The motion picture industry (1933)

CHAPTER VII PROTECTION For years it has been the general practice in the motion picture industry for an exhibitor in buying a picture to secure from the distributor protection against certain other theaters within his competitive zone, in the form of an agreement on the part of the distributor not to permit that picture to be shown by such theaters until a prescribed time has elapsed. The validity of such protection and of the manner in which it shall be provided is an issue which has provoked as much discussion as any other problem in which the distributor and exhibitor have been interested. The theaters which usually are first in their zones to show new pictures are commonly called "first-run" theaters. Those theaters which customarily are the second in their zones to show pictures are known as "second-run" theaters. In like manner those theaters which show pictures third, fourth, or fifth in their zones are classed as third-, fourth-, or fifth-run theaters. While each theater is generally classified according to the run of pictures which it ordinarily shows, many theaters often do exhibit other runs. As a result, out of this whole situation there has developed a most complicated series of arrangements which continually provide points of irritation for both distributors and exhibitors. The basic need for protection rests upon the peculiar nature of the product. In the first place, the newer a picture is, ordinarily, the more valuable it is. It is claimed that 40% of the total revenue of all pictures is secured from the firstrun showings in 100 key centers, and that about 50% of the total revenue of a picture is obtained within the first 90 days after its release. Promptness in distribution is deemed, therefore, both necessary and of value. The accumulation of reve 201