With all of the media content that is readily available right now, it is no surprise that studios are quickly moving to launch their own streaming services to offer subscribers exclusive access to their films and television series. Disney has already capitalized on that market with Disney+, and Warner Bros. and NBCUniversal soon following with HBO Max and Peacock, respectively. And that’s all well and good for the streaming business.
But now it looks like these major studios may able to release films in their own movie theaters. The Justice Department is looking to remove the Paramount Consent Decree, which regulated how major movie studios distributed their films. More on the report below.
According to the Wall Street Journal, the Justice Department is moving to get rid of legal rules that have regulated the film industry since the late 1940s, a step that could change the very nature of how these films are distributed and the terms on which they hit the big screen.
Before the Paramount Consent Decree was set in place studios had absolute control over specific theater chains thereby controlling only the films produced by the studio that owned them. These studios would have the writers, directors, producers, and actors all under contract, and owned the film processing and laboratories that processed the film. Basically, the studios were vertically integrated, creating a de facto oligopoly. That all changed in the late 1930s when the Justice Department put the Paramount Consent Decree into place, which prevented studios from withholding films from certain theaters while releasing them in their own theaters.
Here’s what Assistant Attorney General Makan Delrahim of the American Bar Association had to say (per Variety):
â€œWe have determined that the decrees, as they are, no longer serve the public interest, because the horizontal conspiracy â€” the original violation animating the decrees â€” has been stopped. The Division finds the consent decrees no longer meet consumer interests.â€
Delrahim has a point about how technology is changing the market and how we consume media content. With the age of streaming on the rise, studios are far more inclined to put some of their weaker films on their exclusive streaming services rather than see it flop worldwide in a theater.
The report also adds that in addition to the Paramount Consent Decree termination, there will also be “a two-year sunset on circuit dealing (where one license covers an entire theater circuit) and block booking (a system of selling multiple films to a theater as a unit).” The sunset program allows studios and theaters to adjust to changes.
â€œIt is our hope that the termination of the Paramount decrees clears the way for consumer-friendly innovation,â€ Delrahim said.
What this could mean is that studios like Amazon and Netflix could start to release their own films in their own theaters. This means all a person would need to do to see Marriage Story (Netflix) and The Report (Amazon) is purchase a ticket rather than a subscription plan. I suppose that is the only bright side to all of this, because there is more negative aspects to overturning this than there are positives.
For instance, Disney already owns a big portion of the theatrical market with them owning Disney live-action, Disney animation, Pixar Animation, Marvel Studios, Lucasfilm, and now Fox. Studios could strong-arm major theater chains and smaller mom and pop theaters to show their films. This could be a bad move for smaller indie films like Parasite as it would mean that it would be screened at fewer independent theaters. And in turn, these smaller independent theaters could go out of business.
However, the Justice Department assures that they will still be overseeing studios should they engage business practices that would harm the consumer.
[Source: WSJ | Variety]