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The Wall Street Journal, April 2, 1924, page 5.

Movies Offer New Investment Field (published in 1924)
Half Dozen Companies Control 80% Industry with Nearly Billion Dollars Assets I (1924)

Motion pictures with an investment of $1,250,000,000 have already pushed up to seventh place among the nation's leading industries. Yet only half a dozen prominent banks in the entire United States of America give them extensive credits.

Leading bankers and motion picture promoters have given Dow, Jones & Co. their views on why it is that an industry spending more money than any other on plant enlargement gets 65% of its credit outside the banks.

Bankers have vivid recollections of sensational methods of promoting moving picture companies. "Best and biggest in the world" methods of advertising pictures even today make many avoid the film business as a field for conservative investment.

Recent developments, however, are revolutionizing the film business along lines which are bringing the motion picture industry and the banks together. Ninety-five per cent. of the motion picture industry has been concentrated in the hands of a dozen firms, with assets running into two-figure millions each. These firms have for years been getting bank credits, but from a very limited number of banks.

They now have gotten together in the producers' association, and are falling into line in applying business methods in working to a budget, and in making a statement of their business at the end of the year.

Banks which have picked prudently among the best motion picture companies have done a large and profitable credit business with them. Motion picture firms, too, appreciate good bank contracts, because bank credits which costs them 5% to 6%, from private money lenders costs them sometimes as high as 25%.

Enormous Business

Six companies now do 80% of the production business. The 12 largest concerns, producers and distributors together, in 1921-1923 did a gross domestic business at a yearly average of $84,000,000. The nation spent $520,000,000 on admissions last year.

Architects estimate that the movie industry ordered buildings to cost $179,000,000 this year, compared with $101,000,000 last.

Some 300,000 people are permanently employed in the motion picture business, as many as in the automobile business. Studios have an annual payroll of $75,000,000.

Studios estimated that in the year ending next June, they will have spent some $200,000,000 producing new pictures.

Stars' Big Salaries

The American motion-picture industry pays the highest salaries in the world. Several actor-producers such as Douglas Fairbanks, Mary Pickford and Charlie Chaplin are each supposed to clear over a million a year. Fairbanks, said by bankers to have a fortune around $10,000,000, dug into his own pocket for the money to finance his latest film the Thief of Bagdad. It cost $1,600,000. Norma Talmadge is said to get $10,000 a week. Lillian Gish and a score of others get $5,000 and a large number $2,500 a week.

Some $8,000,000 of American films are exported each year, and already America has 80% of the international picture business. The recent British film week proved a landslide for British producers, sending their demand for American film well above 70% of their total consumption of last year.

Will Hays' organization, Motion Picture Producers & Distributors of America, Inc., says that at the producing end of the industry alone over $5,000,000 is spent on advertising. Several millions more are spent by the 15,000 moving picture theatres on their own advertising. Some $7,000,000 go into materials for glass slides, cards and posters.

It is evident from these figures that the motion picture industry is forcing itself into the limelight. With radio it competes for first place in rapid expansion.

"Movies Offer New Investment Field," The Wall Street Journal, April 2, 1924, page 5.