Motion Picture Commission : hearings before the Committee on Education, House of Representatives, Sixty-third Congress, second session, on bills to establish a Federal Motion Picture Commission (1978)

MOTION PICTURE COMMISSION. 105 thut his competitors showed, and as soon as the ctunpetition grew a little stronger and the form of amusement became very popular, competition would force the theater owner not only to give a better class of pictures, but forced him to show more than one picture, with the result that as the number of shows increased the number of pic- tures shown in each show increased. Mr. Towner. I want to ask you one question in that connection Suppose there are half a dozen moving-picture shows in the city, I think it is true that they do not show the same pictures in the same week ? Mr. Seligsberg. Not in the same neighborhood. That is exactly the point I am coming to. The exhibitor Avould find that he would buy a picture in New York, and his competitor in New York would buy the same thing in Chicago, and that not only killed the one show, but killed them both, b€cause instead of tittracting patronage it dis- couraged it, for people Avho had been in the one show would not go into the other. It therefore became necessary for something to be done so that a show would have novelty for its patrons, and that is really how the motion-picture film exchange came into existence. An exhibitor would own three or four theaters and he would buy a picture and run it through his three or four theaters, and then he began to let it out to other show men, and in that way he acquired rental customers for his films, and thev insisted on variety. The result is that there developed a tremendous mechanism which takes care of its customers and sees they are kept supplied in the trade. If a man on the west side of the street gets a different show from the man on the east side of the street and the film exchange can not supply both, it simply takes the first customer and lets the other go to one of its competitors. It is because, then, of the desire for ex- clusiveness and the desire for novelty and the cost of the film that the theater can not afford to pay for the film and must rent the film. A weighty reason for this existence of the film exchange is the de- mand foV exclusiveness, which sjieaks for itself—the demand for a picture wdiich has never been in the tc»wn. which, of course, is more valuable than one that has been shown once, and so on down the line. If the manufacturer has two agencies in any territory, it is impos- sible to give exclusiveness on any of his product in an}^ one theater, and the result is that the exchanges steadily refused to purchase the films from those manufacturers who would not protect them. It is purely a question of price. The man who want.^ the earlier film pays more, and if he does pay he is entitled to the first shov,- of the ]Hcture. The man who pays less perhaps has a smaller theater and perhaps caters to different audiences and is perfectly willing to have a restricted public, people who, out of consideration of the low price he charges, are willing to see a picture the second time. It is a question of com- petition between the exhibitors. The result is the mainifacturers not only deal through the film exchanges, but give exclusive agencies in territory to particular film exchanges, and that is why we have in this country large groups of manufacturers, all of them disassociated, but all of them publishing and selling their films exclusively through distributing companies. Now, the large distributing companies are the General Film Co. and the Mutual Film Corporation, which I represent. The manu- facturers in the Universal Film Co.'s group are all merged into one