The Film Daily (1927)

THE 10 DAiLV ThurEday, BccsmbDr 15, 1927 Brookhart Bill Aims at Regulation LAUNCH DUAL ATTACK ON BLOCK BOOKING Text of the Brookhart bill is as follows : To prevent obstruction and burdens upon interstate trade and commerce in copyrighted motion-picture films, and to prevent the restraint upon the free competition in the production, distribution, and exhibition of copyrighted motion-picture films, and to prevent the further monopolization of the business of producing, distributing, and exhibiting copyrighted motion pictures, by prohibiting blind booking and block booking of copyrighted motion-picture films and by prohibiting the arbitrary allocation of such films by distributors to theaters in which they or other distributors have an interest, direct or indirect, and by prohibiting the arbitrary refusal to book or sell such films to exhibitors in which they have no such interest. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, (a) For the purpose of this Act "motion-picture film" or "film" or "films" shall mean copyrighted motion-picture film such as is commonly transported in interstate commerce for exhibition in motion-picture theaters. The word "person" shall be construed to import the plural or singular, and shall include individuals, associations, partnerships, corporations, and trusts. The word "producer" shall include any person engaged in photographing scenes, plays, entertainments, events or scenes of news interest, or historical or educational value, and the like or negative motion-picture film for the purpose of making positive prints therefrom or otherwise for exhibition in motion-picture theaters, whether or not such person also is engaged, directly or indirectly, in the distribution or exhibition of such films. The term "distributor" shall include any person engaged in selling, leasing, or renting copyrighted motion-picture film to exhibitors, whether or not such person also is engaged, directly or indirectly, in the production of such films. The term "exhibitor" shall include any person owning or operating a motion-picture theater or theaters or other place where motion pictures are regularly exhibited as all or part of a program of entertainment, whether or not such person also is engaged, directly or indirectly, in the production or distribution of films. The "booking" of a film is the making of a contract of lease, license, or sale between a distributor and an exhibitor, whereby the latter is given the right to make public exhibitions thereof. The words "interstate commerce" shall be construed to mean commerce between any State, Territory, or possession, or the District of Columbia, and any place outside thereof; or between points within the same State, Territory, or possession, or the District of Columbia, but through any place outside thereof, or within any Territory, or possession, or the District of Columbia. (b) For the purpose of this Act (but not in anywise limiting the foregoing definition of interstate commerce) a transaction in respect of any copyrighted motion-picture film shall be considered to be in interstate if the film is a copy or reproduction of a negative or positive film and is part of that current of commerce usual in the motion-picture industry whereby films are sent from one State to another with the expectation that they will circulate in two or more States, being leased first to one exhibitor and then to another until the film has been exhibited .such number of times that the public demand for exhibitions thereof has been met, including in addition to cases within the above general description, all cases where films are shipped by distributors located outside a State into that State to any branch or agency owned or controlled by such distributor. Films normally in such current of commerce shall not be considered out of such commerce through resort being had to any means or device intended to remove transactions in respect thereto from the provisions of this Act. For the purpose of this paragraph the word "State" includes Territory, the District«of Columliia, possession of the United States, and foreign nation. Sec. 2. In the course and conduct of the motion-picture industrj the producers own ;ind or operate studios in the States of Cali fornia. New York, New Jersey, and other States where they make or i)roiluce motionpicture films. Jn the production of motion-picture films large quantities of unexposed negative and positive films arc shipped from other States to the studios. At the studios and on suitable sites called "locations" scenes are photographed upon reels of negative film, and the negative film is developed and edited, and at least one positive film is made. The negative film is then shipped from the studios to laboratories located sometimes in the same States and sometimes in a different State, where as many positive prints are made as may I.e necessary to meet the demand for the films. The positive films being then 'covered by copyright are distributed by distributors to exhibitors in the several States. When the films are projected by an exhibitor upon a screen the final stage of the photographic process takes place and there is then de picted what is commonly known as motion pictures. To facilitate the delivery of motion-picture films to the exhibitors most distributors have established branch offices throughout the United States known as "exchanges," where negotiations for the bonking of films are conducted with exhibitors. From the-e exchanges, located in the principal cities in the various sales distr cts throughout the United States^ service is given to smaller cities and towns in contiguous territory, the films in passing between the exchange and the exhibitor frequently crossing State lines. Sec. 3. A continuous supply of attractive motion-picture subjects is essential to the successful conduct of a film exchange or motion-picture theater. Certain producers and distributors who by means of direct ownership or through total or partial stock control, leases, operating agreements, or otherwise are also exhibitors enjo_y a controlling advantage over distributors and exhibitors who are not so .affiliated. Such con trolling advantage is theirs by \irtue of controlling the production as well as the distribution and exhibition of films. Their control of production and distriltution has resulted in conditions that have made it necessary for many exhibitors to affiliate with the producers and distributors in order to obtain an adequate supply of suitable motion-picture subjects, such affiliations being established by meatis of giving to a producer or distributor control of such exhibitor's theater or theaters through total or partial stock control, leases, operating agreements, or otherwise, or by former exhibitors acfjuiring a substantial interest or control in a producer or distributor. As a reFult of this condition, theaters controlled by or affiliated with one distributor are in many cases operated by another distributor. There is an increasing number of cases of control of a theater or group of theaters by two or more distributors. Such common, interlocking interest and control by one distributor in the theaters of another distributor results in restricting the supply of suitable copyrighted motion-picture films obtainable by exhibitors who are not so affiliated with a producer or distributor. The continually increasing control of motion-picture theaters by producers and distributors restilts in restricting the number of motion-picture theaters in which may be exhibited the film productions of pro ducers and distributors not affiliated with motion-picture theaters. Certain practices have grown up in the distribution of films the continuance of which tends to increase the restrictions a1)0ve decribed and threatens to create a monopoly in the business of producing, di.itributing. :!nil exhibiting copyrighted motion picture-. Thrspractices consist of (a) Iilind booking an ' block liooking (b) unfair discrimination in the allocation of product in favor of exhibitors afiiliated with producers and distributor and to the prejudice of exhibitors not si affiliated. Blind booking and block booking is the system of booking films whereby the exhibitor is denied the right to view the jiroducl he is to lease and to select such part thereof as he deems suitable to the tastes of his public, but is required to lease all of th:' product of a given distributor offered for release during a given perioil long in advance of the time when the product is to lie i\p livered and often before the making of such product has been commenced. This system of "blind booking" and "block Ijooking" makes it incumbcnl upon an txhiliitor to lea ■films which are not suitable for his needs and which he does not want in order to obtain films which from the descriptive matter ' he concludes his patrons will demand and which he nm^t have in the successful con lUict of \\\ business. This system of blind and block liooking of films reipiircs the exhibitor to show films of iioor quality or to suffer the loss of the rental on such films, and precludes the small producer having only a few films a jear or any other producer or distributor having no theater affiliatians. from competing with the producers and distributors liecause the latter by block booking successfully monopolize the |>laying dates of the exhibitors. This practice of blind and block booking i^ fre<|uently waived for the benefit of theaters affiliated with producers and distributors. By the practice of arbitrary allocation of product theaters affiliated with jjtoducers and distributors are arbitrarily given the choice of product without affording the unaffiliated exhibitor competing with such controlled or affiliated theater the opportunity to bid or compete for such choice product. Sec. 4. Six months after the date of this Act it shall be unlawful for any producer or distributor of copyrighted motion-picture films in the current of interstate commerce to lease or offer for lease for exhibition in any theater or t-heaters copyrighted moiicn-picture films in a block or group of two or more films at a designated lump-sum price for the entire block or group only and to require the exhibitor to lease all such films or permit him to lease none ; or to lease or offer for lease fcr exhibition such motion-picture films in a block or group of two or more at a designated lump-sum price for the entire block or group and at separate and several pricefj for separate and several films, or for a number or numbers thereof less than the total number, which total or lump-sum price and separate and several prices shall bear to each other such relation as tO' operate as an unreasonable restraint upon the freedom of an exhibitor to select and lease for use and exhibition only such film or films of such block or group as he may desire and prefer tO' procure for exhibition, or shall bear such relation to each other as to tend to require an exhibitor to lease such an entire block or group or forego the lease of any portion or portions thereof, or shall tear such relation to each other that the effect of such proposed contract for the lease of such films may be substantially to lessen competition or tend to create a monopoly in any part of the certain line of commerce amoing the several States, to wit, the business of production, distribution and exhibition of motion-picture films. Sec. 5. After eighteen months from the date of this Act it shall be unlawful for any producer or distributor of motion-picture films, in the current of interstate commerce, to make or enter into any contract, agreement, or arrangement for the leasing of any film or films for exhibition to the public, unless such copyrighted film or films have been completed and are available for immediate release and without first affording the exhibitor desiring to lease such film or film.s an opportunity to view a projection of such film or films upon a screen if he so desires. Sec. 6. After six months from the date of this Act it shall be unlawful for any producer or distributor to allocate, lease, or rent copyrighted films to theaters which are affiliated directly or indirectly with such producer or distributor or with any other producer or distributor without affording all competing exhibitors an equal opportunity to bid for such films in free and open competition. Sec. 7. Administration of this Act is vested in the Federal Trade Commission, which is hereby authorized and empowered to make suitable rules and rcgu'aiions f-^r g''-'ng e'Oct to the provisions hereof, including the power, after full hearing, to fix the differentials wh ch may be observed between the price of a b'ock or group of films and the price of a separate and several film or films less than such block or group as mentioned in section 4 of this Act. Sec. 8. Any person who shall knowingly and willfully violate any provision of this Act or any order, rule, or regulation made by the Federal Trade Commission, shall, upon conviction in any district court of the United States, be sentenced to a fine or not more than $10,000 and not less than $1,000, or to imprisonment for more than one year or to both such fine and imprisonment, in the discretion of the court. PATHE presents LEO HALONET "¥HE *Ph PEVIL'S TWIN by FORD I. BEEBE Directed by LEO MALONEY Arranged for screen presentation by FORD I. 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