Harvard business reports (1930)

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474 HARVARD BUSINESS REPORTS operated large metropolitan theaters, those who operated theaters of medium size, and those who operated small rural theaters. It had been selling to independent exhibitors as well as to those who operated large chains. Since it released a large number of films of all types, its product was well suited for distribution to all types of theaters. It sold its films to many of the small exhibitors in the United States under the Universal Complete Service Plan.1 While the distribution of the films of the Universal Pictures Corporation was fairly uniform throughout the United States, there were certain sections in which the executives considered the sales volume unsatisfactory. These sections included principally New York, Florida, and certain sections of the Middle West and the extreme Southwest. About 1925, several of the leading producer-distributors began to build up chains of theaters by erecting new theaters or by securing control of old ones. They used the chains thus established as outlets for their films. In these chains they used the films of competing producers only as such films were needed to supplement programs composed of their own productions. Because of the growth of these chains, many theaters which before 1925 had been possible users of the films of the Universal Pictures Corporation no longer constituted possible customers. The Universal Pictures Corporation believed that it was necessary to secure some kind of controlled outlets to supplement the outlets the company then had through independent theaters. To accomplish this purpose it was essential that the company acquire a large number of theaters in many different centers. The control and operation of a large chain also would make possible the sale of the company's pictures to theaters controlled by other producers. The theaters of the other producer-distributors usually required some pictures in addition to their own to complete their programs. The purchasers for such theaters were inclined to consider with favor, if the quality were satisfactory, the pictures of the producers who were able in turn to offer the best outlets for their pictures. The Universal Pictures Corporation, if it acquired a chain of theaters, would require some outside films and thus would be in a position to offer satisfactory outlets for the films of other companies operating theaters. 1 See Universal Pictures Corporation, page 273.