Harrison's Reports (1941)

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 of March 3, 1919 Harrison's Reports Yearly Subscription Rates: 1270 SIXTH -AVENUE Published Weekly United States '. . . '. . . . VI15.00 R~r»m 1 R1 9 ' Harrison's Reports, Inc., U. S: Insular Possessions. 16.50 nwiuioit Publisher Canada. 16.50 New York, N. Y. P. S. HARRISON, Editor Mexico, Cuba, Spain 16.50 . .» ., . . _ . front RHtnin i ^ 75 A Motion Picture Reviewing Service Australia . New ' Zealand,' Devoted Chiefly to the Interests of the Exhibitors Established July 1, 1919 India. Europe, Asia .... 17.50 Jtg Edjtoria, Policy. No problem Too Big for Its Editorial Circle 7-4622 j&c a copy Columns, if It is to Benefit the Exhibitor. A REVIEWING SERVICE FREE FROM THE INFLUENCE OF FILM ADVERTISING Vol. XXIII SATURDAY, JANUARY 4, 1941 No. 1 HERE AND THERE IN THE OCTOBER 26 ISSUE I discussed in these columns the matter of the Federal Admission Tax and its application to admission prices charged to students. I urged the industry to carry on an educational campaign to the end that the tax law might be amended to provide that the exemption from the tax should apply not only to children under twelve years of age, but also to all students, soldiers, sailors and young men of the C.C.C. camps. In the November 9 issue I reproduced a letter addressed to the United States Internal Revenue Department, St. Paul, Minnesota, by Fred H. Strom, Executive Secretary of Allied Theatre Owners of the Northwest, taking up the fight to accomplish the purpose that I had outlined. Since that time, Northwest Allied, through Mr. Strom, has carried on an intensive campaign to have the tax ruling on student admissions modified. The letters exchanged between Mr. Strom and the Treasury Department, both at Washington and at the St. Paul division, are too voluminous to reproduce in these columns, but they contain convincing arguments, which may bring about the results desired. Northwest Allied has indicated also that, if the Commissioner of Internal Revenue should refuse to reverse his ruling, suit would be instituted to test the validity of the ruling. The exhibitors would then have a clearcut decision by the courts as to the application of the tax on student admissions, as well as on admissions of C.C.C. workers and of those in the military service of the country. Some of the other regional organizations of Allied have joined in the work started by the Northwest regional, either by supplementing the protests of Mr. Strom, or by submitting to the Commissioner of Internal Revenue specific questions, the answers to which may lay the foundation for a court battle. Of course it is difficult to predict the action that will be taken by the Tax Department. But one thing is certain, and that is the worthiness of the cause that has been undertaken. The exhibitors are trying to make available to the youth of the country, and to those in the military service, entertainment at the lowest possible cost. These young people have a definite need for entertainment at frequent intervals ; in fact, during these depressing times the fulfillment of this need is essential to their well-being. Yet they don't have the means with which to buy the amount of entertainment they should have. To help them hurdle the obstacle of a fund shortage, the exhibitor has reduced the price of admission for them, and he insists that the government do its bit by exempting them from the Admission Tax. The job that Northwest Allied has undertaken is by no means a job that affects only one locality; it is a matter of national concern, and if the Tax Department should refuse to reverse its ruling, the two other available avenues of attack should be followed without delay, namely, an appeal to the courts for a reversal of the ruling and an appeal to Congress for an amendment of the Tax Law. Here is a cause that should be championed, not by only one group of exhibitors, but by an entire industry. It may be well to let Northwest Allied, the group that has taken the initiative, assume the leadership, but all groups should get behind the leader if they want to be assured that their efforts will prove successful. * * * ONE OF THE MOST COMPREHENSIVE surveys ever undertaken by an exhibitor organization has just been concluded by the Allied Information Department, and the results have been embodied in its report issued on December 12, 1940, under the heading of "The Aid Analyst." An introduction to the report says : "This report is the independent exhibitor's answer to the so-called 'national sales policies' which are proved to be non-existent; to the demands for higher film rentals, which are shown to be unnecessary ; to the restriction of cancellation rights ; and to the forcing of shorts, which is continuing unabated. Here in cold, accurate figures you will find the answers. It has been well said that knowledge is power. Put AID's report to work for you by comparing the national figures and your territorial figures with your own individual operation." The report indicates that, despite efforts of the distributors to obtain higher rentals for the 1940-41 season than they received for their 1939-40 product, the majority of exhibitors bought their product either on the same terms as they bought for the previous season, or at better terms. In 1935, Harrison's Reports, after making an extensive survey among exhibitors, published its findings in a pamphlet called "Harrison's Digest," which proved conclusively that "national sales policy" was nothing more than a phrase used by film salesmen to "bluff" some exhibitors into buying product at higher prices than the product warranted. It showed unbelievable differences in selling terms between theatres of almost identical location, size and requirements. When the publication of Harrison's Digest was discontinued in 1938, the distributors apparently began to work the "national sales policy" gag again, and it took the AID survey to explode it once more. The AID survey shows that, with the exception of Metro, the distributors in many instances made contracts for features all on flat rental terms, and, as the report states, "this disposes of the claim by the various companies that there is a national sales policy requiring the exhibitor to buy some pictures on percentage." Based upon the total number of contracts analyzed, the report shows that nationally 42% of the contracts were sold all-flat and 58% were sold with some percentage pictures. Although this paper, by reason of its experience in compiling Harrison's Digest, was not surprised at the findings of the AID survey, it was gratified to note that "without exception exhibitors in organized territory paid a lower percentage of the gross for film than did exhibitors in nonorganized territories. This also holds true when the buying of members of exhibitor organizations is compared with that of non-members in the same territory." Harrison's Reports congratulates Allied on the great service it has rendered to exhibitors through the AID survey and report, and suggests that, for their own benefit, all exhibitors should cooperate with Allied in furnishing the information requested for future surveys. Only with such information can AID make its surveys comprehensive enough to be compelling, and only by having the AID reports based upon comprehensive surveys can the exhibitors use them to advantage in dealing with the film salesmen. * * * SIDNEY R. KENT, president, and Herman Wobber, general sales manager, of Twentieth Century-Fox are to be congratulated on the steps they have taken in preparation for entering upon the new selling methods under the Consent Decree. They have adopted the sensible attitude that the Decree is now an accomplished fact, and that so long as it remains the guiding rule for the distribution of motion {Continued on last page)