[Repealing the Paramount accords could set independent cinema back
in favour of corporate giants. When larger studios can buyup
properties or drive competitors out of business, that monopoly over
our cultural media is truly dangerous.]
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MONOPOLYWOOD: WHY THE PARAMOUNT ACCORDS SHOULD NOT BE REPEALED  
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Vaughn Joy
March 13, 2023
Red Pepper
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_ Repealing the Paramount accords could set independent cinema back
in favour of corporate giants. When larger studios can buyup
properties or drive competitors out of business, that monopoly over
our cultural media is truly dangerous. _

Screenwriter Dalton Trumbo with his wife Cleo at the House
Un-American Activities Committee hearings in 1947. Marxist poet
Bertoldt Brecht can be seen in the background , (Credit: Mesa County
Libraries via Wikimedia Commons)

 

American independent filmmakers have always fought an unbalanced
battle against the major motion picture studios in Hollywood that is
only worsening with streaming. In 1948, the supreme court, directed by
the Department of Justice (DoJ), sought to bring some balance to the
system with a ruling in United States v Paramount Pictures, Inc.
[[link removed]] Commonly known
as the ‘Paramount accords’, the decision ended the monopolisation
of the studio system. However, in August 2020 the federal district
court for the southern district of New York started a gradual repeal
[[link removed]],
again at the recommendation of the DoJ. This could prove significantly
detrimental to independent filmmakers today as, historically, the
Paramount accords provided much needed equity for the industry.

The Paramount accords originated with a 1938 lawsuit filed by the DoJ
against the ‘big five’ film studios (MGM, Paramount, RKO, 20th
Century Fox and Warner Brothers) and the ‘little three’
(Universal, United Artists and Columbia). According to the DoJ
[[link removed]], the supreme
court found that these studios ‘had engaged in a widespread
conspiracy to illegally fix motion picture prices and monopolise both
the film distribution and movie theatre markets’. This process,
called vertical integration, involved studios owning the processes of
creating, marketing and screening a film for audiences in their
studio-owned movie theatres.

When the supreme court handed down the Paramount decision in May 1948,
the eight studios had to sign consent decrees legally binding them to
stop monopolistic practices. These included studio-owned theatres,
fixed minimum cinema-ticket prices and block booking, which gave the
wealthy studios unfair advantage over competing studios, independent
filmmakers and independent theatre owners.

In the 1950s and 1960s, the anti-monopolistic ruling had a significant
impact on independent filmmakers and theatre owners – even if there
were bumps along the way. For example, a post-war recession meant
cinema-ticket sales plummeted while television was becoming an
affordable and accessible entertainment option. But it was the effects
of the House Committee on Un-American Activities (HUAC) hearings in
1947 and 1952, which sought to root out communists from Hollywood,
that shook the film industry for years.

Commies out

The first HUAC hearings in October 1947 saw ‘friendly witnesses’
cooperating with the committee and naming alleged
communists. Testimonies from prominent figures
[[link removed]] in the motion
picture industry – including Walt Disney and Ronald Reagan, then
president of the Screen Actors Guild – were the backbone of HUAC’s
claims to legitimacy. Jack Warner of the Warner Brothers was among the
first to cooperate with the committee and declare that there had never
been communist ideals in his studio’s work.

As a result of the hearings ten directors, producers, and
screenwriters – the so-called Hollywood Ten
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were sentenced to prison for refusing to answer allegations of
communist ties. In November 1947, Hollywood executives met at the
Waldorf-Astoria Hotel in New York and created a blacklist of cast and
crew suspected of communist sympathies who would be ousted from the
industry, despite lacking evidence.

The blacklist and threats of federal investigation led to a number of
people leaving the industry, including then head of RKO Pictures Floyd
Odlum, who was replaced by the aviation tycoon Howard Hughes. RKO had
two former employees in the Hollywood Ten – Edward Dmytryk and
Adrian Scott – and in response, Hughes, ardently anti-communist,
fired crew members and staff on suspicions of communist associations
in 1948. Simultaneously, Hughes made the decision for RKO to settle in
the anti-trust suit early – eventually leading to bankruptcy –
presumably to gain favour with the federal government at a time of
overwhelming oversight in the cultural sector.

Independence

Amidst these challenges, independents began thriving on both sides of
production and exhibition. In _The Battle for the Bs_
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film historian Blair Davis says the Paramount accords removed the
guaranteed exhibition income studios could receive by limiting
releases to their own – often ‘first-run’ – cinemas where a
film debuted before being sent to subsequent-run cinemas that were
often independently owned. Independents then had a significant
advantage to show major films, and without the block-booking burden
could purchase just the licence for that major film and not be
burdened with multiple worse-performing films simultaneously. The
studios, losing that source of revenue, began remodelling contracts
with their actors, directors, and film crews. Traditionally, the
studios had issued multi-year or multi-picture contracts, but, after
the accords, they opted for recruiting independents on single-film
contracts to cut the budget on payroll.

No studio did this more effectively than United Artists. The studio
increased its film releases from four in 1949 to average 38 a year
between 1951 and 1958 with continued success through the ‘new
Hollywood’ independent years of the 1960s. According to Hollywood
historian Yannis Tzioumakis in American Independent Cinema
[[link removed]], ‘United
Artists’ success [in the 1950s] was the adoption of a particular
brand of independent production system… to provide complete
production finance to independent producers.’

With the economy just starting to recover in the early 1950s and
decreased cinema-ticket sales across the country, banks were less
likely to take risks on independent filmmakers. United Artists’
strategy of providing full funding for sole distribution rights and
approval over key production aspects – such as the director, stars
and budgets – allowed independents significantly more opportunities
than were available before the accords.

Into the unknown

Today, with the gradual repeal of the Paramount accords from 2020 to
August 2022, independents are faced with likely adverse effects. If
studios can again harness the income from exhibition, we may see a
return of traditional vertical integration. However, the primary
reason the DoJ gave in its 2019 argument against the accords
[[link removed]] was the advent
of streaming. The industry is entirely different from 1948 not only
because the studios that signed consent decrees no longer exist as
they did then, but because the accords did not account for streaming,
or crucially, whether a streaming service counts as a film studio.
With the landscape changed so much, and without new anti-monopoly
legislation for streaming services, we cannot know if theatre
ownership will be as profitable a venture for studios to reacquire as
it once was.

Although there are drastic differences between 1948’s Hollywood and
today, we can acknowledge that the DoJ’s reasoning for the Paramount
accords was to provide a more balanced industry for independent
filmmakers and theatre owners. Seven decades later, the rationale of
the DoJ for repealing the accords was to favour major film studios
over the growing streaming services, without emphasised concern for
independents.

Significantly, Netflix, for example, previously funded considerable
amounts of independently created content. However, in 2022, it cut a
substantial portion
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its independent features department. Funding for independent films is
a crucial issue in the industry and one that led the 2022 Zurich
summit, a film festival and conference of filmmakers. Several
independent filmmakers at the summit alleged that streaming sites are
not interested in original stories unless they can own the film
outright as opposed to licensing from an independent producer.

There are many factors weighing on decisions made within the film
industry: the economy, the shifting nature of media consumption and
the ongoing pandemic affect the production, distribution and
exhibition of films. However, it’s clear that the 2019 DoJ was not
concerned with how independent filmmakers would fare in a
post-Paramount accords market and specifically targeted a sector of
the motion picture industry offering considerable opportunity to
independent creators. In a more equitable system, the government would
implement new and updated anti-monopoly legislation for the film
industry to incorporate streaming sites and usher in a new resurgence
for independent filmmakers and exhibitors.

Government reach

Knowing the history of HUAC in Hollywood and that an overrepresented
government in the industry is just as dangerous as a corporatised
motion picture industry, I am cautious to say we need stronger,
updated anti-trust legislation for Hollywood. But it could keep major
studios from owning multiple massive properties – such as Marvel,
Star Wars, etc under one company – and also implement firmer
restrictions on streaming sites.

One current movement to break up monopolies in the entertainment
industry is coming from the American Economic Liberties Project
(AELP). The AELP recently launched a campaign to encourage the DoJ
to unwind the Live Nation-Ticketmaster monopoly
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formed in 2010. If this campaign is successful in disbanding the overt
live event ticketing monopoly, that decision would set precedent for
antitrust review of Hollywood and the current major studios that is
sorely needed in this post-Accords film industry.

When larger studios can buy up properties or drive competitors out of
business, that monopoly over our cultural media is truly dangerous.
Our cultural media is so incredibly important for how we view
ourselves in relation to how people are presented on screen, for how
we understand interpersonal relationships, political ideas and
historical events. Film is an important mirror that reflects back to
us our times and our moment, whether it’s a film allowing us to
escape, a biopic depicting what our contemporaries think about a
bygone person, an allegory about politics, a picture of marriage in
the 21st century, or a sci-fi adventure allowing us to see ourselves
in a futuristic setting just to know we made it through today.

When power over those perspectives is consolidated to a few people’s
final judgement, we risk so much of our culture. Implementing new
anti-trust legislation for the motion picture industry is crucial for
allowing independents more opportunities and protecting the cultural
sector from consolidated ownership over public ideas and imagination.

_Vaughn Joy is a PhD candidate in history at University College London
and co-host of the podcasts ‘Impressions of America’ and ‘The
Joy of Star Wars.’_

_Red Pepper is a quarterly magazine and website of left politics and
culture. We’re a socialist publication drawing on feminist, green
and anti-racist politics. We seek to be a space for debate on the
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* Film Industry
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* cultural industries
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* monopoly
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* HUAC
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