Moving Picture World was a periodical published by
James Petrie (J.P.) Chalmers, Jr and was targeted to film exhibitors. The issue’s articles focus on distribution rights and options, reflecting the early needs of theatre and movie house owners. Later periodicals marketed to film exhibitors would focus more heavily on the viewing experience, but in 1917 there was a bigger focus on securing the films themselves!
The article on “Distribution: Early Practices” from FilmReference.com, provides a detailed description of film distribution practices in the 1910s-20s, which we’ve excerpted below.
With the arrival of feature films—defined by the trade as multiple-reel narratives with unusual content that merited special billing and advertising—a new distribution system was needed to generate more revenue to recoup higher production costs. At first, producers and importers used the “states’ rights” method, which involved selling the marketing rights of an individual feature territory by territory to local distributors, who would then rent out the picture for a flat fee or on a percentage basis to theaters. Producers and importers also used road showing to market their pictures. The technique got rid of the middleman and enabled a showman to book a theater on a percentage-of-the-gross basis and then take over the actual operations for the run. Such a strategy enabled the producer or importer, rather than the subdistributor, to capture most of the box office revenue should the picture prove to be a hit. From 1912 to 1914, nearly three hundred features were distributed using these methods. States’ rights distribution and road showing were satisfactory techniques to exploit one picture at a time, but if producers ever hoped to expand and regularize their output, a better method had to be found.
W. W. Hodkinson (1881–1971), a former General Film exchange man, created such a system in 1914 by convincing a group of regional states’ rights exchanges to join forces and form Paramount Pictures Corporation, the first national distributor of feature films. Hodkinson’s plan guaranteed exhibitors a steady supply of features because Paramount would help producers finance and advertise their pictures with advance rentals collected by the exchanges. In return, the company would charge producers a distribution fee of 35 percent of the gross to cover operating costs and a built-in profit margin. This innovative scheme attracted the country’s best producers—Adolph Zukor’s Famous Players, the Jesse L. Lasky Feature Play Company, among others—who signed long-term franchise agreements granting Paramount exclusive rights to their pictures.
(credit: American Theatre Architecture Archive, Theatre Historical Society of America)
