Why isn't it illegal for content owners to own streaming services?
July 10, 2019 9:47 AM   Subscribe

In United States v. Paramount Pictures, Inc. the U.S. Supreme Court in 1948 ruled, basically, that movie studios could not also own movie theaters. Why isn't this being talked about in relation to streaming services?

This is something I've been thinking about for a while--with media companies like Warner, Disney, etc. scrambling to launch their own streaming services and thus yanking movies/tv shows they own and/or distribute from Netflix, Hulu, etc--is anyone thinking or writing about this in terms of antitrust? It seems pretty obvious to me that United States v. Paramount Pictures is a pretty big precedent here, but is it simply a case that it's not seen as a problem yet? Or is it not a problem because people can also rent or buy discs or buy digital copies from a variety of sources?

Any lawyers want to weigh in on how likely a challenge to this practice would be?
posted by Automocar to Law & Government (8 answers total) 6 users marked this as a favorite
 
Home streaming services aren't movie theaters, so this would probably not be a good precedent. As you note, there are plenty of other ways to see movies in the home.

Antitrust comes into play only when a company uses a monopoly in one area to create a monopoly in another. A studio has a monopoly on distributing its own movies (granted to it by copyright law) so for it to only show its movies in theaters it owns, during the initial theatrical run when there is no home video or other way to see the movie, is leveraging one monopoly into other and this apparently was enough to trigger antitrust.

Arguing that Disney et. al. can't launch their own streaming service is more akin to arguing that book publishers can't own the books they publish, which is a far less reasonable argument.
posted by kindall at 10:22 AM on July 10


I don't have an answer for you, but you might find some useful information/context in this newsletter post from yesterday about this exact subject
posted by attentionplease at 10:27 AM on July 10 [2 favorites]


Arguing that Disney et. al. can't launch their own streaming service is more akin to arguing that book publishers can't own the books they publish, which is a far less reasonable argument.

I won't threadsit, but I want to redirect this because it's not a correct read. It would be more akin to book publishers owning bookstores and only selling their books there.
posted by Automocar at 10:30 AM on July 10 [2 favorites]


The newsletter linked by attentionplease (which is excellent reading) links to this DOJ page on the 1948 consent decree which ended the studio-owned theater system.

They are apparently considering doing away with the 1948 rules due to changes in the movie business, and reading between the lines my feeling is that they are not looking to expand it to include preventing ownership of streaming services by movie studios (even though that would be logical) but instead are just going to toss the whole rulebook altogether, with the excuse that it no longer matters in terms of promoting competition and preventing price-fixing, in the very narrow context of theater movie tickets.
As part of its review, the Department invited interested persons, including motion picture producers, distributors, and exhibitors to provide the Division with information or comments relevant to whether the Paramount Decrees, in whole or in part, still are necessary to protect competition in the motion picture industry.
There's no indication that they are/were seriously considering the rather obvious extension of Paramount to include streaming services as analogous to 1940s theater chains.

Aside from casting some shade at the current leadership of DOJ for being corporate-owned tools (duh), one way of viewing it is that US anti-trust law is, even at the best of times, generally very reactive, and not very proactive. US v. Paramount only happened after the studios had established very firm control over the entire camera-to-screen distribution chain of movies, and were actively and obviously engaged in price-fixing schemes, including outright setting minimum prices for tickets. (It really doesn't get more bald-facedly anticompetitive and consumer-hostile than that.) And they'd been doing it since at least the 1930s. So you had at least a decade for public sentiment to build against the studio system, maybe longer for people who were aware of what was going on.

So, I don't think there's any reason to look at Paramount and assume that anything will be done about anticompetitive practices in the streaming marketplace, or ownership-diversification rules, until the situation gets much worse, and much more obviously worse, than it is right now.
posted by Kadin2048 at 11:05 AM on July 10 [7 favorites]


Why isn't this being talked about in relation to streaming services?

I'd attribute this to the broader falloff in antritrust enforcement across all industries, combined with the fact that the publicly-traded media companies of 2019 are much bigger and more powerful than film studios were in the 1940s, and they use lobbyists to get their way.
posted by overeducated_alligator at 11:08 AM on July 10 [6 favorites]


IANAL but: The current situation is not that content owners buy or launch streaming services; it's that streaming services get into the content business (Netflix, Hulu, HBO, etc.). Going back to the earliest days of television, the TV broadcast networks were both content distributors and content creators. (Ditto, radio networks before them.) So as broadcasting morphed into streaming, it's natural that streaming services would not only pay others for the rights to content, but get into the business of creating content themselves. So while there is vertical integration, it is not the kind that became problematic in the Paramount case because, since there is plenty of competition in streaming, it is not resulting in monopolization of the markets or price fixing.
posted by beagle at 11:44 AM on July 10 [1 favorite]


I don't super have my finger on the pulse on the gaming world but I think this is actually a hot button issue right now. Epic Games launched their own digital distribution platform and are buying rights to exclusive distribution as a tactic to compete with Steam. I have no idea how likely a scenario this is (was it ever an issue with Valve games on Steam?) but the idea of them releasing their games exclusively through their own store has caused a stir among certain Internet People.
posted by ToddBurson at 11:50 AM on July 10


The current situation is not that content owners buy or launch streaming services; it's that streaming services get into the content business (Netflix, Hulu, HBO, etc.).

Disney's getting ready to launch its own service at the end of the year, and that will be monopolization of a lot of popular content.
posted by praemunire at 5:37 PM on July 10


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