Movies and Film
How does the "product"—the feature film—get from the filmmaker to the theater? Why do you need a "middleman" in the first place? How did this process start?
Early on, production companies simply sold their prints to exhibitors, who then traveled around with their prints as itinerant showmen. This practice ended in part because it conflicted with the interests of theater-owners, who did not need to own a print because they changed their bills so much more often than the itinerants did.
Block booking was part of a larger move in the industry to bring all three segments of the industry under single ownership. So Paramount not only controlled some aspects of distribution, but also owned its own theaters (still called "The Paramount" in several cities). In economics this move of one industry into related industries is still called vertical expansion. In the United States, it was still considered a monopolistic practice.
So beginning in the early 1900s, middlemen sprang up, businessmen who bought prints from filmmakers and then rented them to exhibitors, pricing films according to production costs and popularity.
The most controversial mode of distribution began when, in 1916, Paramount began forcing theaters to lease several of the studio's films along with its most prestigious titles, effectively exerting control over the way its films were distributed. This practice was called block booking. Almost immediately, a group of exhibitors formed their own studio, First National Pictures (ultimately bought out by Warner Brothers) so that they, too, could profit by allying production and distribution. The practice ended in 1948 when the government intervened to prevent this essentially monopolistic practice.
Today, distributors remain an integral part of the film industry. Generally, they are the ones who hold the legal right to send out a film. You can't even rent an old 16mm film print (legally) to show to a film class without getting it from one of the distributors for whom this market is a specialty.
Excerpted from The Complete Idiot's Guide to Movies and Film © 2001 by Mark Winokur and Bruce Holsinger. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.