The Film Daily (1940)

I Wednesday, October 30, 1940 <M DAILY U.S. to Keep Constant Check on DecreeOperation Special Unit Will Be Established in Anti-Trust Division for That Purpose the operation of the decree and to handle complaints with respect to it." \ This was disclosed by the Department in its press statement on the impending settlement of the New York equity suit against the "Big Five," issued following yesterday's hearing before Federal Judge Goddard. The statement, some 10 pages, summarized the provisions of the proposed decree and the Rules of Arbitration, and cited "benefits to be anticipated." With reference to the latter, the statement said: Anticipated Benefits "It is reasonably to be expected that the provisions of the decree as to trade showing and sales in small groups will result in an improvement in the quality of pictures as well as in greater opportunity for local community tastes to be reflected in the pictures selected by exhibitors. This new method of selling should open to independent producers a market now closed to them under the system of season block-booking. In addition, exhibitors will have greater and more frequent opportunities to compete for pictures. "Although the method of selling provided for in the decree is new and untried in the motion picture industry, it is believed that it will be of benefit to exhbitors and distributors, as well as to the public. Whether or not the new method of selling willl operate effectively can only be determined after a fair trial and that is provided for by the decree." Other salient sections of the statement follow: Divorcement Action Deferred "In addition to revising selling practices of the five signatory companies, the decree sets up a system for the arbitration of disputes between exhibitors and distributors to be administered by the American Arbitration Association. In order to give this arbitration system a fair trial, the Government agrees not to seek divorcement or dissolution of production and distribution in the industry for a period of three years. During this period the signatory companies agree not to engage in any general program of expansion of theater holdings and to maintain the status quo so far as is practicable. Blind-Selling and Block-Booking "The decree strikes at two selling practices in the motion picture industry_ which have long been under attack by exhibitor organizations, as well as parent-teacher associations and other public groups, i.e., block-booking and blind-selling. Various proposals to eliminate these practices have been suggested from time to time and legislation to that end has been under consideration by Congress. "Under the present practice, at the start of each motion picture season an entire year's supply of pictures is sold at one time. The contract is executed before production has started on the majority of pictures covered by it. An exhibitor must rely on what is at best but a sketchy outline of the pictures the distributor intends to produce. This selling practice is commonly known as blind-selling. Not infrequently the completed picture differs materially, with respect to story, past of characters and quality, from the outline previously presented to the exhibitor. As a result, an exhibitor often finds himself in a position MAJOR POINTS IN EQUITY DECREE "Blind-Selling" is Ended and "Block-Booking" Modified; Trade Showing is Made Obligatory (Continued from Page 1) ment or dissolution of production and dis by June 1, 1942. tribution for a three-year period. Binds the five signatories not to engage in any general program of expansion of theater holdings and to maintain the status quo so far as is practicable. Provides for the termination of the trade showing and blocks of five provisions in the event the Government has not succeeded in procuring a decree requiring the three nonconsenting companies — UA, Universal and Columbia — to comply with similar provisions New Kyser Pix Opens At Roxy, November, 14 Kay Kyser's second RKO Radio picture, "You'll Find Out," will have its world premiere at the Roxy Theater in New York City on Thursday, Nov. 14, with the star and his entire musical organization appearing in person in a special one-week engagement. Assures all other provisions will remain in effect regardless of the outcome of the suit against the "Little Three." Provides for continued Department of Justice check on the decree's operation, the Department establishing a special unit to handle complaints, etc. Retains jurisdiction of cause enabling, among other th.ngs, any of the parties to apply to the Court at any time for a modification in order to conform it to any subsequent Congressional act. To Count Equity Sun. Pix Votes Ballots on the Equity referendum on Sunday legitimate shows in New York will be counted tomorrow. Frank Perry to Film Life Of Charles M. Schwab West Coast Bureau of THE FILM DAILY Hollywood — Frank Perry, nephewin-law of the late Charles M. Schwab of Bethlehem Steel fame, is organizing an independent production unit to film the life of his uncle under title of "The Steel Master." Perry has been quietly lining up star, writers and major release, and is now in New York on the deal. He will make a complete announcement of his organization upon his return to Hollywood. vhere he ■ ul.l Trade Showing "Blind-selling is prohibited by the decree. Pictures must be completed and exhibited to the trade before they can be sold or offered for sale. The defendant companies are required to trade show their pictures in each of their respective exchange districts. Thus every exhibitor is given an opportunity to see the pictures before he buys them. "Under existing practice, each distributor tries to sell as many pictures at one time as it possibly can and requires exhibitors to contract for all or substantially all of the season's output in order to get any of its pictures. As many as fifty pictures may be included in a single block. This is the practice that is known as block-booking. "As a result of this practice, exhibitors have practically no opportunity to select pictures based on the local tastes of the communities which they serve. In addition, the playing time of theaters is filled by pictures bought in large blocks from the defendant companies and exhibitors have little screen time available for showing the product of independent producers. Selling in Blocks of Five "The decree prohibits the licensing of more than five pictures in a single group. It does not prohibit the licensing of less than five pictures in a single group ; distributors are free to sell pictures one at a time or in groups of two, three or four. Although distributors may sell more than one group of five pictures at a time, they may not condition the sale of one group of pictures on the sale of another picture or group of pictures. "Under the method of selling prescribed by the decree, if an exhibitor finds that a particular group of pictures contains some that are objectionable, he can request that these pictures be eliminated or that other pictures be substituted for them. If the distributor refuses to grant his request, the exhibitor is in a position to reject the group without jeopardizing his entire year's supply of films. "The decree neither requires distributors to grant nor prohibits them from granting to exhibitors the privilege of cancelling one or more pictures in a given group. As a result of the process of bargaining between distributors and exhibitors, cancellation privileges in varying degrees have been granted by dis tributors in the past though they have not been legally required to do so. Under the decree the parties are free to bargain with respect to cancellation as well as with respect to the particular pictures to be included in a given group. Offensive Pictures "Exhibitors are given the right to cancel any picture that is locally offensive on moral, religious or racial grounds. "Because pictures to be released during the present selling season have already been contracted for, the provisions of the decree with respect to trade showing and sales in small blocks do not become effective until the opening of the new selling season on Sept. 1, 1941. "Three of the companies that were named in the original complaint, namely, Unitea Artists Corp., Universal Pictures Co., Inc., and Columbia Pictures Corp., have not joinea in the decree. None of these companies owns any theaters. The case will proceed to trial against these three companies at a time to be fixed by the court. To protect the consenting defendants against the competitive advantages that the three non-consenting companies may enjoy if they are not required to conform their selling practices to the provision of the decree with respect to trade showing and sales in small groups, the decree provides for the termination of these provisions as against the five consenting companies in the event the Government has not succeeded in procuring a decree requiring the three non-consenting companies to comply with similar provisions by June 1, 1942. All of the other provisions of the decree remain in effect regardless ot the outcome of the suit against the three nonconsenting companies. Continued D of J Supervision "The Department proposes to keep a constant check on the operation of the decree. The records of the arbitration system are subject to inspection by the Department at all times, as are the records of the defendants relating to the operation of the decree. A unit will be established in the Anti-trust Division to keep in touch with the operation of the decree and to handle complaints with respect to it. As a result of the information thereby obtained, the Department will be in position to determine what further action, if any, need be taken at the end of the trial period." Warners Set Bask Plans for 1941-42 (Continued from Page 1) in the East, conferred here with Harry M. Warner, Albert Warner, Grad Sears and Charles Einfeid on une proposed lineup. The program is expected to be finalized in early January when further conferences will be held at the studio. Jfarticipating at that time, in addition to ..he executives mentioned, will be xial B. Wallis. Number of pictures to be made next season still remains to be determined. Among the governing factors will be the proposed consent decree ending the New York antitrust suit against Warners, as well as four other majors. Provisions of cne decree are bemg closely s turned. Einfeid, who has been in the East since the South Bend premiere of 'Knute Rockne — All American," weaves for the Coast on Friday. He will return to New York in midjanuary, immediately after the 194142 program is set. Para.'s Astoria, London Suburban, Hit by Bomb (Continued from Page 1) which is said to be under repair, was m Brixton, a suburb of London. Leicester Square, another Odeon house figuring in the deal, had its front badly damaged recently by a oomb that exploded in the street. Argentina Turning Out Good Pix, Says Reisman Argentina's film industry is making considerable progress in turning out good pictures, according to Phil Reisman, vice-president in charge of RKO's foreign distribution, who has just returned from .South America. Two studios in the vicinity of Buenos Aires are well equipped to turn out good pictures and they are doing it, Reisman said. Reisman, who attended RKO sales conventions in Buenos Aires and Rio de Janeiro, said that business in both Argentina and Brazil was running smoothly, although the diminished export business had had some effect on patronage. Henry C. Wall Stricken Rockingham, N. C. — Henry C. Wall, 58, owner of the Richmond and Little theaters here, died of a heart attack. He was a former chairman of the board of county commissioners. Surviving are his widow and a sister. Holloway Is First in Draft West Coast Bureau of THE FILM DAILY Hollywood — First actor's number called yesterday in the draft was that of Sterling Holloway. I