The Film Daily (1927)

THE 10 DAILV Thursday, October 13, 1927 Claims Chains Throttle N, Y. Ind'p^ts TIE UPMAJOR PRODUCT; T.O.C.C. TELLS PARLEY Leo Brecher, spokesman for the Theater Owners' Chamber of Commerce, yesterday read into the record at the Trade Practice Conference the following brief dealing with his organization's claims that 543 independent theaters are compelled to bow to the wishes of 82 producerdistributor chain theaters in the buying of pictures: "That there is a deliberate plan afoot to restrict the development of the motion picture industry so that control may be lodged in the hands of a small group is evident even on the most superficial observation of the recent history and present tendencies in the business. And the more thorough the study, the more certain the conviction that unless steps are taken immediately to remedy the situation, we shall witness the disappearance of the independently operated theater, and the independent production of motion pictures, and the concentration of the production of motion pictures as well as the operation of theaters for the exhibition of motion pictures in the hands of a small and closely connected group. Conditions Detrimental "That such a condition would be detrimental to the l)e?(t interest of the public and the nation is obvious. rt is l)ut a degree removed from the control of the press by a small group. The city of New York presents in a concentrated form, the picture of what is going on throughout the country. "In Greater New Vork, there are approximately 625 neighborhood motion picture theaters. The control and operation of these theaters is divided as follows: "Five hundred and forty-three of these theaters are operated by individuals or groups who have no affiliation with the producing or distributing organizations. This is the class we shall refer to as the independent exhibitors. Fifty-one theaters are operated l)y I.oew's, Inc. and affiliated corporations, which are allied with the Metro-tjoldwynMayer-Dist. Corp. and by a close working agreement with the Paramount-Famous Lasky Corp. Eighteen theaters are operated by the Keith Proctor group affiliated with Pathe de Millc Producers Dist. Co., and through direct or indirect connections with First National Pictures Corp. and through working arrangements with Paramount Famous I.asky. Thirteen theaters are oi)erated by the Fox Theaters Corp., affiliated or allied with the Fox Film Corp. "It is a well known fact that the chief Kent Defines In the long discussion over Exhibitor Resolution No. 3 which concerns buying power of unaffiliated and affiliated exhibitors, where Commissioner Myers asked S. R. Kent to describe what Paramount considers an "affiliated" theater. Kent's definition was this: "We consider an affiliated theater a house in which we are partners, to the extent of from 25 to 50 percent. "Theaters we own are not considered 'affiliated', since we own them entirely". Getting Primed (Continued from Page 1) pecially on block booking. Myers shows fire. Hopes consideration of subject was made before two hours ago. Grants adjournment with warning. Commission wants action. Buying Power: Bitter Bone of Contention All on deck at 2:30. Non-theatricals under fire. Resubmitted to joint committee. Likewise tent show competition and other alleged coercive tactics. Affiliated exhibitors want recognition. The chair accords it. Says fabric of industry discounts numerical ballot strength. All groups' views to the commission. Undercurrent of excitement. The unit buying plan. Placing each theater on own in buying. Quick response. Distributors cite Supreme Court precedents. This a defense of chain buying. Affiliated exhibitors get in whack. Edward Sonnenschein on his feet. Calls resolution unfair. Sydney S. Cohen cites independents' difficulties in getting film. Sees resolution as panacea for all independents' ill. Denny Harris says no. Fears end to independent production. So the wrangle goes. Now comes Leo Brecher. Carefully prepared brief cites New York situation. Eighty-two chain theaters — Loew, Fox, Keith, skim the cream. Five hundred and forty-three independent houses go abegging. These and other charges made by Brecher. The chair is impressed. States so. Up rises Sid Kent. Tells of deal to supply independents with Paramount pictures. Sixty-five per cent of the program, Kent says. Not enough independents got together. Therefore, a flop. Brecher denies these statements of Kent. Declares independents weren't approached. The Chair Talks; Opinions of Importance Myers expounds his ideas. First time. Observer no longer. It'.s his party. Looks as if he will run it. Urges exhibitors to clarify the resolution. Text lacks definiteness. Imjiortant observation, this next. Myers believes certain class of exhibitors is being favored. Expounds some ideas on general business. No law preventing manufacturer from dealing in other branches of his industry. Important. Can be construed as sympathetic view toward producer activity in the theater field. Likewise this: Private trader may or may not deal with any one person or persons. It's up to the trader. That's the way we heard it. Modification comes a minute later. Myers hold this business to be different. Why? Because commodity is copyrighted and not obtainable generally except from specific producers. Sounds very legal. Undoubtedly is. That was the third day. Pretty much Myers' affair. He has taken hold now. No doubts now about who's running the conference. value of a motion picture production is in its early release. At such time the public's interest in a particular production is at its height and such public interest dwindles as the date of the release is departed from. Theaters in a position to present pictures on early release attract a large patronage. Theaters unal)le to present these productions at an early date attract much smaller attendance and the business lost on account of such delay in presentation is far greater than the reduction in the cost of the production that is presumed to be made on account of such delay in release. "Tn New York City, the early releases known as first runs in the various neiirhborhoofls of the Parnmomit Famous T.asky Corp.. M-G-M. First National, Fox Film Corp.. Universal Pictures Corp. and Warner Bros, are confined to the three groups controlled by ojierators who have affiliations with producing nrganizatinns. Thus. S\ theaters oi)erate-l b> I.oew's. Inc. obtain the fir«t run privilege of Motro-Cjoldwyn-Mayer. half of Pararmount product, and one-third to one-half of First National product, virtually all of the XTnited Artists product, and any jiart of Universal product not used by the Keith and Proctor theaters, and virtually any part of any other Iiroduct not used by either the Keith Proctor houses or Fox Theaters. "The 18 Keith-Proctor theaters obtain practically all of the product of I'athe-DcMillr organizations, approximately one-half of First National product and a portion of the nroduci of Univbrsal and Warner Bros. The I,^ Fox theaters have first run of the Fox i)roduct, and a portion of the Warner Bros, product. The 543 theaters, which have no af filiations with producing companies are obliged to wait until these three small groups have enjoyed the Iienefit of first rini pre sent.xtions before they can have access to product of these companies. "Aggravating the situation in many cases, some of the Loew's theaters acquire the second runs on pictures played first run by the Keith Proctor or Fox theaters, and by reason of restrictions granted them, independentlyoperated theaters are at times obliged to wait many weeks before they have the opportunity of presenting a production to their public. Effects in Given Sections "The injustice of this practise of confining the early runs to theaters operated by comnanies aflfiliated with producing organizations is even more apparent when the effect on a given section of the city is considered. "Tn the Borough of Queens, out of a total of 70 theaters ,the Loew organization oper.ates four. In the Corona-Jackson Heights section, there are three theaters oj)erated by an independent exhiliitor. This exhibitor enjoyed the privilege of early runs on all pictures until the Loew organization acquired the management or control of one theater. Immediately, the three theaters operated by the independent exhil)itor were relegated to a second run position with serious detrimental results to their business and investment. "In the Flatbush section of Brooklyn there is a group of 12 theaters operated by an independent exhibitor whose houses enjoyed an early run of pictures, but recently, the Loew organization acquired a single theater in that section, and automatically, the independently operated theaters were deprived of early runs they had previously enjoyed. ^"In Manhattan, on Broadway, north of 72'nd St. there are approximately IS theaters. The Loew organization operates one on 83rd St. and one at 160th St. yet all the independently operated theaters are obliged to wait until after the two Loew's theaters have played a picture, and in some cases until the Loew theaters in the remotest parts of the city have played the pictures before they are given an opportunity to present them to the public. Effect on Exhibitor "The effects of this practice are two-fold. The effect on the exhibitor is that year after year his equities are reduced in value and the hazard of doing business is increased. In many cases, independent theater operators have been obliged to turn over their houses to the Loew organization in order to obtain product, and naturally, it is the better type of theaters that find themselves in that position .conseciuently weakening the position of independent operators in every instance where such a condition is compelled. "The effect on the producing field is even more serious for the following reason. Each year the theaters operated by the produceraffiliated organizations, restrict their purchases to the product of their own group, in an increasing degree. As a result, producers who have no neighborhood theater affiliations find their first run market continually decreasing, so that, to cite one example, Universal Pictures Corp. in 1926-1926 sold practically all their product to Keith-Proctor group theaters. During the current year, however, the Keith-Proctor group has increased the number of pictures from Pathe and other organizations directly and indirectly affiliated with them, to such an e.x.tent, that oidy about one-third of Universal product is sold to the Keith-Proctor theaters. "The remainder of their product is sold to a few of the minor Loew theaters and is thereby kept from being available as first runs to independent theater owners. With but a slight increase of the product of any of the producers allied with them, the Keith Proctor theaters will be in a position to exclude all of the productions of the L'niversal. The condition cited above as to the Universal applies with practically equal force to Warner product. The independent exhibitors have for years made efforts to correct this evil practice, and no sincere attempt has been made by the producing companies in that direction. Dangers of Monopoly "There can be but one reason for this attitude, and that reason is a desire to place the independent theater operators in an inferior position so that in time they may be obliged to turn over their properties to one or another of the groups with producer affiliations. The success of such a manoeuver in addition to being extremely unjust to the independent exhibitors involved, would be most deplorable from the standpoint of the public. Therefore, if that manoeuver is successful, there will be placed in the hands of a small group 'the decision as to the kind of productions to be made and exhibited, and decisions as to prices of admission instead of being decided on normal economic conditions, will be determined on the basis of a monopoly. "Considering the latter as the lea'-t important of the two evils, too much emphasis can not be placed upon the danger of placing a medium of expression equal in influence to that of the press in the hands of a limited group who at best have only their own interests to serve. The remedy for the situation is in opening up the market. To make available to every theater the product of every producer, and to make available to every producer the screen of every theater. With this as the basic principle, details of fair apportionment of product to theaters in any given zone and fair prices to every nro ducer will easily take care of themselves. The establishment of this principle will also do away with the evil of compulsory b'f)ck booking which has justly been condemned bv the Federal Trade Commission in its recent findings, because it will of necessity resn't in a ili\'ision of the product of each of the producers among a number of theaters, instead of, as at present, being either forced on or favored to a particular group."