To prohibit and to prevent the trade practices known as "compulsory block-booking" and "blind selling" of motion-picture films in interstate and foreign commerce .. (1939)

TRADE PRACTICES IN MOTION-PICTURE INDUSTRY 7 distributors of motion-picture films listed as "the Big Eight" by the sponsors of the bill, and are not required to play all or none of the motion-picture films produced and distributed by these companies. Witnesses on both sides before the subcommittee testified that all of the distributing companies regularly engaged in the business, not only the so-called Big Eight but also the other national and regional or "State rights" distributors, sometimes referred to as the independents, sell their motion pictures the sam.e way, that is, with what is branded compulsory block booldng and blind selhng. It may be significant to note that since this legislation was first introduced 10 or 12 years ago, and under the "monopolistic and burdensome trade practice" complained of, four new companies have established national wholesale-distribution systems for motion-picture films. These are known as Eepublic Pictures, Monogram Pictures, Grand National Pictures, and Gaumont British Pictures. None of these new distributors are listed as "the Big Eight." The charge made by the sponsors of the bill but unsupported by any evidence that the producer-owned theaters freely reject motion pictures without payment therefor in their own theaters, but that tliis privilege is denied to independent theaters • does not explain the wide difference between the number of theaters that exhibit the difl'erent pictures in the same distributor's group or program of pictures because it was testified that there are less than 2,500 such producer-owned theaters in the United States, while the difi^erences in the number of exhibitions of the pictures of the various companies were Twentieth Century -Fox, 8,633 theaters; Paramount, 9,253 theaters; KKO Radio, 8,722 theaters; Universal, 8,254 theaters; Metro-Goldwyn-Mayer, 5,418 theaters; Colmnbia Pictures, 8,292 theaters. The only defijiite example given of this practice in any of the testimony before the subcommittee involved certain Paramount pictures booked by the Atlas Theater in Washington, D. C. Following an investigation it was later revealed in testimony by the Paramount resident manager in Washington that the facts were exactly the reverse of the charges made; that the producer-owned theaters were required by their licensing agreements and actually did play or pay for the pictures mentioned, but that the independent exhibitor operating the Atlas Theater had the right to reject the same pictures imder his license agreement with Paramount without paying the film rental or license fee, at his own option. It is not contended that there is "bUnd selling" of motion-picture entertainment to the public. Both compulsory block booking and blind selling as defined in the bill relate exclusively to the wholesale buying of the exhibition rights to copyrighted motion pictures by the retail dealers who operate theaters. Much confusion is caused by attempts to consider this as a retail transaction. It is nothing of the sort. The only retail transaction in the motion-picture business is the sale of motion-picture entertainment by the exhibitor to the general public or theater patron. The consumer "buys" the motion picture at the box office of the theater, and never at the film exchange or wholesale dealer's place of business. The exhibitor "buys" pictures, not for personal consumption, but entirely for resale to the public at the theater. There is no complaint that motion pictures are not well advertised and "labeled" to the public by the theater. No theater owner would