Harrison's Reports (1946)

August 10, 1946 HARRISON'S REPORTS 127 A MISLEADING POLL QUESTION Fred Wehrenberg, new President of the Motion Picture Theatre Owners of America, has set out to ascertain the sentiment of the independent exhibitors on four questions: (1) Competitive bidding; (2) arbitration; (3) non-industry arbitrators; and (4) theatre divorcement. The first question on the form prepared by Fred is so poorly worded, however, that the answers will reveal almost nothing for it is ambiguous. The question reads as follows: "Do you approve of the method of competitive bidding proposed by the Court whereby pictures are to be sold theatre by theatre, picture by picture, to the highest responsible bidder having a theatre of the size and equipment adequate to show the pictures upon the terms offered by the distributor?" The question does not make clear whether it means sealed bids or open competitive bidding. There is a great difference between the two. For instance, I doubt whether any independent exhibitor will say "yes" if Fred means that the salesman will have the right to go to one exhibitor and, after obtaining his highest bid, go to the exhibitor's competitor and say to him: "Mr. Jones! Your competitor offered me such-and-such a price and so-and-so terms. How much do you offer?" Such a method of obtaining the highest bid would come under the heading of "cut-throat bidding" and, in the opinion of this paper, neither the Court nor the Department of Justice will stand for it. If Fred meant sealed bids, the answers would be representative of the feeling of the exhibitors in regards to this question. For the purpose of establishing a system whereby the distributors might not be accused of tampering with the bids, and whereby each exhibitor would be offered an opportunity to bid for pictures free from the pressure of "cutthroat bidding," this paper proposed, in the June 29 issue, — it was the first one to propose, in spite of the fact that certain distributors are attempting to adopt the idea without giving credit to the source — the establishment of "clearing house" boards, one in each zone, separate and distinct from its proposed "clearance boards," the function of which will be to establish fair clearances, in accordance with the Court's edict. The function of the "clearirig house" or "bid-receiving" boards will be to inform each exhibitor of a distributor's offering of a picture, giving each bidder identical information, and to accept the bids. Each board would then make a record of the bids before submitting them to the distributor. Through such boards, fair competition can be assured. As the question now has been put to the exhibitors, the answers will reveal nothing. ABE MONTAGUE'S INSIDIOUS STATEMENT In a recent interview with the trade press, Abe Montague, Columbia's general sales manager, outlined the change in his company's selling policy so as to conform to the decision handed down by the Statutory Court. Let me quote from a report of that interview, which appeared in the July 23 issue of Film Daily: "Montague said the new form of selling was bound to increase distribution costs. Sales forces, he asserted, probably would have to be augmented. To send a salesman hundreds of miles to negotiate a deal with an exhibitor who might want to buy only two pictures of a group would not be profitable and yet that will be the situation in some cases. Montague said he didn't know how the added costs would be met, but he indicated that they may have to be shared in part by the exhibitor or passed on to him." This statement is, in the opinion of Harrison's Reports, insidious propaganda, designed to frighten the exhibitors and thus disarm them when the Columbia salesman demands,what might be possible, "hold up" film rentals. What are the facts? In the opinion of Harrison's Reports, the sales forces of Columbia, not only will not be augmented, but they will in all probability be decreased, for the reason that, if the sentiment of those of the Department of Justice officials who are prosecuting the suit means anything, an exhibitor will be permitted to submit bids for pictures by mail, thus the necessity for sending salesmen to the exhibitor will not arise. If Columbia should, despite the uselessness of additional salesmen, see fit to send their sales representatives to small towns to sell its films, it will do so because Montague and those whom he represents may want to take advantage of the other film companies in an effort to sell the exhibitors before these other companies have a chance to do their selling in a fair and square way. That such is the intention of Columbia may be evidenced by the information Pete Wood, business manager of the Independent Theatre Owners of Ohio, printed in the organization's July 23 bulletin. Mr. Wood said that the Columbia salesmen were already out in the Cleveland territory and the entire state of Ohio offering to the exhibitors 27 "Special Feature Attractions," with no stars, no casts, no directors, not even an identification of the story. They are offering just a number of titles, such as "Horse Picture No. 2," "Crime Doctor No. 2," "The Whistler No. 2," and the like. Montague is resorting to another piece of planned psychology: He is trying to make the exhibitors believe that there will be a great shortage of pictures, his intention being to induce them to rush to buy the Columbia product before their competitors buy it so as to insure themselves a constant flow of pictures. It is manifest that Columbia, having lost the opportunity of continuing to sell choice pictures to the exhibitors and then not deliver them so that they might be used as bait to induce the same exhibitor to buy the following season's program, has decided to employ this new method — the method of fright. With Columbia, such a method is understandable, for, other than one or two decent pictures a year, its product has been so consistently poor that it doesn't dare to take the chance of offering its pictures in a straightforward manner. Harrison's Reports can make no criticism when a distributor says : "I want for my pictures so much and no less." It is the distributor's product, and he has the right, within reason, to set the price for his goods. But when such a distributor resorts to all kinds of artifices to frighten an exhibitor into buying pictures at a price that he will regret when he counts the box-office receipts, then it is time for one to stand up and shout a warning. Let me again say that, in the opinion of Harrison's Reports, Columbia has the right to set its own prices on its own pictures, no matter whether such prices are out of reason or not, for it believes that, if the prices are out of reason, the exhibitor will not buy them. What this paper wishes to convey to the exhibitor is a warning, lest they "fall" for Columbia's studied psychological devices. There may be a few exhibitors who do not understand what these psychological devices are. To these exhibitors I wish to say that a salesman, by studying certain traits of his buyer, so maneuvers his talk and actions that the buyer is led to believe that the product offered him is the best, even though the salesman himself believes to the contrary, and that it will be grabbed by his competitor. The idea being that the exhibitor will lose the opportunity of earning high profits, unless he "beats" his competitor in buying the pictures. The salesmen in the picture industry have received lessons in human psychology as much as the salesmen in other industries. Psychology is an art, and I am sure that the Columbia salesmen have studied it and will try to practice it on you. Be smart— beware of this art! (Continued from bac\ page) combination in which the distributors participated, by the "Optional License Agreement," and, during the days of the N.R.A., by a provision in the contract approved by the so-called "Code of Fair Competition in the Motion Picture Industry." In the Jackson Park Case the verdict of the jury, under the instructions of the District Court, was based upon the existence of a conspiracy to establish and maintain admission prices and a system of runs and clearance. In the Circuit Court of Appeals and in the Supreme Court the defendants conceded the sufficiency of the evidence to warrant the finding. Bigelow v. RKO Radio Pictures, Inc., (CCA. 7) ISO F. 2d 877; 326 U.S.