Skip to main content
Article thumbnail
Location of Repository

Economic effects of vertical disintegration: the American motion picture industry, 1945 to 1955

By Gregory Mead Silver

Abstract

In 1948, the United States Supreme Court declared the operations of eight of the nation’s largest motion picture studios in violation of the 1890 Sherman Antitrust Act. The decision ordered them to disintegrate their producer-distributor roles from cinemas. The Court believed this would promote competitive practices in a hitherto uncompetitive industry. However, these desired benefits were not entirely reached. Instead, by leading the Hollywood studio system to collapse, the Court also distorted the supplychain for motion pictures. This work utilizes Coasian analyses of transaction costs to show that institutional integration was an efficient structure for the motion picture industry. It explores the motives to integrate and the benefits it garnered. Having laid this groundwork, it then assesses the effects theatre divorcement had on the industry and offers plausible counterfactuals had the studios remained intact after 1948

Topics: HC Economic History and Conditions, PN1993 Motion Pictures
Publisher: Department of Economic History, London School of Economics and Political Science
Year: 2010
OAI identifier: oai:eprints.lse.ac.uk:30043
Provided by: LSE Research Online

Suggested articles

Citations

  1. (1945). A breast of the market’,
  2. (1953). Admission tax cut still seen likely despite ike nix,”
  3. (1993). An empirical study of cost drivers in the U.S. airline industry’,
  4. (1997). Antitrust in the motion picture industry: economic and legal analysis (1960). 121 Deaton, A.,The analysis of household surveys: a microeconometric approach to development policy doi
  5. (2002). Assessing investor response to information events using return and volume metrics’, doi
  6. (1998). Auctions with constrained information: blind bidding for motion pictures’, doi
  7. (1948). Bell tolls for indie producers’, Variety,
  8. (1953). Big grosses but small profits’,
  9. (2005). Blind trust: market control, legal environments, and the dynamics of competitive intensity in the early American film industry, 1893-1920’,
  10. (1946). Block booking system loses’,
  11. (1997). Boom and bust: doi
  12. (2008). Breaking the studios: antitrust and the motion picture industry’,
  13. (1955). Collective bargaining in the motion picture industry: a struggle for stability (Berkeley,
  14. (1948). Congestion cues “decentralizing”’,
  15. (1987). Contracts as a barrier to entry’,
  16. (1965). Department of Commerce, The national income and product accounts of the United States: income and employment by industry doi
  17. (1972). Dominant firms and the monopoly problem: market failure considerations’, doi
  18. (1949). earnings shown separately’,
  19. (1944). Economic control of the motion picture industry: a study in industrial organization doi
  20. (1998). Entertainment industry economics: a guide for financial analysis doi
  21. (1953). Exhibs wary of 3-d hangover’,
  22. (1947). Financial organization of the motion picture industry’, doi
  23. (1947). Freedom of the movies: a report on self-regulation from the commission on freedom of the press doi
  24. (2003). Hollywood cinema doi
  25. (2004). Hollywood economics: how extreme uncertainty shapes the film industry doi
  26. (1941). Hollywood: the movie colony, the movie makers doi
  27. (2005). Hollywood's road to riches doi
  28. (1948). Independent producers happy over possible K.O. to buying combines’,
  29. (1956). International almanac of motion pictures for
  30. M.,’MGM film grosses, 1924-1948: the Eddie Mannix ledger’. doi
  31. (2002). Making history count: a primer in quantitative methods for historians doi
  32. (1970). Measured productivity and price change: some empirical evidence on service industry bias, motion picture theaters." doi
  33. (1954). Monopoly and competition and their regulation: papers and proceedings of a conference doi
  34. (1955). Monopoly in America: the government as promoter. doi
  35. (1953). Movie antitrust actions hit by exhibitor at inquiry’,
  36. (1948). Movies are seen at critical stage: Balaban, Paramount president, says anti-trust ruling may cut earning potential’,
  37. (1948). Paramount’s business last year’,
  38. (1951). Price policies in the cigarette industry doi
  39. (1998). Profit-sharing contracts in Hollywood: evolution and analysis’, doi
  40. (1985). Properties of predictors in misspecified autoregressive time series models’, doi
  41. (1994). RKO film grosses, 1929-1951: the doi
  42. (1956). Select Committee on Small Business, Motionpicture distribution trade practices –
  43. (2001). Stars and stories: how films became branded products’, doi
  44. (1947). Studio payrolls cut 30% or 7,200’, Variety,
  45. (1948). The big day’, Hollywood Reporter,
  46. (2002). The block booking of films re-examined’, doi
  47. (1985). The economic institutions of capitalism doi
  48. (1983). The economics of block booking’, doi
  49. (1907). The emergence of cinema: the American screen to doi
  50. (1992). The Hollywood story
  51. (1947). The independent producer’, doi
  52. (1930). The merger movement in the motion picture industry."
  53. (1998). The motion picture mega-industry
  54. (1937). The nature of the firm’, doi
  55. (1965). The reunification of economic history with economic theory’, doi
  56. (1947). The rise and place of the motion picture’, doi
  57. (1998). The risk environment of film making: Warner Bros in the inter-war years’, doi
  58. (1946). The Sherman Act and the motion picture industry’, doi
  59. (1950). the Sherman Act’,
  60. (1953). to answer charge of deliberately-plotted shortage‘,
  61. (1953). Top grossers of 1952’, Variety,
  62. (1948). Trade Publications ‘5 majors favor competitive idea’, Variety,
  63. (2009). United Nations. The human development report (New York, doi
  64. (1963). United States v. Loew's Inc.: a note on block-booking’, Supreme Court Review,
  65. (1948). United States v. Paramount Pictures,
  66. (1956). United States v. United Shoe Machinery Corporation doi
  67. (1950). vs. attendance dip’,

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.