US Department of Justice puts an end to the Paramount consent decrees

By Emmanuel Legrand

A ​US District Court ​judge has lifted the so-called Paramount consent decrees that were preventing since 1948 Hollywood studios to own movie theater chains​. In her 17-page decision, Judge Annalisa Torres acknowledged that market conditions have significantly changed since 1948.

  “As internet movie streaming services proliferate, film distributors have become less reliant on theatrical distribution,” wrote Torres. “For example, some independent distributors, relying on subscription, instead of box office revenues, currently release movies to theaters with either limited theatrical runs or on the same day as internet movie streaming services.”

  The Court concluded that the Government has “offered a reasonable and persuasive explanation” for why the termination of the Decrees would “serve the public interest in free and unfettered competition.”

  Following the judge's decision, the US Department of Justice's antitrust division issued the following statement: "This antitrust action concerns consent decrees known as the Paramount Decrees, which ended the motion picture horizontal distributor cartel of the 1930s and 40s and have regulated aspects of the movie industry for the last seventy years.The Antitrust Division of the United States Department of Justice moves to terminate the Decrees effective immediately, except for a two-year sunset period on the Decrees' provisions banning block booking and circuit dealing."

  Observers do not expect the termination of the Paramount decrees to change fundamentally the balance between movie studios and theater chains. However, WIRED suggested that the AMC chain could be a target for Amazon.

  > The US Department of Justice held a virtual two-day public workshop this summer on the ASCAP and BMI consent decrees, offering stakeholders the possibility have their say in the discussion. Views expressed during the hearing were not different from the dozens of submissions to the DoJ.

  In a nutshell, ASCAP and BMI are not asking for the decrees to be terminated but are rather suggesting an adaptation of the decrees to allow for more flexibility so that it would still offer music users stability but would give more latitude the PROs. ASCAP and BMI have set four conditions that would make the situation acceptable for all parties.

  Publishers via the NMPA are asking for the right to selectively withdraw rights from PROs, while songwriters are not too keen on it and would like to see more flexible decrees.

  Meanwhile, the National Association of Broadcasters (NAB) is against any change on the grounds that a system that is not broken and has worked well for 70 years does not need to be fixed. All in all, the hearing did not really offer new perspectives but clearly highlighted the divide between the various proposals. 

  At this stage, the DoJ has not given any indication as to when it plans to rule on the decrees.

Here's a series of quotes lifted from the workshop:
  Assistant Attorney General Makan Delrahim: "This week’s proceedings underscored that liberty in free markets is important to our country, and it’s important to the music industry. As the Antitrust Division considers the appropriate path forward, we will strive to find the one that best supports this critical industry.”
  LeAnn Rimes, singer/songwriter: "It doesn’t take a lawyer to see that these laws have not kept pace with how dramatically the music industry has changed since 1941." 
  Elizabeth Matthews, CEO, ASCAP: "Facebook, Apple, Amazon, Google they are smart, savvy, and all lawyered up and widely unregulated. I have yet to sit in a negotiation with one of these licensees and not feel that songwriters’ hands were tied behind their backs due to the consent decrees. It is crazy to think that in 2020, songwriters are more regulated than Facebook."
  Michael O’Neill, President/CEO, BMI: "Some organisations are using this moment to their advantage. Unregulated parties and licensees are using this review of our consent decree to try to increase regulations on BMI and ASCAP, not for the benefit of songwriters and composers, but we believe for their own benefit. Frankly, this is just amazing to me and completely contradictory to what the DoJ is trying to do overall with consent decrees."
  David Israelite, President/CEO, NMPA: "[Tech] companies are nothing like the fledgling broadcast industry of the 1940s, yet they benefit from the same protections."  
  Gordon Smith, President/CEO, NAB: "The ASCAP and BMI consent decrees have effectively prevented significant harm to licensees, songwriters and consumers, and ensured that radio and television broadcasters are able to fairly, efficiently and transparently license musical works to the benefit of their audiences. For these reasons, the Department of Justice should not terminate, sunset or change the decrees at this time."
  Pharrell Williams, singer/songwriter: "The people need songs to sing, and those are written by songwriters. Let’s protect them too."