The Paramount Decision, 1948
The Paramount Decision
The 3 May 1948 "Paramount Decision" (United States v. Paramount Pictures, Inc., 334 U.S. 131) took its name from the venerable studio founded by Jesse Laskey, Cecil B. DeMille and Adoph Zukor in 1914-1917. But Paramount Pictures was only the first of the eight major studios named in the suit, which applied to all of them: The "Big Five" (Paramount Pictures, Inc, Radio-Keith-Orpheum Corp. (aka RKO); Loew's, Inc. (aka Metro-Goldwyn-Mayer); Twentieth Century-Fox Film Corp.; and Warner Bros Pictures, Inc.) and the "Little Three" (Universal Corp.; Columbia Pictures Corp, and United Artists Corp.). Hollywood since Thomas Ince in the 1910s, had operated on a factory model. Theaters owned and branded by Paramount or Warner functioned like showrooms for a full range of film genres, just as Chevrolet or Ford automobile showrooms were outlets for vehicles produced those companies. The industry had come to rely on complex financial interdependencies between production and exhibition, refining and profit-maximizing schemes like "pooling," in which the profits from all of a quarter's films were pooled to off-set losses to any one of them. The Majors did not have a numerical monopoly on distribution, but Its 3,137 of the 18,076 theaters nationwide were disproportionately "first-run city-center movie houses that commanded 47 percent of the yearly box-office take." (Casper 39).The Roosevelt and Truman Justice Departments had targeted the monopolistic practices of the studios since 1937, so the writing was on the wall by the late 1940s. The 1948 7-1 Supreme Court "Decree" finally forced the studios to divorce or disinvest their exhibition wings from their production wings, which marked the beginning of the end of the old monolithic studios of the Classic Era. That industry had a very refined footprint, standing mostly in Southern California, known collectively as "Hollywood." But this "Classic Hollywood" became "Old Hollywood" in a long slide from the late 1940s through the late 1960s. By the late 1960s and 1970s, a "New Hollywood" had emerged, producing very different kinds of movies and television under very different business models.
