Hollywood studios dominated the film industry and tried to lock up distribution and exhibition channels as well by taking over movie theaters across the country nedherland.
Courts and regulators saw that allowing studios so much power up and down the film supply chain posed grave threats to the integrity of the industry and to viewer choice.
In 1938, the U.S. Justice Department filed an antitrust lawsuit charging that eight major motion picture companies — including Paramount Pictures, Twentieth Century-Fox, Loew’s Incorporated (the precursor of MGM), Warner Bros. Pictures and Columbia Pictures — were illegally fixing prices and monopolizing the market.
Eventually, the landmark set of Supreme Court decisions in 1948 known as the Paramount Decrees effectively outlawed that system and broke the hold of the big studios. This led to the creation of new local businesses, independent production studios, and more options for makers and viewers of film and TV.
There are eerie similarities between pre-1948 Hollywood and today’s streaming market. Dominant streamers own studios and commission “originals,” and are distributor-exhibitors as well. The top five streaming companies dominate this market.
Now a federal agency is investigating whether a proposed merger between Amazon and MGM will be positive or negative for the film industry. With MGM, Amazon would acquire a legendary studio with a deep library of 4,000 films and 17,000 hours of television, and distribution rights to seminal film franchises such as James Bond. This merger represents an opportunity for federal regulators to take a close look at how the streaming industry functions — for the filmmakers who fuel it and consumers who watch.
While Amazon is second to Netflix in the U.S. streaming market, it’s catching up fast. Unlike any other streamer, Amazon brings hundreds of billions of dollars in revenue and the power of a vast network of other lines of business to the fight. Amazon owns, among other things, a dominant streaming device — the Fire TV Stick. It is a major provider of internet back-end services through AWS: Amazon Web Services.
And Amazon can also leverage other parts of its multifaceted business to increase its market share.
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The company, led by its billionaire founder, Jeff Bezos, used to maintain a streaming platform where independent filmmakers could directly post their work. The downsides were that it didn’t let them have any say in royalty rates for those submissions and even unilaterally lowered them on several occasions. Amazon also deleted thousands of independent films from the platform with no explanation or avenue of appeal. And then in February, it stopped accepting most independent submissions altogether. Filmmakers lost revenue but even more important, access to the platform.
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These tactics work for the company. As Amazon’s founder, Jeff Bezos, has himself put it, “when we win a Golden Globe, it helps us sell more shoes.” But does it work for the rest of us? Some lucky independent filmmakers do get contracts with Amazon, especially if it looks as though they might win an Oscar or an Emmy. And some can catch the Amazon rep’s eye at a film festival.
Most don’t. Those filmmakers who do get on Prime Video can’t find out basic information about who saw their films where, even though Amazon is surveilling viewer patterns obsessively. There are no Nielsen ratings, no box office records.
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A lack of knowledge about viewership figures doesn’t just hinder filmmakers’ ability to negotiate. It also impairs their future because they can’t take that knowledge into their next project or use it to make an impression on a potential investor.
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