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

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CONCENTRATION OF ECONOMIC POWER 77 no small part contingent on the strength of the Government's case agaiS these three companies. None of these companies owns or operates theaters. Each is smaller than any of the five affiliated companies It is obvious that many of the complaints of unfair prSs which might be made and provecl with respect to the five affiliated companies are in no way applicable to t^icse three The Government's case against these threo companies is. therefore necessarily very much weaker than it is against any one of the other five pri lucer-distributor-exhibitors. In one sense then the major companies by making certain concessions, have been able to negotiate a s^^sin of the Government's suit for a period of at least 3 years while at the same time the extent of these concessions is limited by the siiccess of the Government in prosecuting a much weaker case Ffnally it has been shown in the body of this report that the misise of economic power attained by linking together numerous ^parate operating units into large and powerful organizations has b?en Responsible for many of those features and practices of the indus- trv which are undesirable from the consumers' standpoint. It is efevin tP point out, then, that the decree does not create any new competing units; rather, it freezes the present competitive situation. r^mTtir of fact, onl. of-the escape.clauses is designed to reheve the consenting companies from certain of the restrictions ol the decree should any marked change in present relationships occur. The remaining pages of this appendix are devoted to a brief analysis of the rektlon of various provisions of the decree to certam industry practices. * * BLOCK BOOKING AND BLIND SELLING With respect to blind selling, section III of the consent decree provides: * * * No consenting defendant engaged in the distribution of motion pictures ^hflll license or offer for license a feature motion picture * . ^^r P; "V^ exh b fon witWn the United States of An.erica at whi^oh ^" f "--^"J^district be charged, until the feature has been trade shown within the exchange district in which the public exhibition is to be held. The purpose of this section is to enable exhibitors and interested public welfare groups to learn about pictures before contracts for ^^The"" decree's answer to the problems raised by block booking is contained in section IV (a), which provides: No distributor defendant shall offer for license or shall license more than five fealres'ina'sTngle'group. In offering its features f-. l-^^^ f,,^^t'may from distributor may change the combinations of features m groups ^^J^* ^fJ^^^^^J time to time determine, and may license or offer ^^^ li«\n«^.^f^I"l^"^ns|'o^ features as it may from time to time determine provided that ^he hcense or oner for license of one group of features shall not be conditioned upon the licensing of another feature or group of features. This provision does not eliminate block booking. It merely limits the size of blocks to 5 or less rather than 40 or 50 features^ It will be noted that the distributor is specifically left free to deter- mine which features shall be grouped to form these .bfo^ks^nd that he is not required to offer blocks of identical composition to difterent or competing theaters. Each exhibitor, of course, is free to negotiate for such combinations of pictures as he may desire out of all those