Independent Exhibitors Film Bulletin (1956)

DANGER IN LIQUIDATION Cites Need for 'Fair Play* in Industry Relations (Continued jrom Page 18) also lure back former portions. Realizing this, the motion picture industry has already made substantial progress in upgrading its products. Taking full advantage of its superior technical facilities, it has been presenting an increasing number of extravaganzas on wide screen, in stereophonic sound, and with colorful, exotic settings. But this should only be the beginning. To keep the motion picture a competitive medium for amusement, Hollywood must adopt "bigger, better and more pictures" as its motto day after day, year after year. In short, Hollywood studios must demonstrate their showmanship unceasingly. Sportsmanship By sportsmanship, we mean fair play and team work between the producers and the exhibitors. For many years, theatre owners have been fighting with film producers over film rental agreements. The dispute reached a climax a few weeks ago when some exhibitors charged in a hearing conducted by the Senate Select Committee on Small Business that producing companies "deliberately" turned out a fewer number of pictures in the last few years so that they could obtain higher rentals on their films. The distributors, in turn, vigorously denied the charge. This service does not attempt to pass judgment on either side; we do feel, however, that such "family squabbles" are highly injurious to the entire industry. Instead of seeking government intervention or Federal regulation, each side of the controversy should realize that the misfortunes of its allied industry cannot possibly produce fortunes for itself. Both the distributors and exhibitors should try to understand each other's problems and work out by themselves an amicable solution that is fair to everyone concerned. There are, in fact, many positive actions the producers and exhibitors can jointly take to improve the condition of their industry. For example, by working as a team, they can probably stage a more successful drive for tax relief. Recently, Rep. King of California introduced to Congress a bill (H.R. 9875), which, if passed, would eliminate the present 10% excise tax on the first dollar paid for any admissions. If everyone in the industry makes it a point to present to his Congressmen and Senators the current financial plights of many of his colleagues in the theatre business, this tax relief bill should stand a good chance of passing, especially when the Federal Government is reporting a substantial surplus this year. Since most theatres are likely to keep the tax money "to remain in business", this BUSINESS: Columbia Pictures produces and distributes motion pictures of both "A" and "B" classes for exhibition in theatres. Screen Gems, Inc., a subsidiary, produces films, including commercials, for television. About 40% of revenues originate abroad. Since World REPORT: As pointed out in a recent Supplementary Report (Issue 9, page 601), Columbia's earnings, suffering from lack of box-office attractions, have declined in the past two quarters; however, this Service feels that the success of $80 million tax relief would give a strong boost to the in dustry's profits. Salesmanship Realizing that the motion picture industry must com pete actively with the television industry, Hollywood, lik any company in a competitive industry, should wage continuous campaign to sell its products. A successfu promotional campaign would involve much more than put ting an ad in the newspaper or mounting a poster in fron of the theatre. Since the advent of television, a large por tion of the American public has lost the theatre-goin habit. Although films made today are generally far su perior in every respect to those made a few years back, i is up to the motion picture companies to tell these "lost patrons what they have missed by not attending their neighborhood theatres. In this respect, film theatre companies might solicit the help of their shareholders indirectly. There are tens of thousands of investors who own shares in the motion pic ture stocks. These people, having invested part of their savings in the motion picture industries, are probably the staunchest supporters of their respective companies. Per haps if the movie companies utilize their quarterly reports to publicize their forthcoming productions or even send their shareholders magazine-like booklets featuring articles on future film releases, they might be able to create strong force of salesmen utilizing the best advertising medium ever — word of mouth. Even a moderate recovery in the American's theatre-going habit will find quick re flection in the companies' revenues and earnings. Conclusion In conclusion, we wish to note that Hollywood has in deed been taking many steps in the right direction. The fact that Hollywood has upgraded the quality of its prod ucts considerably in the last few years, that the Counsel of Motion Picture Organizations has been actively seeking some tax relief, and that film companies have begun to modernize their advertising policies prompts us to believe that the motion picture industry will be able to extend and accelerate its recovery trend, to earn a larger return on its assets, and thereby to show those who are considering liquidation of the major film companies that Hollywood is by no means "better dead than alive". It is on this assump tion that we make our favorable 3 to 5-year projections for the companies in this group. Montague, N. B. Spingold, J. Wald. Incorporated: New York. Address: 72? Seventh Ave., New York 19, New York. Stock traded: NYSE. recent releases will probably serve to offset the poor results of the first half. Two pictures especially seem to have caught the public fancy — with happy results for Co lumbia. "Picnic" was the outstanding box-office attraction COLUMBIA PICTURES War II, cash dividend pay-out has averaged 35% of earnings. Employees: 5,000; stockholders: 2,052. Revenues have increased 18% faster than disposable income since 193?. President, H. Conn; Exec. Vice President, J. Cohn; Vice President's, A. Schneider, A. Pag* 20 Film BULLETIN May 14, 1 956