What Movie Studios Refuse to Understand About Streaming

www.eff.org
5 min read
fairly easy
The longer we live in the new digital world, the more we are seeing it replicate systemic issues we've been fighting for decades. In the case of movie studios, what we've seen in the last few years in streaming mirrors what happened in the 1930s and '40s, when a small group of movie studios also...
controlled the theaters that showed their films. And by 1948, the actions of the studios were deemed violations of antitrust law, resulting in a consent decree. The Justice Department ended that decree in 2019 under the theory that the remaining studios could not "reinstate their cartel." Maybe not in physical movie theaters. But online is another story.

Back in the '30s and '40s, the problem was that the major film studios—including Warner Bros. and Universal which exist to this day—owned everything related to the movies they made. They had everyone involved on staff under exclusive and restrictive contracts. They owned the intellectual property. They even owned the places that processed the physical film. And, of course, they owned the movie theaters.

In 1948, the studios were forced to sell off their stakes in movie theaters and chains, having lost in the Supreme Court.

The benefits for audiences were pretty clear. The old system had theaters scheduling showings so that they wouldn't overlap with each other, so that you could not see a movie at the most convenient theater and most convenient time for you. Studios were also forcing theaters to buy their entire slates of movies without seeing them (called "blind buying"), instead of picking, say, the ones of highest quality or interest—the ones that would bring in audiences. And, of course, the larger chains and the theaters owned by the studios would get preferential treatment.

There is a reason the courts stopped this practice. For audiences, separating theaters from studios meant that their local theaters now had a variety of films, were more likely to have the ones they wanted to see, and would be showing them at the most convenient times. So they didn't have to search listings for some arcane combination of time, location, and movie.

And now it is 2021. If you consume digital media, you may have noticed something… familiar.

The first wave of streaming services—Hulu, Netflix, iTunes, etc.—had a…
Katharine Trendacosta
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