Harrison's Reports (1951)

IN TWO SECTIONS— SECTION ONE Entered as second-class matter January 4, 1921, at the post office at New York, New York, under the act o]f March 3, 1879. Harrison’s Reports Yearly Subscription Rates: United States $15.00 U. S. Insular Possessions. 16.50 Canada 16.50 Mexico, Cuba, Spain 16.50 Great Britain 17.50 Australia, New Zealand, India, Europe, Asia .... 17.50 35c a Copy 1270 SIXTH AVENUE New York 20, N. Y. Published Weekly by Harrison’s Reports, Inc., Publisher A Motion Picture Reviewing Service Devoted Chiefly to the Interests of the Exhibitors P. S. HARRISON, Editor Established July 1, 1919 Its Editorial Policy: No Problem Too Big for Its Editorial Columns, if It is to Benefit the Exhibitor. Circle 7-4622 A REVIEWING SERVICE FREE FROM THE INFLUENCE OF FILM ADVERTISING Vol. XXXIII SATURDAY, APRIL 7, 1951 No. 14 OUT OF BOUNDS “Extraordinary,” “shocking,” “arbitrary,” “capricious," “hostile," “coercive," “intimidatory” and other similar ad' jectives were employed this week by persons within and without the industry in describing the Federal Communica' tions Commission’s statement of policy, issued last week, in which it warned the motion picture companies that they had better make their films, stars and stories available to television stations lest they endanger their own chances of being granted permission to enter the television field. The resentment with which the FCC’s declaration of policy, called a report, has been received, not only by industryites, but also by public officials, columnists and editorial writers, is typified by the statement issued this week by Mr. Abram F. Myers, National Allied’s general counsel, who likened the FCC’s action to the wielding of a ‘blackjack,” and stated that it “sets a new record for usurpation of authority.” Here is what Mr. Myers had to say in his keen analysis of the FCC’s action : “By this report the Commission — “1. Imposes a condition on the right of motion picture companies to qualify for broadcasting licenses based on information coming to it from an unidentified source and without specific findings based upon evidence adduced in support of or opposition to any application for a license. “2. Asserts the authority to regulate the motion picture industry and the use it shall make of its properties although no such authority has been conferred on it by Congress. “3. Would compel the motion picture companies to make available to television broadcasters their finest films and , talent as a condition to the right to qualify for broadcasting licenses. “The report was issued as a result of a hearing held a year ago looking to the establishment of a uniform policy to be followed in the licensing of radio broadcast stations to applicants accused or convicted of violating a law of the United States. “The points set down for hearing, as enumerated in the report, did not even hint that the Commission wished to be enlightened as to its authority to advise prospective applicants for licenses renewals as to the use which they should make of properties which are not subject to the Commission’s regulatory powers, in order to qualify for such licenses or renewals. “Specifically, there was not the slightest intimation that the Commission had in mind the possibility of a ruling or even an expression of opinion to the effect that the motion picture companies, in order to be eligible for licenses or renewals, must first make their choicest films and contract artists available for exhibition in television. “While we have not examined all the briefs and arguments offered at -the hearing in April, 1950, we do not believe that any such startling proposal entered into the discussion. So revolutionary and drastic a proposal would have attracted wide attention and most certainly would have come to our notice. “Sometime between the closing of the hearing and the issuance of the report the Commission either evolved the idea, or it was planted with it, that it could force the motion picture companies to supply their best available films and talent to this rival entertainment medium in order to qualify for licenses. “The report recites blandly that ‘It has come to the Commission’s attention that many motion picture companies refuse to make copies of their films available for yse by television companies.’ It then goes on to say that ‘the success of television will depend to a large measure on the ability of television stations to acquire the best available films and to use the best available talent and stories in their programs.’ “It would be interesting, and it may become necessary to ferret out the source of this information that ‘has come to the Commission’s attention.’ We are confident that it was not openly supplied by the participants in this quasi-judicial inquiry. The motion picture companies represented at the hearing apparently had no warning that such a catastrophic ruling was in contemplation. And the thousands of independent theatre owners, who are the concern of this association, had no reason to suspect that their interests were involved, much less in jeopardy. “Will the Commission Now Regulate the Movies? “It doesn’t seem possible that the Commission itself could have realized the full implications of its actions. “In order to make good on these ‘primary principles’ which are to guide it in making a case-to-case determination of these applications,’ the Commission must exercise strict control over the motion picture companies, Aren to the extent of fixing prices for their products. “Let us consider what could and doubtless will happen if the Commission persists in the policy of requiring the motion picture companies to place their ‘best available films’ at the disposal of its competitor in the entertainment field. A film company desiring a license asserts in its application that it has conformed to the Commission’s requirement. A TV station objects and complains that the applicant had not made its best films available. Is the Commission going to set itself up as an expert to pass on the quality of motion pictures? “But that is child’s play compared to the difficulties thatx will arise when a TV station complains — and this will happen— that the applicant has sought to evade the Commission’s policy by charging film rentals too high for it to pay. The Commission has proceeded in happy ignorance of the cost of producing the best pictures and the methods used in pricing them, or else it has made the cold-blooded determination to subsidize TV at the expense of the motion picture industry and thus confiscate the latter’s property without just compensation. “We are forced to this conclusion because we do not believe it could have been contemplated by the Commission or the person or persons who persuaded it to adopt this policy, that TV would pay film rentals approximating those derived from the theatres. “Admission to a first-run or key neighborhood theatre usually is 50£ or more. Those theatres pay film rentals ranging from 25% to 40% of the gross receipts. If the film companies must make their best pictures available to television, they will be entitled to and should demand the same rentals, based on the same factors, that are charged to the theatres. But when they demand that the TV people pay from 12*/^^ to 20^ for each claimed spectator — and we mean the claims they make in seeking sponsors — they will run snivelling to (Continued on bac\ page)