The motion picture industry (Nov 1935)

throughout the country, operated on a "state right" basis. The state right exchanges "bought films outright or more comripnly leased films with the exclusive right of redistributing then to exhibitors within certain geographical areas. host state right distributors were also exhibitors whose original purposes were to obtain films for their own theatres, their interest in complete distribution being often less than casual, Moreover, since no producer could supply sufficient product to furnish the entire requirements of the average exhibitor, state right distributors were naturally interested in obtaining films from more than one producer, and this diversity of interest usually resulted in mediocre sales, service and maintenance efforts from the point of view of the producers. Aggressive selling efforts necessary for intensive distribution were lacking* Rentals received from films were not believed to be commensurate with their earning power. The producer, on the other hand, could not set prices for the distributors1 subleasing of film but received what the latter would pay for it. He usually found out a picture's value in a given territory after it was too . late to capitalize on it. Producers as Film Distributors. Unlike conditions in the manufacturing industries, the cost of the production of a motion picture has usually little direct relation to its sales value* Consequently the producer soon realized the great importance of obtaining proper control of distribution. Integration with production was inevitable since producers were placed in the position of having the value of their product determined to a large extent by distributors. Consequently, producers with sufficient financial resources generally pursued the policy of obtaining control of distribution. Present-Day Film Distribution. The actual process of distribution involves the licensing of the exhibitor to show copy— righted film, assigning playing dates, physical distribution of films to theatres, and the collection of accounts. Advertising material for the pictures to be shown is usually sold in conjunction with the licensing of films. Exchanges are located in key cities throughout the United States. The 50 to 250 positive prints made from the exposed negative are distributed to first-run, second-run, and subsequent-run theatres in proper order and point of time according to contractual specifications*Rental variations extend from as low as $5 per day to several thousand dollars per week, while percentage agreements may call for 10 per cent to 50 per cent of the box office receipts. Combinations of both forms are not uncommon. Another arrangement sometimes used allows the exhibitor a svn to defray current operating expenses and the surplus is then split according to agreement. The rental charge is governed primarily by the exhibitor's ability to pay, which, in turn, depends upon a variety of factors, chief among which is the estimated box-office receipts, based upon previous experiences with the star and cast in some comparable vehicle. Other factors are seating capacity, number of performances per day, price of admission, character of accompanying presentation, prestige of the theatre, and efforts made for exploitation. All the "major" companies maintain distributing establishments in "key" centers throughout the United States. Small independent producers often distribute their films through the facilities of the large producer-distributors, Total Humber of Exchange Establishments The total number of exchange establishments in 1929 was reported by the Census as 533. (See Table XXIV, Below). 8976