Independent Exhibitors Film Bulletin (1961)

WHAT DO THE FIGURES MEAN? Promotion Seen Increasingly Important Factor (Continued from Page 12) the replacement of several small grocery stores by one giant supermarket. They point out that the one supermarket actually does far more business than the small groceries it has replaced. Let's pursue this analogy. One of the great assets of the supermarket is that it stocks many more items, and far greater quantities of them, than the smaller stores. The reverse is true in the case of the theatres. The fact that there are less theatres and less films for them to show simply means there is less attraction for the vast potential audience. There is no escaping the fact that the motion picture industry is giving the customer less from which to choose — less theatres to visit, less pictures to see. The Commerce report pays homage to the quality of many of our current and forthcoming attractions and to a recent and continuing "step-up in publicity." So far so good. It is highly comforting to find this official government agency, in a factual report, taking cognizance of the influence of promotion. "The results of this publicity," says the report, "should carry over into 1961." With the value of promotion being recognized by even so remote a movie observer as the Commerce Department, one wonders that the film executives do not grasp the opportunity to fill the industry's product needs by making more films and supporting them with expansive ballyhoo. A MARGINAL BUSINESS The basic question which remains, however, is whether the industry is on a sound long-term basis in relying on the periodical life-saving blockbuster film, price increases and a modicum of audience growth, rather than on increasing its supply of what it has to sell. As long as we are confronted with a product shortage, we are in the position of operating a marginal business. Capital invested in the motion picture industry, says the report, is estimated at $2,691,000,000, "of which about 93 per cent is accounted for by theatre facilities." This may be somewhat inaccurate, in terms of the amount invested annually not in capital assets such as real estate but in all the intangibles contained in a big feature picture. Yet it does present one very important commentary on the business. Here is an industry most of whose assets are, financially, at the theatre end; but the theatre end is, to a large extent, a dog being wagged by its Hollywood tail. In the short term, the shortage of Hollywood film product may not seem to work a hardship on the film companies quite as much as on the theatres. But in the long term, the small independent theatres — thousands of them — can mean the difference between success or failure for the film companies. When we have less theatres we attract less and less new customers. When we have less outlets for films we reduce the potential profits of films. Thus, progressively, Hollywood becomes more and more dependent for its theatrical revenues on a) the decreasing number of successful theatres, and b) the foreign market, a market which, in the past, has been so largely influenced by the uncertain tides of international and internal politics around the globe. CUT IN FOREIGN REVENUE The report speaks of "increased competition from television." Let us bear in mind that this growing competition is going to have the most impact on the foreign market, where television installations still are beginning to grow by leaps and bounds. Any diminution of foreign revenues as a result of video competition, perhaps not next year but certainly in the years thereafter, will have to be made up for either by increased U.S. revenues or by further cuts in production. Increased U.S. revenues, the Commerce Department well indicates, depend not only on predictable improvement in the attendance pattern but also on the supply of marketable motion pictures. Incidentally, the Department's figures on the growth of drive-in theatres point out that more of the drive-ins now are operating throughout the year; but there is a negative side to this point, too. In most instances, fourwall theatres operate all year long; many drive-ins still close for the winter; so that the number of theatres available to customers in, say, from December to March, is probably considerably under the total cited by the Department. Also to be noted is the Department's comment that part of the increase in I960 business was due to the fact that "because of the fine fall weather, business continued good for a longer period than usual." In the light of the weather we have been experiencing in recent weeks, it seems fair to say that any reliance on the weather as an asset is, to be sure, somewhat risky. The basic indication of the Commerce study is that good pictures do good business. This should hardly be a surprise; and yet the industry today is simply not making enough good pictures. During the so-called "orphan" '■ periods, in which only an occasional worthy film is put into release, many theatres are placed in jeopardy. Thousands of houses are able to maintain year-'round operations only by the extensive use of old films, and with more and more of the film backlogs going to television, the predicament of these theatres will grow increasingly precarious. Other industries, except when plagued with strikes or shortages of raw materials, have always tried to meet all the needs of their market. The automobile people make as many cars as they can sell; it has been a decade or more since there was a shortage of new automobiles. The television manufacturers may not be selling as many new sets as in the first flush of enthusiasm, but you can still always find a plentiful supply in the dealers' showrooms. Our industry is unique. We 1 seem to be committed to the idea that our customers should never get as much as they want. RETAIL BRANCH BIG Of course, we have all heard defendants of the movie status quo explain : that our industry is a special case. According to the Department of Commerce, we are "a major industry." We employ about 196,000 people (the vast majority of whom are undoubtedly at the exhibition end) and we pay them about $714,709,000 annually. That's big business. However unusual its operations and problems at the production end, it is a big business at the retail end. If the producers fail to cope with the problems of their own retailers, then the retailers must explore solutions of their own. We all know what some of these solutions have been — tear down theatres and build hotels or garages or bowling alleys; reduce (Continued on Page 23) 4 Page 20 Film BULLETIN February 20. 1941