At a time when star prominence was the single most important factor determining a film's box-office success, Zukor had cornered the market. In a 1918 popularity poll...the six top stars on the list—Mary Pickford, Marguerite Clark, Douglas Fairbanks, Harold Lockwood, William S. Hart, and Wallace Reid—were all under contract to Zukor.All of the other major studios, with the exception of United Artists, ultimately copied these policies to varying degrees. For much of the 1920s, Paramount and growing Warner Bros., in particular, "relied heavily on block booking and blind bidding. Already, in 1921 the Federal Trade Commission had launched an investigation of the studios' booking practices that would last for eleven years. A 1927 cease-and-desist order was disregarded by the majors.
Using this leverage, Paramount was able to insist that prospective exhibitors interested in, say, the Pickford films, acquire them in large blocks along with a quantity of less attractive titles. These block-booking arrangements typically included groups of from 13 to 52 or even 104 titles. Paramount salesmen offered a variety of different product lines, from the top-quality Artcraft releases of Pickford, Fairbanks, and Hart to the more modest Realart productions, in which stars such as Bebe Daniels were being developed. Because these films had not yet been produced, exhibitors were required to "buy blind" from a sketchy prospectus or campaign book.
Knowing that even the poorest picture would find an outlet, the studios could operate at full capacity. In the process, the majors shifted the risks of production financing to the independent exhibitor. The long-term effects of the policy also stifled competition by foreclosing the market to independent producers and distributors. In short, block booking allowed the majors to wrest the greatest amount of profits from the marketplace.Along with the blocks of features, exhibitors were required to take the major's shorts as well—a practice known as full-line forcing. The smaller Hollywood studios—known collectively as Poverty Row—didn't have the big pictures with A-list stars that would have allowed them to compel theater owners to directly block book. Instead, they mostly sold exclusive regional distribution rights to so-called states' rights firms. These distributors in turn marketed blocks of movies to exhibitors, typically six or more pictures featuring the same star (given that the films' source was Poverty Row, a relatively minor star). In July 1938, the Justice Department's antitrust division filed a suit, United States v. Paramount Pictures et al., charging the eight major Hollywood studios with violating the Sherman Antitrust Act. Block booking and blind bidding were at the heart of the practices charged as illegally monopolistic.
On October 29, 1940, the Big Five studios (MGM, Paramount, 20th Century-Fox, Warner Bros., and RKO—the majors that owned large theater chains) signed a consent decree in an attempt to settle the case. It provided, among other things, that "block booking would continue, but in blocks no larger than five films; trade shows would be held regularly to provide exhibitors with advance screenings; [and] forcing of shorts and newsreels was banned. Because the decree was forged after the September 1 beginning of the 1940–41 exhibition season, the new blocks-of-five arrangement did not go into effect until the 1941–42 season. When the consent decree lapsed in 1942, most of the majors continued with blocks of five, though MGM went with blocks of twelve for two years. In contrast, Warner Bros. abandoned blocks altogether in 1943. The practice was entirely outlawed by the Supreme Court's 1948 decision against the studios in the Paramount antitrust case.