Block Booking System, Admission Price Discrimination, And The Formation Of Clearance And Zoning Boards

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The Code established trade practices consisting of the block-booking system, admission price discrimination, and the formation of clearance and zoning boards. Block booking was a practice in which motion picture companies would sell their movies in ‘blocks’ in a package deal to the exhibitors. Even though exhibitors were given information about the films they were licensing like who starred in it, what it was about, etc. “the films were licensed without viewing the movie at the time of contracting” (Klein, 2000, p. 431), which meant that the movie studios could even profit off of bad productions as these blocks were sold as a bulk all-or-nothing deal. This meant that if the exhibitors wanted one movie out of the entire block, they…show more content…
The only viable way to make profits was to rely on the novelty of an early run of a new release to attract audiences. The problem with such a reliance was that runs in theaters were regulated by the Clearance and Zoning boards, which were set up as another practice under the Code in an attempt to organize distribution of films in the nation. It arranged theaters in different regions on the marketing pattern of zoning, clearance and run. The country was divided into thirty markets, compartmentalized into zones, and classified by runs that would range from fourteen days to forty-two days or more with a potential of running for more than a year in large markets (Schuchman, & Balio, 1994). This practice gave the Board, which was dominated by the Big 5, the power to control which movie would play when and where. This was specifically important as movies that were already viewed by the potential audience, would not draw in the same patronage as it would in the first run. Consequently whoever got the right to show the movie first would stand to make the most profit. It was very obvious that this would be a potential source of discrimination against independent exhibitors as the Big 5 would favor their own exhibition houses over that of independent exhibitors. With all three practices, it was clear that the intention was to increase profits. Survival of businesses was very precarious as many
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