THE NEW 1948 – IAFT Movie Review
Netflix, founded as a mail DVD rental service, recently announced a deal to produce four upcoming Adam Sandler movies.
This has further positioned Netflix—with its House of Cards—beyond being (a now online) content deliverer—to also being—a content creator.
The Sandler deal will follow the Cards model in that these big budget movies will only be viewed via Netflix—and not in movie theaters.
This agreement also moves Netflix closer to the goal of all businesses—vertical integration—in which there is exclusive control of the process, from production to sale.
It is interesting to view this through the prism of the 1948 Paramount antitrust decision.
The major studios, through 1948, not only controlled movie production—but also owned movie theaters—in which they only exhibited—their own movies.
The Supreme Court ruled that violated the antitrust act in that the vertical integration held by the studios prevented outside booking of other movies into their theaters—thus barring fair trade.
As a result, the studios divested their movie theater interests, which reshaped the movie business—and created a gap—which was, and is still filled—by distribution companies.
The Netflix/Sandler agreement does not require a distribution intermediary—and does establish exhibition exclusivity—much like the pre-1948 studio model.
But before 1948-style antitrust can be considered, we must reflect on the landscapes.
Then—there were only the eight major studios—and the very new—television.
Today—there are majors—mini-majors—hundreds of channels—and the internet.
So with all of the production and exhibition opportunities, it would be difficult to establish a compelling Netflix antitrust case—unless other content deliverers follow suit.
Then it might be—the new 1948.