By Red State•
Will the Trump administration ensure Hollywood remains driven by market principles?
Past harsh, critical comments from both President Trump and William Barr, his attorney general, demonstrate that the White House accepts the entertainment industry for what it is: a leftist, anti-capitalist blob that seeks not only to distort the culture war and remove Republicans from office, but also to rig the competitive market system to artificially increase its power and influence.
However, the question becomes how does the White House address its abuse in a free market way?
It’s a delicate balancing act, to be sure. While Hollywood often acts anti-competitively for personal gain – see: Steven Spielberg’s attempt to kill Netflix films’ ability to compete for Oscars – like every other industry, it also suffers from big-government edicts that unfairly harm their businesses. And, for all of the donating to Hillary Clinton they just made a few years ago, the movie and music industries have sounded alarm bells with the administration that the latter is a major concern to them.
Despite all the flack that the current White House gets for being rash and careless, the Trump administration is working tirelessly to ensure it treats its Hollywood detractors fairly and in line with the conservative principles it preaches.
Through a sweeping antitrust consent decree review, the Department of Justice is trying to successfully achieve this balance. Since April of last year, it has been examining the antitrust judgements that have been on DoJ’s books for generations. Its objective is to determine which are still needed to protect consumers against anti-competitive behavior, and which, at this point, act more as pointless red tape than anything else.
Seemingly as a result of multiple advocacy pushes, the clear focus of this effort quickly became those governing the entertainment industry. Namely, the Paramount consent decrees, which restrain the movie industry, and the ASCAP/BMI decrees, which created guidelines for the Big Music monopolies to follow.
On Nov. 18, the DoJ came to terms with its first major decision, announcing that it will ask the court to phase out the Paramount movie consent decrees. They prohibit the big five movie studios of the 1940s from harming small theaters by making exclusive deals with regional theaters (“circuit dealing”) and mandating that small theaters purchase their films in bundles (“block booking”).
DoJ made the right move. While at the time these decrees were necessary, modern-day innovation has made them obsolete and harmful to market competition.
Today, the Big Five studios from the 1940s are still far from angels, but there are plenty of new distributors that have taken their power away. Just look at Netflix, which plans to release over 50 films this year – more than Paramount, Disney, and Warner Bros. combined. Unlike in the 1940s, there are plenty of other studios with which theaters can do business should MGM, Warner Bros., RKO, Paramount, and 20th Century Fox – the five companies restrained by the decrees – provide terms to small theaters that are not agreeable. In fact, only two of those companies are still even in the Top 5 for market share.
If the DoJ let the decrees continue to restrict these studios while leaving their major competitors that have risen over the last 70 years unchecked, it would distort the marketplace by picking winners and losers. That would work to the detriment of, not the benefit to, consumer choice.
While the DOJ’s decision on Paramount was the right one for the free market, Barr’s department needs to be extra cautious on its next entertainment industry review – the ASCAP/BMI music consent decrees.
ASCAP and BMI – monopolies that control the rights to music licenses for public performance – are pushing for the DoJ to terminate or modify these antitrust guardrails. In an open letter to DOJ, they claimed that doing so would open the free market, which “would create a more productive, efficient and level playing field for everyone involved.” However, a dozen free market groups, including Frontiers of Freedom, have cautioned the DoJ that, contrary to what those monopolies are saying, doing so would run the free marketplace in the music industry to the ground.
The reason the ASCAP and BMI decrees went into place in the first place was to prevent ASCAP and BMI from enacting predatory pricing on small businesses. After all, the two monopolies’ very existence is emblematic of everything that Washington created antitrust law to prevent.
Both ASCAP and BMI are comprised of otherwise competing songwriters and publishers that banded together into these two groups to set prices for a joint product at a joint price. Both institutions were created with the explicit purpose of working together to increase prices. Put simply, there is nothing competitive or free market about them.
For the relaxation or removal of its decrees, ASCAP and BMI would have to prove that price-fixing is no longer a fundamental concern. As alluded to already, that is going to be hard to do when considering that the whole reason for their creation was to price-fix. It is going to be especially be hard to prove when considering how, unlike in the movie industry, their combined market share has barely moved at all since the 1940s – remaining at 90-percent of all performing rights. The fact that ASCAP had to settle a civil contempt charge with the DoJ for violating its decree just three years ago for nearly $2 million shouldn’t help its case either.
By giving everyone – including its political opponents, like the major entertainment industry conglomerates – the benefit of the doubt and the courtesy of a thorough review of present-day regulations, the Trump administration is yet again proving how serious it is about its deregulatory agenda. It is not governing on partisan or electoral grounds, but rather out of a desire to see fairness and accountability restored for everyone – even its enemies.
The White House is off to a good start, but for the sake of the free market and the consumers who depend on the fair playing field it creates, here’s hoping that it finishes strong.
By Steve Eder • New York Times
ALTAMONT, N.Y. — For eight weeks every fall, Indian Ladder Farms, a fifth generation
family operation near Albany, kicks into peak season.
The farm sells homemade apple pies, fresh cider and warm doughnuts. Schoolchildren arrive by the busload to learn about growing apples. And as customers pick fruit from trees, workers fill bins with apples, destined for the farm’s shop and grocery stores.
This fall, amid the rush of commerce — the apple harvest season accounts for about half of Indian Ladder’s annual revenue — federal investigators showed up. They wanted to check the farm’s compliance with migrant labor rules and the Fair Labor Standards Act, which sets pay and other requirements for workers.
Suddenly, the small office staff turned its focus away from making money to
placating a government regulator.
The investigators arrived on a Friday in late September and interviewed the
farm’s management and a group of laborers from Jamaica, who have special work
visas. The investigators hand delivered a notice and said they would be back the
following week, when they asked to have 22 types of records available. The
request included vehicle registrations, insurance documents and time sheets —
reams of paper in all.
By Peter Roff • Washington Examiner
As a general rule, Americans do not like to be told what to do. They will tolerate it, especially when the government makes threats or issues some rule that make sense in the infinite scheme of things, but they’re not happy about it most of the time. This country was founded as a sort of experiment in entrepreneurship — in the commercial sense as well as in the political arena.
Over time, however, the entrepreneurs have given way to the paper-pushers. The bureaucratic impulse to regulate nearly everything that moves has brought what former British Prime Minister Margaret Thatcher used to call the Nanny State home to our shores.
As a result, the ordinary American businessman who was once a virtual king of all he or she surveyed has been forced to turn to the courts to seek relief from the stranglehold that regulatory agencies, legislative bodies and the do-gooders among us have on American small business. Continue reading
America has the best health care system in the world. The same freedoms we all enjoy that produce innovations and advancement in technology, in manufacturing, in finance, in science also combine to lift what the nation’s medical community has to offer well above what is available in the rest of the world.
Recently, the deciphering of the human genome has sparked a serious of advancement in mankind’s understand of the way the human body works which, in turn, is creating new and exciting breakthroughs in the treatment of illness.
Many, like the Manhattan Institute’s Peter Huber, believe America is poised on the edge of a new era of personalized medicine arising from the ability to understand diseases and the drugs that made be used to treat them at the molecular level.
The single biggest impediment to these advances may be the very same agency that is charged with protecting the American people from patent medicine rip-offs and home-based cures that are based more on folk wisdom than science.
The facts, as ABC News recently informed people when it reported “New Drug Approvals for FDA Declined in 2013,” are clear. In the name of keeping us healthy, the U.S. Food and Drug Administration may be condemning people to death.
How can that be? Call it, for want of a better term, a lack of humanity and meaningful cost benefit analysis in the drug approval process. Continue reading
While October numbers show auto sales continuing on their path to pre-recession levels of 15.5 million annually, the good news should not be read as an indicator of the overall strength of the economy. The country can’t rely on one industry to aid its lackluster recovery. Rather, tax reform and deregulation must be priorities for long-term growth.
A new Michigan economic study finds that the implementation of the Affordable Care Act will be a drag on the economy next year. Small businesses have resisted hiring under the uncertainty of Obamacare’s costs, and consumers are feeling the shock of higher health care premiums and canceled policies entering the holiday buying season. That’s not what the economy needs.
In the fourth year of sluggish growth, the twin federal policies of increased regulation and stimulus spending have brought diminishing returns. Continue reading
The Hon. Rob Wittman
2454 Rayburn HOB
United States House of Representatives
Washington. D.C. 20515
Dear Representative Wittman:
On behalf of the members and supporters of Frontiers of Freedom, let me say that we welcome the introduction of your legislation H.R. 3063, the Healthy Fisheries through Better Science Act.
Your leadership in this vital area will help in the effort to extend property rights as a tool for species conservation and sound environmental management over the now-discredited command and control approach still practiced by many parts of the United States government.
If enacted, your legislation will produce improvements in stock assessments through the increased involvement of fishermen and non-federal partners. Fisheries science will be enhanced and the costs of compliance and monitoring will be reduced. Continue reading