What did the Paramount Decision of 1948 require?

• A. End vertical integration
• B. End horizontal integration
• C. End all film production
• D. Create a government film board

Answer: (A)

Ending vertical integration is what the Paramount Decision targeted. Studios at the time controlled production, distribution, and exhibition all in one place, meaning they owned the film studios and the theater chains that showed those films. The Supreme Court ruled that this concentration of power stifled competition and kept prices and access unfavorable to independent theaters and distributors. So the decision required the studios to divest their theater ownership and to separate exhibition from production. They could still make and distribute films, but they couldn’t control the venues that showed them. This shift helped break up the old studio system and opened space for more independent cinemas and distributors. It isn’t about ending film production, creating a government film board, or addressing other kinds of mergers; it specifically targeted the vertical ties between making films and showing them in theaters.