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After the second run, all the neighborhood or subsequent-run theaters are grouped geographically into neighborhood zones, which are numbered. Each zone embraces the theaters in the immediate vicinity that are in direct competition with each other. In the grouping of the neighborhood theaters, there was found to exist at the time a number of large de luxe neighborhood theaters which, because of their larger seating capacities, prominent locations, presentation of supplementary attractions, service, advanced admission prices, extensive advertising, longer playing engagements for strong pictures, etc., were in a position to draw patronage normally over a considerably larger area than the usual run of low-price neighborhood theaters.
In fairness to these theaters it was uniformly agreed that some arrangement should be made for a limited protection over a larger area than was provided for by the numerical neighborhood zones; consequently key zones or lettered zones were devised providing for certain specified de luxe theaters to secure a limited protection over a considerable number of numerical zones. Because the other theaters in the numerical zones with their limited seating capacities and policy of operation were not under any circumstances in a position to draw patronage over this larger area, they were not indicated as key theaters.
Because of the wide area covered by the key zones, frequently the theaters in a numerical zone were situated in close proximity to one of the two or more key theaters. Since the key theater naturally had a more intense draw from the immediate vicinity than from the outlying sections of the key zone, a provision was made that the theater owner in the numerical zone could designate at the time he contracted for film service whether or not the pictures were to be exhibited prior to his run in the particular key theater situated close to his house. If he was not interested in where the picture played on the prior run, no stipulation was made in the contract, and in the absence of such stipulation it was