We use Optical Character Recognition (OCR) during our scanning and processing workflow to make the content of each page searchable. You can view the automatically generated text below as well as copy and paste individual pieces of text to quote in your own work.
Text recognition is never 100% accurate. Many parts of the scanned page may not be reflected in the OCR text output, including: images, page layout, certain fonts or handwriting.
574 HARVARD BUSINESS REPORTS
expense figures in order to counteract the small allowances for profit which they received under percentage plans.
A distributor listed his contemplated year's product by groups or blocks3 for presentation to the exhibitor. After a selection of pictures was made, negotiations as to price ensued. Sometimes the sales sheet contained the price which the home office of the distributor considered the theater should pay for each picture. In most cases this price was in excess of what a salesman would submit to the home office as an offer. It was not uncommon to find the original price 100% higher than the final price paid by the exhibitor. The question of pricing, therefore, became a matter of bargaining between the two parties. The only definite gauge for pricing was the amount paid by the exhibitor in the past for comparable products. Salesmen were constantly trying to raise prices from year to year and exhibitors were endeavoring to hold them to the level of previous contracts.
The manager pointed out that exhibitors were interested primarily in securing a fair average price per picture. They were aware that in any block of pictures there would be some good and some mediocre productions. If they could secure a fair average price, inaccuracies of individual picture evaluation would be compensated for without serious consequences. Distributors, on the other hand, in the manager's opinion, desired individual consideration to be given each picture in a block. Wherever this was possible, salesmen could employ superlatives of description which might influence exhibitors to offer more for pictures than they would otherwise pay for the block considered as a whole. In spite of the exhibitor's desire to secure a low average price, he was often forced to estimate the approximate value of a particular star or type of picture to his theater. Examples of actual contracts illustrating the bargaining nature of pricing and the attempt of the exhibitor to secure an average price are shown in Exhibit i.
The manager of the Wellington Theater had definite factors to consider in evaluating the product for which he was negotiating. The question of first, second, or third run was definitely related to the price paid. Run and protection were distinct factors in pricing. The term "run" had a dual meaning. Its primary meaning related to the chronological order in which theaters of a
3 See Federal Trade Commission v. Famous Players-Lasky Corporation, page 226.