Year book of motion pictures (1951)

122. Ownership and operation by RKO ol theatres in certain principal cities of the United States enables RKO through the utilization o£ the facilities of such theatres to plan and direct the first exploitation of the features which it distributes in such areas in a more effective manner than is possible in areas where RKO does not operate theatres. 1-Z3. The successful exhibition of a feature in its initial runs in any area is widely publicized and closely observed by • subsequent run exhibitors in that area and success in exploiting a picture in such exhibitions produces increased revenue both for the distributor and for subsequent run exhibitors. 124. Each of the five major defendants is able to coordinate the initial exhibition of its features in its theatres with an extensive and acurately limed national advertisings campaign. 125. Twentieth Century-Fox is interested in theatres in only 16 of the 92 cities having a population of over 100.000. In 12 of these 16 cities features of one or more defendants are licensed to independent first run exhibitors competing with Twentieth Century-Fox (New York. Seattle. Denver. Portland. Oakland. San Diego. Long Beach, Los Angeles, San Francisco. Spokane, Sacramento, and Kansas City, Kansas) as well as to other defendants having theatres in some of these cities. In three of the remaining four cities, features of one or more defendants are licensed on first run to other defendants. 126. The 17. .35 per cent of theatres which comprise the five circuits of the major defendants pay from 35 to 54 per cent of the total domestic film rental, respectively, received by the eight distributor defendants and 45 per cent of the total domestic film rental received by all of said distributordefendants. The five largest unaffiliated circuits together pay less than 5 per cent of such rental. 127. The major defendants, as distributors, during the 1943-44 season, received from 71 to 81 per cent of the film rental that was paid to all distributors by exhibitors affiliated with the five major defendants. The minor defendants received from 26 to 15 per cent of such rental and the independent distributors from 2% to 4% per cent of such rental. 128. During the 1943-44 season the eight distrbutor defendants received 45.2 per cent of the total feature film rental received by them from theatres affiliated with the five major defendants; and 54-8 per cent of such rental from other exhibitors. 129. In some situations where Paramount had theatre interests, other defendant distributors licensed their features to competing theatres and not to the Paramount theatres, and in some cases the operating companies in which Paramount was interested were not able to obtain the right to exhibit the feature of some of the other defendant distributors. 130. Paramount features are licensed for exhibition in from 8,000 to 14.500 theatres in the United States annually. The number of licenses each year varies from feature to feature and from year to year. 131. In 21 of the 36 out of the 92 cities where Loew's operates theatres none of the other four producer-exhibitors licensed its feature in the 194344 season for first-run exhibition in a Loew's theatre, to the extent of more than three features, the Loew's theatres' first-run exhibition being otherwise limited to its own features and those of non-theatre-owning producers, 132. Over the 10 years from 1935 to 1945, the ,otal number of features licensed by the other four theatre-owning distributors to Loew's first-run houses, decreased from 1,382 to 998 and the features of non-theatre-owning distributors increased from 1.201 to 1,879. 133. In 1935, the other four theatre-owning distributors earned $2,611,986 from Loew's theatres jnd the non-theatre-owning distributors earned $5,261,116 in Loew's theatres, which was $419,477 more than the $4,841,639, earned in Loew's theatres in that year by the four other theatre-ownins distributors. 134. In 1944, the percentage of the total film rental paid by Loew's theatres to each of the nontheatre-owning distributors. Columbia 8.8 per cent). United Artists (8.3 per cent and Universal (7.4 per cent), was higher than that paid to each of three producer-exhibitor, RKO (2.1 per cent). Warner Bros. (2.1 per cent) and Twentieth Century-Fox (G.l per cent). 135. In the year 1944. of the total film rental paid by Loew's theatres. 47.9 per cent was to Loew's itself for the exhibition of Loew's pictures, and 27.1 per cent was to non-theatre-owning distributors. Thus a total of 75 per cent of all film rentals paid by Loew's theatres went to persons other than the four other defendant-producer-exhibitors. 136. During the 1943-44 season RKO received 56.9 per cent of its total license fees from independent theatres. 14.1 per cent from its own theatres, and (in the aggregate) 2!) per cent from theatres affiliated with other defendants. 137. In the 1943-44 season, of the total number of exhibitions of features in first-run and metropolitan second-run-theatres operated by RKO, 23.1 per cent were exhibitions of features distributed by RKO, 29.6 per cent were exhibitions of features distributed by other theatre-owning distributors, and 47.3 per cent were exhibitors of features distributed b.v non-theatre-owning distributors. In the same season the respective percentages of the feature film rentals paid by RKO were 30.6 to RKO. 43.7 to other theatre-owning defendants, and 23.7 to non-theatre-owning distributors. 138. In the four pre-war seasons of 1937-1940. Warner derived about 61-6/10 per cent of its domestic gross rentals from theatres not affiliated with any of the defendants, about 14 per cent from theatres in which it had an interest, about 13 per cent from theatres in which Paramount had an interest, about 4 per cent from theatres, in which Twentieth Century-Fox had an interest, about 6 per cent from theatres in which RKO had an interest, and less than 1 per cent from theatres in which Loew had an interest. 139. Of its total domestic and foreign rentals Warner received about 30 per cent from abroad, about 4,3 per cent from theatres in which none of the defendants had an interest, about 10 per cent from Warner's own American theatres, and the balance, about 16 per cent, from American theatres in which one or more of the defendants had an interest. 140. Not a single one of the Loew first-run theatres in the 39 of the 92 largest cities where Loew operates or has an interest in first-run theatres licensed a Warner feature for exhibition in the 1943-44 season. In the same season the Warner theatres regularl.v exhibited the Loew features in many of the 28 of the 92 largest cities where Warner operated or had an interest in firstrun theatres. 141. The dollars paid by Warner to each of the other defendants and by each of the other defendants to Warner show non uniformity of pattern from company to company from year to year. 142. There were marked variances from year to year in the sums paid as rental by the theatres in which Warner had an interest to United Artists. Universal, and Columbia, the non-theatre owning defendants. 143. Between 1937 and 1944 the theatres in which Warner had an interest substantially decreased the amount of film rental paid to the five theatre-owning defendants, and sul5stantially increased film rental paid to the non-theatre-owning defendants. 143(a). During the nine pre-war years of 19331941, the average cost of American made Warner features rose from $241,000 in 1933 to $448,000 in 1940. By 1945 the average cost had risen to $1,371,000. 143(b). In the past the foreign business of Warner has been exceedingly profitable. 143(c). With the cessation of the war the foreign market for Warner pictures are being severely restricted. 144. Of the total film revenue received by Twentieth Century-Fox in 1944 from all theatres in the United States, 60.8 per cent was paid by exhibitors 915