 This is the SF Productions Podcast Network. The Court is now in session. From the Pop Culture Bunker, I'm Mindy. And I'm Mark. You can check out our audio podcast, How I Got My Wife to Read Comics on iTunes, or on our website, SFPodcastNetwork.com. So we just wrapped up our history of the movie studios, and a common event for all of them was the impact of the United States versus Paramount Pictures Incorporated in 1948. This Supreme Court decision forced the studios to divest themselves of one of their most profitable divisions, the movie theaters. Just as studios are currently spinning up their own streaming services, Peacock, HBO Max, Disney Plus, there was a desire for what we call today vertical integration. By owning their own theaters, studios could ensure availability of screens for their films, control where those films were shown, and avoid splitting profits with independent theaters. In fact, most of the studios actually began as exhibition companies going all the way back to the Nickelodeons, not the kids' cable network. They then expanded to creating product for their own theaters. This is why, even today, you often see downtown movie theaters with names including Warner's, RKO, Fox, Lowe's, which is MGM, Paramount, etc. Once the studios were well established by the 1920s, a question started to come up. Should studios legally be able to own their own theaters? If you ran a theater not owned by a studio, your choices were fairly meager. If you wanted to show a particular film, you might be forced to accept a bunch of other films to get it. You might be forced to accept a set of movie shorts you didn't want, a practice known as block booking. You also might be forced to accept films before you even get a chance to see them in a preview. This is called blind buying. By 1938, the Justice Department was getting enough complaints about these trade practices that they sued Paramount, who was the primary defendant as the biggest studio at the time, with the other studios as co-defendants. The initial case was settled two years later with a consent decree from the Southern District of New York. It gave them a year to implement the following. No more block booking of shorts. Blocks of full-length films were limited to a set of five. Blind buying was verboten, replacing this with trade-showing, special screenings of films every two weeks for the theater industry, and the creation of a board to enforce all of this. The studio's response was the unity plan, where larger groups of theaters would get blocks of films, but individual theaters could then reject them. At this point, a new organization came into being, the Society of Independent Motion Picture Producers, SIMP. This group, many of whom came from United Artists, was using more indie producers than the other studios at the time, had a goal of advancing their own interests by stopping anti-competitive practices by the studios. One of their first moves was to implement an antitrust suit against Paramount Detroit theaters, which basically controlled that market's exhibitors. Between this and the studio's refusal to comply with the consent decree, the government resumed prosecution in 1943. A decision came down two years later in favor of the studios. It was then appealed from the district court to the Supreme Court. It took three years to reach the highest court in the land, which ruled against the studios, forcing them to divest themselves of the theaters. This was an enormous blow to studio profits, just as television was starting to become a factor. It forced studios to drop long-term contracts with their creatives, which they could no longer afford, sell off studio real estate, ending the studio system they had lived on for decades. Without a guaranteed mechanism, a.k.a. their own theaters, to re-release older hits, something that was common at the time, studios sold off some of their older films in the 50s. Much of this was quickly sent off to the maw of television. Speaking of the boob tube, the decree forced Paramount into two companies, Paramount Pictures and United Paramount theaters. The letter would merge with a nascent TV network spun off from NBC in a separate legal decision and become what we know as ABC today. The studios took greater advantage of location shooting and independent production becoming more like distributors. This further diluted profits, and it would take until the 1970s and the modern blockbuster to regain much of their former luster. So why is this important today? Because the decree that kicked all of this off has been terminated by the courts. The Department of Justice has begun to review decrees without an expiration date, as this one was, to see if they are still valid or not. In November last year, the DOJ announced they would seek to terminate the Paramount Decree, giving the studios a two-year sunset clause to prepare. The court just granted this in August, so the clock is running. So what does all this mean? Considering that the mega studios currently own the entire life cycle of a film, except for the actual screening of them, it's a good bet they are eager to buy out the theater chains once they restore their profits post COVID. At the same time, theater chains are in dire shape due to the COVID shutdown, so they are ripe for the picking. Get ready for Comcast AMC, Disney Regal, etc. and a lot of synergy. It could also mean further pressure on independent theaters to join one of the chains in order to ensure access to the films they want, which is one of the reasons why the decree was there in the first place. What's to stop a studio from keeping a tent full film in only their theaters in a specific market, for example? However, it seems unlikely the studios will be able to keep movies solely in their own chains nationwide, because there's no true nationwide chains. Maybe AMC, but it's mostly regional chains. If they want everyone to have access to them, they're going to have to share with the other chains. Or buy out more than one chain. I suppose they could do that, that's true. We shall see what happens. Yeah, so we have nothing to watch on television and difficulty watching things in the theater, so go listen to our audio podcast, how I got my way through comics on iTunes, or on our website, sfpodcastnetwork.com. From the Pop Culture Bunker, I'm Mindy. And I'm Mark. Thanks for watching.