Each media conglomerate – behemoths like Disney; Comcast, owners of Universal Pictures, Sky TV and NBC; AT&T, recent buyers of Warner Bros. and HBO; and ViacomCBS, which includes Paramount Pictures – will soon have their own streaming services, requiring you to opt in to their service to get the shows they make, and the films they own. Netflix are already concentrating on their own productions as a result, saddling themselves with debt in the process. The entry of a phone company, AT&T, into this industry is not unusual, with technology and IT infrastructure companies already running their own services, like Google, Amazon and Apple.
Hollywood is now part of a vertically-integrated media industry, as in one company will now own the entire process from making a film to releasing it, controlling access to it at each stage. Ironically, the Hollywood studios were engaging in this themselves over seventy years ago, to the point where it was outlawed.
Paramount Pictures is singled out in Classical Hollywood history for this, only because the name of the court case, “United States v. Paramount Pictures, Inc,” named the largest studio, but all the main studios were caught up in what became known as the “Paramount Decree,” which separated film studios from the theatre chains they owned.
Through these chains, the studios were able to engage in practices such as “block booking,” which tied theatres into showing a number of films from one studio for a particular time – this could also be tied into “blind buying,” where the block could be bought without the theatre knowing what the films were. Other short films that made up a programme, like documentaries or cartoons, could be included as part of the block that had to be shown alongside the main features.
Theatre chains and film studios were linked for a number of reasons. Paramount started their own chain, while Warner Bros bought one that gave them a share in a bigger studio, First National, which they also bought. Meanwhile, the Loew’s theatre chain bought one film company to provide them with films, then bought another to increase the quality, then hired a manager for both of them by buying out their company as well – this became Metro-Goldwyn-Mayer, in that order.
As early as 1925, the Loew’s, Paramount and First National chains, and the film studios that made and distributed their films to them, were being described as a “film trust,” the same kind of trust that established Hollywood as the centre of the film industry in the first place: the enforcement, by the Motion Picture Patents Company, of Thomas Edison’s patents for film cameras led to an exodus of many producers from New York by 1915, when it was deemed to have been illegally restraining the filmmaking trade, particularly in attempting to restrict films to one reel in length (about 11-16 minutes).
Like the “Edison trust,” the theatre practices were broken both by progress, and a court case. The US federal government took Paramount, MGM, Warner Bros, 20th Century-Fox, RKO (another studio founded by a theatre chain), Universal, Columbia and United Artists to court over the control they exerted as theatre owners, or through block booking their films. The new rules established in 1943, but only enforced after the case reached the Supreme Court in 1948, was that block booking would be limited to five films in each block, with no shorter films included, and studios had to screen films to exhibitors so they knew what they were booking... and the studios had to sell their theatres.
|[Warner Bros sold their pre-1950 library to a.a.p. in 1956, for just $21m. 2019 value: $197.3m]|
That this happened in 1948 is more crucial, as this was when television started properly entering homes, and the first full schedules of programming appeared on TV networks. Film studios made numerous deals to sell the rights for their films to TV – in some cases, studios like Warner Bros left themselves with no rights to their films prior to 1950, as there was no other way to make money from them at the time. Warner Bros would finally buy those rights back in 1996, after the home video boom, but ahead of online streaming.
Ultimately, the “Paramount decree” made it easier for independent film companies, previously reliant on the bigger studios for exposure, to put films into cinemas. One such company had always believed its films were worth more than what RKO had been paying them, never having sold them away to TV, eventually setting up their own distributor in 1953, named Buena Vista [“good view”] Film Distribution Company, since renamed Walt Disney Studios Motion Pictures.