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

CONCEJSTRATION OF ECONOMIC POWER 33 business and would impose on them additional financial burdens. It is, therefore, interesting to note that the subject of blind selling is disposed of in the recent consent decree by provision for prescreening of all feature pictures. Assent to this provision by the five affiliated companies marks a complete reversal of their former position.^^ We have considered various aspects of the practices of block booking, bhnd selling and forcing of short subjects. One fact stands out in each case. It is that each of these practices is unequally applied. So far as the affiliated interests themselves are concerned, a satisfac- tory answer to the problems created by the industry's selling system has been found. Insistence on any one of these practices by one of the affiliated companies in its relations with another would invite retaliation. Since the companies are generally not in competition with each other in the exhibition field, it has been found mutually more profitable to extend to each other the privilege of selection. The three satellite producer-distributors are perforce required to grant preferential treatment in the matter of selection to the five affiliated companies. Their continued existence depends in no small part on their ability to show their pictures in the important theaters controlled by the affiliated companies. Those who have felt the weight of block booking, blind selling and the forcing of shorts have been in the main the independent ex- hibitors. The very fact that the unsatisfactory features of these practices have been avoided by the dominant elements within the industry and have remained to affect, over many years, those outside the controlling group suggests very strongly the basic cause of discord. In the final analysis, the difficulty does not inherently lie in the par- ticular method of selling which happens to be in vogue. Rather, it rests in the control exercised by the few large integrated companies over the feature films on which the industry depends for its existence. To see this more clearly, let us create an imaginary situation. Instead of 8 large producer-distributors marketing an average of about 50 pictures each, let us suppose that there are 50 separate producer-distributors, each marketing about 8 pictures. In this hypothetical situation the number of features produced each year is roughly the same as at present. How long under such circumstances would one of these small producers remain in business if he tried to foist unsatisfactory features, at a fancy price, on his market in compe- tition with other producers, each striving for a share of the business? Reflection reveals that the undesirable features of the present system of film sales are indissolubly connected with the high degree of control by a few companies which exists in the motion-picture industry- today. It has been contended that any change in the present system ol marketing of films would result in financial losses to the major pro- ducer-distributors. This argument has been advanced by these com- panies themselves as a reason why various legislative remedies affect- ing these practices should not be enacted. It is quite evident that if pictures were not sold in blocks but were sold according to merit, severe losses might be incurred on unpopular pictures. Yet, there is no enter- prise that would long stay in business if the goods offered for sale were not liked by the consumer. There can be no good reason why the motion picture industry should prove an exception in this respect. " The provisions of the consent decree are discussed in detail in appendix III.