Disney monopoly rules2/9/2024 The studio system was borne of politics In the 1920s, as the industry grew, the Republicans chose lax antitrust enforcement as a policy. Five major studios, and a few minor ones, basically had control of all distribution of film. The studio system was based on tight alliances or outright ownership between theater chains and producers of movies. This era was known as the studio system, and the Coen brothers made a delightful film, Hail, Caesar!, which paints a rosy picture of power and culture in it. Until 1948, Hollywood studio bosses had extreme amounts of control, managing virtually every aspect of filmmaking, from the careers of directors and actors to the newspapers that reported on gossip. After World War One, the industry settled into the concentrated structure, with major studios organizing production and financing of films. Like many new industries, there was ample competition among producers and theater owners, much as you saw with the initial creation of apps right after Apple opened the app store, or the explosion of websites in the 1990s. So let’s go back to early Hollywood, and examine how the industry organized itself. In many ways, Disney is seeking to return to the original way Hollywood did business, before the government forced open and creative markets for content. And it’s something we don’t talk about a lot, even though it is the key fulcrum Disney is using to recreate a much more autocratic creative industry. Because that is one area that the Supreme Court took care of when it abolished the studio system in 1948. But I am less interested in the problem of the length of copyright, which is well-trod territory, than the use of copyright monopolies to leverage monopolies over distribution. There’s a vibrant debate over how long copyrights should last. Today, copyright licensing is at a bit of an extreme, with copyrights lasting for the life of the author plus an additional 70 years, after which it goes into the public domain. Copyright gets very complex, and is a set of negotiated deals among artists, studios, distributors, and the public. And then there are terms, like mandatory licensing to all comers, or exclusive licensing, fee structures, and so forth. A seven year license enables one form of market structure, an infinite length enables a different one. The terms of such licensing matters, of course. (Yes, you can do things like satire under what’s called fair use, but we won’t get into that because it’s complex and not important for the purposes of this piece.)Ī limited copyright makes sense, because it enables artists to profit from their work, and thus creates a viable path for artists and financiers to come together and make and sell art. You can use Shakespeare characters, but nothing created by Walt Disney. The reason you can’t make and sell Mickey Mouse TV shows and movies is because the government has granted Disney the exclusive license to do that. This license is called a copyright (and the protection of a branded product, like is called a trademark). That is, its entire business runs on the clause in the Constitution that gives temporary monopolies to artists and creators to profit from the work they create.
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