huntsville, alabama, city

Federal Rule change could impact local theaters

TERRE HAUTE, Ind. (WTWO/WAWV) — In small, rural communities, independent theaters have survived the age of television, DVDs, DVRs and even streaming, but a new threat is looming with the end of an old law.

The Paramount Consent Decrees were put into place in the 1940s when the government stepped in to break up the monopoly movie studios once held over the industry.

Late last month, the Justice Department moved to terminate those long-standing rules.

“The Paramount decrees long ago ended the horizontal conspiracy among movie companies in the 1930s and ‘40s and undid the effects of that conspiracy on the marketplace,” Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division said.  “The Division has concluded that these decrees have served their purpose, and their continued existence may actually harm American consumers by standing in the way of innovative business models for the exhibition of America’s great creative films.”

The Director’s Guild of America called the DOJ’s move “a step in the wrong direction.” According to the Guild, changes to the industry call for “greater, not lesser, antitrust oversight.”

“Fair competition is especially imperative for both independent films and small and independent theaters,” the DGA said.

Small theaters owners, like Brent Barnhart of KJB Theaters, are left wondering what the end of the Paramount Consent Decrees will mean for them. KJB Theaters operates in Washington, Linton and Paris, Ill., and also includes drive-in theaters in Terre Haute and Bloomington.

According to Barnhart, multiplex theaters with 12 to 16 screens might not be impacted by the changes to come, but smaller theaters with only one or two screens will have to worry about the return of practices such as block-booking.

“What block-booking means is a studio might say if you want our popular movie coming out this quarter, you have to play two or three movies that aren’t looking to do so well,” Barnhart explained. “So now, they’re kind of forcing you to take movies that even you know, and the studio knows are not going to perform well in your market for whatever reason. So that definitely puts a hinderance on the business side, and the creative side of what we do.”

Block-booking isn’t the only issue concerning Barnhart and other small theater owners. The prospect of studios setting their own ticket prices could force community cinemas to raise their prices.

“Right now, they cannot dictate that. It’s completely up to the movie theater what they charge for ticket prices,” Barnhart said. “The film studio does set the percentage of the box office that they take of that.”

Paris Area Chamber of Commerce Executive Director said the community is fortunate to have an affordable theater.

“You know, if you travel to Terre Haute for instance,” she said, “it’s very difficult to take a large family to the movie there, and be able to afford the drinks and the popcorn.”

Barnhart said most independent theater owners understand the importance of a reasonably-priced ticket.

“We’re all trying to keep it affordable for families, and trying to not only make it economical for families in those communities to come to the movies, but also to bring some in from other communities, which also helps support the businesses in the community.”

But moving forward, that could all change.

“By removing the Paramount Consent Decrees, there’s a possibility that the film studios could get together and say, you know, ‘every theater’s going to charge this amount’ to satisfy what they want to get out of their product,” Barnhart noted.

Another common practice prior to the Paramount Consent Decrees was circuit dealing, ” which is where certain circuits might get that studio’s movies so other circuits don’t which would be a major concern as well,” Barnhart added.

“Disney is the number one studio, you know in 2019, and imagine if we couldn’t get Disney because a larger chain got all the Disney products,” Barnart said. “It would be very difficult for anybody to survive that.”

According to Barnhart, small town theaters are more than just a place to watch the latest movie. They also serve to bring communities together.

“It brings people together. They share an experience together,” he explained. “If they’re watching a comedy, they’re laughing together. If they’re watching a sad movie, they’re sad together, which is just part of the human experience. And on a business standpoint, they also serve as an anchor and as a draw to those communities.”

The loss of such places could have a widespread impact for these small towns.

“Statistically speaking, when a town loses it’s theater, it tends to lose a lot of the things around that theater,” Barnhart explained. “Not to put too much importance on the movie theater, but I do believe that it is a very important piece of every community to have the movie theater where they, where people get together and share experiences together.”

Lane agreed, saying the loss of the theater would be “very detrimental to our community.”

“As a rule, we take for granted the theater, but they do a lot of good things for the community. I know when we had our Christmas in Paris a couple of weeks ago, they had a movie for the children, and I think there was like over 180 children that went to the free movie. So, they do a lot of things for the community, and sometimes I think we just don’t realize what they do for us and what a great asset they are to Paris.”

It’s still too early to tell exactly what changes the end of the Consent Decrees will bring. According to the DOJ, the motion to terminate the Paramount decrees would allow a two-year transition period to allow the theater and motion picture industry to have “an orderly transition to the new licensing changes.”

Barnhart is optimistic for the future.

“Theaters have gone through, you know, television in the 60s, and um, VCRs in the late 70s, early 80s, and of course, now the internet and streaming, so there’s always going to be something to help foster competitiveness,” he said. “But you know I think, as long as a lot of the things in the Paramount Consent Decree don’t come to fruition, I think we’re going to be ok. We’re going to survive as we have the past, you know, 70-80 years.”

For those who want to help ensure the future of their hometown theater, Barnhart said it’s all about community support.

“Support your local theaters as much as you can,” he said. You know, purchase gift cards, stop in and just buy a popcorn even if you aren’t watching a movie. Theater popcorn’s perfect for watching football at home.”

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