Paramount Decrees Preventing Studios from Owning Theaters Repealed After 70+ Years

This week, a historic ruling was made by the US Justice Department repealing a long standing rule that had a major impact on the way Hollywood business was run. In order to prevent a monopoly on all aspects of film and hold back the power of major movie studios, the Paramount Consent Decrees of 1948 were put in place. These antitrust rules prevented vertical integration, meaning that studios could not own their own movie theaters. This made theaters a place where all films from all studios would compete on an equal playing ground, which was major concern in the early years of the cinema boom.

Now though, that is no longer the case and there are new companies like Netflix that in themselves have control over the production and exhibition of their content, making the old rule seem antiquated. Disney has also always been exempt from the Paramount Decrees, because the company is older than the ruling, and so owns theaters in Los Angeles (El Capitan) and New York (Paris Theater).

The repeal of this rule means that now we may be seeing some upcoming mergers between studios and theater chains. Theaters have been especially hard hit by this pandemic, notably AMC, and mergers may be one way to save them from complete extinction. In the digital age, studios are having to decide if brick and mortar theaters will remain the main source of profit, or if an online, streaming approach will become the new norm.

Deadline claims that at the moment, major studios are not in a hurry to jump at the opportunity to get into the theater business. Netflix and Amazon are rumored to be interested in buying a chain though, as they already have leads in the streaming wars in which most studios are still absorbed in competing.

This news in just another of many changes that the film industry is facing during the pandemic. Production and distribution will be inevitably changed over the course of the year and from here on out, and many adjustments will be necessary to get things back up and running. Already major films are skipping theatrical release in favor of On Demand or streaming release, including Disney’s Mulan, which is going straight to Disney+. The success of that film’s alternative release model will be an indication to all studios of the future possibilities of exhibition.