The affairs of the motion picture industry are so complicated it is difficult for the uninitiated to understand them. At present even many of those who have grown up in the game are puzzled. That those readers who are unfamiliar with the different branches of the industry may fully understand the events set down here, they must bear in mind that there are three distinct branches, namely:
Production.As long as these three branches are independent of each other there can be no real danger of the industry coming under the control of any one group of men.
Distribution.
Exhibition.The producer makes the picture.
The distributor buys it.
The exhibitor shows or exhibits it.
Economists will say that it is an ideal condition for a producer to sell direct to the public, and it would be, if the public were to get the benefit of the saving made by the elimination of the middleman. But it has seldom worked out that way. By over-capitalization and other devices known to corporations, the producer has managed to pocket the savings himself, while assuring the public, and ostensibly providing it by means of his books, that he is making only a reasonable return. Were the public to put practical men in charge of its affairs instead of politicians, such a condition might be prevented, but that would be anticipating the millennium.
But it is not here that the danger lies. Motion pictures are amusement and are, therefore, luxuries. The public can soon end overcharging by staying away from the theater when prices get beyond its purse, but it never can be assured of high-class entertainment at reasonable prices unless there is healthy competition.
Let us then, begin with the producers. Although there are more than 100 producing companies in the field today, those of real force can be counted on the fingers of two hands.
The others are either directly or indirectly connected with the big corporations that control the industry or are owned by men of only moderate means, with no extensive financial backing. The industry also is afflicted with the usual number of crooked promoters, who organize companies solely to reap a harvest from the sale of stock. A number of such gentry are in the hands of justice now.
The Famous Players-Lasky Corporation, with its multifarious ramifications, overshadows and dominates all the big producing companies in the world of pictures. Following it in the order of their importance are the other big four Jewish-controlled corporations, the Goldwyn Film Corporation, the Universal Film Manufacturing Company, Metro Pictures Corporation and the William Fox Film Corporation.
Ranking in importance with these in the United Artists Corporation, composed of the four big stars- Mary Pickford, David Wark Griffith, Charlie Chaplin and Douglas Fairbanks. Hiram Abrams, a Jew, is president of this organization which is extending its activities.
Then comes the Associated Producers, embracing such noted men in the picture world as Thomas Ince, J. Parker Read, Allan Dwan, Maurice Tourneur and Mack Sennett.
Other big independent producing companies are the Benjamin B. Hampton Productions, Robert Brunton, Selznick, Vitagraph, Associated Exhibitors, Equity and Robertson-Cole.
In addition to these there is a number of companies devoted to the making of one, two and three-reel comedies and travel and educational subjects. Many of these are made by the big companies already mentioned, which also produce photo-dramas, serials and animated cartoons.
The big producing companies which have entered the exhibition field have paid but little attention to the production of the short reelers, concentrating on the features and buying the short stuff, such as comedies, cartoons, travelogues, and so on, for their own houses. Lately, however, there has been a tendency toward entering these fields, thus to monopolize branches of the industry.
Now, coming to the distribution branch of the motion picture industry, we find the same phase to be noted as in the producing end, namely, that although there are dozens of companies engaged in the distribution of the film, only a few are of real importance.
Here again we find the Famous Players-Lasky Corporation dominating the field. Under the trade names of Paramount, Artcraft, Cosmopolitan, and so on, and aided by national advertising campaigns, its pictures are the attractions, according to its own claims, in more than 11,000 of the motion picture theaters of this country.
Following the Famous Players-Lasky Corporation are the same four Jewish corporations that come after it in the production field: Goldwyn, Metro, Universal and Fox.
Then come the other producing companies previously enumerated which distribute their own product.
But in the distribution field there also are two other large corporations which do but little, if any, producing. These are First National and Pathe. The former was a co-operative organization formed by the exhibitors to combat the Famous Players-Lasky Corporation. The detailed history of this concern will be given later.
Pathe, a French corporation, the majority of the stock in which, according to recent reports, has been purchased by the American stockholders is the largest independent distributing company in the business. Through it are distributed the products of W.W. Hodkinson, who handles the pictures of Benjamin B. Hampton, Robert Brunton, J.L. Frothingham, J. Parker Read and other independents. Pathe also distributes the productions of the American Film Company, Incorporated, the Stoll Film Corporation (an English-Jewish concern) and others, including many serials and comedies.
Then there are a large number of small exchanges and state rights organizations, which, at the present time, cut but a small figure in the industry.
And, lastly, we now come to the exhibitors, the only persons connected with the industry with whom the public is in contact.
Once again we find the Famous Players-Lasky Corporation leading the field as the largest owner of motion picture theaters of any single concern in the business.
The First National Exhibitors, which is a distributing concern with co-operative exhibitor-ownership, also controls a great many theaters, although the houses themselves are owned by the individual units of the corporation.
Other producing concerns that own theaters are Goldwyn, Fox and Universal. This latter company was compelled to buy a theater in Los Angeles to get a first-run showing of its pictures. It has been said that it cost this company its entire receipts to get a first-run showing in Chicago.
Although the Metro Pictures Corporation is not publicly known to own any theaters, its president, Marcus Loew, controls a chain of houses which bear his name and are used for both vaudeville and pictures, numbering more than 100.
Aside from these theaters controlled by the companies mentioned are some 12,000 houses throughout the country which are owned by local persons in the smaller cities and towns and in the suburbs of the larger cities. Last year, these theater owners were driven by the exactions of the large distributing companies to form an organization known as the Motion Picture Theater Owners of America.
Now, it may seem strange to the reader that with more than half the theaters of the country in the hands of independent owners it should be possible for one producer or group of producers to control the situation.
Mr. Lasky made that point in reply to the trust allegations in the New York World, previously referred to.
"It is perfectly ridiculous," he said. "Of the 15,000 or 16,000 theaters in America we are interested in but a few hundred. The picture business by its very nature can never be controlled. All Wall Street could not control so peculiar an industry. You might as well try to control all the newspapers in the United States, their circulation and their policies."
Sounds reasonable, does it not?
But let us analyze the situation.
In every section of this country there always is one large city which dominates the smaller cities and towns. Thus Chicago dominates the territory contiguous to it. St. Louis exercises a commanding influence over the country near it. Los Angeles dictates to the smaller cities and towns in its vicinity. Especially is this true in theatrical matters. New York, for instance, dominates theatrically the entire continent.
The motion picture industry recognizes this fact. It calls these cities "key" cities.
Supposing, as has been the case frequently of late, that an independent producer is unable to get a showing in one of these first-run theaters in the city. Not only has he lost the large receipts to which such a showing would entitle him if his picture is meritorious, but he has lost all this advertising. What chance has he to break into the smaller theaters in the city or the out-of-town houses in competition with the attractions that have had a first run in the big down-town theaters?
You see, therefore, that for any special feature film, the making of which may have cost hundreds of thousands of dollars, it is absolutely necessary for the producer to get a first-run showing if he expects to make money or even break even on his picture.
You can now perceive how the Famous Players-Lasky Corporation, because it owns, as Mr. Lasky says, "but a few hundred theaters," located in these "key" cities, can control all the theaters in contiguous territories.
However, the Famous Players-Lasky Corporation, not satisfied with occupying these strategic positions, has been slowly but none the less surely reaching out for the possession of even the smaller theaters, as will be shown later on in these articles.
As the Famous Players-Lasky Corporation is the dominant power, it might be well to delve into its history, to show who and what are the men who hold the reins.
His first job was in a fur store in New York, where he was employed as a sweeper. A youth of his native ability could not be kept in a subordinate position and it was not long before he was a valued employe. After four years he left for Chicago, where he went into the fur business for himself. Nine years later he was back in New York as a partner of Marcus Loew in the penny arcade business. This prospered so that they soon established a chain of penny arcades and later vaudeville theaters throughout the East and Middle West.
From running movie shows to producing pictures was but a step to this ambitious young foreigner. Therefore, in 1912, he organized the Famous Players Film Company, enlisting with him the Jewish theatrical producer, Daniel Frohman.
Men familiar with the history of the films at that time say that Zukor deserves great credit for his perseverance in the face of odds. Even at that time Zukor had conceived great plans for the stabilization of the industry, but the men then in power would have none of him.
Perseverance seems to be Zukor's greatest asset. Give him an idea and he will hang to it like a bulldog to a root. He also has an uncanny ability in picking his subordinates. It would be useless to deny his ability, for otherwise how could this little ordinary appearing man, who still speaks English with a broken accent, have become the dictator of the film world? Those who know him say he is a born executive, able not only to conceive plans but to put them into execution.
Zukor's business ethics are those of most "great financiers." Judging from his tactics in the past, he believes in the doctrine of "dog eat dog." If innocent spectators should suffer in the process of the battle he is ready with words of sympathy, but little else.
A man who has been in the picture business for years, who has worked with and for Zukor, was asked what kind of man he found the head of the Famous Players-Lasky to be. He replied:
"Personally, I found him rather likable. He impresses one as being a man of vision and sincerity. When there is any strong-arm work to be done Zukor shifts it to a bunch of [excised slur] said to be kept for that purpose. A Gentile has no chance to advance in his organization. [cut more of the same] Unless he is a genius who is absolutely indispensable, he has not a chance to survive."
Zukor's first venture in producing having met with success, he began to look into the distribution field, which was then in a rather disorganized condition.
About this time he met W.W. Hodkinson, who at that time was the most prominent distributor on the Pacific Coast. Hodkinson is a Scotchman who started in the picture game in 1907 in Ogden, Utah. He owned and operated motion picture theaters and film exchanges for a number of years, was Pacific Coast representative of the General Film Company and after that so-called trust was dissolved went back into the distribution business on his own account.
In 1914, Hodkinson organized the Paramount Pictures Corporation, a distributing organization with Zukor's Famous Players, the Jesse L. Lasky Feature Play Company and Bosworth, Incorporated, as its units.
On July 1, 1916, the Famous Players and the Jesse L. Lasky Feature Play Company combined, taking the present name, the Famous Players-Lasky Corporation.
Jesse L. Lasky, also a Jew, had been a theatrical producer with but indifferent success before he tackled motion pictures. With Cecil De Mille, who now bears the resounding title of director-general of the Famous Players-Lasky Corporation, and Samuel Goldfisch (now Goldwyn and president of the Goldwyn Pictures Corporation) as partners, Lasky bought the picture rights to "The Squawman" and produced it with Dustin Farnum as the star.
The three organized the Jesse Lasky Feature Play Company with a capitalization of $20,000. Goldwyn soon left this combination and went into business for himself as head of the Goldwyn Pictures Corporation. Then came the merger of Lasky and DeMille with Zukor.
Three months after this combine the Famous Players-Lasky expanded again by absorbing Bosworth, Incorporated, and the Oliver Morosco Photo Play Company.
"The Producer, the Distributor, the Exhibitor," Baring The Heart of Hollywood Part II, The Dearborn Independent, November 3, 1921, page 6, 14.
© 1998, David Pierce, on editing and revisions (if any)
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