Boxoffice (Apr-Jun 1939)

MORE PERCENTERS IN HIGHER RRACKETS FOR '39-40 IN MOVE TO BALANCE CANCELLATIONS Hiked Costs and Jittery Foreign Situation Are Contributory Causes 111 THE RIGHT DIRfCTIOIl . . . and the lion and the lamb shall lie down together.” New York — There will be more percentage pictures in higher percentage brackets for 1939-40 than in any other season in the history of the business. Aside from their normal desire to get the highest prices they can, distributors are reported stepping up their allocations for next season in an effort to balance anticipated shrunken revenue which may confront them under the 20 per cent cancellation clause of the trade practice pact. The controlling factors are several. For one, production costs are not down, they are up. Distributors attribute this to competition, regarded as normal in Hollywood, but also to generally increased operating overhead attributable largely to labor, organized and unorganized, but chiefly organized. The majors maintain it is their desire and their intention not only to maintain, but to augment, quality, but they insist the exhibitor must help them carry the load. Foreign Worries Increase For another, worries over the foreign situation are increasing, not diminishing. While the returns from overseas markets continue at a very substantial clip, there is increasing evidence that current troubles in restricted, or totally closed, markets like Germany, Italy, Japan, Czechoslovakia that once was, and Spain make essential greater caution about the general economic picture and preparations now for a recouping of essential revenue through channels still open and highly productive. The domestic market, obviously, is the ace in this regard. Chiefly, however, and although not blessed by confirmation from any source, is the cancellation formula provided under trade practice formulation. Distributors long since have expressed their opinion that the schedule ranging from a 20 per cent kickout privilege where rentals average up to $100 to 15 per cent where rentals run between $100 and $250 and 10 per cent on all averages above $250 will prove an effective answer to compulsory block booking and, additionally, extend to the exhibitor a freedom in his buy such as he has never enjoyed before. Ed Kuykendall, MPTOA president, as a matter of fact, is on record with the statement the 20 per cent bracket will apply to over 10,000 accounts and the 10 and 15 per cent brackets to 4,000 more. Prepared to go for it as they are, distributors likewise maintain they are entitled to some protection and assert a stepping up of percentage pictures is their (Continued on page 21) This biblical expression contains a prophecy that came true in Chicago last week insofar as the motion picture industry is concerned. The “lion" in this case was Metro-Goldwyn-Mayer (viz: the M-G-M trademark) and the “lambs" the three exhibitor leaders invited by M-G-M to attend and address the company's annual sales convention. In the current precedental instance the “lion" and the “lamb" sat down together and broke bread . . . and a few supposedly unbreakable motion picture customs. Open expression was given to the plans of the “lion" and the problems, in which those plans were indirectly a part, of the “lambs." Precedent, or prejudice, that heretofore often kept distributor and exhibitor in separate camps was cast aside. Matters, previously treated as confidential and divulged behind closely guarded convention-room doors, were openly discussed in the presence of the three exhibitor leaders and representatives of the trade press. Frankness and straightforwardness marked the entire proceedings. And as a climax to the occasion 200 exhibitors from the Chicago territory added their presence. This is an eye-witness and not a hearsay report. To William F. Rodgers, general sales manager of M-G-M, goes the credit for this co-gathering, which well might mark a new milestone in the progress of the industry. Prior to this occasion Mr. Rodgers had proved himself aware of the need for harmonious relationship between buyer and seller. He has been in the forefront in the industry's trade practice negotiations. He has evidenced a sincerity that is refreshingly praiseworthy. But our purpose is not merely to bestow commendation, howsoever deserved. It is to point up the indication, in the occasion and events above referred to, of an underlying trend which may foreshadow a new era in trade relations. It is a coincidence that just as we reach this point word comes to us via the teletype that the final draft of the official industry pact for self-, regulation of trade practices is expected to be ready within the week. That is another evidence of a getting together of exhibitor and distributor in the common interest. In that document is represented a work and effort of many men and many minds carried on over a period of many months — years, in fact. It represents a meeting of minds, perhaps not in complete unanimity, but a start, nevertheless, in the direction of industry harmony through understanding and cooperative negotiation. There are other evidences from other directions that “pull together" is the new order of the new day in this industry. They have been recorded in the pages of this publication as they have occurred. They hold much promise, the fulfillment of which is entirely within the realm of probability. This is no claim that Utopia is here, or even near. Not by a long shot. But the right road has been charted. It is not necessarily a straight or perfect road. Certain bad stretches may call for repairs and, some of them may even require detours. But, if the signs are correctly read, there will be a minimum of travel in arriving at the place in the road where the going will be smoother than ever before. 4 BOXOFFICE :: April 1, 1939