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The small-town movie house braces for an unexpected threat

The Callicoon Theater is a single-screen cinema along the banks of the Delaware River in the Catskills, in rural upstate New York. It has an art-deco facade and 380 seats. Owner Kristina Smith says the Callicoon is more than a place to see “Frozen 2” or “Parasite.” It’s a meeting place, a Main Street fixture, a hearth. Sullivan Catskills Visitors Association via AP

NEW YORK — The Callicoon Theater is a single-screen cinema along the banks of the Delaware River in the Catskills, in rural upstate New York. It has an art-deco facade and 380 seats. “We never sell out,” its box office phone line promises. There’s not another theater for 30 miles.

Kristina Smith last year moved up from Brooklyn and bought the Callicoon, becoming only its third owner. The Callicoon, she says, is more than a place to see “Frozen 2” or “Parasite.” It’s a meeting place, a Main Street fixture, a hearth.

“It’s been like that for a really long time. All the locals up here, from third-generation farmers to school teachers and families, they kind of rely on it,” says Smith. “In some of these rural areas in America, a little movie theater is kind of a little beating heart of a town.”


Somehow, the Callicoon has managed to operate continuously for 71 years. It has survived television. It has survived the multiplex. It has survived Netflix. But, like a lot of small-town movie houses with one or two screens, the Callicoon is facing a new uncertainty. This time it’s not because of something new but the eradication of something old.

The Justice Department last week moved to terminate the Paramount Consent Decrees, the agreement that has long governed the separation of Hollywood studios from movie theaters. Hatched in the aftermath of a 1948 Supreme Court decision that forced the studios to divest themselves of the theaters they owned, the Paramount Decrees disallowed several then-common practices of studio control, like “block-booking,” or forcing theaters to take a block of films in order to play an expected hit.

Their dissolution isn’t assured. Courts will review the Justice Department’s arguments and ultimately decide their fate. But the potential crumbling of a bedrock Hollywood tenet has led to widespread consternation from one corner of the movie world more than any other: small, independent theaters. The fallout for major studios and large theater circuits is less certain. But in interviews with people on all sides of the movie business, one takeaway is agreed upon: It’s bad news for small-town movie houses like the Callicoon.


“There is a heavy amount of pushback and unease on the part of mid-size and small exhibitors and, frankly, there should be,” said a studio distribution executive who spoke on the condition of anonymity because he wasn’t authorized to speak on his company’s behalf. “The smaller exhibitors will get hurt. And that’s really a shame. It’s disturbing that the showmanship of the smaller towns will disappear in the event of this happening.”

The Paramount Decrees may sound like a relic from a bygone time. They were signed when most movie theaters were single-screen studio-controlled cinemas, when TVs had yet to invade most homes, when Gene Kelly and Humphrey Bogart were top stars. But the decrees have played a massive role in the history of American movies, shaping what, where, and how moviegoers see what they see.

While more general antitrust laws would still apply, theaters stand to lose legal protection on issues regarding block-booking and price-setting — issues that can have an outsized effect on smaller movie houses. Studios already sometimes mandate a three-to-four week run for a popular picture. If a studio turns around and says that in order to play one surefire blockbuster, a theater must also take a less popular film for an extended run, that could have dire effects on a movie house with only so many screens.


“Because of the population size, I don’t have enough people up here to withstand a four-week run of a picture. I don’t care what movie it is, by week four, I’m losing money,” says Smith. “Tether that to a less popular picture, you could probably only do that two or three times to the Callicoon Theater before we close our doors.”

During the Justice Department’s review of the decrees, the loudest protest came from small theaters and drive-ins. They are smaller in number than they once were, but they’re still out there. Regal, AMC, and Cinemark account for roughly half of the 41,000 screens in the US, giving them plenty of leverage in negotiations with studios. The 91 remaining single-screen venues and the few hundred houses with a handful of screens, naturally, have far less bargaining power.

“Without these decrees, larger circuits could make business more difficult for theaters like mine. The movie studios are not as motivated to work with our needs and would prefer to streamline their product to large circuits that will offer exclusivity,” argued the two-screen, circa 1927 Falls Theatre in Falls River, Wis., in the DOJ’s public comments.

These are also theaters that, catering to rural, less affluent areas, don’t sell premium $15 or higher ticket prices. So the prospect of studios setting a nationwide ticket price on a movie is also worrisome to them.


“The removal of the decree on resale price maintenance is another step in the death knell of the independent, regional chains, and small theaters in rural and metropolitan areas,” said the Trinity Theater in Weaverville, Calif.

Most smaller independent theaters are already just squeaking by. Funneling as much as 65 percent of a movie’s box office back to distributors, any profits mostly come from concessions. And they feel like they know their audience better than distant corporations. The United Drive-In Theater Owners Association, for example, noted that they have their own programming considerations separate from “indoor cinema.”

The Justice Department and Makan Delrahim, head of its antitrust division, nevertheless decided the decrees “have served their purpose,” adding that “their continued existence may actually harm American consumers by standing in the way of innovative business models for the exhibition of America’s great creative films.”