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154 <^ ^> ^> The Motion Picture Industry
The contention that block booking is wholesaling as applied to the sale of motion pictures is probably sound. On the assumption that the discount offered because of block purchasing bears a definite relation to the saving in the costs resulting from such block purchases, the practice is quite similar to that followed in many other lines of business. That such savings do appear seems clearly established. The practice of offering a lower price for quantity buying cannot be entirely divorced from the question of who bears the risk of the industry. The exhibitor buys a given block of pictures, pays a lower price for them, and assumes the risk as to the box office value of the pictures. Undoubtedly this makes it possible for a distributor to include in a block poor pictures along with the good ones. That this makes it possible for him to secure a larger income from those poorer pictures than he would otherwise be able to obtain is probably true. On the other hand, if the distributor sells a block of pictures under a brand name, good practice might dictate that the pictures in that group should be of as uniform a quality as possible. Unevenness in quality lowers their standing in the exhibitor market and is likely to make the brand name meaningless. Here again the situation is not entirely different from that in other industries. Not infrequently a manufacturer or a wholesaler may sell a case of assorted merchandise in which the quality is not uniform. He may frequently include in the case merchandise of distinctly lower character as a means of clearing his inventories of such merchandise. In both cases the price is lower than otherwise would be the consequence. That motion picture distributors, unable to make every picture of consistent quality, should follow the same practice is not surprising nor is it in itself to be condemned.
It has been urged that the wholesaling argument does not apply here because, although the product may be of uniform quality, the individual items are not identical. To this assertion it may be replied that such a practice is not without