Boxoffice (Apr-Jun 1939)

PUBLISHED EVERY SATURDAY BY ASSOCIATED PUBLICATIONS Vol. 34 Number 19 April 1, 1939 Member Audit Bureau of Circulations Editorial Offices: 9 rockefeller plaza, new york city; Publication Office: 4704 e. 9th ST., KANSAS CITY, MO.,' HollyiVOOd.' 6404 HOLLYWOOD BLVD.; Chicago: 332 s. Michigan blvd. BEN SHLYEN Publisher MAURICE KANN Editor-in-Chief J. H. GALLAGHER General Manager William G. Pormby, Editor; Jesse Shlyen, Managing Editor; J. Harry Toler, Modern Theatre Editor; Louis Rydell, Advertising Manager ; Ivan Spear, Western Manager. ITS A TALL ORDER, BUT OF LATE, your editorialist has found himself in sharp disagreement with Allied and its tactics, if not always with some of its objectives. This is so because that group openly supports one point of view by lip service, and full, yet covertly, by the confidential memorandum route, encourages something else. The two are easy to understand, but hard to reconcile. On closer common ground, however, is a general point emphasized by Colonel H. A. Cole in his address before the M-G-M sales convention in Chicago. He was talking about those two irreconcilables — the buyer and the seller — and was saying this: "You wunt to sell lor as, much and I want to buy for as little as possible. This is inescapable and, if held within due bounds, is healthful. It is the life of trade. But, for this civilized form of warfare to be waged with the best results, it is necessary that both parties be free agents. The law recognizes that when one party to a supposed contract has been induced to sign by fraud, coercion or duress, there is no contract. The abused party cannot be held. But, if he must have the products that are the subjects of the contract, if he cannot get them elsewhere under better terms, then the coercion and duress may be very real and yet he cannot repudiate the contract because to do so he would have to forego the products which he must have." By way of further developing the point, Cole continued with: "A seller dealing with a buyer in that helpless situation owes a duty to the industry, to society and to the law not to press him so hard as to deprive him of a means of livelihood. The motion picture business is not a public utility, its prices and terms are not regulated by law; but the arbitrary exercise of a monopolistic power is what has caused other industries to be classified as public utilities. Therefore, a sense of responsibility to the public in general, as well as an enlightened self-interest, should admonish a distributor not to drive too hard a bargain simply because an exhibitor must have his pictures. Now more than ever before it is to the interest of the distributors to keep the exhibitors in business; not to force them out." And this: "Not only must the distributors exercise some restraint in the matter of draining off theatre earnings,, unless they want to kill the goose that lays the shiny eggs, but they must preserve the right of the exhibitor to bargain in respect of terms and conditions that greatly affect his earning power. The buyer — and here I speak for the subsequent run exhibitor — must be free to make his contract with the seller unhindered by terms and conditions imposed by third persons, who are not parties to the transaction The crudest concepts of individual freedom imply this. And now the highest court in the land has laid down that very principle for the guidance of this industry. Like it or not, it is the law. For my part, I should think you would like it. Countless exhibitors have told me that they got along all right with the film salesmen and exchange managers; that the latter were anxious to grant them better terms than they were receiving; that their hands were tied and their policy was dictated by the large buyers who insisted on writing their terms into the contracts between the distributors and the subsequent runs." Here is a two-way approach. One dips into the matter of dollars the exhibitor must pay for his product and that's dipping into plenty of trouble. It will be agreed widely and at once that the distributor ought to see to it none of his accounts is forced to the wall because of terms of the film buy. Yet, in that connection and as unsatisfactory from the broad viewpoint as it may be, it also may be that Cole has largely answered his own question when he points out the seller is after what he can get and the buyer for as little as he can get it. The distributor owns the copyrighted merchandise and the exhibitor, of course, has to have it. This gradually establishes a mutuality of interest leading to a final agreement, no matter who wins. It also ought to be remembered that, if Cole is suggesting a slight application of whitewash for the exhibitor that the man running the theatre is not always as much of the victim as the man selling the film is the villain. Both know how to take care of themselves. And neither is a lily. On clearance, the situation is not quite the same, however. The present evil of exorbitant protection exacted by mass buying power, the inequity in its conception and the damage in its application have been heading for trouble for years. Any quick observer of the scene recognized long ago either an ultimate blow-up with the bonfire touched off by legal decision which the Supreme Court opinion in the Interstate case may turn out to be, or changes growing out of better judgment, voluntarily exercised from the inside. The faster way probably will be through court mandate, or fear of it, because, as business conducts itself, it normally refuses to give up practices which seem to have taken on the coloration of rights. Against reasonable protection for the first run with its investment, its large seating capacity and its consequent ability to pay more, there never has been any dispute. Against protection which permits a single chain to control an entire state through a series of overlapping, circular walls surrounding each of its first runs, there is all the dispute. A system such as this cannot hope to stand forever. Neither has it that right. Through this spy glass, the situation emerges a knotty and troublesome one. It is a very tall order, indeed, to readjust an entire industry sprawling over an entire nation. Yet, these are the times when readjustments that recognize the rights of others beyond those chosen, or self-nominated, seem finally destined to prevail. How fast? Through what pressure? By what exact formula? These questions find us looking out the window. 1