Why Movie Theaters are in Trouble After DOJ Nixes 70-year-old Case

upstart writes in with an IRC submission:

Why movie theaters are in trouble after DOJ nixes 70-year-old case:

By the late 1930s, the majority of power in Hollywood was concentrated in the hands of eight film studios, with the so-called Big Five-Paramount, MGM, Warner Brothers, 20th Century Fox, and RKO-holding the lion's share of the market. The studios not only locked actors into contracts and controlled film production and the distribution of those films, but also they bought up and founded movie theaters all over the country and thus controlled exhibition as well.

The DOJ [US Department of Justice] filed suit in 1938 alleging the eight studios were violating antitrust law in two key ways. First, the DOJ said, the studios were part of an unlawful price-fixing conspiracy, and second, they were monopolizing the distribution and exhibition sectors.

A federal District Court found in 1940 that the studios were indeed in violation of the law, which ended up leading to a whole long series of other legal challenges and appeals. In the end, the US Supreme Court in 1948 ruled 7-1 in favor of the DOJ in United States v. Paramount Pictures. The agreements the studios reached with the government, called consent decrees, required the studios to divest all their stakes in movie theater chains. They also had to end the practice of block booking, in which studios would require theaters to book a whole block of content-films and shorts-if they wanted to exhibit any of that content.

[...] In April 2018, the Justice Department announced it would undertake a review of "legacy" consent decrees put in place during the late 19th and 20th centuries as part of an agency-wide modernization initiative.

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