Harrison's Reports (1951)

Entered as second-class matter January 4, 1921, at the post office at New York, New York, under the act of 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 17.60 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 21, 1951 No. 16 THE UNITED ARTISTS -EAGLE LION DEAL As most of you no doubt know by this time, United Artists, in a sudden move that caught the industry by surprise, has acquired Eagle Lion Classics. Being an outright sale and not a merger, it is essentially a product deal by which UA bought out ELC’s entire inventory of pictures, including all future pictures that have been committed to ELC by different independent producers. It is estimated that there are approximately two hundred and twenty-five pictures involved, of which about fifty have not yet been completely played out. Additionally, there are about eight or nine pictures that are awaiting release, and about four or five that are in production and have yet to be delivered. Excluded from the deal is the ELC studio property in Hollywood, as well as all the liabilities and obligations of the company, such as exchange leases and employment con< tracts, which are to be assumed by Pathe Industries, the ELC parent company. According to United Artists' officials, the acquisition of the ELC product will give UA enough pictures to enable it to operate immediately on an economical and profitable basis for the balance of 1951, after which it will be in a position to follow through on its own plan of releasing two top “A” features per month with the beginning of 1952. Insofar as the exhibitors are concerned, UA's acquisition of ELC is both encouraging and regrettable. It is encouraging in that it will serve to strengthen United Artists considerably until the new management can solidify its long range plans to rebuild the company as a top distribution outlet for the industry's leading independent producers. And a strong United Artitsts will, of course, benefit the exhibitors, for it will serve as a dependable source from which to expect a steady flow of product. The regrettable part of the deal is that it removes Eagle Lion Classics as a distributor, thus it not only leaves the exhibitor short of a source of product, but also lessens the competition among distributors for his playdates. There are two things about this deal that will require the close attention of the exhibitors insofar as the future booking and buying of ELC product is concerned. The first has to do with the 16 mm. rights to the pictures, and the second with the television rights. Although it is admitted that ELC has made television deals on certain of the pictures, and that Pictorial Films, a subsidiary of Pathe Industries, holds the 16 mm. rights, at this writing neither the UA nor the ELC officials have made it clear as to just which pictures are affected. Because of the vagueness surrounding these rights, the exhibitor who books the ELC pictures in the future should make a point of insisting that his license agreements include clauses that would guarantee that the pictures booked have not been and will not be shown either on television or through 16 mm. channels within his territory until after a specific number of days following the exhibition of the pictures in his theatre. An exhibitor’s insistence on such a guarantee, with appropriate penalties, is not unreasonable; in the case of the ELC pictures, it is the only way by which he can protect himself from TV and 16 mm. competition. A SHARING PLAN AIMED AT ELIMINATING PERCENTAGE EVILS For years, many exhibitors have complained that the distributors’ selling policies leave them with no incentive to go out and exploit a picture in a big way. They maintain that whenever they do any outstanding showmanship work and get more dollars into the box-office, an almost immediate result is an increase in their future film rentals. Accordingly, many of them hesitate to put extra effort behind the exploitation of a picture lest they be penalized. Several weeks ago, Abram F. Myers, National Allied's general counsel, told the Washington correspondent of Quigley Publications that the distributors are going to have to change over from “penalty selling” to “incentive selling” if the industry is to surmount the challenges ahead from television and other competing entertainments. Characterizing the working out of such an ‘incentive" selling system as “the one biggest job we have to face,” Mr. Myers is quoted as saying: “In my judgment, there’s going to have to be a complete reform in licensing practices. There’s been no real innovation in film selling in the last 40 years — just some refinements like the sliding scale. The whole theory is wrong — it’s penalty selling. If an exhibitor spends his time and money selling a picture, the rental increases. Top distributors have accused exhibitors of laying down on the job. Why shouldn't they? A television salesman makes more money the more television sets he sells. An auto salesman makes more when he sells more cars. The television manufacturer doesn’t say that you’ll get a 50 per cent commission if you sell 25 sets but only a 25 per cent commission if you sell 50 sets." Mr. Myers added that the present distributor practices deter an exhibitor from renovating and redecorating their theatres. “An exhibitor spends $10,000 remodeling his thea? tre, and the next time he goes to buy a film he has to pay a much higher rental. This is all wrong. We need some method of incentive selling, so that the exhibitor will make more money when he keeps his theatre modern and aggressively merchandises his product.” Agreeing with Mr. Myers’ plea that the distributors should abandon “penalty selling,” the Associated Theatre Owners of Indiana, in its latest organizational bulletin, suggests a different sharing plan as a substitute for the various percentage arrangements now in use. The plan, which follows, should be of interest to all exhibitors, as well as the distributors: “From our first experience with percentage films, sliding scales and 50% control figures we felt that they had disadvantages to the entire industry. We thought that there was a substitute for the various percentage arrangements that would eliminate many of the present evils and at the same time create new incentives for all concerned. “Without going into all the detail, we think there is much merit in a plan along the following lines: First we would divide all the theatres in the exchange area into blocks according to their geographical location and according to the type of situation. For example, all the city break houses in a city would be in one block, deeper subs in another block, first run small towns within a certain area would be in another block, etc. Next we would take the average admission (Continued on bac^ page)