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394 o ^> <^ The Motion Picture Industry
The distributor therefore has every incentive to secure the widest distribution possible for every picture. To double the number of theaters in which a given picture may be booked may easily increase the net revenue 10 or 15 times. Proportionately speaking, the largest part of this revenue is secured in the de luxe and first-run houses; every showing that can be secured adds to the income without materially increasing the cost, however, and the distributor feels that he has gained by renting a picture to a theater for $7.50 if that makes possible an additional showing. In other words, he does have $7.50 more gross revenue than he would have had, and that amount becomes almost entirely net gain.
Hence it is clear, to repeat, that a producer-distributor wants the very widest distribution of his product that he can get. This applies not only to the domestic distribution but equally to the foreign. If a picture can be distributed in the European or the Latin American market, it is so much additional revenue earned on that product, the principal cost of which has already been incurred. Hence, with motion pictures, world-wide distribution would, to a peculiar degree, be the ideal distribution. For a great many — perhaps, indeed, most — pictures, the real profit is realized from the foreign market. Since the domestic market may not do much if any more than yield to the producer sufficient revenue to cover his negative costs, a substantial volume of foreign sales is quite essential to financial success. Naturally, as will be indicated later, there are some serious conditions which result in additional costs, the most notable among them being the possible necessity of producing a so-called foreign version. However, the principle is clear.
The American companies have been very fortunate, therefore, in their ability to establish American motion pictures so firmly in the foreign field. A part of this position is due to chance, a part to natural advantages for production, and a part to the keenness of the men responsible for the direction of the industry. There are various reasons that the motion picture industry developed in the United States at