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PATHE EXCHANGE, INCORPORATED 373
The segregation of product as between short subjects and feature products and educational pictures was doubtless sound so far as educational pictures were concerned. Such pictures were substantially different in character from the rest of the company's product and were sold largely to a different type of market. There was not the same justification for segregating short subjects and features. Both these types of pictures were sold primarily because of their entertainment value. Both were sold to theaters and both were sold to the same theaters. The expense incidental to the maintenance of two groups of salesmen, augmented by the possibility of irritation on the part of the exhibitors upon being visited by two representatives of the same company, could not be offset by the possible increase in volume. Several other companies have at one time or another followed the policy thus outlined. In common with Pathe Exchange, Incorporated, all have abandoned it.
The strategy of having the salesmen emphasize short subjects before calling attention to the company's feature pictures is interesting. It can be justified only on the ground that short subjects are more important than are the features, or that they are better known to the exhibitors. The first argument can scarcely be seriously urged, since short subjects are practically always incidental parts of a program in the minds of exhibitors. That Pathe short subjects were better known than its feature pictures may have been true. Since, however, Pathe Exchange, Incorporated, was undertaking to offer a complete program, and since feature pictures provide the basis of any program, the strategy of attempting to sell the incidental product first was questionable. Only in the event that the distributor considered the short product as of greater importance to himself, would such a course appear wise.
The proposed plan of reorganization (Exhibit 2) remedies many of the difficulties in the organization as depicted in Exhibit 1. The reallocation of exchanges presents some apparent inconsistencies. It is not clear why the eastern division manager should have supervision over Dallas and New Orleans as well as Boston and New York, while the central division manager was responsible for Albany and Oklahoma City. The organization finally adopted corrects these anomalous situations in the main. The form of organization finally adopted has distinct merits over either of the other two. The lines of authority are substantially clearer than in either of the other cases. The territorial limitation of each district is more consistent. Segregation of the nontheatrical department from the theatrical department is wisely retained. The centralization was justified because of the increasing importance of distributor-controlled theaters and of the tendency for centralized buying to supplant a larger number of individual purchases.