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Ainsworth Pictures, Incorporated1
producer — motion pictures
Distribution Organization — Regional Exchanges Expanded through Purchase of Organized National Exchanges. A corporation producing motion pictures, which it sold through a few regional exchanges, desired a wider distribution of its product. It decided to purchase a controlling interest in a corporation with a well-established national distributing organization. After several years of operation the executives of the corporation were convinced that their purchase was justified by the results obtained.
(1925)
In 1925, Ainsworth Pictures, Incorporated, was offered an opportunity to acquire Climax, Incorporated,1 a producer of photoplays, operating its own well-established national distributing organization. Since Ainsworth Pictures, Incorporated, at that time distributed its products through regional exchanges, the executives were considering the advisability of purchasing a controlling interest in Climax, Incorporated.
Ainsworth Pictures, Incorporated, organized in 191 7 as an independent producer, made pictures in its own studios, located in Hollywood, California. Since its organization, the company had released about 20 pictures each year. These pictures were of average quality, the cost of each being approximately $125,000. Although it had been the policy of the management to produce all types of photoplays, the company had specialized in society dramas.
Since 191 7, Ainsworth pictures had been sold to an average of 6,500 accounts each year. The gross revenue of about $6,000,000 a year had returned a satisfactory net profit, and as a result the company had developed financial strength and stability.
In 191 7, the use of regional exchanges was a common practice among all except the largest producers. This method of marketing films utilized the services of a number of regional distributing companies known as state right exchanges,2 each of which dis
1 Fictitious name.
2 See Independent Films, Incorporated, page 295.
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