posted by
JoelWeide
on
February 22, 2007 at 4:48 am
Did the Sherman Antitrust act of 1890 apply to the motion picture industry or was it at a later date? I am trying to find out when the film companies were forced to sell off their theaters.
The court action that forced the major studios to divest their related theater chains took place in 1948. I am not a lawyer, but I do know that the major theory of the case was that the studios' control of motion picture distribution through their allied theaters amounted to a vertical monopoly. You can read more about the case here:
I am sure that there are others who could give a better or more comprehensive answer, but it is clear that motion picture production and distribution now is nowhere near as vertically integrated as it was prior to 1948. The “studio system” basically died with the Consent Decree; now studios basically serve as production facilities and production managers; they don’t often do not own the finished films; they distribute them pursuant to contracts. Theaters now bid to show films and I am sure that there are procedures in place to keep the bidding process open. A glance at the offerings at any large multiplex will show that films from many studios are on exhibition at any given moment, even if the theater is owned by a chain affiliated with a studio.
My understanding is that as distributors starting buying stakes back into exhibition in the early 80’s the government looked the other way and the Reagan administration eventually eliminated any remaining constraints for vertical integration in the entertainment business, making the Viacoms and Time Warners of the world possible.
The process took about ten years – the suit started around 1938 and took 10 years for the decision. Then it was about another 10 years before all theatre divestitures that the decree asked for were completed.
Comments (6)
The court action that forced the major studios to divest their related theater chains took place in 1948. I am not a lawyer, but I do know that the major theory of the case was that the studios' control of motion picture distribution through their allied theaters amounted to a vertical monopoly. You can read more about the case here:
View link
The Sherman Anti-trust applied to the major oil companies (Standard Oil in particular).
You want to check out the “Paramount Consent Decree of 1948”.
So why were studios eventually allowed to e-acquire theatre chains? (for instance, the Sony/Loews combination)
I am sure that there are others who could give a better or more comprehensive answer, but it is clear that motion picture production and distribution now is nowhere near as vertically integrated as it was prior to 1948. The “studio system” basically died with the Consent Decree; now studios basically serve as production facilities and production managers; they don’t often do not own the finished films; they distribute them pursuant to contracts. Theaters now bid to show films and I am sure that there are procedures in place to keep the bidding process open. A glance at the offerings at any large multiplex will show that films from many studios are on exhibition at any given moment, even if the theater is owned by a chain affiliated with a studio.
My understanding is that as distributors starting buying stakes back into exhibition in the early 80’s the government looked the other way and the Reagan administration eventually eliminated any remaining constraints for vertical integration in the entertainment business, making the Viacoms and Time Warners of the world possible.
The process took about ten years – the suit started around 1938 and took 10 years for the decision. Then it was about another 10 years before all theatre divestitures that the decree asked for were completed.