1.3 The Paramount Decree and Postwar Production Changes

1.3 The Paramount Decree and Postwar Production Changes

United States v. Paramount Pictures, Inc., 334 U.S. 131 (1948)

In 1938, the Department filed an antitrust lawsuit alleging that eight major motion picture companies had conspired to control the motion picture industry through their ownership of film distribution and exhibition. The eight original defendants were Paramount Pictures, Inc., Twentieth Century-Fox Corporation, Loew’s Incorporated (now Metro-Goldwyn-Mayer (“MGM”)), Radio-Keith-Orpheum (dissolved in 1959), Warner Brothers Pictures, Columbia Pictures Corporation, Universal Corporation, and United Artists Corporation. After a trial, the district court found that the defendants had engaged in a wide-spread conspiracy to illegally fix motion picture prices and monopolize both the film distribution and movie theatre markets. On appeal, the Supreme Court sustained those findings. See United States v. Paramount, 334 U.S. 131 (1948). Subsequently, each of the defendants entered into a consent decree with the Department (collectively, “the Paramount Decrees”).

The Paramount case and the resulting decrees significantly altered the structure of the motion picture industry. First, the Supreme Court ordered and the decrees mandate a separation between film distribution and exhibition by requiring the five defendants that then owned movie theatres to divest either their distribution operations or their theatres. Going forward, the decrees prohibited those defendants from both distributing movies and owning theatres without prior court approval. Second, the Supreme Court and the decrees outlawed various motion picture distribution practices including block booking (bundling multiple films into one theatre license), circuit dealing (entering into one license that covered all theatres in a theatre circuit), resale price maintenance (setting minimum prices on movie tickets), and granting over-broad clearances (exclusive film licenses for specific geographic areas).

- U.S. Department of Justice - Link

The "Paramount Decree" and Postwar Production Changes

The federal government's efforts to regulate the film industry more closely and eliminate its oligopolistic practices culminated in the Supreme Court's ruling against the majors in May 1948, known as the Paramount Decree, because Paramount was the first major named in the case. The ruling ended the practice of block booking and terminated vertical integration: the majors had to separate, 'divorce,' their exhibition from their distribution and production arms were expected gradually to sell off their cinema circuits (Izod, 1988, pp. 122-3). Each film now had to be rented on a separate basis and the majors cut back production, concentrating on a smaller number of better-produced films to woo exhibitors. The majors deployed more and more of their energies into the "super production," the roadshowed epic that could exploit the introduction of costly technical developments, including Technicolor and Cinemascope, which proclaimed cinema's superiority to television (Maltby, 1983, pp. 63-73). These "prestige" films were often well over 2 hours long and therefore eliminated the need for a support feature. As Thomas Schatz argues, this shift toward fewer, more individualized and carefully marketed films signaled "an emphatic end to the studio-based production system, with its contract personnel, steady cash flow, and regulated output" (Schatz 1989, p. 435). Production by the majors declined from 477 films released in 1940, to 187 in 1959, a fall of over 60%. This process was accelerated by audience decline and the rise of television. All the majors experienced slumps in profit from the high of 1946, but only RKO ceased trading, in 1957.

Within the more fluid and unstable pattern of production that followed the Paramount Decree, and with the majors concentrating on prestige productions, a greater space opened up in the mid-bottom range of the market. Poverty Row companies such as Monogram and Republic were tempted into producing intermediates or 'ambitious "B"s', in a bid for critical and commercial prestige. Gun Crazy (1950) was just such a film, produced by the King Brothers who had made their money installing slot machines, the numerous 'cheapies' for Monogram, and were now making a bid for higher cultural status with United Artists acting as distributor. The King Brothers were prepared to employ the blacklisted Dalton Trumbo, credited under the pseudonym of Millard Kaufman, as they were anxious to secure the services of the man who had formerly been the highest-paid writer in Hollywood. However, their dubious reputation made front-line stars wary of taking parts and they were forced to use John Dall and Peggy Cummins, who were not big draws (Kitses, 1996, pp. 12, 57, 73-5). The director, Joseph H. Lewis, had a $450,000 budget and the luxury of a 30-day shoot which he used to construct several elaborate long takes including the celebrated sequence in which Annie and Bart rob the Armour Meat-Packing Plant, shot with great ingenuity in a single take of three and a half minutes. Lewis cleverly uses a fog-bound setting for the denouement where there is no need for a large cast or expensive panoramic shots, but which also contributes to the mood of moral confusion that makes Gun Crazy a celebrated film noir. Overall the film has the fast-paced 'furious' quality that was the hallmark of the 'B' feature 'actioner', overlaid with a subtlety of characterization and care in execution that were more characteristic of the 'A' film. (the concept of the long take is a new concept in cinema) 

Andrew Spicer, Film Noir 2014 pp. 32-3 ( was textbook for this class - insane pricetag)