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Background of the Industry ^ ^ ^> ^ 11
pendent producers could not be licensed by the Patents Company and, therefore, could not be distributed through the exchanges of the General Film Company, the independent producer could secure national distribution of his product only through independent exchange men scattered throughout the country and operating on a state right basis.5 Most of this state right distribution was confined to the pictures of small independent producers who could not afford to maintain national exchange systems.
In the second place, the methods employed by the early state right distributors were unsatisfactory for the efficient distribution of feature pictures. Many exchange men in the state right group were also exhibitors. In fact, the original purpose of their exchange activities in many cases had been that of securing films for their own theaters. When, therefore, a state right exchange man secured territorial rights for the distribution of a producer's product, he was interested primarily in the use of that product in his own houses. After the distributor's own exhibitions had received attention, distribution to other exhibitors in the territory was undertaken. This casual type of distribution had serious shortcomings for the producer who desired aggressive selling for his product. Furthermore, since no one source of films could supply a sufficient number to meet the total requirements of the average theater, each exchange man usually handled the product of several producers. This fact accentuated a diversity of interest on the part of the distributor, so that he was further inclined to offer but mediocre sales promotion to any particular producer's product. It also affected the distributor's performance of service functions upon which each producer depended for the maintenance of the physical quality of the film and for its prompt delivery to the exhibitor.
5 State right exchanges are independent organizations which buy outright, or more commonly lease under exclusive rights for perhaps five years, films from various producers and in turn lease them to exhibitors within their territory.