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492 HARVARD BUSINESS REPORTS
the silent field. The major producing companies were devoting their attention to sound pictures. From the standpoint of better entertainment, therefore, the manager was convinced that the installation of a sound reproducing system was advisable.
Before installing sound equipment, it was necessary to determine whether the additional outlay in expense would be reimbursed through an increase in gross revenue. The additional weekly operating expense was approximately $1,000. It was estimated as follows: write-off of investment, $60; interest on investment, $20; increase in projectionists' wages, $190; equipment service charge, $50; synchronization, $150; increase in film rental, $350; sound news, $100. A doubled projection force and additional wages for the normal force were required by the trade union of machine operators. Offsetting this additional outlay, it was possible that better entertainment furnished by the new sound pictures might enable the theater to lengthen the run of its pictures, thereby reducing the film rental expense. Assuming that a first-run picture in the territory cost $1,000 for three days, the additional cost for the balance of the week would not exceed $500. On the other hand, the rental on sound news would be greater than that of the existing silent news. The managers of certain local exchanges maintained by distributors had stated a policy whereby a theater with sound equipment would not be permitted to choose individual sound versions, but must choose either all silent pictures as per existing contracts or all sound pictures.
The increase in gross revenue because of sound installation was difficult to forecast. Because of the appeal to curiosity, the increase in revenue probably would be higher at first. Future revenue would depend entirely upon the quality of entertainment that could be produced with sound synchronization. It was the opinion of the manager that the latest releases were a distinct improvement over the earlier productions and that further developments would be favorably received by the public.
Clayton was not overseated in comparison with other cities of its size. Partly because of its metropolitan location, the Clayton Theater drew upon a considerable population, and good entertainment would always attract a profitable attendance. The theater would seat 2,000 at capacity. Weekly attendance, including matinee and evening performances in October and