Competition watchdog the Office Of Fair Trading (OFT) is to investigate film distribution in the UK.
The OFT will review its Film Orders, which regulate the distribution of films in the UK. The Orders were introduced in 1983 and 1994 after reports by the then Monopolies and Mergers Commission (now the Competition Commission) found that the practices of the large distributors and cinema chains restricted competition.
The Orders ban exclusive agreements between distributors and cinemas covering more than one film, and prevent distributors from imposing lengthy minimum exhibition periods on cinemas.
The review is expected to take around nine months, at the end of which the OFT will decide whether or not to change the Film Orders. It could even refer the case to the Competition Commission, if new competition problems are uncovered.
The supply of first-run films in the UK has become a hot topic since the launch of low-cost exhibitor easyCinema earlier this year, which planned to dispense with the revenue sharing rental model in favour of paying distributors a flat fee at what it claims is the market rate. The circuit, which is owned by entrepreneur Stelios Haji-Ioannou and has one site in Milton Keynes, has so far been unable to secure any first run films.
"I believe that the tacit collusion of the Hollywood studios and their distributors has maintained artificially high prices to consumers," said Haji-Ioannou.
But the OFT review is not linked to easyCinema's difficulties. A spokesman for the OFT confirmed to Screen Daily that no official complaint had been received from the exhibitor.