Block-booking refers to the practice of movie distributors striking a deal with theaters to exhibit a collection of movies, regardless of the theaters’ preference. Occasionally, the movies included in the deal may lack quality. This unfairness affects both the theaters and the audience attending the movies. The U.S. Supreme Court has declared block-booking illegal due to its violation of fair competition principles.
Block-booking refers to the practice employed by film distributors when granting licences or usage rights for movies. It entails the condition that the entire package or block of films must be accepted, even if it includes unwanted or inferior movies. This practice is deemed illegal and violates the Sherman Act. For instance, if a movie theater wishes to screen a popular movie distributed by a block-booking company, the distributor may demand that the theater also exhibit several other less popular or desirable movies in order to obtain the licence for the popular movie. Consequently, the theater is compelled to showcase movies it may not prefer, thereby limiting the choices available to moviegoers. This example demonstrates how block-booking can restrict competition and consumer choice. Additionally, it highlights the detrimental impact this practice can have on smaller theaters that lack the resources to exhibit a large number of movies.
Block-booking refers to a practice where a distributor requires a theater to exhibit multiple films as a condition for obtaining a popular or highly anticipated film.
Block-booking is generally considered illegal under antitrust laws, specifically the Sherman Antitrust Act, as it can be seen as an anti-competitive practice that limits consumer choice and stifles competition.
Block-booking may be justified if it can be proven that it benefits the public interest by promoting diversity in film exhibition or if it is necessary to ensure the financial viability of smaller theaters.
Engaging in block-booking can lead to legal action, including fines and injunctions. The affected parties may also file civil lawsuits seeking damages for antitrust violations.
Evidence of block-booking can include contractual agreements that require the exhibition of multiple films, exclusive licensing arrangements, or a lack of flexibility in film selection.
Independent theaters may be exempt from block-booking regulations if they can demonstrate that they lack the market power to engage in anti-competitive behavior or if they are part of a cooperative arrangement that benefits the public interest.
There are limited exceptions to the prohibition on block-booking, such as when a distributor offers a package deal that includes a popular film along with less desirable films, as long as the package is not coercive or anti-competitive.
While block-booking is most commonly associated with the film industry, similar practices can occur in other industries, such as publishing or music, where a dominant entity may require the purchase or exhibition of multiple products.
If you suspect block-booking practices, you can report them to the appropriate antitrust enforcement agency, such as the Federal Trade Commission (FTC) in the United States.
Alternatives to block-booking include open bidding processes for film distribution, allowing theaters to select films individually, and promoting fair competition among distributors to ensure a diverse range of films are available for exhibition.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 16th April 2024.
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