In Spite of the Show Trial Coming Out of D.C.
Occasionally, the 500+ people in Washington D.C., who think they run things are like a stopped clock — they eventually get one right.
In a stunning reversal of a close to 100-year-old precedent, the Justice Department has recently indicated that they will cease to enforce what is called the “Paramount Decrees”.
“What are those?” you might be asking.
Well, they are as follows:
In the late 1930s, the Justice Department sued the prominent movie studios of the era, claiming that the studios had too much control over the industry. The government won the case in 1948, forcing the studios to give up their ownership of theaters across the country and making several common distribution practices illegal, including block booking (bundling multiple films into one theatre license), circuit dealing (entering into one license that covered all theaters in a theater circuit), resale price maintenance (setting minimum prices on movie tickets), and granting overbroad clearances (exclusive film licenses for specific geographic areas).
Basically, following an era of Progressive “trust-busting” that was a spillover from the great and sainted Teddy Roosevelt, the Justice Department is finally recognizing that you actually consume content multiple ways outside of the movie theater, including:
- Your television
- Your mobile phone
- Your computer/laptop
- Your tablet device
- Via the Internet on some other device
Bundling already happens, as well as unbundling.
Circuit dealing happens — Disney is notorious for this with films such as Star Wars — as is Paramount with the Mission Impossible franchise.
Resale price maintenance, which AMC and other theater chains engage in on the regular, and the lack of need for oversight over geographic clearances because the Internet is virtually accessible everywhere in the United States.
Welcome to the 21st century, Justice Department, we missed you.
The Reality of Small, Independent Theaters
The major gripe against the Paramount Decrees going away is a mirror image of the gripe that independent booksellers have against Amazon: Too many people want speed and convenience to content over the experience of dealing with a crusty bookseller.
Case in point:
A Forbes article from last year suggested that if this overhaul indeed comes to pass, it could also mean that smaller studios “may very well cut back their release schedules, fearing a lack of available screens for their smaller titles, thereby limiting the choices that moviegoers have when they head to their local multiplexes.” That same article also points out that under our current laws, “studios are mandated to provide a viewing of all films prior to negotiation and release,” but if the decree is wiped out, “there will be no system of checks and balances to prevent a studio from selling blocks of films sight unseen, as was the case in the early days of Hollywood.”
But smaller studios do this kind of thing anyway, and many smaller studios — and indie producers — are having to go the streaming and VOD route to get audience attention anyway.
As for “selling blocks of films sight unseen” well, most films are garbage anyway under the current anti-trust decrees as they are currently interpreted and there won’t be that sharp a decline in quality in a competitive landscape, where every studio, content distributor, and other provider and creator realizes that they are in a battle for your attention.
The Future is Streaming for Indie Films
As for indie theaters, well:
…studios should be able to buy their own theaters again. That could allow streamers like Netflix and Amazon to purchase theaters and then potentially offer subscribers access to see their films in theaters, either for free or (probably more likely) for a small additional fee – maybe even a separate subscription tier.
This is a good thing for indie theaters, indie producers, and indie studios, who could conceivably band together — even geographically if they so choose too — to deliver indie content to smaller towns and municipalities in the US not located near Washington, D.C., New York City, LA, Chicago, Dallas, Atlanta or Miami.
And, of course, Amazon, Netflix, and maybe even HBO would want to buy some of these old movie houses for the Millennial and Generation Z crowd who don’t all remember what it’s like to sit a theater quietly to watch in community.
Less regulation, less management of a market good from a centralized government, more recognition of actual market realities rather than warping them to “fit” some politicians or regulators idea of the common good, and more options for competitive choices in the market.
Goodbye, Paramount Decrees.
But, what do you think, Goblin?
Are you willing to pay a little extra to stream The Ozarks in your town?
Sound off below.
