Capri Theatre Update (From Martin McCaffery)

 

Sometimes I think they are just trying to make things harder.

This morning a ruling came down in a Federal Court that the 1948 Paramount Consent Decree will be dissolved. The Paramount Decree was the backbone of the motion picture industry, and about the only protection the small independent theatres had against the major studios. The consent decree was the culmination of years of Federal lawsuits against the monopolistic practices of the motion picture industries going back to the pre-Hollywood days of movies. From the beginning of movies, various entities tried to exert monopolistic control over the movie business. Thomas Edison's Motion Pictures Patents Company was the first to be broken up in 1915 during the Progressive Era of Anti-Trust. There is even a movie about it, Nickelodeon (as always, don't get your history from movies).

Many other suits and and consent decrees followed, as the motion picture industry grew larger and hungrier. Studios owned movie chains in part or in whole (Paramount affiliated chains tended to dominate Montgomery. How do you think the Paramount got it's name?), meaning they could hold or exclude movies from the competition. They could also force block-booking upon the theatres. Blocking booking is where the studios would license the rights to show a movie in groups, so that if a theatre wanted to show Big Production A, it would also have to show Medium Production B, C, D, and a few Total Bombs E, F, G. They could even make the theatres book a film before it was even made. In the days when theatres changed movies three times a week, maybe that wasn't so burdensome, but you can see how a system where the studios ran everything from production to exhibition could be abused.

The Federal government saw it, and in 1938 sued the five major studios at the time - Paramount, RKO, 20th Century Fox and Warner Brothers - and the mini-majors - Universal, Columbia and United Artists - resulting in a 1940 consent decree stating the studios would eliminate some of their more egregious practices.

The studios fairly quickly were non-compliant with the consent decree and back in court. They made it to the Supreme Court, which ruled 7-1 (Frankfurter partially dissented because he thought the ruling did not go far enough) against the studios in 1948, forcing them to divest themselves of their theatre chains and, in effect, ending the Hollywood "studio system."

According to the all knowing Wikipedia, "The Paramount decision is a bedrock of corporate antitrust law and as such is cited in most cases where issues of vertical integration play a prominent role in restricting fair trade."

Although studios have come and gone since 1948, the Consent Decree has been the cornerstone upon which the movie exhibition business of the last 70 plus years is built. There have been exceptions, work arounds and outright violations over the years, usually to the studios benefit. Theatre chains have risen large and powerful enough to bend the will of the studios for awhile, but there seems to be a limit as to how big a movie chain can be before collapsing under a mountain of debt.

What does this mean to the smaller theatres, the ones who don't have the weight to make the major studios (or as we call them now, distributors) care? As always, it is up to the big distributors to dictate the terms of how and where their movies are shown. There is a two year phaseout period in the new court order. If the order stands, this could be another cataclysmic disruption in the movie business.

Will studios like Universal buy distressed theatre chains like AMC? Will small town theatres be even more starved for product then they are already? Will little art theatres be forced to play some doper comedy if they want to show the latest Brit-Lit-Twit Romance?

I don't know. As I said last week, the business model is going to change. This is just another warning shot in our back.

I was going to write about Virtual Cinema this week. Although it will be part of whatever new business model emerges from the pandemic, there is no clear vision of what it will be. You are in on the ground floor and no one knows how high the elevator goes.

I do know the available selection, although of quality equal or better than much we show at the Capri, is not attracting anything like an audience. We sold eight tickets for Flannery last week, and that's typical.

It's understandable that when viewing some random documentary cost as much as two months of Disney+ you have to be really motivated to see the documentary. The same is true of seeing a movie at the theatre. It is up to us as the theatre operator to make the theatre itself one of the motivators for you to get out and see the movie. Our job will be even tougher when we can safely re-open. We look forward to the day, or evening, you'll be able to sit in our theatre and see a movie the way it was intended to be seen.

And in the meantime, for those of you who have watched The Fight, "Train Wine!"

Stay Home and Stay Well

Wear A Mask - It's The Polite Thing to Do.

Martin McCaffery, Director Capri Theatre