The battle between major movie theater chains and their smaller, independent counterparts took a big step forward this week, as the Department of Justice continues its investigation into antitrust violations within the industry. New reports have confirmed that AMC Theaters - one of three major chains being looked into - has turned in requested documents to the federal government.
Coming as an update to a story that broke about three weeks ago, Entertainment Weekly is reporting that only now has AMC Entertainment responded to the aforementioned government order. The Department of Justice is performing an inquiry to determine whether or not AMC Entertainment, Regal Entertainment Group, and Cinemark - which are the three biggest theater chains in the United States - are operating in violation of national antitrust laws. Thus far, AMC is the only company that has gotten back to the DoJ, and they issued the following statement regarding their position:
We do not believe the company has violated federal or state antitrust laws and are cooperating with the relevant governmental authorities. However, we cannot predict the ultimate scope, duration or outcome of these investigations.
The central focus of the investigation is a practice known as "clearances," which were first introduced to the industry after a Supreme Court decision back in 1948. Clearances are license agreements that are made between theaters and the movie studios that distribute films, and the idea behind them is that certain cinemas will have the ability to exclusively feature first-run movies in their respective areas - preventing them from playing in smaller theaters nearby. It's been argued that these deals are helpful for studios, in that they stop titles from being wastefully shown in too many locations within the same proximity. However, the Department of Justice is determining whether or not AMC, Regal and Cinemark have an unfair advantage over their competitors thanks to their relationship with the studios releasing Hollywood's biggest titles.
Even the average movie-goer is probably aware of the dominance that AMC, Regal and Cinemark have in the movie theater game nationwide. Regal is at the top of the pile, with 7,334 screens operating in America, and AMC and Cinemark aren't far beind, running 5,128 and 4,498 screens, respectively. With the kind of spread and resources that these companies have - not to mention the growing appeal of video on-demand and streaming services - it's not hard to see why independent theater owners are in favor of change.
It's very likely that we will be hearing about this case for a long while. The Department of Justice has estimated that the investigation is expected to last between six months and a year (and it will probably be on the longer side if Regal and Cinemark continue to not provide the documents requested of them). Whenever it does wrap up, however, it could mean some big changes for the future of the way we watch movies, so stay tuned for updates.
