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Background of the Industry <^ ^> ^> <^ 7
number of feet of films. This policy involved a sharp break with the policy adopted by the General Film Company. Under the policy of the latter, "no account was taken of individual pictures or of individual actors or directors, and the flat rate per foot applied without regard to the number of separate pictures furnished, the quality or character of the pictures, the size of the theater, or of the town or city in which it was located, and regardless of whether the particular exhibition was a first or subsequent run". But if feature pictures of varying length and of varying quality were introduced, then some system of comparative pricing seemed logical. Moreover, a producing company, striving to develop a demand for its own particular type of picture, could scarcely be satisfied with having its product sold on an equal basis with that of all other producers.
When this stage in the evolution of the industry was reached, it is clear that two problems emerged. First, there was the baffling one of determining the type of pictures that would satisfy the public demand. The attempt to analyze, forecast, and meet the constantly varying whims of the entertainment-seeking public still constitutes one of the major problems of the motion picture business. This problem will be dealt with in detail at a later point in this volume.4
The second important problem which emerged was that of determining the manner in which these pictures were to be priced and distributed. In the earlier days pictures were licensed through exchanges to exhibitors under what has been designated as the "program system", a plan "by virtue of which an exhibitor could purchase the right to use a certain number of reels per day, constituting his entire program, for an indefinite time in the future at a flat rate per foot of film . . . What the distributors sold and what the exhibitors wanted was a service, that is, a constant supply of two or three reels of motion picture film furnished two
4 See Chapters III and IV.