Media's Growing Monopolistic Moves - And Lesser Concerns

Should we be worried about a movie studio buying up a modestly sized movie theater chain in terms of antitrust, monopolistic tendencies?

No. Because this isn’t the 1940s.

Sony Pictures is buying Texas-based Alamo Drafthouse, the seventh-largest movie theater chain, with 35 cinemas. It's the first time in half a century that a traditional Hollywood studio will own a movie theater chain.

Enacted in 1948, the Paramount Consent Decrees ordered major studios to divest their cinemas -- to push back on businesses growing monopolistic tendencies.



Monopolistic concerns over media and communications business have been a concern for critics, and analysts for years. 

Proponents would say that vertical integration and synergy make for good growth of those companies. Opponents would argue that this can be anti-consumer, in terms of pricing and fees.

Jumping into the 1960s and 1970s, movie producers/studios moved into producing TV shows and owning TV networks, all that brought about some consternation as well. 

Starting in 1934, with the creation of the Federal Communications Commission, there were new rules regarding media ownership including putting limitations on TV station ownership (as well as cross ownership with local market newspapers).

But similar distinctions did not apply for those that own cable TV networks. 

Some decades ago -- before the advent of smart TV -- there was a belief that many TV networks should also make TV sets completing the entire consumer chain.

Back to movies: In 2020, a judge approved the termination of the antitrust rules that for 71 years have prevented major Hollywood studios from taking control of theatrical distribution.

Too little too late. Now four years into this decision, studios for the most part have avoided purchasing cinema chains. And 2020 came right smack in the early phase of the pandemic crisis.

And there was more.  

In the immediate aftermath of the pandemic, movie studios and chains were just trying to survive -- all while their sister TV companies were ramping up new streaming premium TV-video platforms to carry all sorts of content -- like new theatrical films.

It was an easy decision to push new movies to these streamers as typical moviegoing consumers remained at home for the most part.

Now there is a new concern over consolidation: Premium streaming price increases and streaming bundling, which some believe could further escalate consumer pricing.

And we have even touched on digital-first media companies' tendencies to get bigger. 

Focusing on new consolidation concerns to come may be obvious. Perhaps looking backward toward segments of the media business that are not at risk should be examined as well.

2 comments about "Media's Growing Monopolistic Moves - And Lesser Concerns".
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  1. Ed Papazian from Media Dynamics Inc, June 14, 2024 at 11:05 a.m.

    Wayne, I don't remember any movie studio owning a broadcast TV network in the 1960s or 70s---that came much later. Also, when TV began its rapid expansion in the early 1950s the FCC quickly granted about 100 licnses for TV stations and then called a halt--which lasted for several years----- to consider more equitable ways to do so as many of the early grants were to major newspaper interests which also had radio stations in their portfolios. The FCC was, belatedly concerned about setting up media monoploies in the larger markets.

    If we go back to the 1940s the feds were wary of RCA---the major maker of radio sets, controlling two radio networks---the red and the blue---- and forced it to divest one---the blue---which eventually morphed into ABC. When TV began its push in 1950, once again we had RCA--a major TV set producer---- controlling the NBC TV network and DuMont--another set maker---launched its own TV network and TV station O&Os like WABD in New York which struggled on for about 5-6 years. Finally, I believe that the theatre chains controlled many of the Hollywood studios back in the 1920s and 30s.

    My point is the same as yours. There have been many cases of media platform mixing and matching---usually for the self interests of those concerned----- and the feds have been somewhat cautious about stepping in to control these situations. Now we are in for another round of this with new players like Amazon, Google, etc getting in on the action.Where that will lead us is anyone's guess.

  2. Ben B from Retired, June 15, 2024 at 1:17 a.m.

    There was the Alamo Drafthouse in Downtown Kazoo for 3 years closed in the spring of 17 AMC took over in Dec of 17 COVID hit and AMC left in Dec of 2020 now KP local owner has been in the space since last Nov. Longest owner was Rave from Nov 06 to Nov 12 6 years.

    Never seen a studio ever owning a movie theater chain before until now.

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