Independent Exhibitors Film Bulletin (1938)

%depeudent IXHIBITORS FILM BULLETIN MYERS FLINGS 'DICTATORSHIP7 Following are excerpts from the speech scheduled to be delivered by Abram F. Myers, general counsel of Allied, before the Twentieth Century Club of Boston, Tuesday, April 26th. The title of the address is 'LATEST DEVELOPMENTS ALONG THE MOVIE FRONT.' The American people have made it clear that they will not tolerate any form of government that smacks of dictatorship. Before such an audience as this, there is no need to inveigh against the evils of a political dictatorship. But I am not so sure that the people have been equally as alert as regards the possibilities of an economic dictatorship in this country. In a few minutes I shall undertake to compare the acts and policies of the Fascist and Communist dictatorships with certain of the acts and policies of the motion picture industry. In doing so, I shall confine myself to statements of fact which independent theatre owners in the audience (I was informed that some would be here) will verify. As I proceed with this comparison you might consider not only the implications of the unified control of so important a matter to the general welfare as motion pictures, but also what would be the result if all other lines of endeavor were similarly monopolized, so that dictation as to what you might read, eat and wear came to you from remote private agencies and all the remaining independent merchants in your communities were reduced to the status of automatons unable to conduct their businesses to suit your peculiar needs and were controlled and regulated in all matters by those who supply their merchandise. The indicia of a political dictatorship are: (a) Concentration of power. (b) Exercise of power for personal aggrandizement. (c) Levying of tribute. (d) Regimentation. (e) Control of the press. (f) Use of secret agents. (g) Resistance to any assertion of right by the people. (h) Discrimination against and suppression of those not in the fold. Concentration of poivcr. As already stated virtually all of the quality pictures exhibited in this country are produced and/or distributed by eight great corporations, five of which embody two or more previously competing companies and each of which has numerous subsidiaries and affiliated corporations. All of them havejiome offices in New York, studios in California and branch offices' in each of the 3 0 odd film exchange centers. Five of these corporations control large chains of theatres, located for the most part, jn the dities and larger towns. That a strong community of interest exists among the Big Eight, partly financial, and partly personal, is a matter of common knowledge in the industry. Perhaps the strongest bond between them resides in the fact that five of the Big Eight control the five largest circuits of theatres. All are, anxious that these great circuits play their pictures and it is only natural that A should stipulate to play B's pictures provided B, in turn, contracts to play A's. So long as the producerdistributors confined their efforts to producing and distributing pictures, they vied with one another for the good will and patronage of the epchibitors, and there was no incentive to harass or oppress independent exhibitors as a class. It was not until Adolph Zukor (dominant factor in Paramount) made his forays into the field of exhibition, and the Hays Association was formed to soften the growing competition between distributors, that the major companies began to regard exhibitors as actual or potential competitors and not merely as customers. 2. Personal aggrandizement . There has been much publicityconcerning the large salaries paid to motion picture stars. Recently published excerpts from the President's press conferences indicate that, in 1933, he requested a deputy administrator of N. R. A. to inquire concerning allegedly unconscionable salaries paid to so-called "immature" persons; meaning, I presume, certain child actors. For some reason, little or no attention has been given the stupendous salaries paid to the Big Eight executives. It is reported in the trade press that 14 executives of one company have contracts for salaries and percentages of net profits which, it is computed, will aggregate $4,712,000, or 3.9'; of the gross or 3 1 '/< of the net income of that company. In the language of a song featured in a recent movie, this is "Nice Work If You Can Get It." 3. Levying tribute. In the early days of the business, films were leased to the exhibitors on a flat rental basis. The exhibitors, knowing the other items of operating expense, could contract for product with assurance as to how film rentals would fit in with such other items. But under practices that have grown up in the industry an exhibitor, in signing a contract for necessary supplies of film, not only does not have any assurance as to what pictures will be delivered thereunder but actually cannot compute in advance how much he will be required to pay therefor. He does not know what will be delivered because no pictures are identified in the standard form of contract, and this form recites that advertising, oral representations, etc., as to the pictures to be released are not binding on the distributor. Spokesmen for the industry, defending these practices, are wont to say that it is one of the glories of the business that it has devised a method of distribution which enables it to supply its most costly productions to the smallest theatres at a price they can afford to pay. This, however, is merely an engaging way of saying that the distributors take for their product all that the traffic will bear. Thirty per cent of the gross receipts at a large high admission price theatre naturally will amount to more than the same percentage of a small low admission price theatre, and, as I will later point out, the distributors see to it that as much as possible of the total available patronage is diverted to the high price theatres. But the division bears on the little fellow just as hard as it does on the big fellow; and since there are some patrons who prefer or are compelled to patronize the small theatres the distributors are glad to take their cut of the revenue which they provide and there is no philanthropy involved in it. As you doubtless know, motion pictures are leased to exhibitors under contracts which require the exhibitor to play whatever pictures are released by the distributor during a stated period — usually a year. This is compulsory block booking. Very little descriptive matter is made available as to the kind of pictures which will be delivered, and even this, as I have already pointed out, is not binding on the distributor. This is blind selling. Now the prices (that is, rentals) to be paid by the exhibitor are fixed in the contract. When business recessions come the producers can and do act promptly to curtail production costs. The newspapers and trade press for several months have carried stories to the effect that no more big pictures are contemplated for the current season and that thousands of studio workers are being dismissed. But the high percentages and flat rentals which the exhibitors stipulated to pay in reliance on the representations made last year concerning the big pictures to be made and delivered are binding on the exhibitors. 4. Regimentation. I have already mentioned that pictures are leased by the distributors on a uniform contract. By this I do not mean that the rentals are uniform, only the terms and conditions of the lease. An exhibitor in contracting for films has no choice but to subscribe to this form in its entirety. Under this form the exhibitor is required to accept whatever pictures the distributor sees fit to release, but there is no corresponding obligation on the