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

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OOX'CENTRATION OP BOONOMIC POWER 79 Subdivision (g) of section XII assumes that all eight companies will have been brought under the decree by June 1, 1942, since these paragraphs only become operative after September 1, 1943. Sub- division (g) relieves the signatories from the trade showing and blocks-of-five provisions of the decree if 25 percent or more of the features released for exhibition in the United States are distributed by other means, or if 12}^ percent or more of the total gross income from film rentals, excluding the gross income of States' right exchanges, is derived frojn pictures licensed otherwise than in accordance with sections III and IV (a). Subdivision (h) goes into eft'ect after September 1, 1942. After this date sections III and IV (a) become inoperative if the competition of those using methods of sale contrary to these provisions "has substantially and adversely affected" the business of any one of the consenting defendants. Subdivision (g) and (h) together agree, in effect, that if the pro- visions with respect to block booking and blind selling are successful in permitting new competition to the major producers to develop, these companies will be free to return to these methods in order to stifle this new competition. Finally, the signatories are released from the trade showing and blocks-of-five provisions of the decree if at any time an Act of Congress requiring trade showing or limiting the number of feature pictures which may be licensed in a block is passed. Considering all these avenues of escape, it seems improbable that these provisions will be in effect for a very long period of time. FORCING OF SHORTS AND FOREIGNS Section IV (b) of the consent decree states: No distributor defendant shall require an exhibitor to license short subjects, Tiewsreels, trailers, or serials (* * * collectively referred to as shorts) as a condition of licensing features. No distributor defendant shall require nn ex- hibitor to license reissues, westerns, or foreigns (* * * collectively referred to as foreigns) as a condition of licensing other features. On the surface this appears to be an unequivocal response to the exhibitors' complaint against forcing of shorts, news reels, serials or westerns. However, there is no requirement regarding the way in which such subjects shall be licensed. Presumably, sales will be made in as large a block as possible and at the beginning of a season. Features, on the other hand, will be almost necessarily sold throughout the year. There is no assurance that a distributor wall view sympa- thetically the feature-picture requirements of an exhibitor who has failed to contract for short subjects. Claims that licensing of features has been made conditional upon execution of a short subject contract may be arbitrated. But it will, be a most difficult matter to relate the price paid for feature pictures during a season to a contract which may or may not have be«n entered into for short subjects at some previous time. BUYING POWER Section V is aimed at decentralization of circuit buying power, inasmuch as it requires a circuit with theaters in more than one exchange area to make individual contracts for its theaters in each