The collapse of U.S. antitrust protections is fueling a new era of platform consolidation, with global consequences for theatrical markets in Mexico and beyond.
The Paramount Decrees , a product of the Supreme Court’s landmark 1948 antitrust ruling, dismantled Hollywood’s vertical grip on theatrical exhibition by outlawing block booking, price fixing, and studio ownership of theaters. When the U.S. Department of Justice allowed the Decrees to sunset in 2019—on grounds that they were outdated in the digital age—it triggered a profound structural shift. The change coincided with the COVID-19 pandemic , which further disrupted traditional release windows and ushered in an era of day-and-date distribution.
That pivot was cemented by Universal’s 2020 decision to release Trolls World Tour directly to premium video on demand (PVOD), bypassing theaters entirely and grossing $100 million in digital sales (Universal report). Since then, the standard 90-day theatrical window has shrunk to as little as 17–45 days—or vanished altogether—undercutting the financial footing of cinemas, particularly those outside major U.S. metro areas.
U.S. Studios Turn Into Streaming Powerhouses
In the United States, Disney , Universal (owned by Comcast), and Warner Bros. (under Warner Bros. Discovery) have become vertically integrated streaming empires. With platforms like Disney+ , Peacock, and Max , these firms control both content pipelines and global distribution, underwritten by deep capital reserves and diversified business models spanning merchandise, theme parks, and gaming.
In stark contrast, Mexican theater chains such as Cinépolis and Cinemex operate in a structurally asymmetric environment. Dependent on first-run U.S. blockbusters, they lack leverage to negotiate favorable terms or secure exclusive theatrical windows. This power imbalance has grown moe pronounced with each release bypassing traditional models.
Financial Disparities Drive Licensing Inequities
The scale disparity is staggering. Paramount Pictures , the smallest of the U.S. majors, holds a market capitalization more than triple that of AMC Theatres, North America’s largest exhibitor. Disney and Comcast each report market caps well over $100 billion (SEC filings: Disney, Comcast). This financial heft enables studios to impose bundled content deals, demand higher revenue splits, and prioritize streaming-exclusive releases, rendering theatrical exhibition increasingly untenable—particularly for international markets like Mexico.
Legal Friction Over Backend Compensation
Scarlett Johansson’s lawsuit against Disney over the hybrid release of Black Widow laid bare the structural fragility of traditional backend compensation models—agreements that tie an actor’s or producer’s earnings to theatrical box office performance. In the streaming era, such metrics have become opaque or irrelevant, as revenue is often tied to subscriber growth, platform engagement, or undisclosed internal valuation formulas. Similarly, Village Roadshow’s lawsuit against Warner Bros. over The Matrix Resurrections challenged the shift to simultaneous digital and theatrical releases, alleging financial sabotage of legacy profit-sharing terms.
These disputes are not mere contractual anomalies; they reflect a systemic breakdown in how financial participation is calculated and enforced. For Mexican co-producers, distributors, and licensees—many of whom structure deals around box office receipts or exclusive exhibition—this shift introduces legal uncertainty and heightens the risk of being excluded from meaningful revenue participation altogether.
Mexico’s Regulatory Lag Leaves Exhibitors Exposed
While France and other EU nations have codified theatrical windows as tools of cultural policy , Mexico has not yet followed suit. COFECE , Mexico’s federal antitrust body, is empowered to investigate vertical restraints and market concentration but has so far remained silent on streaming consolidation.
This regulatory vacuum leaves Mexican exhibitors—especially independent chains and regional operators—at the mercy of non-transparent, studio-driven licensing agreements. These deals often lack standardized terms for revenue splits, windowing durations, or territorial exclusivity, giving U.S.-based studios disproportionate control over how and when content is released. In the absence of formal antitrust oversight or cultural policy safeguards, this imbalance undermines exhibitors’ ability to plan, invest, or compete.
The result is a slow attrition of Mexico’s mid-tier cinema infrastructure: theaters in secondary cities face declining access to first-run films, reduced negotiating leverage, and shrinking audience turnout. Over time, this could hollow out local film economies, weakening both cultural access and economic resilience in communities far removed from major urban hubs.
In fact, in many smaller markets throughout Mexico where broadband remains uneven, theaters serve as cultural anchors and key local employers. Without robust policy tools—such as window minimums or greater revenue transparency—many of these institutions face structural decline.
For U.S. streamers, the long-term risks include reputational fallout and regulatory backlash, particularly if Mexico begins enforcing its Ley Federal de Competencia Económica (LFCE) to address platform dominance.
Toward a Bilateral Framework for Cinema’s Future
To preserve North America’s theatrical diversity, both nations may need to recalibrate. In the U.S., Congress and state lawmakers could revisit antitrust rules to better address vertical integration in the platform era. In Mexico, COFECE and cultural agencies could lead a coordinated response—establishing minimum standards for theatrical access, enforcing fair licensing, and promoting local content participation.
Absent such frameworks, the region’s cinematic ecosystem may become a closed pipeline controlled by a handful of U.S. giants—eroding cultural plurality and weakening cross-border creative exchange.
Frequently Asked Questions (FAQ)
1. What were the Paramount Decrees and why were they important?
The Paramount Decrees were a set of antitrust rulings issued in 1948 that forced major Hollywood studios to divest their theater chains and banned monopolistic practices like block booking. They reshaped the U.S. film industry by breaking vertical integration and opening theatrical access to independent cinemas.
2. Why did the U.S. Department of Justice end the Paramount Decrees?
In 2019, the DOJ argued that the Paramount Decrees were no longer necessary due to changes in technology and distribution, particularly the rise of streaming. Officials claimed existing antitrust laws were sufficient, paving the way for studios to re-integrate production and distribution.
3. How has streaming changed theatrical windows in the U.S. and Mexico?
Streaming has drastically shortened theatrical release windows from the traditional 90 days to as little as 17 days—or eliminated them entirely. This shift has eroded cinema revenues and negotiating power, particularly for Mexican exhibitors who depend on U.S. blockbusters.
4. What is vertical integration in the film industry?
Vertical integration occurs when a single company controls multiple stages of a film’s life cycle—such as production, distribution, and exhibition. In the streaming era, studios like Disney and Warner Bros. own both content and platforms, allowing them to bypass traditional theaters entirely.
5. What role does COFECE play in regulating Mexico’s film industry?
COFECE, Mexico’s antitrust authority, has the legal mandate to investigate and regulate anti-competitive behavior, including digital platform dominance. However, it has yet to take action on vertical integration or streaming-related consolidation in the film sector.
6. What risks do Mexican cinemas face from Hollywood’s streaming model?
Mexican theaters risk being excluded from top-tier releases, facing opaque licensing terms, and losing cultural influence. Without regulatory protections, smaller cities could lose vital entertainment infrastructure, while U.S. platforms consolidate market power across borders.
7. Could Mexico enforce antitrust laws like the LFCE against U.S. studios?
Yes. Mexico’s Ley Federal de Competencia Económica (LFCE) allows COFECE to investigate vertical integration and unfair practices. If cross-border consolidation continues unchecked, Mexico could introduce new rules to protect local exhibitors and ensure competitive fairness.