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22 <^ ^> ^> The Motion Picture Industry
reentrance of the producer-distributor into the exhibition field. This new policy, furthermore, was tremendously stimulated by an increasing recognition that exhibition itself was one of the most profitable branches of the industry.
As a result, beginning in 1925, a general program of theater acquisition was relaunched. Universal, in 1925, acquired the E. J. Sparkes enterprises. Similar acquisitions were soon under way by other producer-distributors, and prominent independent chains sought to expand their activities by seeking additional retail outlets. Balaban and Katz in the Middle West, Warner Bros. Pictures, Inc., the Famous Players-Lasky Corporation, the West Coast Theaters in northern California, William Fox, and others all entered into an aggressive race for theater acquisition. These acquisitions during 1925 in some considerable measure marked only the beginning of the consolidation program, but the field was becoming rather clearly defined. Famous Players-Lasky, First National, and Loew's, Incorporated, were in the lead, while Universal, Fox, and Warner Brothers were just beginning to assume national importance. In 1926 and 1927 many consolidations of the smaller independent chains took place, but the real battle centered around the acquisition of the larger circuits by producerdistributors and the building of de luxe houses by these same corporations. Into this situation there was injected later a whole series of factors which at this earlier date it was difficult to foresee.
It is rather clear that the rate of integration was continually accelerated by the cumulative effect of competition, by the acquisition of outlets, and by the ease of acquiring capital. This hurried expansion might easily have led to very serious embarrassments, as it eventually did. This embarrassment, in some instances at least, was postponed by the introduction of the sound pictures in the latter part of 1928. The introduction of sound, reluctantly adopted by most producers, came in some respects at a most opportune time — and this is said with due recognition of the fact that