Movie Pictorial (September 5, 1914)

26 THE MOVIE PICTORIAL September 5, 1914 Fortunes in the Movies Scores of Millionaires Created by Craze for Motion Picture Plays Enormous Profits From Films Made by Closely Held Private Corporations U. S. Court Decision Now Opens Way for Others to Share in Golden Harvest Lewis Film Corporation Organized to Establish Exchanges and Manufacture Films A TYPICAL MOVING PICTURE AUDIENCE Public Offered Chance to Enter Profitable Field Under Advantag eous Plan Among the business romances of the world none equals in vivid interest and astounding success the history of the growth and develop- ment of the moving picture industry, which, in half a dozen years, has created a score of mil- lionaires and which is still in its infancy. It is a matter of congressional record that over $1,600,000 is paid in to the moving picture theatres of the - United States alone every day of the year, or $574,000,000 a year. There are to-day approximately 25,000 moving picture theatres in this country. These charge prices ranging from 5 cents to $1—and the ma- jority of these are good paying theaters. That a number of them do not pay larger returns is due to the system which prevails in the market- ing of the films. With such an enormous field and such ‘tre- mendous receipts it is only natural that the men behind the moving picture business should be doing all in their power to centralize the business and keep outsiders from entering the field. Last year alone it is estimated that the lead- ing motion picture companies cleared net profits of over $50,000,000. Conditions have prevailed until recently which made it possible to central- ize the power of these great firms. But the recent release of patents and the decisions of the United States Court of Appeals have made it possible for competing firms to enter the tremendously rich field. NEED OF EXCHANGES FELT. The great obstacle at present is the inability of independent concerns to market their films except through the three great distributing agencies. These are the General Film Company, the Mutual and the Universal. These three con- cerns are owned and controlled by the principal film manufacturing concerns. Under the anti- trust law they cannot exclude outside manu- facturers. These three great concerns provide through their exchanges the film programs for the movie theatres. Of course, all theatres cannot get first service of films, as the number of weekly re- leases (as the distribution of new films are called in the profession) is limited. The result is that hundreds of theatres only receive their weekly programs after the same films have already been seen in other theaters and are no longer new. These hundreds of theaters that show old films need a new exchange. They need new pro- grams; they need attractions that have not been shown elsewhere, perhaps in the same neighbor- hood, even next door. To give this new service and to offer an out- let for the dozens of independent manufacturers outside the golden circle has been organized the Lewis Film Corporation. It is the purpose of this new company to organize immediately a chain of exchanges all over the country. As soon as this claim will have been completed, giving a market for full daily programs, the Lewis Film Corporation will begin the manufac- turing of films on its own account, meanwhile marketing the best American and foreign films mailable. The great profits of the motion picture busi- ness is in the exchanges. These secure from the manufacturers the original films at a more or less standardized price. This price averages for ordinary films 10 cents a foot. The exchanges then rent these films to the exhibitors. A weekly service of four films a day for seven days ranges in price, according to the newness of the films, at from $40 to $350 a week. BIG PROFITS IN EXCHANGES. The average life of a film is about six months; that is, its earning period during which time it remains in good condition to be shown. After that the films begin to crack and show wear. Now, during that period of six months a thou- sand-foot reel averages in earning power about $300. This gives an idea of the enormous profits to be made from the handling of films. In a week it is learned that the General Film Company, for instance, has cleared $65,000 through its various exchanges. As this company is owned by ten film manufacturers, their profits are made not only from the manufacture of films alone, but from the distribution of the same through their exchanges. At this rate the Gen- eral should have earned in a year over $3,000,000. The Lewis Film Corporation is prepared to establish a circuit of film exchanges all over the country, beginning with ten in the leading cities. To do this it is offering to the public an op- portunity to invest in its company. Hitherto the film business has been controlled through closely held private interests. The public has not been allowed to share. Every film concern has been a closed corporation with only a few owners. Film companies started on a "shoe string” have been built up into concerns rated to-day at sev- eral millions of dollars. The Vitagraph Company, for Instance, is said to have started with a capital of $10,000. It is rated to-day at several million dollars. All the beginnings have been humble. The Universal was started by Carl Laemmle, an immigrant of only a few years’ experience in the United States, who invested his first few hundred dol- lars in a movie theater in Chicago. To-day the Universal’s profits are counted by millions. Selig, Kleine, Spoor, Anderson, Lubin, Pathe and the dozen other magnates of the film world began with small investments which to-day are worth many millions. A CHANCE TO SHARE IN PROFITS. But all these men held to their stock and al- lowed only such capital to enter as was needed to start the ball rolling and get going. The Lewis company is offering the general investing public a chance to share in the rich harvest. The Lewis company is a reorganization of the Chicago Film Exchange, which was formed in 1906 as a distributing agency. At that time the independent film concerns were in litigation of a most costly character with the original film