Hollywood studios sold the slate, not the film, until the court said stop

In the studio era, major Hollywood distributors controlled exhibition through owned theater circuits. Licensing practice included block booking, in the Justice Department's words 'bundling multiple films into one theatre license', along with circuit dealing, one license for a whole chain, resale price maintenance on tickets, and overbroad exclusive clearances.

In United States v. Paramount Pictures, 334 U.S. 131 (1948), the Supreme Court sustained findings that eight defendant studios, Paramount, Twentieth Century-Fox, Loew's, RKO, Warner Brothers, Columbia, Universal and United Artists, had engaged in a wide-spread conspiracy to fix motion picture prices and monopolize distribution and exhibition. Each then entered consent decrees.

The bundle is the pricing machine: a theater that wants next season's star vehicle must also license the B-pictures, so every film in the slate finds a screen and the studio's average, not any single film's quality, sets the revenue. Packaging plus owned exhibition let studios price at the system level and capture the theater's margin too, exactly the integration the decrees severed.

Forced theaters to license the whole slate, not single films, so the predictable average of hits and duds set revenue, and owned theaters captured the margin too.

Theater demand for a hit is inelastic, so bundling duds with hits transfers surplus to the studio.

System-level pricing averages out hits and misses, making revenue predictable.

Owned theater circuits guaranteed outlets and disciplined independent exhibitors.

When individual units are unpredictable, bundle them to sell the average, but don't also own the buyer or you'll invite antitrust.

The decrees banned block booking and circuit dealing, barred distribution-plus-exhibition ownership, and forced studio divestiture. Reshaped Hollywood into distributor-financiers and independent theaters; the decrees stood for over seventy years until a Department of Justice review culminated in a termination order.