An empirical investigation of the Paramount antitrust case

Production patterns in the US movie industry changed drastically between 1940 and 1960. During these decades, a major event took place: the Paramount antitrust case was resolved by the US Supreme Court in 1948. As a result, the five largest studios (MGM, Paramount, 20th Century Fox, Warner Brothers and RKO) were forced to vertically disintegrate and separate production and distribution from exhibition. The Supreme Court also banned these and three other studios (Columbia, Universal and United Artists) from using block booking as contractual practice. In this article, I examine how this antitrust ruling affected the movie industry.