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AINSWORTH PICTURES, INCORPORATED 29
the Ainsworth trade-mark. The contracts between producers and the exchanges provided that no alterations were to be made in the pictures and that the names of the producing company, cast, directors, and scenarists, and the producer's trade-mark were not to be deleted from the pictures without the permission of the company. These contracts did not require the exchanges to emphasize the company's name when selling the pictures. If the pictures were particularly good, the distributor usually managed to use his own trade-mark to the best advantage. Finally, because state right exchanges handled the products of several different producers, it was not the customary practice for them to place particular sales promotional effort on Ainsworth pictures.
In addition to these natural disadvantages, the president mentioned certain abuses which had developed in this method of distribution. The heterogeneous blocks made up by the exchanges often resulted in rather questionable price policies. For example, an Ainsworth picture might be blocked with several pictures of unknown box office value. The distributor would use the Ainsworth picture as a trading leverage in order to sell the other photoplays. Then, as it was a privilege of an exchange to allocate the prices to be paid for the individual pictures, a general average might be used. Obviously such a procedure would be unfair and would deprive Ainsworth Pictures, Incorporated, of maximum revenue. This practice was often resorted to in an effort to complete bookings for small theaters exhibiting low-quality films.
The executives of Ainsworth Pictures, Incorporated, however, thought that, despite the many disadvantages connected with state right exchanges, they offered the only practical means of distribution open to the producer having limited capital. But it was their contention that if sufficient capital was available, a producer-owned and producer-controlled distribution organization would prove more efficient and likewise more profitable than the state right exchange method.
During the period from 1917 to 1925 a majority of the large producers of motion pictures had acquired or established their own exchanges. Some had purchased control of distributing companies having nation-wide systems of exchanges. Some had built up slowly their own exchanges and sales personnel. Others had purchased interests in a number of state right exchanges and had consolidated them into a unified system of distribution.