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will. In their opinion, the quality of Radio pictures had not yet become known by the public or by the exhibitors. It would not be good business practice, therefore, to force distribution of a product adjudged to be inferior and of questionable propriety. If, in case the picture should be released, censorship proceedings were instituted rather generally, the company might suffer from unfavorable propaganda, especially from the social reform groups. On the other hand, by withholding the release, the company would establish a precedent which might bolster its standing in the trade and provide an invaluable selling argument in the future. RKO Productions, Incorporated, could withstand the financial loss without seriously weakening its position.
If the company decided to release the picture, the cost involved in its distribution would be approximately $40,000. Of this amount about $12,000 represented fixed charges which would have to be allocated to the other pictures in the event that it was decided to withhold release. Another reason for not releasing the picture was the likelihood that exhibitors in general would withhold their datings on the picture. It was probable that many would eventually cancel their bookings outright, while others would endeavor to effect a tradeout 16 on the next year's product. It was practically impossible to conceal the quality of any picture once it had been exhibited in one or more key centers.
The fact that the picture in question was scheduled to be shown in a majority of the 200 theaters operated by the Radio-Keith-Orpheum Corporation, and that 25% of the total expected gross receipts would probably be derived from this source, were other reasons advanced for withholding release. Whereas the total rental paid by the theater to the producer would offset a large part of the cost of producing the picture and therefore reflect favorably on the balance sheet of RKO Productions, Incorporated, the theater division, because of the low box office value of the film, might
16 For a discussion of this practice, see Lewis, Howard T., op. cit., p. 391.