Investigation of concentration of economic power; monograph no. 1[-43] (1940)

g CONCENTRATION OF ECONOMIC POWER sentatives of the Administration without vote, and labor representa- tion when labor problems were to be considered. Despite this appearance of unbiased character, the Code Authority, like the industry, was dominated by the affiliated interests. The Darrow Board report said: It was indicated that of the 10 members of the Code Authority, 5 represent- ing affiliated producers, distributors, and exhibitors, and 5 representing un- affiliated producers, distributors, and exhibitors, that only 2 of them were not connected in some way with the affiliated producers, distributors, and exhibitors and could thus be classed as really independent.'^ To insure sympathetic administration of the code, the unusual ex- pedient was adopted oi naming the members of the Code Authority in the Code itself. In only two other Codes of Fair Competition did this occur. The same control was seen in the composition of the 31 local grievance boards and 31 local clearance and zoning boards set up under the code to adjudicate motion picture disputes of a local nature. They are dominated by the distributors and first-run exhibitors, whose in- terests are the same. There are only two independent subsequent-run exhibitors provided for on the boards. The interests of distributors and first run theaters being identical as opposed to subsequent-run independent theaters, it is obvious that * * * the voting strength of the boards will be four to two again.st the independent subsequent-run exhibitors.!^ Control of the industry remained undisturbed by the code. Never- theless, independent exhibitors, because of Government intervention, received under the code a number of concessions from the affiliated interests in the way of trade practice reforms. Many of these re- forms came to an end after the codes were declared unconstitutional by the Supreme Court on May 27, 1935. CRYSTALLIZATION OF THE PATTERN The period of hectic growth and change in the motion-picture in- dustry is over. The early pioneering days have given way to a mature and stabilized business on a grand scale. The bitter com- petition of yesterday is the close control of today. All told, there are in the United States about 110 producers, nu- merous distributors and a multitude of exhibitors. Nevertheless, the industry is dominated by 5 major companies,^* all of which are active in production, distribution, and exhibition, and 3 satellite companies,'^ interested solely in production and distribution. The production scene today is one in which about 70 percent of all features produced in this coimtry are made by the 8 major companies. Each of these companies produces from 40 to 60 pictures annuall}' with the exception of United Artists which provides distribution fa- cilities for a group of individual producers who all together make 20 or less. '2 Report of the National Recover^ Review (Darrow) Board relating to the Motion Picture Industry, Washington, 1934. Composition of Authority: Representing affiliates, M. H. Aylesworth, president, R. K. O.; S. R. Kent, president, Fox; O. .T. Sehaefer, vice-president, Paramount; N. M. Schenck, presi- dent, Loew's; H. M. Warner, president. Warner's. Representing unaffiliates. R. H. Cochrane, vice presi- dent. Universal; W. R. Johnston, president. Republic; E. Kuykendall, president, Motion Picture Theatre Owners of America (includingaffiliated and unaffiliated theater owners); C. L. O'Reilly, president, Theatre Owners Chamber of Commerce, N. Y.; and N. Yamins, independent exhibitor. "Ibid. " Paramount Pictures, Inc., Loew'j, Inc. (Metro-Goldwyn-Mayer), Twentieth Century-Fox Film Corporation, Warner Brothers Pictures, Inc., and Radio-Keith-Orpheum Corporation. '5 Universal Corporation, Columbia Pictures Corporation, and United Artists Corporation.