Independent Exhibitors Film Bulletin (1956)

Justice Department Denies L,enienctj Toward Film Companies Under Decree Highlights of the statement by the Antitrust Division Department of Justice, issued at the request of the Senate Small Business Committee on enforcement of the consent decree in the motion picture monopoly case. For the Subcommittee on Retailing. Distribution and Fair Trade Practices of the Select Committee on Small Business of the I nited States Senate. Senator Humphrey, Chairman of this Subcommittee, has equested Department of Justice comments on various tatements by certain motion picture exhibitors, March 21 nd 22, 1956, before this Subcommittee, as well as our opinion as to the effects of the consent decrees — United itates v. Paramount Pictures, Inc., et al. — particularly the ffect on the independent distributors." Generally, these xhibitor comments relate to: (a) Alleged fixing of admis.ion prices by distributors: (b) assertedly unreasonable :learances; (c) forcing of pictures; (d) negotiations for the icensing of the motion picture "Guys and Dolls" in Coumbus, Indiana; (e) licensing of the motion pictures 'We're No Angels'' and "Guys and Dolls" in Cincinnati, Ohio; (f) divestiture of the Capitol Theatre in Cincinnati, Ohio; and (g) acquisitions of theatres by the divorced circuits. At the outset, how do Paramount judgment provisions bear on these problems? To promote competition, those judgments required the five integrated companies to sell off their theatre circuits and the resulting circuits to divest themselves of their interest in specified theatres. Beyond divorcement, these judgments enjoined certain distributors from: (a) granting any license in which minimum prices for admission to a theatre are fixed by the parties; (b) agreeing with any exhibitors or distributors to maintain a system of clearances; (c) granting any clearance between theatres not in substantial competition; (d) granting unreasonably long clearances between theatres in substantial competition; (e) performing or entering into any license in which the right to exhibit one feature is conditioned upon the licensee's taking one or more other features; and (f) licensing any feature for exhibition upon any run in any theatre in any other manner than that each license shall be offered and taken theatre-by-theatre, solely upon the merits and without discrimination in favor of affiliated theatres, circuit theatres or others. Finally, judgment injunctions bar the new theatre companies resulting from divorcement from acquiring any additional theatre except on an affirmative showing that the acquisition will not unduly restrain competition. Recent Industry Developments These judgment provisions can be appraised only against the background of recent business developments. The mo tion picture industry has recently undergone and still faces a time of difficult transition. In 1932 and 1933, depression years, the estimated average weekly attendance at motion picture theatres in the United States was 60,000,000. And by 1946, 1947, and 1948, this estimated weekly attendance figure had jumped to 90,000,000. By 1955, however, weekly movie viewers had dropped some 50% to 45,800,000. This decline stems in the main from the growth of television. On January 1, 1948, there were 17 commercial television stations on the air in the United States. A year later this number had risen to 50. And by January 1, 1956, there were 482. In corresponding fashion, television sets in use have risen sharply. On January 1, 1948, there were 189,900 television sets in use in the United States. This number had increased to 1,000,000, by the first of 1949, to some 36,900,000 by January 1, 1956, and according to Television Digest's May 19, 1956, issue "industry researchers estimate minimum of 38,500,000 sets-in-use as of May 1." In addition, many theatres have suffered from the competition by newly-constructed "drive-ins". As this Department, on June 17, 1953, wrote to Senator Schoeppel, Chairman of the Subcommittee on Monopoly of the Select Committee on Small Business of the United States Senate : Drive-in theatres have been constructed in great numbers since the war. Before the war they were pretty much a novelty. At present there are in excess of 4,000 drive-in theatres in the United States. This is new competition which many conventional theatres have found it very difficult to meet. Other new theatres of the conventional type that have been built since the war have taken patronage away from older theatres. There has been a great surge of home building in the United States since the war, resulting in many new residential areas in many of which new theatres have been built. People have moved into these new areas in large numbers. Their patronage is lost to the theatres located in the areas from which they have moved. Steps Taken To Enforce Decree We encourage any exhibitor, and especially the small exhibitor, to tell us of any difficulties he encounters in the operation of his business. If they are difficulties with which we can properly help him, we do so. We have successfully resolved the distributors countless problems brought to us by small exhibitors. However, some exhibi (Continued on Page 14) FILM Bulletin June 25, 1954 Page 13