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26 ^> ^> ^> The Motion Picture Industry
While in some respects the situation was reminiscent of the patent situation of the earlier days, it was not entirely comparable. Instead of limiting the use of its reproduction equipment exclusively to films recorded by Western Electric recording apparatus, Western Electric from the beginning followed a policy of permitting the use of its equipment for the reproducing of films which had been recorded on apparatus other than its own. There were several reasons for this policy of interchangeability. One was that Western Electric came to the motion picture industry with its product as an outsider seeking the market, whereas it may be recalled that the Motion Picture Patents Company was composed of various producers within the industry who had pooled their individual patents in order to control distribution of films and projectors simultaneously. In the second place, the custom of exhibitors to use films of several producers would probably have prevented a stipulation to the effect that sound films manufactured by one process could be used only with projectors licensed under that system. And finally, it is probable that any attempt to monopolize all types of sound equipment under Western Electric control would have resulted in federal action. Hence, interchangeability was permitted.
On the other hand, RCA Photophone, Incorporated, and its parent companies, the Radio Group, arrived on the market too late to secure extensive distribution for their licensed machines. As a result, the Radio Group decided to enter the motion picture industry as producers, distributors, and exhibitors of sound motion pictures. This decision was most significant. It naturally raised the question as to what the future connection between Western Electric and the motion picture industry is likely to become. The aggressive and businesslike methods of the Radio Group applied to the motion picture industry have already effected certain definite changes in the type of executive management. There is less of the old "showman" apparent and more of a systematized method in prospect for governing the whole business