The first week of May is well known for a series of justice, human rights, and independence celebrations; via the Law Day, May Day, and Cinco de Mayo holidays. Interestingly enough, this week also marks a historic breakthrough in film distribution and the proverbial “beginning of the end” for the Hollywood studio system.
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Prior to the late 1940’s, the Hollywood film industry was run by five studios, which controlled every aspect of major film production, distribution, and exhibition. Of particular note in this system was the practice of “block booking” films (i.e. forcing theatres to purchase numerous films, as a package deal) and studio ownership of prime theatre locations; effectively allowing studios to monopolize theatres with their product. In retaliation to this non competitive system, a series of complaints were lodged against the five studios, by independent producers; culminating in the Hollywood Anti Trust Case of 1948 (aka the “United States v. Paramount Pictures”).
On May 4, 1948, the United States Supreme Court handed down a decision on the “United States vs. Paramount Pictures” anti-trust case. The ruling basically held that the established film distribution system was in violation of U.S. anti-trust laws, forcing studios to abandon “block booking” and divest themselves of theatre ownership. While there would be several more court cases, before the studio system was officially broken, the Paramount Decision proved to be the turning point, that eventually “opened” the industry.
In addition to eroding the studio system and opening the film industry to a greater degree of competition, the Hollywood Anti Trust Case of 1948 also resulted in a drastic alteration to the business model of cinemas. No longer being directly tied in to studios, theatres were faced with higher film fees and decreased percentages of ticket sales, forcing a move towards concession as a primary means of revenue; the separation of studio and theatre pushed theatres out of the film business and in to the food business. In turn, cinema design, operations, and the overall movie going experience were set on a new path, ultimately leading to what we see today.
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