Minutes of evidence taken before the Departmental Committee on Cinematograph Films (1936)

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110 COMMITTEE ON CINEMATOGRAPH FILMS 30 June, 1936.] Mr. S. Rowson. [Continued. between buyer and seller — in this case between distributor and exhibitor — as to the propriety of the price which is to be charged and paid for the films in the programme. Both parties are agreed that success, which is measured by profits, can only result if pictures attract audiences, and that profits are a function of the size of the audiences. 7. There are two main sources of supply of pictures for the British exhibitor — Britain and America. The pictures derived from both these sources have been proved capable of attracting British audiences in sufficiently large numbers to interest and satisfy exhibitors. In my opinion there is ample evidence supporting this conclusion in the statistics which, I understand, have been laid before you and with which I assume you are familiar. In general such statistics indicate the popularity of both English and American films, but give no clue to the relative popularity of the two categories. I am inclined to attach some significance, however, to the figures in Table I (see Appendix) prepared from information published by the Board of Trade. 8. What I have done in this table is to compare the returns of renters and exhibitors for " long " films. I have assumed that the films registered by the renters in any year of return will be the same films shown by the exhibitors in their year of return — which will be a year commencing six months later. This assumption is not strictly true because every film is exhibited over a long period up to, perhaps, 12 months from release. But the sequence of exhibition dates with any exhibitor is not likely to show any very marked differences for different films. That is to say, each exhibitor may be assumed to show each film at approximately the same interval after its release. This interval varies in different districts and for different exhibitors, but for the mass of exhibitors the average interval may be regarded as approximately constant. There may be — indeed we have good reason for believing there is — a gradual tendency for this interval to increase. But this secondary movement may be ignored, and we are concerned only to measure the exhibitor's footage returns for a year commencing at some unascertainable interval after the year to which the renters' returns apply. If instead of six months the true average interval was nine, ten, or eleven months the actual figures in my table might be different, but as between the successive years they would probably indicate the same kind of trend. 9. I invite you, therefore, to use them only as evidence of tendency and subject to this limitation they seem to me to justify the following inferences : First: During the past four years British " long " films have been screened about 6 per cent, more frequently than the foreign " long " films. Second: The fact that in every year the exhibitors' quota liability was largely exceeded is an evidence that British films have possessed superior attractiveness over their foreign competitors. (Attractiveness is, of course, a subjective quality not easily related to objective values.) Third: There are signs that the margin of superior attractiveness of the British film is disappearing. During the first two years the average difference of screenings was S per cent. ; in the last two years it was only 4 per cent. Fourth : On the whole, the attractiveness of both British and foreign films is approximately the same. 10. Like any other commercial inquiry the investigations of the British film industry involves, on the one hand, an ascertainment of the si/.e and value of the available markets and, on the other hand, of the cost of production. Between two competitors success may be expected to the party whose markets are larger or whose production costs are lower. The American industry appears to me at the present time to have the advantage on both sides of the account. I propose, therefore, to separate the various factors contributing to that advantage and to follow up by suggesting means by which in part or altogether the advantage might be reasonably curtailed or redressed. 11. The first, and most obvious, commercial advantage of the American industry over the British is in the size of the domestic market. The figures in Table II (see Appendix) make a comparison possible. Very noticeable is the relative populations of the two countries ; it is estimated that at the end of 1935 the total population in the U.S.A. was 127 millions and bore to the population of Great Britain the ratio of 282 : 100. As our purpose is to compare actual and potential patrons of the cinema, I prefer to exclude the comparatively young, and I have therefore taken into account only the population aged 15 and upwards. The ratio of the adolescent and adult population of the two countries is now seen to be 262 : 100. For every ten persons for whom the film might hope to cater in Great Britain there are 26 to invite into American cinemas. In many respects the film, regarded as a commercial article, is very closely analogous to a newspaper. The organisation of opportunities to make the newspaper available to the public is the aim of the newspaper proprietor; and similarly the provision of opportunities for showing the film is the aim of the film manufacturer, distributor and cinema proprietor. The number of persons who might be procured to read the newspaper or see the film, measures the potential circulation. The prime cost of each issue of the newspaper, like the prime cost of every film, is enormously large compared with the increment of expenditure for each added reader or each film patron. Therefore the greater the actual number of readers (i.e. the so-called " circulation ") like the greater the number of patrons, the more commercially profitable will the venture prove. 12. This analogy with newspaper circulation emphasizes the importance of studying the relative sizes at the present time of the two domestic markets. The best estimates of cinema admissions in the U.S.A. in 1935 put the figure at about 3.700 millions, which may be compared with my own estimate for 1934 (which I believe true within a comparatively small " probable error ") of 963 millions for Great Britain; that is to say the American figure is not far short of four times as larg«. Measured against the " potential circulation " we find the former figure is equivalent to 41 and the latter 28 visits annually for each person aged 15 and upwards. Such a difference, is. of course, very considerable and may be due either to the fact that in America relatively more people go to the cinema, or the cinema patrons each go more frequently, .ir perhaps to both influences operating simultaneously. There are no means of separating these possible alternative explanations, but the general impression is that the American public is in fact much more cinema-inclined than the British public. 13. On the other hand a slightly different conclusion seems to be suggested by the statistics of cinemas. As in this country, the ascertainment of the number of cinemas and the seats installed in them has been left to private enterprise; but the best estimates so obtained point to the existence in operation of 14,500 cinemas with 10 million seats in the U.S.A. compared with 4.500 cinemas with 3,872,000 seats in Great Britain. By comparison with " admissions " this indicates that every cinema seat in the U.S.A. is occupied an average of 370 i mies every year, and in Great Britain only 248 times. To the extent therefore that the total domestic market is larger and the cinema seats more frequently occupied, the industry in America must be regarded as having considerable commercial advantages over that in Great Britain.