, Amazon, Apple and others—that produce and distribute movies are subject to the Decrees. Thus, the remaining Defendants are subject to legal constraints that do not apply to their competitors…Distributors who were not subject to the decrees have shown no propensity to acquire major movie theater circuits or engage in the type of collusive practices the Decrees targeted.

U.S. DISTRICT COURT JUDGE ANALISA TORRES

In other words, “Those houses aren’t the only places making movies so AMC, Cinemark, and Regal–get your portfolios ready!”

Is This Good for Movie Theaters?

Credit: Jay L. Clendenin / Los Angeles Times

It’s no secret COVID-19 has pummeled movie theaters and the entire cinematic experience into oblivion. Movie theater chains are ready to file bankruptcy. Some can’t decide how to enforce safety. Big box stores are creating pop-up drive-ins. And now, VOD is bringing movie releases to your home directly.

Now that the Paramount Consent Decrees are over and antitrust is no longer a concern, it’s possible the movie-watching experience may change forever. Like that theater you love so much may only show Universal movie moving forward. You want to see Dune this winter? Tough. The Warner Bros. movie theater is in the next town.

The National Association of Theater Owners (NATO, again…dolts can’t figure out acronyms) has chimed in to Judge Torres’ ruling because they are certain ending these decrees will deregulate movie chains and the aforementioned and outlandish example may become the norm.

The Paramount Consent Decrees were a remedy fashioned for extreme, anticompetitive behavior in the movie industry.  We agree with the Court that anticompetitive behavior remains anticompetitive under existing antitrust law. This decision simply shifts the mechanism for enforcement into regular, existing channels.

anonymous talking head from nato

(You think “anticompetitive” was a keyword in his or her notes?)

For a quick history lesson, creating the Paramount Consent Decrees took more than 10 years. The U.S. Department of Justice first filed suit against any studio monopoly (they focused on Paramount Pictures) in 1938. The decrees were printed into law in 1949.

Streaming has opened up the floodgates for many things. Thankfully, we’ve had it to break the Coronavirus monotony. We may not feel so grateful if you’re forced to go to the Universal Movie Theaters or the WarnerMedia Multiplex next year. So long, movie theaters. We’ll miss you all.

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