El Paso herald. (El Paso, Tex.) 1901-1931, 1911-10-17

IN HE most complex and intricate
business problem Of the motion
picture trade is the distribution
Of the films. There are probably 20
film manufacturers in the American
market, 40 domestic and 80 foreign.
These 20 concerns must distribute their
product TO exhibitors ranging in num-
Der from 10000 or 1900 IN the winter.
to $1,000 or 10000 in the summer. Since
each exhibitor viii require an average
OF at least three reels daily. and since
at least 80 percent of the exhibitors de-
mand a complete change Of program
every day, it is manifcst that the natural
problems arising from the very nature
and character OF the business are far
from simple.
But in the United States these natural
complexities are increased and multi
piled by the division Of the entire mo-
ton picture business into two camps,
known as the licensed and the -n-
dependent" AS far as the manu1actur-
ers and the middlemen are concerned
these camps are hostile, and the eN-
hibitOrs are forced TO divide, largely
against their wils by the powers high
er up.
Combination Formed.
The whole question at issue arises
from the Iiffgated control Of the pat
ents on the essential parts OF moving
picture machines, both cameras ana
projectors. The older manufacturing
companies, after g long season Of sharp
compe tiuOn. combined to organize the
Motion Picture Patents company 20
which were assigned the principal anu
essential patents This company licenses
manufacturers to operate with the use
of its patented machines These licensed
manufacturers lease the films they
a stipulated rental, varying accofullIs
to the character Of the film THIS com
pany, in turn. leases the films to the
exhibitors through exchanges Operateu
In cities all over the country.
Licensed films are leased only 70 eA-
hibitors who have obtained from the
parent patent company q license TOT
which a fee Of 81 a week IS cnaI8
Since there are 5000 licensed Exhibitors,
this fee alone brings to the Patents
company an annual income OF approx
mateIy $500, 600. Licensed films are new
er sold. but are leased by the manuIalc-
turers to the Film company, which III
turn leases them TO the eXhlDlIors.
The Independents.
The "fndependent' manufacturers are
those who deny that the patents owned
and controlled by the Motion Picture
Patents company cover the esse lIlal
features Of moving picture macnlnss'
They operate under other patents WA!c-
they assert I'm the courts 90 NOT IN
facturers. Most Of the independent com
panies also work in cooperation win
each other, but on a different pan. ne
films they produce ara sold outright TO
the Motion Picture Distributing ana
Sales company. This concern through
independent film exchanges operated IA
cities all over the country leases the
films to Independent exhibitors, VINO are
not required to pay a fee for the priv
ilege
sold, but always leased Such ulms
are permitted to circulate over the
country for space Of seven months
when they are recalled and retired m
dependent films being sold outright 20
the distributing agency, have no TINE
limit placed upon their lire, ana Il5y
continue in circulation until the eXhib-
itors refuse longer TO book them or IN
til they are worn OuE.
Licensed exhibitors are prohibited
from showing independent films, the
Densltv being revocation Of their
licenses Since the licensed exchanges
strictly enforce this rule II therefore
happens that licensed and Independent
I films are never shown IN the same the
Rter In this way the exhibitors are
compelled TO choose between the rival
organizations.
There are other INDEPENDENT IlIn
manufacturers who sell and lease Illms
directly to the exhibitors or who oper-
ate through film exchanges or their
own. But by Tar the greater paFL Of
the motion picture business IS DIVIDED
between what are briefly known as
"the Patents company and the sales
Do We'll Despite Suits.
The Independents have built up
large business in spite Of tntermlnaoN
and extensive litigation. AT one time
the licensed people having won judi
cial victory, the Independent companies
fled precipitately from the DOMINION or
the United States, some OF them taxing
refuge in Canada, others going to Mex
leo and others to Cuba Iney con
tinued, however, to distribute their
films IN this country.
Finally, the Independents won VIC
tory in court by q decision which oe-
clared certain foreign made camera
not TO be an infringement upon me
patents of the Patents company Under
this decision the Independents came
back to America and since have been
operating here. The litigation when
is most complex and involved, is yet
pending in the courts, and 1t remains
for the future to determine whether
or not the licensed manufactures viii
be able TO drive the independents out
of business.
Before the film distribution business
was crystalized in its present form by
reason Of the patent litigation between
the two groups Of manufacturers, MIN
exchanges ordinarily were operated as
private and individual enterprises AS
there was competition The exchange men
necessarily took good care to please
the exhibitors, the relation being that
of merchant and customer. This led TO
discrimination in favor Of large eXhib-
itors over small ones, and when the
film exchanges were taken over by the
corporations and competition was mar
rOWed to the two rival camps, the
change was generally welcomed on the
part of the exhibitors.
Later, as was inevitable, the eXhib-
itor found that he was forced to sub
init. more or less TO the dictatiOn Of
the exchange men, the influence o. open
competition having been removed, and
therefore, there is an increasing demand
among exhibitors all over the country
for me open market" The exhibitors
are willing to let the manufacturers
fight out their differences among them
selves, If only they viii rem owe the re-
strictiOns placed upon exhibitors, and
permit each exhibitor to book what
films he chooses, from what exchange
he pIeases, without respect TO their or
igin.
League Is Organized.
A national organization Of motion
picture exhibitors, called the Motion
Picture League OF America, was organ
lied at Cleveland in August in response
to a call issued by the Ohio Exhibitors
league. While little was done at this