American independent filmmakers have always fought an unbalanced battle against the major motion picture studios in Hollywood that is only worsening with streaming. In 1948, the supreme court, directed by the Department of Justice (DoJ), sought to bring some balance to the system with a ruling in United States v Paramount Pictures, Inc. Commonly known as the ‘Paramount accords’, the decision ended the monopolisation of the studio system. However, in August 2020 the federal district court for the southern district of New York started a gradual repeal, again at the recommendation of the DoJ. This could prove significantly detrimental to independent filmmakers today as, historically, the Paramount accords provided much needed equity for the industry.
The Paramount accords originated with a 1938 lawsuit filed by the DoJ against the ‘big five’ film studios (MGM, Paramount, RKO, 20th Century Fox and Warner Brothers) and the ‘little three’ (Universal, United Artists and Columbia). According to the DoJ, the supreme court found that these studios ‘had engaged in a widespread conspiracy to illegally fix motion picture prices and monopolise both the film distribution and movie theatre markets’. This process, called vertical integration, involved studios owning the processes of creating, marketing and screening a film for audiences in their studio-owned movie theatres.
When the supreme court handed down the Paramount decision in May 1948, the eight studios had to sign consent decrees legally binding them to stop monopolistic practices. These included studio-owned theatres, fixed minimum cinema-ticket prices and block booking, which gave the wealthy studios unfair advantage over competing studios, independent filmmakers and independent theatre owners.
In the 1950s and 1960s, the anti-monopolistic ruling had a significant impact on independent filmmakers and theatre owners – even if there were bumps along the way. For example, a post-war recession meant cinema-ticket sales plummeted while television was becoming an affordable and accessible entertainment option. But it was the effects of the House Committee on Un-American Activities (HUAC) hearings in 1947 and 1952, which sought to root out communists from Hollywood, that shook the film industry for years.
Commies out
The first HUAC hearings in October 1947 saw ‘friendly witnesses’ cooperating with the committee and naming alleged communists. Testimonies from prominent figures in the motion picture industry – including Walt Disney and Ronald Reagan, then president of the Screen Actors Guild – were the backbone of HUAC’s claims to legitimacy. Jack Warner of the Warner Brothers was among the first to cooperate with the committee and declare that there had never been communist ideals in his studio’s work.