The motion picture industry (1933)

CHAPTER XIII FOREIGN PROBLEMS While it is true that the greater part of the revenue received by American motion picture companies is derived from the distribution and exhibition of pictures in the United States, yet a very substantial amount of revenue is derived from the foreign market. The amount of this foreign revenue, of course, varies from year to year, but American producers probably obtain from 20% to 30% of their total revenue from foreign distribution. The status of this foreign market, therefore, is a matter of tremendous importance, and every development affecting it is studied with great care. Furthermore, the foreign market is of unusual significance in the motion picture industry because normally between 65% and 75% of all pictures shown throughout the world in recent years have been American-made product. The significance of this foreign business to American distributors becomes the more apparent when the relationship between the cost of production and that of rentals is borne in mind. As has been indicated before, the largest expenditure involved in any picture is spent in the production of the negative. Up to the time that the positive films are available, it is the common belief that the investment in any given picture is highly speculative. A great deal of money is invested in a product whose value is not known. Having once made this expenditure, the producer-distributor incurs no further cost beyond that of distribution and exploitation. These latter expenditures are, it is true, significant, but the volume of the product itself is substantially the same whether the picture is exhibited in 500 or. 7,500 theaters. 393