Back in August, in an announcement that received very little press outside of a few select industries, the U.S. Justice Department announced that it would start reviewing several antitrust decrees, one of which is the 1948 Paramount Consent Decree, which limited Hollywood studio power over movie theater operators.
In a recent article, Reuters explained that the 1948 decree prohibited Hollywood studios not only from owning movie theaters but also from engaging in a process called "block booking," whereby a studio could link a lesser-grossing film with a top-grossing, in-demand film. It was as if you had to purchase a beat-up Plymouth Duster if you wanted a new Tesla.
I worked in movie distribution for nearly 30 years, and one of the first things I learned when I started as a sales trainee in the Boston branch at Columbia Pictures (yes, they used to have regional sales branches across the country back in the days before consolidation) was to always adhere to the phrase "picture-by-picture, theater-by-theater." I went to sleep repeating that phrase every night. This meant that I, along with every other salesperson across the country at every studio, could engage in film negotiations with exhibitors on only one film at a time and in only one theater at a time. It took me months to understand the nuances of my new sales territory, but the concept of block booking I grasped after about an hour. It was that important, and it was that drilled into us.
Interestingly, things have remained fairly consistent for the last 70 years. Studio distribution salespeople still negotiate with exhibitors on only one film at a time, fearing the long arm of the DOJ law raining hellfire and damnation down upon them. If you had a known dud of a film to sell on December 7 and the new entry into the Star Wars franchise on December 14, it was illegal to tie one booking into the other.
But with this DOJ announcement, things may be changing, and not for the better, at least not for theater owners and moviegoers.
Currently, theater owners employ film programmers to select which films will play in each of the cinemas they book. For example, if the film buyer has an eight-screen complex (as more and more theaters that feature in-theater dining and other amenities do now) to book, then he or she will fill those screens with the six to eight (depending upon multiple screens for the tentpole films) films that will maximize revenue for the company.
If Studio A has a film that the buyer projects will finish No. 1 at the box office on opening weekend, then the film will be slotted in the theater, oftentimes with multiple screens and in large-format auditoriums. If the following week Studio A has a film that the buyer believes will finish No. 9 at the box office, then the buyer will advise the studio that the film will not be playing in the theater. This sets off a flurry of back-and-forth negotiations on Monday mornings between the studio salesperson and the film programmer to try to secure a spot for that second film, but at no part during that debate will the salesperson dangle the studio's next tentpole hit as hostage trade bait.
However, if the Consent Decree is extinguished, then, in the example above, the film buyer would be forced to play a substandard grossing film or risk not playing the next studio hit.
There will also be a palpable effect on moviegoers: Not only is the theater owner in the above example forced to play a film he or she knows won't do any business, but it will also preclude the theater from showing the latest independent or genre hit in its place or from holding over a high-grossing film that is still attracting an audience.
In addition, if the lion's share of films that will be exhibited theatrically are going to come more and more from a few select studios that have the market cornered on tentpole releases, then the other Hollywood 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.
The National Association of Theatre Owners put it succinctly in its October response to the proposed Consent Decree changes by saying: "The current system allows exhibitors the flexibility to program content based on their customers’ demands. A repeal of the prohibition on block booking could render theaters unable to effectively program, force many exhibitors out of business, and leave consumers with fewer options for quality entertainment in the community."
Another important aspect of a potential elimination of the Consent Decree that doesn't receive the same press is the process of exhibitor trade screenings. Currently, studios are mandated to provide a viewing of all films prior to negotiation and release. If the decree is eliminated, then 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.
The studio to watch here is
As more and more content is vacuumed up by streaming services like
