Harrison's Reports (1952)

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: 1270 SIXTH AVENUE 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 New York 20, N. Y. A Motion Picture Reviewing Service Devoted Chiefly to the Interests of the Exhibitors Its Editorial Policy: No Problem Too Big for Its Editorial Columns, if It is to Benefit the Exhibitor. Published Weekly by Harrison’s Reports, Inc., Publisher P. S. HARRISON, Editor Established July 1, 1919 Circle 7-4622 A REVIEWING SERVICE FREE FROM THE INFLUENCE OF FILM ADVERTISING Vol. XXXIV SATURDAY, JANUARY 26, 1952 No. 4 THE NEED FOR A FAIR COMPETITIVE BIDDING SYSTEM Charging that the major distributors are handling competitive bidding in an “unfair, evasive and discriminatory manner to such extent that pictures are being awarded to low bidders,” the trustees of Western Theatre Owners, Inc., formerly the Pacific Coast Conference of Independent Theatre Owners, met in Portland, Oregon, last week and adopted a resolution calling for competitive bidding to be conducted by means of sealed bids to be opened on a given date and time in the presence of the interested parties, with the picture to be awarded to the highest bidder at that time. The WTO warned that failure to conduct bidding along these lines will result only in future lawsuits. Back in 1946, when the three-judge statutory court handed down its decision in the Government's New York anti-trust suit and offered competitive bidding as a substitute for theatre divorcement, Harrison’s Reports, in a series of articles titled “An Analysis of the Court's Opinion” from a layman’s point of view, suggested that a plan, generally along the following lines, should provide a system of competitive bidding that will be compatible with fair play for both distributors and exhibitors: The first requirement, it was said, should be the establishment, in each exchange area, of a sort of central “clearing house” for the purpose of administering the details involved in such a system. To insure impartial handling of the business to come before it, and to instill confidence in those dealing with it, it was suggested that the “clearing house” be presided over by persons who shall have no connection whatever with any branch of the industry. Administrative ability, not experience in the distribution and exhibition of motion pictures, should be the qualification of those appointed to head each “clearing house,” for it can be assumed that they will have to follow and administer a specific set of rules and regulations designed to insure an equitable system of competitive bidding. It was further suggested that the basic functions of the “clearing house” should include: 1. To receive from each distributor complete information about each picture, such as a synopsis with cast and credits; running time; date and place of trade-show; the minimum flat or percentage rental acceptable for each run within each competitive area; the preferred playing time required, if any; a definite hour and date for the public opening of all bids; and whatever other specifications or conditions a distributor may deem it necessary to include in connection with the offering of the license for a particular picture. For instance, where a distributor desires an alternate bid covering day and date showings with other exhibitors, the bidder should be furnished with complete information regarding the terms and conditions of such alternate bids. All the foregoing information should be furnished to the “clearing house" suflu ciently in advance to enable it to notify every qualified exhibitor within each competitive area of a particular picture’s availability for bids at least ten days prior to the tradeshow in order that each exhibitor may have sufficient time to decide whether or not he desires to submit a bid. 2. To compile and keep up to date a complete list of every exhibitor within each competitive area and, when a picture is offered for license on competitive bids, to either submit or make available to each exhibitor identical information about the picture and about the conditions of bidding. 3. To use its facilities for the scheduling of tradeshows at such hours and dates as will prevent a conflict of tradeshows. 4. To open publicly, at the hour and date set, all sealed bids submitted for a particular license, and to return unopened any bids that might arrive after the time set for the opening, except that, in the case of bids submitted through the mails, such bids shall be honored if the postmark on the envelope indicates that it was mailed in sufficient time to reach the “clearing house” prior to the opening of the bids. As pointed out when the aforementioned plan was suggested in 1946, it is but a skeleton, embodying the basic principles for an orderly and equitable bidding system, and under close study its scope can be either modified or enlarged. Its purpose, however, is to bring about a logical and fair procedure by which competitive bidding should be conducted, so that an exhibitor, knowing that he is bidding under the same conditions as his competitor, can prepare his bid intelligently and be reasonably assured that he will get the picture if he is the highest bidder. The Western Theatre Owners’ charge that the distributors are handling bidding in an “unfair, evasive and discriminatory” manner is not an empty one. Only recently it was brought to the attention of this paper that in one competitive situation in a Southeastern city a major distributor exchange awarded pictures to an exhibitor for two days at less rental than had been offered by his competitor for a run of three days. In other words, the exhibitor who did not get the pictures may have offered fifty or sixty per cent on a picture for three days, yet that picture was awarded to his competitor at forty per cent for two days. Such biased preference could not exist under a proper system of competitive bidding, one that would be administered impartially by persons having no connection whatever with the industry. This paper still believes that the plan outlined above merits the careful consideration of both distribution and exhibition. But whether it is this plan or any other plan that is eventually adopted, something should be done quickly, for the dissension caused by the evils that exist in the present method of handling competitive bids is keeping the relationship between buyer and seller in a constant turmoil at a time when there is a dire need for intra-industry cooperation.