Pay Attention to That Man Behind the Curtain

FRIDAY, OCTOBER 2, 2026

The world may have changed, but we’re still looking at screens.

Paramount and Warner Bros. made headlines. They were being sued. The federal government got involved. The word “antitrust” kept appearing. Mountains of money dominated the news reports and magazine articles. The Wizard of Oz was about to become an award-winning film the following year. That year was 1938.

Perhaps recent headlines had you thinking this was another article about Paramount's recent move to purchase and merge with Warner Bros.? On September 29, 2026, they began selling tens of billions of dollars in bonds to finance their acquisition of Warner Bros. Discovery, and on September 30, Judge Araceli Martínez-Olguín approved the settlement, clearing the deal to close.

But we’ll get to that Paramount and Warner Bros. deal shortly. First, it’s back to Dorothy and friends.

Maybe you don’t know the 1939 film wasn't a blockbuster and actually lost money when it was released, though it won two Oscars. (It wasn’t until TV broadcasts beginning in 1956 that it became a valuable and beloved property) And I’d bet my ruby slippers (if I had any) that very few movie fans knew much about what was going on inside the Hollywood “dream factory” back in 1938.

The Golden Age of Hollywood was at its peak, and movie fans saw nothing but glamour. Theaters were often called “palaces,” and Americans went to the movies at a rate few of us can imagine today. Estimates put weekly attendance around 80 million tickets sold. Keep in mind that the U.S. population was only about 129 million in 1938, so many people went more than once a week (by 1946 it hit 90 million tickets weekly). It also meant movie houses were a big part of everyday life. Televisions were still years away from most American homes, so it was the age of the “silver screen.”

The movies had been big business for decades. Movie companies hadn’t invented vertical integration, but they sure had relied on it. The major studios of the Golden Age of Hollywood could make movies, distribute them, and own the theaters that screened them. They even “owned” players through contracts, loaning them out to one competing studio in exchange for another popular star. They exerted tremendous influence over their entire industry.

But the bottom line was those 80 million tickets sold every week. And if you were an independent theater owner attempting to compete with their established system and sell some tickets, good luck.

Studios could use “block booking” to force owners to take a package of films to get the hottest films on their screens. “Clearances” meant theaters couldn’t get access if competing theaters were already showing certain films. “Circuit dealing” might have covered entire chains of theaters, making it even harder to compete.

Moviegoers saw a glowing marquee naming the stars and the films. Theater owners saw the nightmare within the dream machine, ruled by the studios.

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1938

By 1938, the Justice Department decided to throw a wrench into the works. It took ten years, but by 1948 their antitrust case (United States v. Paramount Pictures) brought their vertical integration to an end. The “Big Five,” along with the “Little Three”, would have to separate their theater operations from their production and distribution businesses. We still know them today: Paramount, MGM, Warner Bros., 20th Century Fox, Columbia Pictures, Universal, RKO, and United Artists.

So, dismantling their monopolies didn’t destroy them. In fact, the weakening of the old studio system (along with the rise of TV) produced success stories like The African Queen, High Noon, and Marty, each made by independent production companies of the time, and initiated a new era of filmmaking.

In 2020, the federal government determined that the rules had done their job and terminated the Paramount decrees. The Department of Justice said that the entertainment business had changed so radically since the 1940s that any studio conspiracy was now moot. The DOJ also said that modern antitrust laws could address any future anticompetitive behavior without needing the decades-old court orders.

It seems that “future” arrived only six years later with Paramount back in the headlines, along with the word antitrust again. Funnily enough, Warner Bros. sits tucked right alongside them in those headlines.

Is it because the old studio system is being reborn? No, but let’s not forget about that old system and its hold on screens. Because the world may have changed, but we’re still looking at screens. Lots of them, and they still yield huge profits for the people controlling what reaches them.

In 1938, the path to screens was easy to understand: the studio controlled talent, made the movie, distributed it, and owned many of the places people paid to see it. Studio heads had departments compiling reports on what worked, what flopped, who was hot, and who was not. The studios also controlled film promotion and news around their stars, even keeping “fixers” on the payroll, individuals hired to keep reputations clean and scandals at a minimum. All to keep movies the top attraction and seats filled with admiring eyes fixed on the screens.

Today, the path is not as simple; screens migrated from movie theaters to our homes and then our pockets. Not only are there different screens, but the sheer volume is impossible to comprehend. And vertical integration is still at work.

Take Netflix. It finances movies or series, distributes them through its own platform, collects the subscription fees, and gets one other thing: data. Unlike the studio system, Netflix knows a lot more about you as a viewer: how you use the service, what you prefer, how often you watch, and countless other valuable data points. And Apple does the same, while also making the screens.

Instead of minding a stable of stars, media companies mind vast libraries and intellectual property (IP), gathering entire worlds or universes under their corporate rooftops. Just think about Disney acquiring the Star Wars and Muppets franchises, or how Stranger Things has bloomed into multiple series, games, and even a Broadway show. The libraries and IP belonging to today’s entertainment companies supply our TVs, phones, tablets, computers, and theaters with streaming services, games, merchandise, and more.

So, it is the same old competition over eyeballs on screens and who controls what gets to those screens, and it’s at the heart of the Paramount deal making today’s headlines.

Paramount under one roof will include Paramount Pictures, Warner Bros., CBS, CNN, HBO, Showtime, Paramount+, HBO Max, Nickelodeon, MTV, Comedy Central, Discovery, TLC, HGTV, Food Network, and the vast, incomprehensibly large libraries and IP that already belong to them. That doesn’t account for games, licensing, consumer products, and the facilities and infrastructure that already exist.

$110B

At an estimated $110 billion, the consolidation is almost too large to picture.

Paramount insists that this will be good for competition. But the state attorneys general for twelve states disagreed and sued, as did the Writers Guild of America. Concerns over a merger of this scale and scope ranged from consumer choice and prices to industry jobs, bargaining power, and how the new companies decide what gets made. In a word, antitrust. Still, on the last day of September 2026, the deal was approved and is expected to close on October 6.

In the final act of The Wizard of Oz, the “Great and Powerful Oz” is revealed as a “man behind the curtain,” using his inventions to steer major events in his domain. It makes for a good metaphor for the film industry in the Golden Age of Hollywood. Lots of control in a few hands; lots of glamour hiding something less than ideal.

It doesn’t look much different from what’s happening in Hollywood now; it’s just that the machinery behind that curtain has changed. And that’s the useful lesson from the original Paramount case. Corporate power in entertainment is not an issue that can be permanently settled; the marketplace always changes and companies adapt.

In 1938, moviegoers didn’t need to understand the tactics to feel the effects of the system. They didn’t really know what was going on behind the curtain. Just as today, most of us won’t study the antitrust settlement or billion-dollar bond offerings. We’ll whip out a device and open an app, or buy a ticket, or click on a TV and watch whatever is made available.

We may think studio systems don’t matter. But they do. What we pay for streaming services and movie tickets, what films get made (or don’t), what disappears from screens, who has a job or doesn’t, and how many other options we have when we don’t like what’s being offered prove competition matters.

It’s been almost a century since Dorothy Gale brought us into theaters to gaze at a wondrous transformation from sepia to color, all in one film. She then appeared on clunky black-and-white TVs in millions of homes, moved to color TVs, then on to VHS and DVD, finally to whatever screen could stream her amazing journey. This has helped The Wizard of Oz become a cultural institution. The movie never changed; the road the audience follows to it has.

Loving certain films often makes us wish we could go back and experience them again for that very first enchanting time. I recall my younger self feeling shock and anger at the Great and Powerful Oz for his trickery. He’d landed in a magical place and used it as an opportunity to accumulate wealth, power, and control. He was kept busy maintaining the illusion of greatness. He seems relieved to be unmasked, but then he escapes, flying off to some unknown destination.

The audience cares only about Dorothy and her friends, but just maybe, every once in a while, it’s worth caring more about where Oz landed and what he’s got going on behind that new curtain.

Faithfully,