Harrison's Reports (1955)

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 Published Weekly by United States $15.00 „AwY M N Y Harrison's Reports, Inc.. U. S. Insular Possessions. 16.50 Wew IOrlC W' *' Publisher Canada • • • • • 16 50 A Motion Picture Reviewing Service P S. HARRISON, Editor Mexico, Cuba, Spain 16.50 Devoted Chiefly to the Interests of the Exhibitors Great Britain ............ 17.50 Established July 1, 1919 Australia, New Zealand, India, Europe, Asia 17.50 it8 Editorial Policy: No Problem Too Big for Its Editorial _ . „ .„„„ 35c a Copy Columns, if It is to Benefit the Exhibitor. circle i-i\>u A REVIEWING SERVICE FREE FROM THE INFLUENCE OF FILM ADVERTISING Vol. XXXVII SATURDAY, DECEMBER 3, 1955 No. 49 PARAMOUNT TAKES EXCEPTION In an 8-page letter sent on November 23 to Abram F. Myers, National AlliecTs general counsel, Paramount, through Louis Phillips, its general counsel, has taken sharp exception to the doubts cast by Mr. Myers on the propriety and legality of the company's so-called "merchandising engagements." Phillips' letter was in reply to a letter Myers sent in midOctober to George Weltner, Paramount 's worldwide sales chief, and to statements made by Myers at different times on the subjects covered in his letter to Weltner. Asserting that "we cannot be put into a straightjacket and forced to license our pictures one way, your way, and still continue to make the outstanding pictures we are making," Phillips denied that clearance was in any way involved in merchandising engagements, and defended the policy as having proved to be invaluable in creating "the largest audiences for the benefit of all runs, early as well as subsequent," particularly in view of the great changes in marketing conditions undergone by the industry in the past few years. Pointing out that production costs have risen to unprecedented heights, and that the public today is more highly selective than ever in the pictures it chooses to patronize, Phillips declared that these and other factors require new marketing and merchandising methods, so as to attract the greatest patronage, for the benefit of both Paramount and its customers. Challenging the valdity of the legal points raised by Myers in connection with merchandising engagements, Phillips declared that "our present methods do not violate either the law or the decree," and had this to say, in part: "We are not slavishly dedicated to any fixed system of run or clearance. In marketing each of our pictures, we take into account its own individual qualities and appeal. Certain pictures require broad release at the very beginning. Others require slower distribution in order to arouse the public interest in their quality and appeal. Experience has shown that this benefits exhibitors generally. "No decision or decree has taken away from a producer or distributor the right to market a picture, so as to attain for it the widest possible patronage. Nor have we been deprived of the right, by trial and error, to discover ways and means of merchandising our product so as to achieve the best results. "There is nothing sacred about the present clearances, no matter how long they have been observed, and no Court has enjoined us from changing them. We are enjoined only from granting unreasonable clearances, more clearance than is reasonably necessary to protect the license in the run granted, and from granting clearance as between theatres not in substantial competition. These injunctions are being scrupulously observed by us. The special merchandising engagements are not violative of the injunctive provisions of the Decree. "We are not withholding pictures from subsequent run and thereby increasing clearance. The fact of the matter is that clearance is not at all involved under our merchandising method of releasing certain pictures on a limited basis. When a picture is not made available for any theatre or theatres, in accordance with our plan of release, it is withheld only for a brief period. This is not clearance and therefore cannot be said to be an increase of clearance, for in these instances we have not granted clearance over theatres from which you claim availabilities have been withheld." With reference to Myers1 criticism of the fact that only 128 theatres in the United States were chosen in October as suitable for showing "Desperate Hours" in "merchandising engagements," Phillips declared that "we are strictly within our rights in handling the merchandising engagements as we are doing. In so doing, no discrimination whatever is involved, for the reasons which follow : "First, we select cities in the United States which, by reason of their size and importance and the extent of their trading area, will have a wide sphere of influence on the exhibition of the picture in later exhibitions, thus establishing the picture in the mind of the public as an outstanding picture. "Second, in non-bidding situations, we select the theatre which, in our judgment, affords the best outlet and is capable of producing the best terms and film rental, provided, of course, that the theatre's owner and ourselves can make a satisfactory deal. "Third, where exhibitors have desired that they be afforded the opportunity to compete for the earliest exhibition, and they have theatres which are suitable and to some extent, at least, comparable, we afford them the opportunity requested, to compete by competitive bidding or competitive negotiation. We have done this to avoid a claim of discriminaton. While we believe, as stated above, we have the right to select our customer, based on sound business consideration, the trial of cases demonstrates that often a question of fact is presented which must be resolved by a jury when there is one; otherwise by the judge, — as to whether or not our choice of customer was the result of individual conduct or the result of conspiratorial conduct. (Continued on bac\ page)