Harvard business reports (1930)

232 HARVARD BUSINESS REPORTS tribution methods underwent a change . . . The recognition that these pictures as individual entities differed in quality came about principally because of the tremendous importance which was attached to the presence of a certain star in a given motion picture . . . This shift in public taste to star worship resulted in a modification of the then current methods of distribution. While distributors still continued to offer large numbers of pictures at one time to exhibitors, the pictures so offered were subdivided into series of seven or eight, in each of which one particular star was featured. Under this system the emphasis was transferred from the program as a whole to star series. The names of the particular pictures were still of no importance and the pictures were not sold by name but merely by the series or blocks in which the same star appeared. As already explained, the exhibitor bought, for example, 6 Pickfords, 6 Harts, or 6 Clarks. It was the universal custom of the trade for exhibitors to take all of the pictures in a star series and distributors not only required exhibitors to buy all of the pictures in a star series but tried to get them to buy all of the star series which were offered at the same time. The star series method of licensing the exhibition of motion pictures was generally adopted by the trade between the years 191 7 and 1919. It did not, however, persist because it rapidly resulted in increased production costs because the emphasis placed upon the particular stars caused the stars to develop such ideas of their popularity that they demanded increases in salary which the producers thought excessive. The star series system was gradually abandoned and about 1920 or 192 1 the then existing methods of selling motion pictures were almost completely replaced by the present generally used method of block booking, that is, the offering at one time of a "block" composed of a number of pictures to be released over a period of time. Some of the distributors had tried other methods of selling and all distributors had considered them; but, with a few exceptions such as the United Artists Corporation's plan, no plan had been worked out which, in the minds of distributors, met the needs of the situation as well as block booking. In defense of block booking distributors testifying before the Federal Trade Commission advanced five distinct arguments: (1) it was simply wholesaling applied to the sale of motion pictures just as wholesaling was applied in the sale of ordinary commodities; (2) it reduced the cost of distribution, thus benefiting the distributors and, in turn, the exhibitors; (3) it simplified the buying problem of exhibitors by making it possible to obtain a year's supply of pictures in a few large purchases; (4) it assured a producer a definite income which enabled him to make better pictures than he otherwise could have made; and (5) it had been found more