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342 HARVARD BUSINESS REPORTS
ably increase its sales in this field. In order to increase the sales to this type of exhibitor, it would be necessary first to segregate such accounts and then engage in additional sales promotion activities in that direction.
The proposed plan was communicated to the distributing organization. While the exchange managers recognized the possibility of increasing sales to nontheatrical accounts, they questioned the advisability of developing this market. Their attitude was largely the result of opposition on the part of their theatrical accounts, as the exchanges had no difficulty in managing the nontheatrical business. The opposition of the exhibitor to nontheatrical exhibition was based on the belief that it reduced the patronage at his theater by satisfying elsewhere the demand for motion picture entertainment. In his desire to protect this patronage, he would often complain to the film salesman and the exchange manager concerning such distribution in his locality. The effect of these complaints was to discourage the exchange manager from the solicitation of nontheatrical business, even though it increased the profits at his exchange. Selling to nontheatrical accounts differed but slightly from selling to theaters. Only feature pictures and comedies were sold.
The price to nontheatrical accounts was largely determined by what the account could pay. It had been found that public institutions were restricted by budget to a certain definite amount for entertainment, and a sale to such an institution could be made only if the price of the film were reduced to conform to the budget. The films desired were usually the older pictures and it was possible to quote individual prices which were lower than were ordinarily quoted to a theatrical exhibitor. No films were released for nontheatrical exhibition prior to the release date for theatrical showings in that particular city or territory, nor were sales made to institutions for exhibition in competition with a regular theatrical account.
While the revenue derived from sales to nontheatrical accounts was, on the average, less per film than that from sales to theatrical accounts, the executives of the company considered it to be net revenue. Although there was no allocation of sales expense to nontheatrical sales, it was thought that the expense involved was slight in view of the belief that little additional time and effort were required for a salesman to call upon a nontheatrical account