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THE MOTION PICTURE INDUSTRY: AN ECONOMIC STUDY OF THE HISTORY AND PRACTICES OF A BUSINESS PDF

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INFORMATION TO USERS This material was produced from a microfilm copy of the original document. While the most advanced technological means to photograph and reproduce this document have been used, the quality is heavily dependent upon the quality of the original submitted. The following explanation of techniques is provided to help you understand markings or patterns which may appear on this reproduction. 1. The sign or "target" for pages apparently lacking from the document photographed is "Missing Page(s)". If it was possible to obtain the missing page(s) or section, they are spliced into the film along with adjacent pages. This may have necessitated cutting thru an image and duplicating adjacent pages to insure you complete continuity. 2. When an image on the film is obliterated with a large round black mark, it is an indication that the photographer suspected that the copy may have moved during exposure and thus cause a blurred image. You will find a good image of the page in the adjacent frame. 3. When a map, drawing or chart, etc., was part of the material being photographed the photographer followed a definite method in "sectioning" the material. It is customary to begin photoing at the upper left hand corner of a large sheet and to continue photoing from left to right in equal sections with a small overlap. If necessary, sectioning is continued again — beginning below the first row and continuing on until complete. 4. The majority of users indicate that the textual content is of greatest value, however, a somewhat higher quality reproduction could be made from "photographs" if essential to the understanding of the dissertation. Silver prints of "photographs" may be ordered at additional charge by writing the Order Department, giving the catalog number, title, author and specific pages you wish reproduced. 5. PLEASE NOTE: Some pages may have indistinct print. Filmed as received. Xerox University Microfilms 300 North Zeeb Road Ann Arbor, Michigan 48106 TS-ZZ.OU. 3 LD3907 Greenwald, William Irving, 1920- The motion picture industry; an economic study of the history and practices of a business, Hew York 19£0. iii,280 typewritten leaves, 29cm. Thesis (Ph.D.) - Hew York Univer­ sity, Graduate School, 19^0, Bibliography: p,263-280. C57650 LiSl University Microfilms, Ann Arbor, Michigan 48106 THIS DISSERTATION HAS BEEN MICROFILMED EXACTLY AS RECEIVED. “LIBRARY OF BEW YORK OWIVSR8ITI v BmiRSIIT SEIOHTfr THE MOTION PICTURE INDUSTRY AN ECONOMIC STUDY OF THE HISTORY AND PRACTICES OF A BUSINESS William If Greenwald February 1950 A Dissertation in the Department of Economics sub­ mitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy at New York University* i Introduction Very little of a genuinely analytical character has been written about the motion picture industiy. Most of the literature relating to the industry has been concerned with its artistic, social, and cultural functions with an attendant neglect of economic and technical aspects. Even less has been written about the industry concerning its rank and importance in relation to the service industiy, the amusement industry, or to general industrial activity. Very little historical research has been devoted to uncovering the developmental patterns of this business for the purpose of comparing the design of its growth with that of other major industries. As a result, a significant body of knowledge is not available for under­ standing and explaining the contemporary structure and functional charac­ teristics of the industry. Legally and corporally it is difficult to justify such a tradition­ al classification but conventionally the film industiy has been categor^4d into production, distribution, and exhibition branches. The industry as a unit, for empirical purposes, has generally been classified as a service industiy. At the same time, however, as a business it is more comparable to manufacturing. The basic distinguishing feature of film production from other commodity manufacture lies in the inherent nature of the prod­ uct which is produced, priced, and sold. Due to the particularistic nature of this product the film industiy has developed trade and business I practices which are exceptionally unique. A superficial examination of such practices might lead one to believe that the film industiy is great­ ly different from other businesses. Actually, however, as will be demon­ strated in the course of this study, a^ configurative and careful ii examination of the industry's financial, legal, and economic development reveals a typical industrial enterprise. In any descriptive or analytical study of an industry the question of general methodology arises. An analytical and descriptive method which is synoptic in scope relates the specific characteristics of an industry to the historical changes through which an industry has moved. All the unique patterns and processes of the film industry have takenxplace in historical time and have been influenced by developments in other indus­ trial sectors of the economy. Only by such an approach has it been pos­ sible to unveil the underlying structure and operations of the film indus­ try. Such a detailed historical inquiry dovolopcd has given rise to in­ ferences and generalizations which have been basic for a genuine under­ standing of the contemporary constitution of.the industry. A detailed historical study of this sort, however, does not necessarily imply a study in detail. By a careful and deliberated selection only those factors which have been relevant and important have been incorporated into the exposition. Historical analysis does not merely represent a stucjy in dynamism. Evaluations and inferences about the generalized business behavior of the film industry are dependent, in part, upon the dynamic patterns revealed. Out of a knowledge of the growth and speed of development of the film industry has arisen a revealing perspective of the common bend of progress in the film industry with general industrial activity. For this reason, in part, pure statistical and quantitative analysis has not been relied upon. An empirical analysis which is not complimented by other types of analyses too frequently fails to reveal much about underlying patterns, processes, and changes. Therefore, in studying the economic, financial, iii technical, and corporate developments of the film industry it has been necessary to examine, measure, and analyze the qualitative, factual, statistical, and legal developments. In establishing this as the aim of this paper, the artistic, social, cultural, and moral characteristics and influences of the film and the industiy producing the film have not been studied or measured. However, often one or more of these factors acted as the major stimulus for material change. Where such factors were the significant ones in affect­ ing the economic, technologic, or financial structure of the film indus­ try, they have been examined and their importance noted. Only in this way has it been scientifically possible to study the motion picture in­ dustry in its structural, functional, and dynamic form and shape. CONTENTS Chapter Page Introduction Part One The Development of the Industry 1888-1930 I The Early Years of the Industry, 1888-1908 1 II A Premature Combination, The Motion Picture Patents Com­ pany and Subsidiary, The General Film Company, 1908-12 16 III The Era of the Silent Film, 1912-1926 31 Appendix A to Chapter III, F.T.C. vs. Paramount Famous Players-Lasky Corporation 61 Appendix B to Chapter III, Standardized Techniques for the Mass Production of Films 63 IV Sound and the Silence of Competition, 1926-1930 68 Part Two Trade Practices V Contracts, Arbitration, and Credit 92 VI Film Amortization Schedules 106 VII Run, Zoning, and Clearance 117 VIII Block Booking and Blind Buying 126 IX The Legalization of Trade Practices, The Code of Fair Competition for the Motion Picture Under the National Recovery Administration 142 X The Film and Public Policy 137 - Contents - Chapter Page Part Three The Maturity of the Industry 1930-1948 XI Challenging the International Structure of the Industry 164 XII A Mature Industry Confronts the Troublesome'Thirties 176 Appendix A to Chapter XII, Analysis of Double Features 193 XIII The Conflict and Aftermath of Two Wars 199 XIV The Industry and Its Future 217 Part Four Appendices A The Availability and Reliability of Statistical Data on the Motion Picture Industry 241 B Definitions of Trade Terms 248 C Bibliography on the Motion Picture Industiy 263 TABLES Number Page IV-1 Total Assets and Net Earnings of Warner Brothers, Inc., 1925-1936 71 IV-2 Theaters Annually Services by E.R.P.I., 1928-1936 80 IV-3 Structural Relation Between the Electrical and Film Industries, 1929-1936 82 V-l Summary of Claims Handled by Boards of Arbitration in the United States, 1924-1928 99 V-2 Summary of Cases of Arbitration in the United States, 1924-1928 100 V-3 Bases of Claims Filed by Distributors in the United States, 1928 101 V-4 Bases of Claims Filed by Exhibitors in the United States, 1928 102 VI-1 Hypothetical Film Amortization Schedules 109 VI-2 Film Amortization Schedules of the Seven Leading Compan­ ies for 1935j 1940, and 1946 112-113 VI-3 Geographic Areas Covered by AmortizationS chedules 115 VIII-1 Legislation Intended to Abolish Compulsory Block Booking and Blind Selling, 1927-1939 140 IX-1 Theoretical Booking Schedule 150 IX-2 Percent of Cases Handled by 31 Grievance Boards Under the N.R.A., 1933-1935 152 ix-3 291 Code Authority Decisions on Appeal Under the N.R.A., 1933-1935 153 XII-1 Films Approved by the Production Code Administration, 1935-1945 189 XIII-1 Affiliated Theaters in the United States, 1945 204 XIV-1 Comparison of Exhibition with all Amusement, 1939 225 XIV-2 Expenditures on Motion Pictures and Other Amusements, 1929-1947 227 - Tables - Number Page XIV-3 Representative Financial Aggregates of the Motion Pic­ ture Industry Compared with all Industry, Service, and other Amusement, 1944 228 XIV-4 Employment in Production, Distribution, and Exhibition, 1939 230 A-l Receipts of Motion Picture Theaters, 1927-1947 244

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