The motion picture industry (1933)

182 ^> ^> ^ The Motion Picture Industry 1. A picture is sold solely because of its entertainment value and not as a physical product to be resold. Being a service and an intangible places it in a somewhat different class, in some respects, from ordinary physical merchandise. 2. The picture is purchased by an exhibitor for resale as entertainment to a public, whose tastes are very fickle in so far as individual types of pictures are concerned, but which in the aggregate exerts a continuous demand for pictures in general. It is also true that the public seems to demand pictures in cycles,2 a fact which suggests a marked similarity to the well-known fashion cycle. 3. The film partakes of the character of a monopoly product in that no one producer makes two films identically the same and no producer sells a picture which is identical to that of any other producer. Furthermore, the overwhelming majority of feature pictures are made by a very limited number of producers. 4. The title to the picture remains with the seller. What he sells is a legal right permitting the exhibitor to show a particular film. In addition to these characteristics of pictures themselves, there are certain special practices in the industry which must be known before the pricing problem can be approached understanding^ : 1. The picture is sold to exhibitors wholly by description. Very rarely does the exhibitor see the picture before he buys it, and frequently the description is of the very vaguest possible character. 2. In practice the price paid by an individual exhibitor is the result of a bargaining process. The distributor does not set a specific price on a picture and then sell it to all exhibitors at that price. Usually he does not even sell it to exhibitors of the same type at the same price. There is, it is true, a certain very general but very definite uniformity in the range within which the price varies for any one exhibitor. In fact, if one may speak very broadly, it is probably true that the variation in price settled upon by the various exhibitors is not so widely different as one might at first suppose. 3. The costs which influence the price paid by an exhibitor are ordinary circumstances as essential to the program, are in practice quite likely to be looked upon as valuable in so far as they supplement the feature picture rather than because of any particular drawing power which they have in themselves. (See pp. 331-334.) This fact obviously has great significance in the pricing of such short films. The reader will note, however, that much of the argument relative to feature pictures applies equally well to shorts. For newsreels, see Chapter IV. Compare also with Chapter V and Chapter VIII. 2 See p. 108.