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Top Stories > Business

Justice Department decision affecting local movie theater

Dec 2, 2019

By Isabel Braverman - staff writer

Callicoon Theater Owner Krissy Smith says new Justice Department regulations could have big impacts on small business owners like herself.
CALLICOON — The Callicoon Theater has been a mainstay in the communityfor decades, being the only independent movie theater in the county.
When Krissy Smith took it over in 2018, she wanted to bring a variety of films to the screen, from small Indies to big blockbusters.
But now, she might not be able to do that.
That's because of something called the Paramount Consent Decrees. They are essentially an agreement that separates film studios (like Disney, Universal, etc.) from movie theaters, giving the theaters more control over what they show.

The Paramount Consent Decrees were formed in a 1948 Supreme Court decision. Recently, the Justice Department moved to terminate them.
This will have consequential effects on the movie theater business, says Smith.
Running the one-screen Callicoon Theater already comes with certain restraints. Smith explained that when she shows a movie she has to sign a contract with the film studio that produced it. This contract can include certain clauses, such as how long the movie can be shown, and thatother movies cannot be shown at the same time.
For instance, right now the Callicoon Theater is playing “Frozen 2.” Smith said she has to show it for three weeks. Independent films are generally shown for a week.
“I believe there are a lot of different kinds of consumers here,” Smith said. “There's families and also retired baby boomers and artistic types. The customer who wants ‘Frozen' doesn't necessarily want ‘Parasite' and vice versa, so I'm trying to give a little bit to everybody, if I can.”
In addition to these constraints on what can be shown and for how long, the film studios also get a cut of box office sales. And for theblockbuster movies, the split goes up. Independent films are usually around 35 or 40 percent, and big films can be 60 to 70 percent.
That means on a ten dollar ticket (which has been the price of a ticket at the Callicoon Theater for a long time) Smith must pay the studio $6.70.
What most people don't know is that movie theaters make most of their money through concessions.
“I'm making very little. That's why my hope is that after you buy your ticket you're going to go over to the concession stand and spend tenbucks on popcorn, because then I am actually making enough money to keep the lights on, keep the heat going and pay my staff,” Smith said.
Running a profitable business might become challenging with the anti-trust laws being thrown out.
“We're talking about even more handcuffs being put on small independent theater owners, beyond what we're already working with,” Smith said.
One of the biggest changes is that studios could force movie theaters to do something known as “block booking.” For example, they could say if you want to play “Frozen 2” you have to show our other movie that's coming out in March.
They could also set the prices for tickets (while the Callicoon Theater has kept prices low, theaters in cities are already at $16 or more for a ticket) and decide that only one theater can play their movie.
Smith worries that this will monopolize businesses and put more power in the hands of corporations, while taking volition away from small business owners, and therefore, the consumer.
“I believe that films and the stories we tell have a lot of impact in terms of how people think about the world. So if you allow those freedoms to be taken away that's a slippery slope,” Smith remarked.
How the Justice Department decision will play out remains to be seen.
Smith says she heard it could happen soon or could take years for changes to go into effect.
Either way, the Callicoon Theater will remain open. Smith said they are going to keep operating with business as usual.
“Now more than ever we need people to show up and support us,” Smith said.

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