A seven-decade long rule may be about to change as the U.S. Department of Justice has reportedly announced plans to review the antitrust rules that have governed Hollywood since a 1948 Supreme Court case forced major Hollywood studios to sell their ownership stakes in movie theaters.
The result is we could soon see a shift in how studios distribute movies with studios such as Paramount, Warners and Universal being able to own cinemas again – and in doing so becoming less reliant on the middle men that are theatrical exhibitors.
Assistant Attorney General Makan Delrahim said in a statement: “The rules need to be reviewed as the landscape of the exhibitor industry has changed from largely single-screen theaters in the 1940s to nationwide multiplex chains today. It is high time that these and other legacy judgments are examined to determine whether they still serve to protect competition.”
There have been notable cases of distributors owning a small number of cinemas despite the ‘consent decrees’, such as Disney’s El Capitan theater, Sony’s share in Loews years ago, and companies like IFC and Drafthouse owning their own theaters.
In any case the industry as a whole has completely changed since the 1948 ruling, most notably ticket sales are continuing on a downward trend which they have been since 2002. Revenue may have gone up, but cinema-going hasn’t been a growth business for sometime. A move like this is seen as a way to bolster revenue and increase competition against disruptive streaming services.
Source: The Wrap