Prior to the advent of home videocassettes and DVDs, the only way to obtain a movie for a public performance was in 16 or 35mm format, available only from the motion picture studio directly or through one of their non-theatrical distributors. Public performances were licensed on a "per movie" basis. When videocassettes were popularized in the mid-1980s, MGM pioneered a new form of public performance copyright licensing by physically distributing videocassettes which included public performance rights. Clients soon wanted the ease of going directly to a video or retail store themselves instead of waiting for videocassettes to be shipped directly. MGM then began to "blanket license" locations, meaning that the location was licensed instead of the specific film. The unique characteristics of each facility was used to determine the license fee (i.e. number of exhibitions, size, etc.). This approach changed the dynamics of how the fee was based. It moved the cost away from the traditional business model, cost driven by title, and replaced it with the cost driven by market and use.
The MPLC was founded by former MGM executives following the receipt of the U.S. Department of Justice’s Business Review Letter in December 1986. The concept of blanket licensing was reestablished, and the MPLC began to issue the Umbrella License® in the later part of 1987 as an independent licensing agency representing numerous motion picture studios and producers.
Read more about this topic: Motion Picture Licensing Corporation
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