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466 HARVARD BUSINESS REPORTS
cost per film was considerably less than that of American companies, many of whose feature pictures were made at costs in excess of $500,000. The annual business of French producing companies in 1928 in the domestic and foreign markets was estimated at 90,000,000 francs.12 Approximately 3,000 persons were employed in the production of films.
Fundamental contrasts with the industry in the United States were: the retarded stage in the development of motion picture distribution and exhibition; the lack of sufficient capital for large scale operations; a comparatively limited national market; a relatively less successful technique in producing pictures of popular appeal; and a closer relationship between the industry and the government, a relationship which was the result of a request for assistance from the government.
The introduction of sound pictures with dialogue had an important effect upon the relations between the motion picture industry of France and that of the United States. France was slow to adopt the production of the synchronized sound picture. The lack of domestic production of electrical reproducing equipment, the concentration of American equipment manufacturers upon the home market, and the six months' suspension of business during the negotiations over quota regulations were responsible perhaps for the tardy development. There were indications, however, that the talking film would become as popular in France as elsewhere.
The introduction of talking pictures complicated the problem of legislative restriction of imports, and emphasized a necessity for smoother working relations between the industries of the two countries. No French talking films of any consequence had been produced. Competitive conditions were on an entirely different basis from that before the introduction of sound.
While a measure of success might be obtained at first in the exhibition of English dialogue pictures, it was generally recognized that a long run program would require the use of French actors in productions especially adapted to French consumption. The possibility of arousing antiAmerican agitation might be increased by the addition of English dialogue. This possibility, in turn, would enhance the development of the nationalistic character
12 Film Daily Year Book, 1929.