Hollywood Spectator (1931)

July 18, 1931 7 I repeat: There is not a motion picture share on the market to-day that is worth the price that it is quoted at. Intrinsically motion picture shares are worthless. The financial statements that apparently give them value, are the keenest comedies that the industry has turned out. It is a gamble whether the holders of such stocks ever will realize anything from them. Next year none of the companies will earn enough to meet its dividend requirements, and the gamble consists of the chance that the bankers who have their hands at the throats of the industry, somehow will find money to pay dividends as they did recently in the case of the Fox company. ▼ ▼ All THE investment value films have depends upon the whim of bankers. Wall Street could take over all the companies to-day if it wanted to. Until it wants to, no doubt dividends in some amount will be paid, but next year’s dividends will not be paid from this year’s earnings, for not one of the companies is going to make any money this year. Perhaps, again as in the case of the Fox company, annual statements will indicate profits, but the accounting staffs, not the producing and selling staffs, will be responsible for the satisfactory showings. Rapidly approaching is the time when the banks will stop juggling with the film companies and will take them over as just another step in the program planned when Wall Street first began to lend money to Hollywood. This move will be made at a time when liquidation of the companies will show that there are just enough assets to reimburse the banks and not enough over to make the stock worth anything. The film industry is the most mismanaged in the country, and it depends for its success upon being the best managed. It is unlike all other industries. A shoe manufacturer makes certain styles of shoes. They are put upon the market, and the manufacturer’s problem becomes one of duplication of his product and the maintenance of its standard. These are purely physical things that can be established as part of the factory routine. With his sales force properly organized and managed, the manufacturer is justified in regarding his business as permanent, and he can maintain his level of dividends which gives stock in his company a definite and practically fixed value. This value is maintained largely by machines. ▼ ^ But THE plodding efficiency with which the shoe company is managed will not do for the film industry. Here we have no duplication of product. Every article offered for sale is a fresh financial adventure. Instead of being a duplication of all that has been offered before, it must go to the other extreme and differ as widely as possible. Perfection attained in turning out one unit of production can not be maintained thereafter by machines. Such a condition in an industry demands the greatest intelligence in its management. Pictures have the most unintelligent management that any business on earth ever was handicapped with. I can’t go into here all the things that have been done to the picture business by those who control it. It would take a whole Spectator to handle that job. My opinion that film stocks are worth nothing is based upon the fact that the business of all the companies is falling off at an alarming rate, and that every one of them is turning out the same kind of product this year that ruined the business last year. The same management that started the business on its downward course still is managing it, and it is a management that never has had the faintest conception of what kind of business it is. In two years at the most the banks will be in complete control of the major organizations. The prospect need give Hollywood no concern. It always will make pictures, always will be the world’s greatest production center and boxoffices everywhere will contribute to the prosperity that it always will enjoy. Reviews FOR a COUPLE of months the Spectator will be more or less lazy about seeking out new pictures for review. My personal inclinations are against putting myself under obligations to producers by asking them to show me their product in projection rooms ; they refuse to let me know when they hold previews in theatres, and I refuse to journey from the coolness of the beach to the heat of downtown Los Angeles to catch first runs. I hope readers will permit me without protest to wait until the pictures come to the neighborhood houses within the limits of my physical inclinations. Ultimately I will get around to reviewing all the pictures worth seeing and a lot more that aren’t. My own conception of the reviews I write for the Spectator is that the time element is not important. I do not regard them as guides to those looking for screen entertainment. Rather my aim is to take pictures apart and suggest what their producers could have done to make them better. If you read my reviews with that thought in mind, it will matter little to you how long the reviews appear after the pictures are released. Dalton Trumbo will endeavor to keep up to date with his reviews. When I first approached the young man on the serious business of becoming a member of the Spectator staff, he said that he couldn’t qualify for the job as he knew nothing about pictures. I told him that that was his chief recommendation, as I wanted someone who would be governed in his reviews solely by the degree of entertainment he derived from the pictures and not by technical knowledge of film production. I’m beginning to feel that Trumbo fooled me. He seems to know his subject. Anyway, his reviews are written charmingly and are well worth reading, even if you are not interested in the pictures he discusses. More About Stories THANKS to the interest the new Spectator has aroused I don’t have to spend much time thinking up things to write about. The mailman brings them to me. For instance, here is a letter from an associate producer stating that he does not agree with me when I say that stories are not important. Commercially, and in their relation to the whole activity of the producing end of motion pictures, stories are important. If a man in a hurry walks four miles in the wrong direction, the walk is important even though it is a sheer waste of time. Stories are important for the same reason. They occupy so