The Paramount Decree +

Written By Alex Schneidman

1.3

Welcome back or welcome to arachne 🕸️! Hello friends. This week I do a broad strokes explainer on the Paramount Decree and do a lightning round on Threads. Let’s go.

🌟 Feature

Have you heard of the Paramount Decree? If not, here’s the basics. And why you should care.

So in broad strokes:

Back in the old days, like the 1930s and 40s, the Big Five Hollywood studios functioned under what was referred to as “the studio system.” Under that system, the movie industry looked like this:

It doesn’t really need to be spelled out, but obviously this is a problem. The entire system of vertical integration and oligopoly was bad for workers, bad for creativity, and bad for competition.

The studios would essentially force theaters, owned by them and not, to not only display their A-list blockbuster movies, but take on short films and less popular titles all in one “block.” The studios could set the prices, block book movies without prescreening them to movie owners, and retaliate heavily if a theater didn’t go along with the practice.

Imagine this. You want to watch a movie, but you can’t just go to anywhere to do it. You have to navigate a minefield of antagonists, all of whom are charging you differently, with different degrees of efficacy, and at distances too great to travel for just a movie.

The Southern District of New York agreed with growing sentiment that this behavior was in violation of anti-trust regulation. They brought a case and it was settled. The Big Five + Universal, Columbia, and United Artists agreed to a consent decree. They would have two years to comply with a set of agreements to scale back their anti-competition. The studios failed to uphold the decree. Soon, the case went to the Supreme Court and the so-named Paramount Decree was made. Again, broad strokes, broad strokes.

This completely upended the Hollywood industry. The studios were forced to sell off their theaters, beginning a cascade of dismantlement. Soon, the whole studio system would disappear. Independent theaters started showing more independent films, the mid-century art house movement began, creators of all stripes were free to play the market.

In 2019, the Trump Justice Department moved to dissolve the Paramount Decree. In 2020, a federal judge said “Sounds good” and the decree was terminated via a two year sundown period.

So now there is no Paramount Decree.

But there is Paramount+.

Imagine this. You want to watch a movie or TV show, but you can’t just go anywhere to do it. You have to navigate a minefield of antagonists, all of whom charge you differently and with different degrees of efficacy. Your monthly credit card charges probably know the feeling.

We’ve come full circle. The studios again outright own the means of their own exhibition. Disney+ and Hulu, Netflix, Peacock, Paramount+, etc.: all owned by the people who make the content on them. They control the analytics, they control the IP, they control promotion and self preference, they control how much to pay creatives, they control how much to charge you, and on, and on, and on.

In essence, this is why the WGA is striking. The streamers have consolidated so much power over the process that they’ve essentially created a modern studio system, one that treats creative workers as disposable and pads pockets at the top with the value generated by those at the bottom.

In many ways this is the story of the entire economy. The profits for the companies (and the compensation packages for their executives) have rapidly outpaced the median earnings of the typical worker.

So where do we stand? The Biden administration is surprisingly anti-monopolist, and has jumped in to disrupt multiple creative mergers. Nvidia, the semiconductor company, abandoned its plan to merge with ARM, Penguin Random House was stopped from becoming Penguin Random House & Simon & Schuster. But these have all been preemptive moves; it’s unlikely, as of right now, they go after the existing practices of these large entertainment companies.

In an effort to keep this brief, I’ll end by saying this: I don’t care how long the writers remain on strike, I hope they get every last thing they are asking for.

📚 Reading list

You’ve really got to read this blog from David Pierce, one of my favorite writers on the world of technology.

So where are we all supposed to go now? by David Pierce for The Verge

Would love to hear what you think about this. Reach out however you want.

⚡️ Lightning

  • Oh, Threads. Welcome to hell. Here are some quick Threads takes.

    • I think Threads’ ceiling is “text based LinkedIn.” It’s going to be corporate and edgeless. Imagine revolutions being organized on Threads like they were on Twitter in 2010.

    • I think Threads’ floor is the same as its grandparent company’s: non existence in the next 5-10 years.

    • Instagram made 100% the correct choice in using the existing Instagram social graph. This is their huge competitive advantage over the other Twitter wannabes.

    • Threads will not be a direct 1-1 replacement of Twitter. It is not meant to be, philosophically or technologically. Threads will be part of the so-called “fediverse.”

    • Keep an eye on Threads’ moderation and recommendation practices. As it stands right now, the Instagram moderation framework is built into Threads, which has some pros and cons for users. For recommendation, give it a couple weeks before assessing it’s quality.

    • I am not on Mastodon, but I am on Bluesky. The ✨vibe✨ feels a lot more like Twitter than Threads does. There’s edge. Join meeeeee.

📕 Glossary

  • oligopoly

    • A scenario in which a few highly powerful companies have total control over one or a few industries.

  • social graph

    • The series of connections from and to you on an internet platform. Think of it as the people you follow and that follow you. But also who they follow and are followed by. But also who they-

  • fediverse

    • The industry term for an emerging protocol in which the internet is decentralized. Instead of, say, having one account (and the followers it has accrued) on Instagram, one on YouTube, and one on Spotify, this new protocol proposes detaching that social graph from the platform and to the individual user. I am eager to see it implemented more. It could open the door for more autonomy on the internet. Autonomy over your data, over the content you consume, and so forth.

  • Mastodon and Bluesky

    • Two different decentralized social media platforms vying for Twitter’s text based gig. Mastodon is built on the fediverse’s most popular protocol, ActivityPub, while Bluesky has its own decentralized protocol. Bluesky was founded by Jack Dorsey, the former CEO of Twitter.

☎️ Answers

Here’s a question my incredibly supportive girlfriend asked me this week:

Can you make your newsletter shorter?

Yes.

That’s all for this week. I promise I’ll try to get more to the point in these things. Thanks for reading! Much love, Alex.

Alex Schneidman
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Age of Oligopoly
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First They Came For The Data