BOSTON PUBLIC LIBRARY
BOSTON PUBLIC LIBRARY
3 9999 06317 543 2
NATIONAL RECOVERY ADMINISTRATION
DIVISION OF REVIEW
THE MOTION PICTURE INDUSTRY
(NOT FOR RELEASE: FOR USE IN DIVISION ONLY)
THE EVIDENCE STUDY SEMES
The EVIDENCE STUDIES were originally jilanned as a means of gathering evidence
tearing upon various legal issues which arose under the National Industrial .Re-
Those studios have value quite aside from the use for which they were originally
intended. Accordingly, they are now made available for confidential use within the
Division of Review, and for inclusion in Code Histories.
The full list of the Evidence Studies is as follows:
1. Automobile Manufacturing Ind, 23.
2. Boot and Shoe Mfg. Ind. 24.
3. Bottled Soft Drink Ind. 25.
4. Builders' Supplies Ind. 26.
5. Chemical Mfg. Ind. 27.
6. Cigar Mfg. Industry 28.
7. Construction Industry 29.
8. Col; ton Carment Industry 30.
9. Dress Mfg. Ind. 31.
10. Electrical Contracting Ind. 32.
11. Electrical Mfg. Ind. 33.
12. Fab. Metal Prod. Mfg., etc. 34.
13. Fishery Industry 35.
14. Furniture Mfg. Ind. 36.
15. General Contractors Ind. 37.
16. Graphic Arts Ind. 38.
17. Gray Iron Foundry Ind. 39.
18. Hosier:/ Ind. 40.
19. Infant's & Children's Wear Ind. 41.
20. Iron and Steel Ind. 42.
31. Leather 43.
22. Lumber & Timber Prod. Ind.
Mason Contractors Industry
Men's Clothing Industry
Motion Picture Industry
Motor Bus Mfg. Industry (Dropped)
Needlework Ind. of Puerto Rico
Fainting & Paperhanging & Decorating
Photo Engraving Industry
Plumbing Contracting Industry
Retail Food (See No. 42)
Retail Lumber Industry
Retail Solid Fuel (Dropped.)
Retail Trade Industry
Rubber Mfg. Ind.
Rubber Tire Mfg. Ind.
Silk Textile Ind.
Structural Clay Froducts Ind.
Waste Materials Ind.
Wholesale & Retail Food Ind. (See No. SI)
Wholesale Fresh Fruit & Veg.
In addition to the studies brought to completion, certain materials have been
assembled for other industries. These MATERIALS are included in the series and are
also made available for confidential use within the Division of Review and for in-
clusion in Code Histories, as follows:
•44. Wool Textile Industry
45. Automotive Parts & Equip. Ind.
46. Baking Industry
47. Canning Industry
48. Coat and Suit Ind.
49. Household Goods & Storage, etc. (Dropped)
50. Motor Vehicle Retailing Trade Ind.
51. Retail Tire & Battery Trade Ind.
52. Ship & Boat Bldg. & Repairing Ind.
53. Wholesaling or Distributing Trade
L. C. Marshall
Director, Division of Review
PARI I: I1TTRODUCTION
CHAPTER I ~ TIH HA.TURI OP THE IHDUSTRY 2
Definitions of the Industry 2
Description and Scope of the Industry 2
Capital Investment 4
Interstate Character of the Industry 4
PART II: PRODUCTION
CHAPTER I - THE HATERS 01 THE DIVISIOH 6
Total Hunter of Establishments 6
number of Establishments by Principal States. ... 6
Hunter of lienbers and Size of Concerns. ...... 7
Gross and Het Incone 7
Het Incone by Major Conpanies 8
Total Cost of Production , 9
Volume of Production 9
Total Domestic and Foreign Releases 9
Production of "Features ". 10
Production of "Shorts" 11
"Bo;c-0ffice Halting" of Producers 11
CHAPTER II - LABOR STATISTICS
Total Hunter of Employees 13
Hunter of "E::tras" 15
Seasonal Variation in Employment 14
Total Annual Wages 15
Annual Wages by Principal States 15
Salaries and Wages as a Per Cent of Cost
of Production 16
Wages of Extras 17
Average Hourly Wr.ge Rate 18
Average Hours Worked per Week 18
Child Lator 19
Employees by Principal States 19
Total Employees 19
Wage Earners 20
III - MATERIALS 21
Cost of Principal Materials Used 21
Source of Equipment and Supplies 21
IV - UNFAIR TRADE PRACTICES 23
Enticement of Talent and Activities of Agents ... 23
V - GENERAL INFORMATION 24
Productive Capacity 24
Trade Associations 24
Motion Picture Producers and
Distributors of America, Inc 24
The Academy of Motion Picture
Arts and Sciences ....... 24
Trade Union Activity 25
PART III: DISTRIBUTION
I - THE FATURE OP THE DIVISIOIT 26
History and Scope of Division 26
Origin of Film Exchange .26
Developments in Film Distribution 26
national and "State Right"
Producers as Film Distributors 27
Present— Day Film Distribution 27
Total l T umber of Exchange Establishments 28
lumber of Exchange Establishments by
Principal States 28
Volume of Business ^j Principal States 28
Number of Establishments by Type of
Volume of Business by Type of Exchange 29
II - LA30R STATISTICS 31
Average Annual Number of Employees. ... 31
Total Number of Employees oi r Types
of Exchanges , 31
Average Annual Payrolls 31
Per Cent Salaries and Wages are of
Total Expense 31
CHAPTER III - IMPAIR TRADE PRACTICES 32
Block Booking and Blind Booking 32
Forcing Snort Subjects with Features 53
CHAPTER IV - GENERAL INFORMATION 34
Trade Association Activity 34
PART IV: EXHIBITION
CHAPTER I - THE NATURE OE THE DIVISION 35
History and Description of Division. ....... 35
The Development of notion Picture
Theatres . 35
The Development of the Entertainment
Entrance of Producers into the
Exhibition Division ,35
Classes of Exhibitors 35
Total Number of Theatres 36
Number of Theatres by Principal States 36
Number of Theatres Open and Closed 37
Seating Capacity 37
Number of Theatres and Number of Seats
Classified by Type of Ownership 39
Total Theatre Receipts and Attendance 40
Theatre Receipts by Principal States ....... 41
Competition nith Other Industries 41
Expenditures for Theatre Construction 41
Financial Condition 42
CHAPTER II - LABOR STATISTICS 43
Number of Employees 43
Total Annual Payrolls 45
Total Annual Payrolls as a Per Cent of
Total Receipts 44
Number of Wage Earners and Total Annual
Wages by Principal States 44
Wages and Hours 45
In Principal Cities 45
In Washington, D. C 46
CHAPTER III - MATERIALS 49
Number of Films Used, 49
Per Cent of Consumer's Motion Picture Dollar
Spent on Film Rental 49
CHAPTER IV - UNFAIR TRADE PRACTICES 51
Clearance and Zoning .51
Other Unfair Trade Practices 51
Trade Associations 52
The Motion Picture Theatre Comers
of America. 52
Allied States Association of
Motion Picture Exhibitors .52
Trade Union Activity 52
International Alliance of Theatrical
State Employees and Motion Picture
Machine Operators of the United States
and Canada 52
Exhibit A - Persons Qualified as Experts on the Entire Industry . 53
Exhibit 3 - The Advent of Sound in Motion Pictures 55
Sound in Exhibition 55
Sound in Production 56
TABLE I -
TA3LE I A -
TABLE II -
TABLE III -
TABLE IV -
IABLE V -
TABLE VI -
TABLE VII -
TABLE VIII «
TABLE IX -
TABLE X -
TABLE XI -
table xii -
table xiii -
table: xiv -
TABLE XV -
Assets of llotion Picture Producers, 1930-1953. ... 3
Assets of Llotion Picture Theatres, 1930-1935 .... 4
Total Hunter of Establishments, for Census
Yoars, 1921-1935 6
Wumber of Establishments, "07 Si:; Principal
Gross Income and ITet Profit or Loss, 1927-1932 ... 8
Consolidated !Tet Income or Loss for Six
Major Motion Picttire Companies, 1932-1934 8
Total Cost of Production, for Census Years,
Humber of Domestic and Foreign Llotion Picture
Features Released in the United States,
Features Released "by l.Iajor and Independent
Domestic Companies 10
Total Ilumber of Shorts Produced, 1930-1931
to 1954-1935 11
Estimate of Bo:: Office Strength of Feature
Pictures, for each of Eight l.Iajor Companies
and All Independents, 1933 and 1954 12
Average Annual ITumber of Salaried Employees
and of Wage Earners 13
ITumber of Placements and Wages of "Extras"
Registered with the Central Casting Corporation,
1926-1934 \ 14
Number of Wage Earners, "02 r Months, 1929 and 1935 . . 15
Total Annual Salaries and Wages, 1929 and 1933 ... 16
Annual Wages, by Three Principal States,
1929 and 1933 ' 16
TABLE XVI ~ Total Coat of Production, Annual Salaries
and Annual Uages, 1929 and 1933 17
TABLE XVII - Distribution of Placements of Extras by
the Central Casting Corporation at
Specified Daily Wage Hates, 1930 and 1933 18
TABLE XVIII - lumber of Establishments and Number of
Uage Earners, Classified by Number of
Full-Time Hours ITorked ~>er Week, 1929 19
TABLE XIX - Average Annual Number of Employees, by
Three Principal States, 1929 and 1933 19
TABLE XX - Average Annual number of TTage Earners,
by Three Principal States, 1929 and 1933 20
TABLE XXI - Total Cost of Production and Cost of
Materials, Fuel, and Purchased Electric
TABLE XXII - Number of Establishments Producing Photo-
graphic Apparatus and Supplies, by
Principal States 22
TABLE XXIII - Exports of Motion Picture Films, 1929 and 1934 . . 24
TABLE XXIV - Number of Exchanges and Volume of Business
Handled, by Six Principal States, 1929 23
TABLE XXV - Number of Exchanges, and Number of Employees,
by Principal Types of Exchanges, 1929 29
TABLE XXVI - Volume of Business, Salaries, Wages and
Total Expenses, by Principal Types
of Exchanges, 1929 30
TABLE XXVII - Average Annual Number of Employees
and Average Annual Payrolls, 1929 31
TABLE XXVIII- Number of Motion Picture Theatres,
by Principal States 55
TABLE XXIX - Sound and Silent Motion Pictiu-e Theatres,
Classified as to Whether Open or
Closed, 1929-1935 '38
Pa f <?e
TABLE XXX - Total Number of Seats in Motion
Picture Theatres, 1931-1955 39
TABLE XXXI - Humber of Motion Picture Theatres,
Classified by Type of Ownership, 1933-1955. . . 40
TABLE XXXI I - lumber of Lotion Picture Theatre Seats,
Classified by Type of Ormership, 1933-1935. . . 40
TABLE XXXIII - Estimated Total Bo:;-0ffice Receipts, Average
Admission Prices, and Attendance, 1929-1934 . . 41
Annual Expenditure in Theatre Construction,
1929 - March, 1955 42
Cross Income, Het Profit or Loss, 1927-1932 . . 42
TABLE XXXVI - Annual Average ITuaber Employed, Full and
Part-Time, "by Types of Theatres, 1933 43
TABLE XXXVII - Total Payrolls, Full and Part-time,
by Types of Theatres, 1933 44
TABLE XXXVIII - Total Receipts, Number of Full-Time Employees
and Payrolls, Classified "by 10 Principal
States, 1933 45
TABLE XXXIX - Wage Scales and Hours Worked per Week "by
Unionized Projectionists, Classified "by
Number of Cities, 1933 46
TABLE XL - Average Weekly Hours and Wages of Employees
in 11 neighborhood Motion Pictiire Theatres
of Washington, D. C. , by Branch of Work
and Occupation, 1951 47
TABLE XLI - Average Weekly Wages in Different Types of
Motion Picture Theatres of Washington, B. C. ,
by Branch of Work and Occupation, 1951 48
TABLE XLII - Per Cent of the Consumer's Motion Picture
Dollar Accounted for by the Chief Divisions
of the Industry, 1933 50
MOTION PICTURE INDUSTRY
The do.tr. -presented in this report hrve been assembled from both government
and private sources. Most of the governnent data used have been taken from
publications of the Bureau of the Census, but data have also been taken from
reports of the Bureau of Labor Statistics and the Bureau of Internal Revenue.
Among the private sources, the most important arc the Motion Picture Alnanac ,
the Pi In Daily Yearbook , reports of 'he Standard Statistics Company, and the
trade o-ssociation, the Motion Picture Producers and Distributors of America,
The organization of this study is somewhat different fron that called for
in the Outline for Evidence Studies. Hie Industry as codified included the
production, distribution, and exhibition of moving pictures, and it has "oeen
considered advisable to follow the Outline through separately for each of these
divisions. The present study therefore consists of four parts: Part I, Intro-
duction, in which certain material pertaining to the Industry as a whole is
presented; and Part II, Production; Part III, Distribution; and finally, Part
III, Exhibition. The particular Census oublieations used in describing each of
the three nain divisions of the Industry are as follows: Production, Census
of Manufactures ; Distribution, Census o f "Thole sale Dist ribution; and
Exhibition, Cen sus of Ame rican "Business , "Services", Amusements, and Hotels".
The Census data are considered roughly applicable to the appropriate
division of the Industry as codified. The fact tha.t the Census coverage foes
not include the smaller establishments is not held significant in this Industr;
As pointed out in the text, however, Census data and those from private sovrcei
often indicate large discrepancies which are presumably due to the fact that
the latter are frequently estimates and to difference in the coverage of the
two sets of data.
FART I: INTRODUCTION
Chapter I. The Nature of the Industry
Definitions of the Industry
The Motion Picture Industry, as defined hy the Code of Fair Competition
for the Industry, includes,
".... without limitation, the production, distribution, or
exhibition of motion pictures and all activities normally related ^
thereto, except as s-necif ically excepted from the operation of the Code.
The limitations in the sco"oe of the Code are as follow:
"Nothing in this Code shall be deemed to a-only to the pro-
duction, distribution, or exhibition of motion pictures on film
of recognized substandard widths, or to slide films, or to non-
theatrical motion pictures designed primarily for educational,
scientific, industrial, commercial, advertising, selling, or other
non- theatrical purposes, or to television of motion pictures,
provided that the commercial production, distribution, or exhibi-
tion of such films shall be subject to investigation by the Code
Authority to determine whether such production, distribution, or
exhibition of such films is unfair competition to an established
motion picture theatre or theatres. If found to be unfair com-
petition, the Code Authority shall promulgate rules and regulations
governing such unfair competition."
The Code covered "actor employees in vaudeville and presentation motion
picture theatres" in "both permanent and traveling companies of artists play-
ing presentation and vaudeville houses," but it did not cover "amateur" shows,
"rep," "tab," "tent," "wagon," "truck" and "medicine" shows, "show-boat" or
"burlesque," as these terms are understood in the theatre.
The Industry as defined by the Census of Manufactures embraces,
".... all processes and activities connected with the pro-
duction of motion pictures, such as the photography of scenes, the
development of exposed films, the printing of projection films, and
other studio and laboratory work necessary in connection with the
preparation of projection films for use."
Since Census of Manufactures data thus cover only motion picture pro-
duction, they are not applicable to the entire Industry as defined by the
Code, but only to the production branch of the Industry which is described in
Part II of this study. The remaining branches of the Industry, distribution,
and exhibition, are covered by the Wholesale Census and the Census of Service,
Amusements, and Hotels.
Description and Sco-oe of the Industry
The Industry as codified is composed of three major divisions of activity;
production, distribution, and exhibition. These three economic divisions of
this Industry are closely inter-related with and dependent upon each other.
The production division covers all of the processes and activities involved in
the making of motion pictures. It includes the preparation and photography of
scenes; the developing of exposed films; the printing of projection films; and
other studio and laboratory work required in the preparation of positive films
for use. The distribution division involves the "renting" or "leasing" of
films to exhibitors; the maintenance and physical distribution of the films,
and the collection of due accounts. It also includes the outright sale of
finished films and the sale of advertising materials. The exhibition division
includes the commercial exhibiting of the finished films in the theatres; and
also vaudeville and presentations given in conjunction with motion pictures.
This Industry, which has assumed a position of unusual importance because
of its far-reaching influence upon social and economic standards and conduct,
is characterized by rapid growth by the possibility of radical changes through
technical developments in the film -nd related industries by the geographical
concentration of production. It's further characterized by the large degree
of integration of its three main divisions, and the individuality in the in-
dustrial practices which it follows.
Production, distribution, and exhibition are both horizontally and verti-
cally integrated and the concentration of corporate ownership in the hands of
a few large companies provides an economic division of the Industry between
what are known as "major" and "independent" interests. The economic conse-
quences of this concentration are reflected in nearly all problems of the
Tables I and IA show the assets of motion nicture producers and. exhibitor:
for the years 1930 through 1935. Fixed assets constitute the largest type in
both the production and exhibition divisions. Total assets of -oroducers drop-
ped from $934,000,000 in 1930 to $249,000,000 in 1933, while in the exhibition
division total assets rose during the same period from $619,000,000 to $1,-
076,000,000. The number of concerns reporting in the production division
averaged around 175 ea.ch year, whereas in the exhibition group the number
rose steadily from 1,889 in 1931 to 2,368 in 1933.
Assets of Motion Picture Producers, 1930-1933
(Dollars In Thousands)
1930 1931 1932 1933
182 170 177 131
Total Assets $933,847 $849,916 $411,622 $248,824
Current 228,871 192,911 54,015 42,057
Investments 251,320 220,408 109,593 18,543
Fixed 334,421 571,765 213,629 163.^40
Miscellaneous 59,255 H4.P51 29,335 24', 504
Source; Bureau of Internal Revenue, tabulation sheets and published reports
(Statistics of Income).
TABLE I A
Assets of notion Picture Theatres, 1S30-1933
(Dollars In thousands)
1930 1331 1932 1933
Number Reporting 1,689 1,309 3,132 2,368
Total Assets $618,792 $717,307 35,684 $1,076,486
Current 102,404 113,728 205,919 265,927
Investments 53,540 68,143 173,753 244,684
Fixed 389,494 470,433 523,241 490,536
Miscellaneous 73,554 59,003 83,771 75,339
Source: Bureau of Internal Revenue, tabulation sheets and published reports
(Statistics of Income).
According to the Motion Picture Almanac the capital investment of the
Industry stood at $2,000,000,000 in each of the years from 1929 to 1935, with
the exception of 1934 when the figure was placed at $1,750,000,000. The invest-
ment in studios is roughly $100,000,000; the investment in the distribution
branch of the Industry is something between $10,000,000 and $20,000,000; while
that for the exhibition branch of the Industry lies between $1,630,000,000 and
$1,380,000,000. In other words, the investments in production or distribution
are insignificant in comparison vith the investment in exhibition. In a study
made recently by a group of architects, Messrs. Lamb, Rapp, Alschlager, Eberson
and Schultz, it was estimate . that $1,460,000,000 has been spent to date in the
building of theatres exclusive of those parts of theatre buildings given over
to office space. 1/
Interstate Character of the Industry
In the making of films, numerous writers, actors, actresses, directors,
cameramen, and other artists and artisans, are assembled from many different
states and foreign countries. Great quantities of unexposed films and large
quantities of scenery, costumes, paraphernalia, and wro-nerties are transported
from many different states to the studios located in those few where motion
pictures are -produced.
The distributors enter into contracts for leases with exhibitors for the
exhibition of films throughout the United States through the media of corres-
pondence, branch offices, and salesmen. Thus film contracts which are entered
into between residents of different states, involve the leasing of a commodity
manufactured in one state and transported to and used in another state.
1/ Verbal statement by Mr. David palfreyman of the Theatre Service Division of
the Motion Picture Producers and Distributors of America (June, 1935).
After the films are produced, they are packed into metal containers, and
are transported by parcel post, express trucks and other common carriers, from
the studios and laboratories to exchanges, then to the theatres in cities and
towns of the country. After display to the public, the films are returned to
the exchanges for redistribution to other theatres, or are forwarded to other
exhibitors. Thus, there is a constant current of trade and commerce in films
through the states.
PAET II: PHODUCTION
Chapter I. The Nature of the Division
Total Uumber of Establishments
Table II indicates the number of establishments engaged in the produc-
tion of notion pictures. It '-/ill be noted that in the first Census taken
after the depression years of 1921 and 1933, the number of establishments
showed a marked decrease in each instance.
Total Number of Establishments, for
Census Years, 1921-1933
Year Number Per Cent Change
from Preceding Year
of Manufactures , 1929 and 1933 ,
"Motion Pictures, not Including Pro-
jection in Theatres."
Number of Establishments by Principal States
An examination of Table III shows that more than 80 per cent of all
motion picture establishments are located in six states. In 1929 California,
the leading state, accounted for 41 per cent of all establishments and New
York accounted for 21 per cent. By 1931 California had gained relatively
and New York had lost, while in 1933 the reverse was true. The concentra-
tion in the six states was more marked in 1931 and also in 1933 than in 1929.
Number of Establishments, "by Six Principal States
1929 1931 1933
State Number Per Cent Number Per Cent Number per Cent
of Total of Total of Total
U. S. Total 142 100.0 140 100.0 92 100.0
California 58 40.9 71 50.7
Illinois 8 5.G 7 5.0
New Jersey 6 4.2 5 3.6
New York 30 21.1 26 18.5
Ohio 8 5.6 6 4.3
Pennsylvania 5 3.6 6 4.3
Total, 6 States 115 81.0 121 86.4
Total, Other States 27 19.0 19 13.6
Source: Census of Manufactures . 1929 . 1931 . and 1933 , "Motion Pictures, not
Including Projection in Theatres."
Number of Members and Size of Concerns
The members of the production division of the Industry fall into two
groups. There are eight large companies which produce approximately 80 per
cent of the total value of production as valued on a cost-of-production
basis and approximately 65 per cent by number of features produced. 1/ Five
of the major companies supply nearly 100 per cent of the newsreels produced.
The remaining pictures are produced by approximately 30 independent com-
panies having sufficient importance to have the names of their production
staffs listed in the Motion Picture Almanac . Most of these minor producing
firms contribute their portion of the product under a "unit" system which
fits into and becomes a part of the production schedules of the major pro-
ducers. In addition to the above, there are many other small producers who
make tme or two motion pictures intermittently over a period of years.
Gross end Net Income
Table IV shows the gross income and the net profit or loss of motion
picture producers from 1927 through 1932. In 1930 gross income increased al-
most 70 million dollars over the 1929 level of $343,445,000 and the producers
reported a profit of more than $40,000,000 annually in each of these years.
Although in 1931 gross income was almost 100 million dollars greater than in
1929, there was a net loss of $8,674,000. In 1932 gross income fell to less
than one-half the 1931 level and the producers suffered a net loss of over
1/ Motion Picture Producers and Distributors of America.
The decrease in the profitability of the Industry has "been attributed
to a number of factors, including over-expansion in the direction of seating
capacity, erection of theatres at an excessive cost per seat, mismanagement
within the Industry, payment of inordinately large compensation for services,
and the effect of the depression upon the demand for entertainment.
Gross Income and Net Profit or Loss, 1927-1933
Year Gross Income Net Profit or Loss
410 , 700
Source: Bureau of Internal Revenue, Statistics of Income ,
Net Income by Major Companies
Table V shows the consolidated net income of six major companies for
1932, 1933, and 1934. Attention is directed to the recovery made by the
three companies, namely, Fox, Warner, and Paramount, which had the largest
net "bases in 1932. The totals show that the group loss of $36,519,000 in
1932 had "by 1934 been turned into a net income of $14,371,000.
Consolidated Net Income or Loss for Six Major Motion Picture
Company 1932 1933 1934
Columbia Pictures Corporation
Fox Film Corporation
Loew' s Incorporated
Warner Brothers Pictures, Inc.
- 500 a/
Source: Standard Statistics Company, Standard Trade and Securities ,
''Theatres and Motion Pictures, " Vol. 75, No. 22 (February 20, 1935),
Total Cost of Production
The production of motion picture films is not a manufacturing activity
in the sense in which the term is generally used to designate the factory
production of commodities. Furthermore, since the Motion Picture Industry
does not usually sell, "but leases or rents its product, it is impossible to
determine the actual value of the output of a given year until a long time
after its close. It is therefore necessary to substitute "cost of produc-
tion" for "value of product" in presenting data for this Industry.
An examination of Table VI indicates that the cost of production increased
each year from 1921, until it reached a peak of $184,102,000 in 1929 when
the introduction of equipment for sound production caused a large increase in
cost of production. In 1931, the Industry's decreased production costs can
probably be attributed in part to better adjustment to the innovation of
sound, but the impact of the depression was probably beginning to be felt.
Total Cost of Production, for Census Years, 1921-1933
Census of Manufactures,
Pictures, not Including Projection in Theatres."
Volume of Production
Total Domestic and Foreign Releases . - Table VII shows the total number
of features released in the United States for the years 1927 to 1934. Data
are presented to show how many of the total releases were foreign features and
how many were made by American producers. During the years 1932, 1933, and
1934, the proportion of foreign pictures releases was greater than in most of
the prior years. In 1934 the number of foreign features shown in this country
amounted to 27,5 per cent of the total.
Number of Domestic and Foreign Motion Picture Feature;
In the United States, 1927-1934
Film Daily Yearbool/ of Motion
i-Toduction of "Features." - Table VIII shows the number of features
produced from 1927 through 1934. Attention is directed to the high number
of releases by major companies in 1927 and the gradual decline through 1932,
with the subsequent moderate rise. During these years the major companies
averaged almost 70 per cent of the total number of feature pictures released.
Features Released by Major and Independent Domestic
a/ During 1927-1931, ten companies listed; during 1932-1934, eight
Produc tion of "Shorts." - Table IX shows the estimated number of
"Short Subjects," of one or two-reel length, produced for the years 1930-
1931 through 1934-1935. The table does not include newsreels produced
annually "by each of the five major companies, or approximately 20 reels.
Total number of Shorts Produced,
1930-1931 to 193-1-1935
1933-1934 1,062 a/
1934-1935 956 a/
Source: Compiled from data in the ivlotion
a/ Estimated on basis of announced
plans of companies.
"3ox-Office Rating" of Producers
The relative quality and importance of the production of the eight
major producers may be ascertained from an examination of Table X, which
shows the estimated "box-office strength" of feature pictures produced by
the major -producers in comparison with the feature pictures produced by the
Each feature release is assigned a weight, according to indicated box-
office potency, and a weighted average for the entire year is then computed.
A perfect score of 1,000 would result only if every film of a producer were
given a. "Hit" rating.
It will be seen from the table that United Artists and Loew' s (lIGU) re-
ceived the highest box-office ratings in both 1933 and 1934. In 1934 they
received 762 and 552 respectively. In the same year, independent companies
received an average rating of 164.
Estimate of Box Office Strength of Feature Pictures,
for Each of Eight Major Companies and All Independents,
1933 and 1934
Company 1933 1934
United Artists 583 762
Loev;' s (MGLi) 582 552
tfarner Brothers 486 429
R.Z.O. 395 433
Paramount 380 508
Pox Film 368 446
Universal 362 366
Columbia 260 302
Average 424 453
Independents 175 164
Source: Standard Statistics Company, Standard Trade and
Securities , "Theatre and Motion Pictures," Vol.
75, No. 22 (February 20, 1935) p. TH-48.
PART II: PRODUCTION
Chapter II. Labor Statistics
Total Number of Employee s
Table XI shows the average annual number of employees, in the produc-
tion division as reported by the Census of Manufactures. The Motion Picture
Almanac has estimated the total employment as 30,000 in 1933, compared with
the Census figure of 19,037 for the same year.
Average Annual Number of Salaried Employees and of
1929 1931 1933
Salaried Employees 8,818 — 8,260
Wage Earners 10,784 — 10,777
Total 19,602 14,839 a/ 19,037
Source: Cens us of Manufactures, 1935 , "Motion Pictures, Hot
Including Projection in Theatres."
a/ Figures for 1931 are incomplete and not comparable
with figures for other years.
Number of "-hxtras "
There are no accurate data as to the total number of "extras" employed
in the Industry. Mr. Allen Garcia, representing extras, stated at the
hearing on the proposed Code that the total number of this type of employee
registered and available has been variously estimated as between 8,000 and
14,000 annually. 1/
In addition, complete data are not available as to the total number
of placements of extras, but Table XII shows the number of such placements
made by the Central Casting Corporation, the leading employment agency for
obtaining jobs for this type of employee. The number reported by this
agency is considered to represent a great majority of the total number of
1/ Transcript of NRA Hearing, Motion Picture Industry, September 12, 1933.
Number of Placements and Wages
of "Extras" Registered with the
Central Casting Corporation
Report of the Central Casting
a/ Total number of placements divided by total number of days,
exclusive of Sundays.
b/ Data for 1931 are for the first eleven months of the year.
c/ Data for 1932 are for the first ten months of the year.
Seasonal Variation in Employment
Data on seasonal variation of employment in the production division
of the Industry, which are presented for the years 1929 and 1933 in Table
XIII, show relatively low employment in the first four months of each year.
Production for the summer selling season begins around May, and -oroducers
usually attempt to start work on special features at that time in order
to further their sales efforts. In 1929 and 1933 employment was higher in
the last six months of the year, with maximum employment occurring in
Table XIII also shows that during the last four months of 1933, deploy-
ment was generally about 15 oer cent higher than in 1929. This increase
may be partially attributed to a decrease in hours and subsequent increa.se
in the number of wage earners under the "President's Re-employment Agreement."
Number of Wage Earners, "by lionths, 1929 and 1933
er age= 100 )
Source: Census of Manufactures , 1929 and 1933 , "Motion Pictures,
not Inclxiding Projection in Theatres."
Total Annual Wages
Table XIV shows the total salaries and wages paid in 1929 and 1933
as reported by the Census of Manufactures. Comparison of the years 1929
and 1933 indicates that the reported total compensation decreased from
$85,028,000 to $71,343,000, or 16 per cent, salaries decreased approximate-
ly 12 per cent, and wages dropped about 26 per cent. The decline in total
salaries was accompanied by a somewhat smaller decrease in the number of
salaried emoloyees, but since the 26 per cent decline in total wages was
accompanied by practically no change in the number of wage earners, there
must have occurred marked cuts in wage rates and/or a considerable substi-
tution of part-time for full-time workers. (See Table XI, above.)
It may also be seen from Table XIV that salaried employees enjoyed
a larger proportion of the total compensation in 1933 than in 1929. Salaries
represented approximately 71 per cent of the total compensation in 1929 and
about 74 per cent in 1933, while wages as a percentage of total compensation
decreased from about 29 per cent to approximately 26 per cent.
Total Annual Salaries and Wages, 1929 and 1933
1929 1933 Per Cent
_ n Kind Amount Per Cent Amount Per Cent XS 6 ?,*,.,
or Compensation / nnn , \ - m j. -, ^nnm > ^ n j. -\ 192y-iy<5<5
(000's) oi Total (OOO's) of Total
Total $85,328 100.0 $71,343 100.0 - 16.1
Salaries 60,168 70.8 52,948 74.2 - 12.0
Wages 24,860 29.2 16,395 25. S - 26.0
Source: Census of Hanufactures, 1933 , "Motion Pictures, not Including
Projection in Theatres."
Annual Wages "by Principal States
Table XV shows the annual wages paid in 1929 and 1933 in the three
principal producing states. California acco\inted for 79 per cent of the
total in 1929 and 34 per cent in 1933. New York declined in importance
from 1929 to 1933, for it accounted for 15 per cent of the total in 1929
"but only 11.5 per cent in 1933.
Annual Wages, "by Three Principal States,
1929 and 1933
U. S. Total
Total, 3 Stat
Not Including Projection in Theatres."
Salaries and Wages as a Per Cent of Cost of Production
Table XVI shows the -oer cent of total cost of production spent for
wages in 1929 and 1933. The 1929 wage cost of $24,860,000 dropped to
$18,395,000 in 1933, "but as a per cent of total cost of production, it
increased fron 13.5 per cent in 1929 to 15.4 per cent in 1933, or a gain
of 14 per cent. While the annual salaries paid in 1929 decreased from
$60,168,000 to $52,948,000, the -oer cent of total cost of production which
these figures represent rose fron 32.7 per cent in 1929 to 44.4 per cent
in 1933 or a gain of 36 per cent.
Total Cost of Production, Annual Salaries and Annual Wages
1929 and 1933
Total Salaries and Salaries
Amount Per Cent of Amount Per Cent
Total Cost (000's) of Total
Amount Per Cent o:
(000' s) Total Cos'
$85,028 46.2 $60,168 32.7
71,343 59.8 52,948 44.4
Manufactures, 1933, "Motion Pictures, Not
Projection in Theatres".
Wages of Extras
Table XII above indicates the average wage per extras placed by the
Central Casting Corporation. These figures were derived by dividing the
total annual wages by the total number of placements. It must be understood
that the average wage per placement as shown does not represent the average
wage of all registered extras, but merely of those placed by this particular
Table XVII indicates the reduction between 1930 and 1933 in the nuiaber
of extras, as placed by the Central Casting Corporation who received high
daily wage rates. In the former year three-fourths of the placements re-
ported in the table received $10.00 per day while in 1933 only one- third were
placed at this rate. The number receiving daily wages of $5.00 increased
from 24 per cent to 40 per cent while the number in the $3.00 wage class in-
creased from .1 of one per cent in 1930 to 27 per cent in 1933.
Distribution of Placements of Extras by the Central Casting Corporation
at Specified Daily Wage Hates, 1930 and 1933 a/
Source: Transcript of 1JRA Hearing, Liotion Picture Industry, September 12, 1933.
a/ The number of placements does not represent the total number of
extras placed, but covers only those placements made at the wage
Estimated by -prorating the placements for the first half of 1933.
Average Hourly T, r age Rat e
There are no accurate average figures available which represent the
composite hourly wage rate for all classes of wage earners in the production
division of the Industry. The minimum hourly v/age rate specified in the Code
for all classes of employees was 40 cents. The range in minimum rates for
various classes of studio mechanics and laboratory workers was from 60 cents
to $2.25 per hour. Reports of the Research and Planning Division of HRA
and from the Division Administrator's Office have indicated that the Code
rates represented an estimated increase of approximately 15 per cent over the
1929 rates. It is believed that the increases applied mainly in the lower
wage brackets, where labor is largely unorganized..
Average Ho\irs Worked per Week
Table XVIII gives the prevailing hours of labor ~>er week in the pro-
duction division of the Industry for the year 1929. Lore than 60 per cent
of the total number of establishments worked their employees between 45 and
48 hours per week. The total number of wage earners in this group amounted
to 86 per cent of the total number of wage earners. Only .1 of one per cent
of the wage earners worked 48 hours or more per week.
Ifeitier of Establishments and Number of Wage Earners,
Classified by Number of Full-Tirae Hours Worked
per Week, 1929
Number of Hours
Es tabl i shrnent s
Number of Total
40 hours or less
40 - 45 hours
45 - 48 hours
48 hours or more
Source: Conroiled from Census of Manufactures, 1929, Vol. I, Table VI ,
"Liotion Pictures, not Including Projection in Theatres".
Child labor is not an important problem in the Industry. In 1930,
2,213 helpers in motion picture production were reported by the occupation
statistics of the Census of Population, but only 93 of these helpers were
between the ages of 10 and 17 years. It must be borne in mind that these
data refer not to the number actually emroloyed, but rather to the number
reporting themselves as belonging, "by occupation, to this Industry.
Employees by Principal States
Total Em-ployees . - Table XIX shows the average annual number of salaried
employees and wage earners by three principal states for 1929 and 1933. There
was an increase in California from 77.4 per cent of the total in 1929 to 86.2
per cent in 1933, a ain of 11 per cent. New York showed a large decrease,
from 14.5 per cent of the total to 9.2 per cent, or a loss of 36 per cent.
These two states alone employed over 90 per cent of the workers in each of
Average Annual Number of Employees, by Three Principal
States, 1929 and 1933 a/
U. S. Total
Total, 3 States
Total, Other States
1 , 748
Census of uanufac tares , 1929 and 1933 , "Liotion pictures,
not Including Projection in Theatres".
Includes wage earners and salaried employees.
Wage Earners. - Table XX shows wage earners, "by principal states,
for 192S and 1933. In 1929 California accounted for 74.6 per cent of total
wage earners; in 1933, 83.7 per cent, representing a gain of 12 per cent.
New York again showed a large decline fron 15.7 per cent of the total to
10.7 per cent, or a loss of about one-third. These two states alone employ-
ed more than 90 -per cent of the wage earners in 1929 and 1933.
Average Animal llumber of Wage Earners, by Three
Principal States, 1929 and 1933
Per Cent Number of Per Cent
of Total Wage Earners of Total
U. S. Total
Total, 3 States 9,839
Total Other States 955
Source: C ensus of Manufactures , 1929 and 1935 , "Motion Pictures,
not Including Projection in Theatres."
PART II: PRODUCTION
Chap t e r III. Mat e rial s
Cost of principal Materials Used
The principal material used in the production division of the
Industry is raw film, purchased from the Eastman Kodak Company, the
Dupont Film Manufacturing Corporation, and from a few foreign countries,
principally Germany, France, and England.
Table XXI shows the total cost of materials, fuel, and purchased
electric energy used by the production division of the Industry in 1929,
1931, and 1935. This cost averaged abotit 21 per cent of the total cost
of production in each of the year?, shown.
Total Cost of Production and Cost of Materials,
Fuel, and purchased Electric Energy
Total Cost of
Cost of Materials, £/ Fuel,
and Purchased Electric Energy
Amount Per Cent of
(000' s) Total Cost
Source; Census of ^Manufactures, 1933 , "Motion Pictures, not Including
Projection in Theatres."
a/ Materials consist of miscellaneous studio supplies and
containers for films.
Source of Equipment and Supplies
Table XXII snows the number of establishments producing photographic
apparatus and supplies by states for 1929, 1931, and 1933. It must be
understood that these data pertain to the entire production of such material
and not just to that used by the Motion Picture Industry.
NumDer of Establishments Producing photographic
Apparatus and Supplies, "by principal States
U. S. Total
Total, 10 States
Source: Census of Manufactures , 1929 , 1931 , and 1933, "photographic
Apparatus and Supplies." Census data do not include estab-
lishments having an annual production of less than $5,000.
a/ "~ot reported separately in 1933.
- L'O -
PART II: PI10DUCTI01"
Chapter IV. Unfair Trade Practices
Enticement of Talent and Activities of Agents
The problem of salaries of stars and the activities of agents are the
only two significant trade practice problems which nay he clearly allocated
to the production division of the Industry.
This division centers about a relatively snail group of personalities
— such as actors, directors, writers, and technicians — who have becone
known through advertising, publicity, and other methods. The renoval of a
personality often seriously disrupted production until a suitable replace-
ment could be found or developed.
Hew companies usually found it more profitable to employ talent
already developed and secured such individuals by offers of higher salaries.
Long-tern contracts did not solve the problem of "star-raiding, " because
competing exhibitors, desirous of acquiring the services of such talent,
induced the breaking of existing contracts. lioreover, offers of higher
salaries from competitors unquestionably produced psychological effects
which tended to decrease the quality of the stars' work and in extreme
cases rendered them worthless. Complete contentment necessary for quality
work was usually reestablished only when the employer equalled the com-
petitive offer which, in some cases was not definite enough properly to
be called an offer.
- 24 ~
PART II: PHODUCTIOE
Chanter V. General Information
Table IIXIII shows the erqports of total linear feet of film for the
years 19.C9 through 1934. ilo figures are available on the value of such
films other than the declared value, which is "based largely on quantity
rather than on exhibition value.
Ercoorts of I lotion Picture Films, 1929-1934 vj
( In thousands )
Total Linear Feet
1933 164, 537
Source: h ot ion Picture Almanac ; as prepared "by the Bureau of Poreign
and Donestic Commerce.
a/ Includes negative and positive sound and silent films.
The i.fotion Picture Almanac has estimated that the Industry as a
whole spends 070,000,000 annually for advertising in newspaper, magazines,
billboards, radio, and other media, ho fig-ores are available relative to
the amount spent by the producers.
Ho adequate measures of the- productive capacity of the Industry
exist. Production schedules are determined largely by the demand from
the exhibition division.
ii otion Picture Producers and Distributors of America. Inc. (I PPBA). -
This organization, of which Will H. Hays is President, was formed in 1922.
It is composed of more than twenty companies, including the so-called
"Big 8" producers and distributors. It furnishes information on all Industry
— . D —
matters and serves as a coordinating agency in industrial relationships
and functions as interpreter of problems and policies of public interest.
It also represents the Industry in connection with all sorts of "anti"
legislative measures which are a constantly recurring plague to the Indus-
try. Its members fine it an economical means of gathering useful infor-
mation, and of securing necessary services and facilities.
The Academy of notion Pictu.- e Arts .and_ Sciences . - This organization
which is a guild-like association of the production branch of the Industry>
was organized in 1927 to deal with production problems. The Academy is
controlled and financed "by the producers. It has provided methods of
adjustment and reconciliation among producers as well as "between producers
and their various classes of employees. It has attempted to "bring about
industry-wide technical coordination by educational campaigns designed to
reach all concerned therein, and has served as a clearing house for the
collection of technical data in production. Its public-relations efforts
have been focused towards contacting survey experts, special organizations,
and manufacturing and research concerns, rather than the press and the
Trade Union Activity
The Actor's Equity Association which is chartered by the Associated
Actors and Artists of America and affiliated with the American Federation
of Labor has jurisdiction in the motion picture field. Its offices are
located in Hew York, Chicago and Hollywood. In 1933, the Association had
1,418 members. These consist of both actors and actresses who had received
screen credit (i.e. listing in cast of pictures) or professional recognition.
PART III: DISTRIBUTION
Chroter I. The Fature of the Division
History and Scope of Division
Origin of Film Exchange. - During the Industry's fornative stages, films
were purchase d outright from producers and exhibited until worn out or until
they ceased to be nrofi table. This sjrsten later gave way to a nore efficient
and econcnical r.ethod of distribution known as the film exchange, which was
introduced in 1502 by Harry J. Miles of San Francisco. This system originated
in the functions of maintaining film stocks, which requires the suoervising
and physical transportation of film, and the inspection and repair of damaged
film. The film exchange is in essence a licensing system whereby the films
remain the property of the exchange, and the exhibitor merely obtains a license
to show a particular film in a designated theatre for a stipulated period of
time, at a charge equal to about half the purchase price.
Developments in Film Distribution. - In the early stages, positive films
were sold by length on a flat footage basis regardless of the individual pic-
ture, actor, or director. IIo consideration was given to the number of "Dicture
leased, character and size of theatre, and the population of the town or cit Tr .
There were no distinctions made between first or subsequent runs.
The distributors developed what was known as the "program system," supply-
ing the exhibitor with a constant flow of two or three-real pictures, two or
three time per week, The public appreciation for better-quality films gave
rise to the "star" system, and demands for longer programs featuring such star
Pickford, Hart, and Sermett. • The exploitation of stars and concomitant effort'
to attain quality by purchases of e:rpensive scenarios and production extrava-
ganda brought on the full-length feature, absorbing the greater part of the
entertainment program. Rising production costs led to an upward revision of
leasing charges and eventually to the general adoption of a policy of block
booking by the distributors.
Another development was the construction of theatres exclusively for the
showing of notion pictures, displacing arcades, shooting galleries, and empty
stores as well as legitimate and vaudeville theatres.
~ith the development of the "star" and the "feature" system which gave th
pictures individuality, and the construction of theatres exclusively for m.otio -
pictures which resulted in more efficient and economical presentation, distri-
butors began to vary the prices of pictures according to their estimated value
Pictures were no longer sold at random on a flat footage basis. T/idcr geor
graphical distribution came to be considered necessary since it 'was found that
first showings usually exhausted considerable e:diibition value of a picture
in localized areas. Thus nation-wide facilities for merchandising, rehandlin
and servicing a product, which varied in price and quality, became necessary.
National and "State Right" Distribution. - The first effort to attain
effective national distribution was made by the formation in 1910 of the G-ener-
al Film Company, controlled '^y the hotion Picture Patents Company. Independent
producers, who were not permitted to use these facilities, distributed chiefly
through independent distributor:-;. These distributors, who were scattered
throu hout the country, operated on a "state right" basis. The state right ex-
changes bought films outright or "ore conmonly leased films with the exclusive
right of redistributing then to exhibitors within certain geographical areas.
Most state right distributors were also exhibitors '/hose original purposes
'■ere to obtain films for their own theatres, their interest in complete distri-
bution being often less than casual. Moreover, since no producer could supply
sufficient product to furnish the entire requirements of the average exhibitor,
state right distributors were naturally interested in obtaining films from more
than one producer, and this diversity of interest usually resulted in mediocre
sales, service and maintenance efforts from the point of viev; of the producers.
Aggressive selling efforts necessary for intensive distribution were lacking*
Rentals received fron films were not believed to be commensurate with their
earning power. The producer, on the other hand, could not set prices for the
distributors' subleasing of film but received what the latter would pay for it.
He usually found out a nic tore's value in a given territory after it was too
late to capitalize on it.
Producers as Film Distributors . - Unlike conditions in the manufacturing
industries, the cost of the production of a notion picture has usually little
direct relation to its sales value. Consequently the producer soon realized
the gre; t importance of obtaining proper control of distribution. Integration
with production was inevitable since producers were olaced in the position of
having the value of their product determined to a. large extent by distributors.
Consequent 1;-, producers with sufficient financial resources generally pursued
the policy of obtaining control of distribution.
Present-Day Film Distribution . - The actual process of distribution in-
volves the licensing of the exhibitor to show copy-righted film, assigning play-
ing dates, physical distribution of films to theatres, and the collection of
accounts. Advertising material for the pictures to be shown is usually sold in
conjunction with the licensing of films. Exchanges are located in key cities
throughout the United States. Hie 50 to 250 positive prints made iron the ex-
posed negative are distributed to first-run, second-run, and subsequent-run
theatres in proper order and point of tine according to contractual specifica-
tions. Rental variations extend from as low as $5 per day to several thousand
dollar ! i reek, while percentage agreements may call for 10 per cent to 50
per cent of the box office receipts. Combinations of both forms are not un-
common. Another arrangement sometimes used allows the exhibitor a sum to de-
fray current operating exoenses and the surplus is then split according to
agreement. The rental charge is governed primarily by the exhibitor'-; ability
to pay, which, in turn, depends upon a variety of factors, chief among which is
the estimated box-office receipts, based upon previous experiences with the
star and cast in sok comparable vehicle. Other factors are seating capacity,
number of performances per day, price of admission, character of accompanying
presentation, prestige of the theatre, and efforts made for exploitation.
All the "maj or" companies maintain distributing establishments in "key"
centers throughout the United States. Snail independent producers often dis-
tribute their "films through the facilities of the large producer-distributors.
Total Ilumber of Exchange Establishments
Tie total number of exchange establishments in 1929 was reported by the
Census as 555. (See Table XXIV, Below).
N umber of Ikxh: na'e Establishments "b:~ P r incipal States
Table XXIV shows the distribution of the 533 exchanges by si': principal
states in 1929, Fe-j York accounted for :ilnost 1G ->er cent of the total nunber,
California ant". Penns2 r lvania each had nore than 6 per cent. Ohio, Massachusetts
and Illinois follow in the order mentioned, each having about 4 "oer cent of the
total nunber of exchanges within their borders. The six states accounted for
42 -oer cent of the total nunber for the country.
TABLE XXI V
Number of Exchanges and Volume of Business Handled, by
Six Principal States, 1929
Sxchar/res Volurie of Business ,
State Number Per Cent An unt Per Cent
of Total (000's) of Total
U. S. Total 533 100.0 $220,605 100.0
lia s sachus e 1 1 s 23
New York 85 a/
Total, 6 states 225
Total, Other States 308
Source: Censu s of Distribution, 1929 "iiotion Picture Films" (Trade Series,
Distribution No. 7-201).
a/ Includes 14 export exchanges.
Voluue of Business b" Principal States
Table XXIV, above also shows the volune of business done by these six
principal states in 1929. New York, which had the largest number of exchanges
accounted for nore than 23 per cent of the total exchange business (including
exports "oy the 14 New York City exchanges which engaged in export business
exclusively.) Pennsylvania was the second nost important state: in 1929, ac-
counting for about 11 per cent of tiie total business; California accounted foi
7 per cent of the bush--,..; and Illinois, Massachusetts, and Ohio, averaged a
little nore than- 6 per cent each.
It is noteworthy that thesi si:: states containing "less than 38 per cent
of total Population of United' States accounted for more than 60 per cent of tin
total volune of the notion -oicture distributing business.
Il umber of Establishments by Tyoe of Exchang e
ulth the development of large chain theatres, the vertical integration of
producers with theatre chains, and the growing financial strength of producing
conaanies, the independent distributor has become less significant. Producers
nor either associate with existing distributors or nore often establish their
own distinct exchanges. In 1929, recording to Trble XXV, producers exchanges
totalled 444 in number or 83 per cent of the total. Ucxt in iEiportar^.e to the
exchanges owned ''oy producers were the inde pendent" exchanges , comprising 14 per
cent of the total. The export exchanges numbered 14, or less than 3 per cent
of the aggregate, and 4 of these were owned by producers.
lumber of Exchanges, and Ilunber of Emmlo^ees, by
Principal Types of Exchanges, 1929
T^rpe of Exchange
I ten Tpt_uL pr oducer _ Independent Export
Efunbcr Per Cent Euriber per Cent Totcl Per Cent Total Per Cent
of Total of Total Amount of Total Anour.t of Total
Exchanges 533 100.0 444 33.3 75 14.1 14 2.6
Employees 9342 100.0 8797 94.2 393 4.2 152 1.6
Source: Census, o f Distribution. 1929, "'notion Picture Films" (Trade Series,
Distribution No. CT-201.)
Volume of Business b" Tye o f Exchange
Table XTVI shows that in 1929 the -reducers exchanges did most of the
business, for they accounted for 95 re: cent of the total. Furthermore, the
4 export exchanges ovnaed by the latter contributed an additional $5,318,000
worth of business or almost 2.5 per cent of the total volume,
llext in importance to the exchanges owned by producers were the exoort
exchanges which carried on a business amounting to 3 ;oer cent, 2-j per cent of
which, as mentioned above, was done by the 4 exchanges owned by the producers.
The independents accounted for only about 2 per cent of the total.
« : :
LCN .=* LO
C ^ CO
^i 1 -
O K III
CO £ .H
3 03 ri
PART III; DISTRIBUTION
Chapter II. Labor Statistics
Average Annual Number of Employees
Census data as presented in Table XXVII place the average annual em-
ployment of all exchanges at 9,342 in 1929. Of these, about 20 per cent
were executives or salesmen.
Total Number of Employees by Types of Exchanges
As shovm in Table XXV, above, producers' exchanges reported 8,797,
or O'i per cent of the total number of employees. Independent exchanges
employed 4 per cent, and the export group accounted for less than 2 per
cent of the total.
Average Annual Payroll s
According to Table XXVII, the average annual payroll covering all
employees was $17,978,000 in 1929.. Executives, who constituted less than
4 per cent of total employees, received almost 14 per cent, while the
salesmen, amounting to 17 per cent of the total number, received 35 per cent
of the total payroll. The remaining employees, who constituted almost 80
per cent of the total employees, received 51 per cent of the total payroll,
Average Annual Number of Employees and Average Annual
Total 9,342 100.0
Executives 335 3.6
Salesmen 1,562 16.7
Other Employees 7,445 79.7
6 , 253
Source: Census of Distribution, 1929 , "Motion Picture Films" (Trade
Series, Distribution No. W-201).
Per Cent Salaries and Wages are of Total Expense
In 1929 salaries and wages constituted the largest single item of
expense, amounting to about one-half of total expenses for all types of
exchanges. In both the producer and independent type of exchange, total
salaries and wages accounted for about one-half the total expenses, but
in the export exchanges, this percentage was somewhat less. (See Table
PART III: DISTRIBUTION
Chapter III. Unfair Trade Practices
Block Booking and Blind Booking .
"Block "booking" and "blind booking", which involve the purchase of films
sight unseen, has long been existent in the Industry. Producer-distributors
have maintained that this method is economically sound, inasmuch as it assures
exhibitors a continuous supply of films while at the same time stabilizing
-production. Individual selections, it has been claimed, would result in
prohibitive license fees, since all pictures are not box-office successes.
The impossibility of pre- judging box-office attractions has also been pointed
The opponents of block booking and blind booking, who are mostly indepen-
dents, have claimed that these practices have forced them to show undesirable
pictures These independents have had the support of social, religious, and
educational organizations which have realized that independents would probably
be ruined financially if they were to refrain from showing, yet be forced to
pay, for all unendorsed pictures.
The "right to buy" controversy appears to have been concerned primarily
with preferential master contracts existing between producer-exhibitors.
It has bean alleged by independents that certain producer-exhibitors having
competition in a specified area are given unfair advantage by being permitted
to purchase films of other producer-exhibitors at lower prices than those
at which the former's competitors are permitted to buy — if they are permitted
to bay at all. In return the latter producer- exhibitors received this low
rate preference from the former when they have competition from independents
in their areas.
Independents who have thus been unable to compete with the large circuit
and producer-affiliated theatres for the purchase of first-run pictures
have been at a further disadvantage because of the fact that these producer-
affiliated theatres have exchanged their playing time among themselves. This
has resulted in forcing the independents to show subsequent run pictures,
Hhile exhibitors have sought the "right to buy" first runs irrespective
of the character of theatre, location, size, quality of accompanying presen-
tations, or prestige and standing enjoyed in the community, producer-distrib-
utors have claimed the "right to choose" their customers. They have sought
to bring out their features under the most favorable auspices in theatres
having established reputations and the best and finest quality presentation
in the country. They claimed the right to determine the factors that go into
a bargain, such as the financial responsibility of the buyer.
It is generally understood ^y the independents that the "right to choose"
customers, provided no collusion exists, has been found justified by the
Federal Trc.de Commission, as shown by the following quotation from federal
Trade Conmi -ion versus Paramount Famous Players Corporation, 57 Ped, 152:
"A distributor of films by lease or sale has the
right to select his own customers and sell such
quantities at given prices, or to refuse to sell at all
to any particular person for reasons of his own.
Federal Trade Commission versus Raymond Bros. -Clark Co.,
263 U. S., 565; U. S. versus Colgate, 250 U. S., 30;
Great A L P versus Cream O'^Theat, 227 Fed. 46 (CCA. 2)."
Forcing Short Subjects with Feature s
Forcing the purchase of short sxibjects as a condition for contracting
of features has "been a long- established practice in the Industry. Exhibitors
have claimed that in some instances requirements were exacted which forced
them to "buy more shorts than the:" could reasonably he expected to show. Dis-
tributors have contended that this was a long-established selling method and
that their investment was based unon the "tying in" of the sale of short
subjects. They have claimed further that the cost of features was directly
related to the total sales made and that interference with the usual -practice
would result in an increase in the cost of features. Distributors claimed
moreover, that they were providing the exhibitors with a well-balanced program.
It has been generally admitted that certain financially well- entrenched
exhibitors have sometimes contracted for more motion pictures than they
reasonably required for exhibition in their own theatres with the intent of
depriving a competing exhibitor from securing sufficient pictures for exhibi-
tion in his theatre. This practice has been generally recognized by the
Industry as unfair.
PA2? III: DISTRIBUTIOI!
Chanter IV. General Information
Trade Association Activity
Film Boards of Trade, which constitute local distributor trade
association, were established in 1922 as the field organization of the
Motion Picture Producers and Distributors of America. These hoards exist
in 32 key city exchange centers.
The Film Eoards keep sales managers advised of changes in theatre
ownership. During the transition period from the silent to the sound
pictures, the Boards supplied distributors with, information relative to
the equipment used "by various exhibitors. The Boards also locate lost
and stolen films, check up on "nissouts," determine responsibility for
film mutilations and delated returns of prints, and attend to various
other routine matters in the interest of their members.
PART IV: EXHIBITION
Chapter I. The Nature of the Division
History and Description of Division
The Development of Motion Pir.ture Theatres . - The exibition division of the
Motion Picture Industry corresponds to the retail branch of manufacturing in-
dustries. It started with the "store-room" show, composed of short-reel en-
tertainment with 5 cents as an admission charge. The seating capacity of
these "store-rooms" was anywhere from 100 to 200. At a later date the seating
capacity at "store-room" shows was enlarged from 200 to 300, and the enter-
tainment program was lengthened. The priee of admission was then raised to
Construction of buildings in great numbers, for the exclusive purpose of
showing moving pictures soon followed. The seating capacities of these movie
houses ranged from 300 to 600, and again the entertainment was lengthened and
the price of admission increased, this time to 20 cents.
At this point, promoters entered into the business and adopted various
methods of obtaining capital with which to build lavish theatres, some of which
had seating capacities ranging up to 5,000 seats. The building of these large
"de luxe" theatres on a grand scale required substantial public financing,
which meant that the promoters had to turn to bond issues and eventually to
Wall Street for the necessary financing.
The Development of th e Entertainment Program . - The construction of de
luxe theatres required more lavish motion pictures in order to operate the
picture houses profitably, and it thus became necessary for theatre omers from
different parts of the country to combine into operating units so as to obtain
high-class entertainment to which they hoped to attract capacity audiences.
As the size of the theatres was increased, programs were expanded to include
additional entertainment, such as '•presentations" consisting of symphony
orchestras, ballets, and headline vaudeville acts. At the same time, the price
of admission was increased to offset the added expense involved.
Entrance of Producers into the Exhibition Division . - The motion picture
theatre owners almost from the beginning, formed cooperative buying groups in
order to buy picture films for their theatres and to control if possible,
prices and playing time. The producers were sometimes required to sell at
prices which these groups were willing to pay or else not sell at all. Finally
to meet this situation, producers of motion pictures entered into the exhibi-
tion field. While the great majority of the theatres are operated b~- indivi-
duals and by independent chains a large proportion of the most important
theatres is controlled by the producer-distributors.
Classes of Exhibitors . - The exhibition division of the Industry today is
composed of three classes of exhibitors; namely affiliated, unaffiliated, and
independent. Affilitated exhibitors include those operating a number of
theatres, commonly called circuits, which are owned or controlled by the pro-
ducer-distributors. Unaffiliated exhibitors include those who operate a cir-
cuit of theatres but have no connection with producer-distributors. The re-
maining exhibitors are called independents. (See Table XXXI, below.)
Total Number of Theatres .
As shown in Table XXVIII, the Film Daily Yearbook reooited 16,885 motion
picture theatres in the United States in 1934.
Number of Theatres by Principal States
While production of motion pictures is highly concentrated in a feu states,
the market for films, which consists of all exhibiting theatres in the United
States, is widely scattered. Table XXVIII indicates the distribution of
theatres by principal states in 1934. The state of New York was the most im-
portant in 1934, for it reported 9 per cent of the total number of theatres.
Pennsylvania and Ohio followed in close order having 6.6 per cent and 5.7 per
cent respectively. California, which is the principal producing state, con-
tained about 5 per cent of all theatres.
Number of Motion Picture Theatres, by Principal
State Number of Theatres Per Cent of Total
U. S. Total a/ 16,885 100.0
California 375 5.2
Illinois 965 5.7
Indiana 573 3.4
Iowa 458 2.7
Kentucky 420 2.5
Massachusetts 499 3.0
Michigan 570 3.4
Minnesota 421 2.5
Missouri 523 3.1
New Jersey 427 2.5
New York 1,539 9.1
Ohio 985 5.8
Pennsylvania 1,121 6.6
Texas 930 5.5
Wisconsin 484 2.9
Total, 15 States 10,790 63.9
Total, Other States 6,095 36.1
Source; Film Daily Yearbook of Motion Pictures, 1934 .
a/ This total figure does not agree with the total given by the Motion
Picture Producers and Distributor;: of America which report 18,371 as
shown in Table XXXI below.
N umber of Theatres Oven and Close d
Table XXIX shows the total number of theatres from 1929 through 1935, and
from 1932 on; the data are broken down to show the number open and closed. It
will be noted that in 1352, 4,627 movie houses out of a total of 20,100, or al-
most 25 per cent, rere closed. However, only 737, or 17 per cent, of those
closed ' 7 ere sound-equipped theatres. In 1933, out cf a total of 13,311
theatres, 5,895, or about 30 per cent, were closed, of which 2,170, or almost
37 per cent, were equipped with sound. The over-e:toansion in the number of
theatres, their construction in unsuitable locations as real e state promo-
tions, anci the attendance by the public at the finer bheatres only, resulted
in the closing of a large number that had become obsolete or should never have
Although the proportion of closed theatres decreased from 1332 to 1935,
the relative number of closed sound-e qui raped theatres had increased. However,
it roust be borne in mine" that the proportion of sound-equipped movie houses to
the total has been increasing since 1929, until in 1935 these houses constitu-
ted almost SO per cent of all theatres.
Table XXX shows the total number of seats in motion picture theatres
during the years 1931 through 1935. Since 1933, the number has remained re-
latively constant at slightly more than 11 million.
The potential seating capacity of the Industry may be obtained by com-
bining with the actual number of seats the average number of shows per day.
Since some theatres give at least two shows per day, and most of them probably
three or four shows per day, the uotential daily capacity would be at least
two or three times the actual number of seats.
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"7;?! "^l "731 dl "©1
Total Number of Seats in Motion Picture
Theatres, 1931-1935 a/
Date Number of Seats b/
1932 10,767,000 c/
Source; Data for 1231, 1932, and 193/. from Motion
Picture Alr.gnac, 1953 , p. 6; for 1932 as
indicated in footnote c / ; for 1933, 1934,
and 1935 from Film Board of Trade Reports .
a/ As of January 1, each year; includes open
and closed theatres.
b/ It -'ill "be noted that the total number of
seats is not identical r;ith those given by
the source cited in Table XXXII, below.
c/ Standard Statistics Company, Standard Trade
and Securitie s, "Theatres and Motion Pictures,"
Vol. 75, No. 22 (February 20, 1935), p. TE-46.
Number of Theatres and Number of Seats Classified bv Type of Ownership
Although, as shorn in Table XXXI, affiliated circuits owned on an average
about 11 per cent of tne total number of theatres during the years 1933-1935,
they owned, or controlled about 25 per cent of the total number of seats, as
shown in Table XXXII. This indicates that this group owned large theatres.
The unaffiliated circuits average about 16 per cent of the number of theatres,
but they represent approximately 23 per cent of the total seating capacity.
Theatres of large seating capacity are also found among the unaffiliated cir-
cuits, but independents, who own or control approximately 72 per cent of the
total number of theatres, account for a little more than 50 per cent of the
total seating capacity.
This is significant because of the competition within the Industry between
these three groups. The unaffiliated circuits are usually well entrenched and.
in a powerful bargaining position in the purchase of films. The independents,
who are widely scattered, are usually in a relatively -ooor bargaining position
when their theatres happen to be located in close proximity to the affiliated
or unaffiliated circuits. Independents located in non-competitive areas, how-
ever, are often in good bargaining positions in the purchase of films.
Number of Motion Picture Theatres, Classified by Type
of Ownership, 1933-1935
Num- Per Cent
her of Total
IS , 371
Source: Motion Picture Producers and Distributors of America, Inc., as of
January 1, each year.
Number of Motion Picture Theatre Seats, Classified by Type
of Ownership, 1933-1935
Year Total ^ Circuit Independent
Number Per Cent Affiliated Unaffiliated Num- per Cent
(OQO's) of Total Theatres Theatres ber of Total
Num- Per Cent Num- Per Cent (000' s)
ber of Total ber of Total
(000' s) (000' s)
1933 11,086 100.0 2,938 2S.5 2,562 23.1 5,586 50.4
1934 11,029 100.0 2,537 23.5 2,493 22.6 5,949 53.9
1935 11,032 100.0 2,719 24.4 2,539 22.8 5,874 52.8
Source: Motion Picture Producers and Distributors of America, Inc., as of
January 1, each year.
a/ It -/ill be noted that the total numbers of seats is not identical with
those given by the source cited in Table XXX above.
Total Theatre Recej-nts and Attendance
The total estimated box-office receipts from 1929 through 1934, inclusive,
are shown in Table XXXIII. Receipts fell from $1,100,000,000 in 1929 and 1930
to approximately half this amount in 1933. While average estimated admission
prices fell from 30 cents in 1929 to 28 cents in 1930, the increased attendance
was sufficient to keep the total estimated receipts at the 1929 level, namely,
$1,100,000,000. The estimated average admission price fell from 30 cents in
1929 to 20 cents in 1933 and 1934, or a dron of one-third.
Estimated Total Box-Office Receipts, Average Admission Price,
and Attendance, 1929-1934
Year Total Receipts Average Attendance a/
(in millions) Admission (in millions)
1929 $1,100 .30 3,660
1930 1,100 .28 3,920
1931 880 .24 3,330
1932 625 .22 2,840
1933 560 .20 2,800
1934 650 .20 3,250
Source; Standard Statistics Company, Standard Tra.'.e and Securities , "Theatres
and Motion Pictures," Vol. 75, No. 22 (February 20, 1935), p. TH-46.
a/ These figures are not consistent with the average weekly attendance
figures given by the Film Daily Year Book, 1935 , presumably because
the latter source has a more complete coverage than that of the
Standard Statistics Company.
Theatre Receipts by principal States
Receipts by ten principal states are shown below in Chapter II, Table
XXXVIII, as reported by the Census of American 3usiness for the year 1933.
New York State accounted for 23 per cent of the total receipts reported in
1933, although, as shown in Table XXVIII, above, it contained only about 9
per cent of the total number of theatres in 1934. The ten principal states
together accounted for more than 70 per cent of the total receipts in 1933.
Competition with Qtner Industries
Aside from competition between various types of theatres within the In-
dustry, motion picture theatres compete with radio broadcasting, sports, and
other amusements, such as the burlesque industry and the legitimate theatre.
Moreover, there exists a type of so-called non- theatrical convoetition wherein
.schools, churches, lodges, and sometimes business concerns, display films to
the disadvantage of local exhibitors. No figures are available as to the ex-
tent of competition from these sources.
Expenditures for Theatre Construction
Table XXXIV shows the rapid decrease in annual theatre construction from
$163,559,000 in 1929 to $13,500,000 for the 16 months covering 1933 and the
first 4 months of 1934. The figure of $20,000,000 for the 11 months from May,
1934, to April, 1935, indicates the beginning of more activity in theatre con-
struction. The biggest decline came in 1932 when construction dropped 51 per
Annual Expenditure in Theatre Construction,
Table XXXV shows the latest available data concerning financial condi-
tions of exhibiting corporations reporting to the Bureau of Internal Revenue
for the years 1927 through 1932. The peak of earnings for all corporations was
reached in 1930, when net profits amounted to almost $30,000,000. However,
the year 1931 saw a decrease of about 87 per cent in nrofits from the 1930
peak. In the year 1932 motion picture theatres operated at a loss of more
Gross Income, Net Profit or Loss,
Year Gross Income Net Profit or Loss
1927 $345,771 $18,951
1928 407,842 21,646
1929 508,439 22,394
1930 513,105 29,743
1931 434,652 4,423
1932 505,490 -59,336
Source: Bureau of Internal Revenue, Statistics of Income .
PART IV: EXHIBITION
Chapter II. Labor Statistics
Number of Employees
Census data for the years prior to 1933 are not available on employment
and wages in the exhibition branch of the Industry. Table XXXVI , token from
the Census of American Business, 1933, shows the total number of employees
and the average number employed per motion picture theatre. The figure of
6.9 for the average number employed per theatre is lower than that reported
by the Bureau of Labor Statistics in a study made of eleven neighborhood
theatres in Washington, D. C, in the latter part of 1931, when an average
of 10.7 employees per theatre was reported (See Table XL, below). However,
according to figures given in trade publications such as the Film Daily ,
Variety , and Motion Picture Almanac , theatres have been reported to average
about 16 employees. It is considered that the average for the entire
country approaches the latter figure as reported by the trade publications,
especially since the higher figure is further supported by the fact that
employees such as musicians, vaudeville talent, and office employees were
omitted from the Washington survey.
Annual Average Number Employed, Full and Part-Time,
by Types of Theatres, 1933 a/
Type of Theatre
Per Cent Num- Per Cent Num- per Cent per
of Total ber of Total ber of Total Theatre
Motion Picture only 65,728 100.0 54,030 82.2 11,698 17.0
Motion Picture and
Vaudeville 8,635 100.0 7,924 91.8 711 8.2
Total Theatres showing
Motion Pictures 74,363 100.0 61,954 83.3 12,409 16.7
Source: Census of American Business. 1933 . "Service, Amusements, and Hotels."
a/ Includes proprietors.
Total Annual Payrolls
Table XXXVII shows total payrolls for moving picture theatres in 1933.
For all types of motion picture houses, full-time payrolls amounted to 94
per cent of the total.
Total Payrolls, Pull and Part-time, by Types of Theatres, 1933
Type of Theatre
Amount Per Cent Amount Per Cent Amount Per Cent
(000' s) of Total (OOO's) of Total (000' s) of Total
Motion Picture and
Total Theatres Showing
Motion Pictures 81,756
100.0 $67,009 93.8 $4,442 6.2
100.0 10,053 97.5 252 2.5
100.0 77,062 94.2 4,694 5.8
Source: Census of American Business. 1933 . "Service, Amusements, and Hotels."
Total Annual Payrolls as a Per Cent of Total Receipts
According to estimates of the Hot ion Picture Almanac for 1933, payrolls
in the e:diibition division represent about 25 per cent of total theatre
receipts. This figure is slightly higher than that derived from receipts
and payroll data reported by the Census of American Business in 1933, which
listed receipts as $415,153,000 (see Table XXXVIII, below) , and a total, full anc"
part-time payroll of $81,756,000, which represents approximately 20 per cent
of total receipts. (See Table XXXVII, above.)
Number of Wage Earners and Total Annual Wages by Principal States
Table XXXVIII shows the distribution of full-time employees and payrolls
by ten principal states, as reported by the Census of American Business in
1933. The ten states listed employed almost 67 per cent of all the full-time
employees in that year and paid them 73 per cent of the total payroll. The
state of Now York employed 18 per cent of all full-time workers, but reported
26 per cent of the total full-time payroll, which indicates high average
wages in that state. California was second with more than 8 per cent of
total employees, who received 8 per cent of the total payroll. Hew York also
received the largest share of theatre receipts, amounting to 23 per cent of
Total Receipts, Number of Pull-Time Employees and Payrolls,
Classified by 10 principal States, 1933 a/
Tota l Receipts Full-Time Employ ees Full-Time Payroll
Amount Per Cent Number
(000's) of Total (000' s)
Per Cent Amount Per Cent
of Total (OOJ 1 s) of Total
U. S. Total
Total, 10 States
Total, Other States
$415,153 100.0 63,136
100.0 $80,519 100.0
Source: Census of American Business. 1933 . "Services, Amusements, and The-
a/ The data include 122 legitimate theatres and operas which grossed
$8,611,000 and employed 1,182 full-time workers with a payroll of
$3,457,000. When allowance is made for the inclusion of these
legitimate theatres and operas, the employee and payroll data in
this table are identical with those given in Tables XXXVI and
Wages and Hours
In Principal Cities . - Reports on wages and hours of unionized projection-
ists in 1933 were published oy the Bureau of Labor Statistics in the Monthly
Labor Review for May, 1933. The report, which embraces almost 230 cities and
5,494 operators, shows that average weekly wages ranged from $22.50 to $95.00.
Prevailing hours ranged from 23 to 62 hours per week.
An analysis of the report discloses the distribution of weekly union wage
scales and hours worked per week shown in Table XXXIX. These ranges vary
primarily with the strength of the union in particular localities rather than
with the size and type of theatre, size of city, or section of the country.
It is believed that wages and hours of work of other organized workers (stage
hands and musicians) in the motion picture theatres would show a similar
variation, depending upon the strength of the union.
Wage Scales and Hours Worked per Week "by Unionized
Projectionists, Classified by Number of Cities, 1933
Number of Cities
Under $35 per week
Between $35 and $45
Between $45 and $65
Hours Worked -per Week
Between 36 and 40
Between 40 and 45
Between 45 and 50
Source: Compiled from Bureau of Labor Statistics
Monthly Labor Review , (May, 1933) p. 1111.
In Washington. D. C. - Table XL shows the hourly wage rate and hours
worked per week by the various classes of wage earners employed in eleven
neighborhood theatres in Washington, D. C. in the latter part of 1931. 1/
The average weekly hours for all types of full-time employees ranged from
32.5 to 49 hours per week; for all "types of part-time workers, from 8 to 24
hours. In the service branch, weekly wages for full-time employees ranged
from $9,28 to $18.40; for part-time employees, from $6.65 to $8.55. Tech-
nicians such as operators, electricians and engineers were the highest paid
help and averaged about 45 hours per week.
1_/ The Bureau of Labor Statistics reports tnat the city of Washington was
chosen for this survey "because of the belief that this city has been af-
fected less than any other city of its size ~by the business depression,
and it would therefore be possible to segregate the effects brought about
by the changes in technology from those due to other causes, and especi-
ally to the depression."
Average Weekly Hours and Wages of Employees in 11
Neighborhood Motion Picture Theatres of Washington, D. C.
by Branch of Work and Occupation, 1931
Branch of work
Total Number Employed
Average per theater
Source: Bureau of Labor
Review, (November, 1931)
Table XII shows the average weekly wage of full-time projectionists and
"service" employees in the various types of theatres in Washington, D. C,
Cashiers in downtown de luxe picture houses, labelled Type 1, averaged
$21.85 while in "other colored" theatres, Type 7, they averaged only $10.00
per week. Projectionist operators in Type 1 theatres averaged $96.67, while
in Type 7 they received $31.00.
Average Weekly Wages in Different Types of Motion
Picture Theatres of Washington, D.C., "by Branch
of Work and Occupation, 1931
Branch of Work
Theatre T.ynes 3/
96.67 83.55 50.00 67.10 41.47 47.33 31.01
Source: Compiled from Bureau of Labor Statistics, Monthly Labor Review
(November, 1931), pp. 4-6.
a/ Theatre types are defined as follows:
Type 1 - Down-town de-luxe presentation houses.
2 - Down-town first-class straight-picture houses.
3 - Other down straight-picture houses.
4 - First-class neighborhood straigt-picturo houses.,
5 - Other neighborhood straight-picture houses.
6 - Colored first-class picture houses.
7 - Other colored picture houses.
FAIIT IV: EXHIBITION
Chaoter III. Materials
Number ox Films Used
De luxe theatres usually exhibit no nore than 50 feat-are pictures curing
the year, while the better neighborhood theatres generally exhibit iron 100 to
150 features. Eoth these types of theatre show each year approximately twice
as many short subjects as features. These short subjects consist of conedies,
cartoons, and travelogues, etc., but do not include news films.
In other neighborhood theatres, where features are changed three times
a week, approximately 150 are required annually. In recent years there has
developed the practice of showing two features during a program, and this lias
greatly increased the number of films used per year.
Per Cent of Consumer ' s Motion Picture Dollar Spent on Film Rental
l!o accurate data are available as to the total expenditures of exhibitors
for film rentals. According to Table XLII, the cost of producing films ac-
counts for' a little more than 18 per cent of the consumer's moving pictLU-e
dollar, and distribution costs amount to almost 8 per cent. This makes a
total of 26 per cent which may be taken as a rough indication of the proportion
of the consumer's dollar spent on film rental.
per Cent of the Consumer's Motion Picture Dollar
Accounted for "by the Chief Divisions of the
Division Per Cent
Directors and Cameramen 2.4
Rav; Film 1.4
Stories and Scripts 2.9
Source: Motion Picture Almanac, 1933 -
Total Production 18.2
Branch Expenses 3.6
Print Cost 1.6
Home Office Exoense 2.6
Total Distribution 7.8
Depreciation and Maintenance 5.1
Pent, Heal Estate, and Taxes 15.4
Other Taxes and Insurance 2.1
Electricity and Heat 5.1
Other Expenses 8.3
Interest and Profit 5.1
Total Exhibition 74.0
Total for Industry 100.0
FAST IV. EXHIBITION
Chapter IV. Unfair Trade Practices
Clearance and Zoning
Equi table clearance and zoning has "been, and still remains, a most con-
troversial problem within the Industry. Peature filns, which open in large
cities for as much as $5,000 per week, may eventually return to those sane
cities for $25.00 Eirst-run erhibitors, paying large license fees and charging
hign. admission ■jricus, have comlained that insufficient tine elapses between
the first-run of a feature picture at a large theatre and subsequent rxins in
smaller theatres. Claims have been nade that the payment of large fees en-
titles then to the -jrotection of showing pictures without the fear that smaller
theatres nay present the same film so soon after the first showing, that pros-
pective patrons would be inclined to wait for the lower admission prices on
subsequent runs elsewhere.
On the other hand, subsequent- run exhibitors have claimed that the major
exhibitors receive unreasonable clearance of time between first and subseqx\ent
showings, and alro that the large exhibitors have exacted rights over unreason-
ably large areas.
Other Unfair Trade Practices
Host e:hibitor contracts with distributors contain provisions that the
exhibitor will charge specified admission ;orices and the cost of the license
to show the picture is based on these trices. Exhibitors, although publishing
these -Trices, have often materially lowered then by offering gifts or premiums}
by holding lotteries, or by instituting a policy of throw-awa.y tickets or twc-
for-one admissions. Once started, these practices spread throughout an entire
conoetitve area and exhibitors have vied with each other in making more ex-
The 23ra.ctice of showing two feature filns for one adnission mrice was an
extremely controversial subject during ore-Code discussion. Socia.l, religious,
ana educational organizations protested that this policy of having a double-
feature mrogram absorbed screen time which would otherwise be given over to the
showing of trrvelogues and other educa.tional short subjects. Some independent
exhibitors claimed that the elimination of this policy would deprive then of
their only means of conpeting with the larger noving picture thea.tres. This
Tractice, which spread raoidl3'- in a,ny territory where it was initiated, was
soon adopted by the larger as well as the smaller thea.tres.
E:;hibitors as a group have considered unfa.ir the leasing of films to non-
theatrical aocounts, i. e., to social, religious, and educational organizations
which exhibit motion aict-ores such as travelogues, religious pictures, comedies,
and educa.tional short subjects.
Exhibitor s have claimed that discrimination has been used in the applica-
tion of "score" charges. These charges ar a hangover from the early days
when "scored music" was sold in conjunction with pictures. Then sound record-
ing was introduced the "score" charge was continued, being included in the
cost of the disc or sound track.
The Ilotion Picture Theatre Owners of America (V P T -'-.J.. - This
_sociation was organized in 1320 "by independent theatre owners to combat the
theatre expansion policy pursued by Famous Players Lasky Corporation.
The organization is composed of several sisate and regional groups operat-
ing as independent associations. The national organization attempts to coordj
nate activities and provide uniform action on problems of major importance to
exhibitors. It nay roughly he stated to represent at least 2,500 of the af-
In 1927, because of the expressed belief that more constructive accom-
plishments could be secured by constructive cooperation rather than open
hostility, producer-distributor theatre owners were granted membership. The
organization immediately became financially dependent upon these new members
and control passed from the hands of the independents to the new group.
Allied States Association of Motion Picture Exhibitors . - This Associa-
tion was originally formed in 1923 as a protest against some of the practices
of the Motion Picture Theatre Owners of America.. It './as fashioned after the
t£,P T A. and in many instances regional groups simply transferred their al-
legiance from one organization to the other. In 1926, following a. promise "oj
the L P T _=.. to serve the interests of the independent exhibitors primarily,
Allied States voted to disband and affiliate with the former. Two ""ears late:!
certain prominent independent exhibitor members of the original Allied grow")
decided to reorganize.
In 1932 Professor Lewis Howard reported that Allied States represented
6,000 theatres. It is generally conceded by the Industry that the larger
circuits are represented by the IvI ? T A, and the smaller theatres by Allied
Trade Unior Activity
International Alliance o f Theatrical Sta f vo Pa. doyees and Motion Picture
Machine Operators o f the United States and Canada . - This union was composed
of approximately 26,000 members in 1934, according to a. statement made in
that yea.r by its Assistant President, Louis Krouse. It is affiliated with
the American Federation of Labor and its members are the skilled employees in
the Industry. The organization is composed of a number of local unions
throughout the United States and Canada,
Exhibit A. Persons Qualified as Experts on the Entire Industry
Will H. Hays, President, Motion Picture Producers &
Distributors of America, Inc.,
28 West 44th Street, New York, Hew York
David Palfreyman, Theatre Service Division, Motion Picture
Producers & Distributors of America, Inc.,
23 West 44th Street, Hew York New York
Sol A. Rosenblatt, former Division Administrator, NRA,
International Building, Radio City, New York
John C. Elinn, former Secretary of the Code Authority,
now connected with Variety, Inc.,
154 West 4eth Street, Hew York, New York
Tyree Dillard, former Counsel for the Code Authority,
now connected with Lietro-Goldwyn-Mayer,
New York, New York
Nathan Yamins, represented Independent Exhibitors on Code
Fall River, Massachusetts
Ed Kuykendall, President, Hot ion Picture Theatre Owners of
America; also represented Independent
Exhibitors on former Code Authority,
1600 Broadway, Hew York, New York, and/ or
Abram P. layers, Chairman of Board and General Counsel for
Allied States Association of Motion
729 15th Street, N.W., Washington, D. C.
John P. Knight, Maintenance Executive, Paramount Theatres
Times Square, New York, New York
Pat Casey, Producers' Representative for Studio Labor,
1600 Broadway, New York, New York, and/or
5504 Hollywood Blvd., Hollywood, California
George Browne, President, International alliance of Theatrical
Stage Employees and Motion Picture Machine
Operators of the United States and Canada,
Earle Theatre Building, Washington, D. C.
Lotiis Krouse, Assistant President, International Alliance
of Theatrical Stage Employees and Motion
Picture Machine Operators of the United States
Earle Theatre Building, Washington, D. C.
Steven ITewman, International Peoresentative, International
Alliance of Theatrical Stage Employees and
Motion Picture Machine Operators of the
United States and Canada,
3671 Valley Brink Poad, Los Angeles, California
Joseph Vleber, President, American Federation of Musicians,
1450 Broadway, Uew York, Kew York
Prank C-ilmore, President, Actors Equity Association and Chorus
45 West 47th Street, Pew York, New York
Professor Li. P. MclTair, Disinterested authority on the Industry,
Harvard Bureau of Business Research,
Professor Howard T. Lewis, Disinterested authority and historian
on the Industry,
Harvard Graduate School of Business,
Terr;-- Pamsaye, Editor, Motion Picture Herald; Writer, historian
and authority whose works have teen
regarded by subsequent historians as
Exhibit B. The Advent of Sound in Motion Pictures
Sound in Exhibition
The advent of sound in 1926 caused a revolution in the Industry-
comparable with the introduction of the feature picture in 1913. The
development suddenly changed the entire business and revived a failing
interest in motion picture entertainment. The tremendous influence of
goo4 music later brought to sound- equipped theatres a large increase in
patronage. At first only shorts were synchronized with sound reproduced
from discs. Companies moved cautiously to make the transition to sound
as gradual as possible, presumably because of the large technical changes
Warner Brothers' Vitaphone ushered in the present commercially
successful innovation in August, 1926. Pox closed a contract with Western
Electric for the development of Movietone in January, 1927, which led to
a cross-licensing arrangement with Vitaphone. A simple attachment to the
projectors was developed by which Vitaphone and Movietone equipment could
be used interchangably. Subsequent cooperation of General Electric,
R. C. A. and Western Electric with major producers brought quick progress.
Cost of equipment for reproduction was constantly decreased, due to the
Industry's Imowledge that small- theatre installations were necessary to
the success of sound pictures. Fox "caught" the Lindbergh takeoff for the
solo flight to Paris for the Movietone News. The "covering" of the
Lindbergh reception in Washington with sound newsreel made history. How-
ever, the distribution of the newsreel was restricted, due to the limited
number of wired houses.
Marketing of the Western Electric equipment by Electrical Research
Products began in August, 1927, offering the systems which embraced sound-
on-film, sound-on- disc, and no n- synchronous disc systems. Installation
costs ranged from $8,000 to $15,000 in price, depending upon the theatre
and its accoustical requirements.
Meanwhile, Warner Brothers had secretly prepared an all-dialogue
picture entitled "The Lights of New York." Experiments up to this time
had included mostly sound, effects and music with only scatterings of
dialogue. Vitaphone and Movietone News, as short "all talkers," had been
tremendously successful. While successfully received throughout the
country, "The Lights of New York" clearly demonstrated that the most rigid
care had to be exercised in the selection of words given the characters to
speak. Voices which would synchronize were necessary. Stars began to
worry about lessons in elocution.
Wired theatres prospered while unwired houses were not even given
proper exploitation advantages. Exhibitors were fretful concerning the
oft-arising question of interchangeability.cn which the patent holders
refused clearly to commit themselves although well-informed sources had
conceded it to be no problem, rrrovided reproduction standards and quality
The year 1929 found sound pictures off to mi suspicious start, due
to the announcement of lower prices "by Western Electric for either the
Vitaphone or Liovittone reproduction equipment for June 1st delivery at a
price of $5,500 each, or $7,000 for both. At the end cf 192S, wired
theatres numbered 9,350. 'Jill H. Hays estimated that theatre attendance
increased 15,000,000 weekly during the year.
Sound in productio n
The introduction of sou.id in production caused a change in style
of making pictures, the erection of mo^e than 100 sound stages, and the
installation of rdllicnr. of dollars in equipment. Old talent was
eliminated in numerous instaaces and new talent introduced. An addition
of approximately 5,000 employees was reported at the end of 1930. It
has been estimated that 99 per cent cf all pictures produced in 1930 were
either sound or all-talking pictures.
The cost of making a picture with round was sstiuiated to he from
five to seven times the cost of making an all- silent picture. The
increased overhead, less of cox-office names of players who had starred
in silent pictures, employment of additional writers, loss of time through
experimentation, and the use of more film were the major contributing
At the ent 1 if 1930, 60 per cent of the exhibitors were using the
sound-track method of projection and the remainder were using the disc
method. Until late 1930, Earner Brothers and First National were
producing all pictures on discs, but in that year they began to \ise the
sound-track method. The disc method has the disadvantage that the discs
are cumbersome and hard to handle, and the method is also more expensive.
According to the Motion Ficture Daily of July 39, 1935, 18 patent
licenses for a new sound system have been issued. The invention is known
as "the dynamic multiplier system," by which the undesirable character-
istics of present sound apparatus are eliminated. More life-like quality
is effected, which may again revolutionize the Industry.