Motion Picture Distribution, Film Splitting, and Antitrust Policy

Abstract

The United States Department of Justice (DOJ) launched a major program in the mid-1980s against film splitting agreements, whereby motion picture exhibitors in a city agree not to competitively bid for movies. The DOJ held such agreements are per se price fixing conspiracies. This Article examines film splitting and its per se status. The author examines previous explanations for film splitting by reviewing the history of movie distribution and the efficiencies of distribution practices prior to the famous Paramount decision. The author also compares alternative methods of licensing and concludes that film splitting can reduce distribution costs, increase the number of films shown relative to competitive bidding for films, and help maintain lower box office prices. The author further concludes splitting agreements were an attempt to preserve distribution efficiencies eliminated under the Paramount rulings. Moreover, splitting should have been analyzed under a rule of reason