Independent Exhibitors Film Bulletin (1956)

DECREE ENFORCED, SAYS D OF J 1 laints Help for Small Exhibitors (Continued from Page 13) tors' problems we can do nothing about. They may, for example, pertain to matters, not touched upon by the judgments, that come within legitimate business perogatives and which, accordingly, we could not properly take up with distributors. In either event, however, Paramount distributor defendants know we investigate carefully all exhibitor complaints and, where judgment problems are involved, demand a solution of those problems in accordance with the Paramount judgments. As a result, distributors have developed business procedures to effectuate those judgments' design. Evolution of such procedures has been hastened by distributors' knowledge that the Department vigorously enforces judgment provisions. The result has been improved compliance. We do not confine ourselves strictly to judgment problems. Even though no judgment problem is involved, there are instances where we may be instrumental in having a small exhibitor's grievance corrected by a distributor. In such instances, where we can do so with propriety, we do not hesitate to use our good offices. But judgment enforcement and the additional help we may give small exhibitors alone cannot solve the serious economic problems television has caused motion picture exhibitors. While day-to-day judgment problems are of utmost importance, we have taken a broader view of our responsibilities pertaining to the motion picture industry. As a result, every effort has been made to keep abreast of the industry, to know about its technological improvements and the impacts such improvements have on the industry as a whole and on the individual exhibitor, to know something about the pictures that are produced, their artistic merit, their box office appeal, how many or how few are produced, what they cost, and the level of film rentals. We do this so that our consideration of the difficult problems we are asked to act upon may be an informed one. Only thus can we insure that whatever we do concerning those problems is, consistent with our obligations under the antitrust laws and the Paramount judgments, best for the industry as a whole, for the exhibitor, and especially for the independent exhibitor, and for the public. Illustrative of this is the attention we have given to increasing the supply of pictures. As the subcommittee knows, most exhibitors believe that the number of pictures now produced is inadequate. With this in mind, we gave every proper encouragement, for example, to the so-called Makelim plan for producing additional pictures. In addition, we spent considerable time discussing with representatives of Theatre Owners of America and the divorced circuits under what conditions such circuits might secure court approval to invest in Exhibitors Film Financial Group, Inc., conceived by certain members of Theatre Owners of America as a means of providing risk capital to independent producers and thus increase the supply of motion pictures. The two largest exhibitor organizations have recently urged, as a means of increasing the supply of pictures, that the divorced theatre circuits be permitted to produce anr distribute motion pictures with these circuits to have pre emptive rights to exhibit such pictures in the theatres the now own. We do not know whether any of such circuit will decide to enter into production and distribution 01 whether it will be possible to devise adequate safeguard against the return as a result of any such new integratior of practices violative of the antitrust laws prevalent in the industry before the Paramount case. Also, we are aware this may not be the ideal way of securing more motion picture product. However, because of our deep interest in the industry and its welfare and because we try to know what the problems of the industry and especially the problems of the small independent exhibitor are, we are giving a great deal of attention to this proposal. It would be easy for us to rest on the judgments which divorced exhibition from production and distribution and oppose any such proposal. It may be that because we are willing to devote a great deal of effort to giving the proposal our sympathetic consideratizon some will construe this as a more lenient and indulgent attitude towards the defendant circuits. However, we do know that the number of pictures produced has fallen, that the level of film rentals has risen, and that whatever the reasons are for the rise in the levels of film rentals a short supply of pictures must contribute to such rise. Therefore, with the independent motion picture exhibitor in mind, we have taken the proposal under advisement. Nor is this any manifesta' tion of a more lenient and indulgent attitude towards the defendant distributors involved in the Paramount case, for if anything comes of the proposal it means that such distributors will have new competitors. SPECIFIC EXHIBITOR COMMENTS Admission Prices We believe it would be helpful to add just a few comments on the background of the injunctive provisions in the Paramount judgments relating to the fixing of admission prices. Five of the eight major distributors of motion pictures owned and operated circuits of theatres. The court found that the theatres of the integrated defendants were protected from price competition by provisions in licensing 1 agreements fixing minimum admission prices which other theatres would charge. This was done whether the picture was licensed for a flat rental or for a percentage of the theatre's gross receipts. Provisions were included in the license agreements for severe penalties if less than the prices agreed upon were charged. Nevertheless in its opinion the court stated: The foregoing holding that the defendants have all engaged in unlawful price-fixing does not prevent the distributors from continuing their present methods of determining film rentals; they may measure their compensation by stated sums, by a given percentage of a particular theatre's receipts, by a combination of these two, or by any other appropriate means. What is held to be Page 14 FILM Bulletin June 25. 1 956