The Exhibitor (1955)

MOTION PICTURE EXHIBITOR 15 Chart No. 3 SLIDING SCALE "C" (The Theatre keeps as Profit only the same % of the Film Rental as the % relationship of Film Rental to Gross) RATIO UNIT GROSS** FILM RENTAL % THEATRE PR( of Gross of Gross Unit Overhead x 1.316 20* 4.0 Unit Overhead x 1.341 — zz 21 4.4 Unit Overhead x 1.367 — = 22 4.8 Unit Overhead x 1.380 zz 22V2* 5.1 Unit Overhead x 1.395 = = 23 5.3 Unit Overhead x 1.424 zzz 24 5.8 Unit Overhead x 1.455 =: zz 25* 6.3 Unit Overhead x 1.487 =: =z 26 6.8 Unit Overhead x 1.522 zz 27 7.3 Unit Overhead x 1.540 zz 271/2* 7.6 Unit Overhead x 1.559 • zz 28 7.8 Unit Overhead x 1.598 29 8.4 Unit Overhead x 1.639 =; zz 30* 9.0 Unit Overhead x 1.684 = zz 31 9.6 Unit Overhead x 1.731 HZ zz 32 10.2 Unit Overhead x 1.756 — zz 32'/2* 10.6 Unit Overhead x 1.782 zz 33 10.9 Unit Overhead x 1.837 = 34 11.6 Unit Overhead x 1.896 = zz 35* 12.3 Unit Overhead x 1.959 zr zz 36 13.0 Unit Overhead x 2.028 zz zz 37 13.7 Unit Overhead x 2.065 — zz 371/2* 14.1 Unit Overhead x 2.103 = zz 38 14.4 Unit Overhead x 2.184 =; zz 39 15.2 Unit Overhead x 2,273 zz 40* 16.0 Unit Overhead x 2.370 zz zz 41 16.8 Unit Overhead x 2.478 zz; zz 42 17.6 Unit Overhead x 2.536 zz zz 421/2* 18.1 Unit Overhead x 2.597 zz zz 43 18.5 Unit Overhead x 2.729 z= z: 44 19.4 Unit Overhead x 2.877 = zz 45* 20.3 Unit Overhead x 3.045 = 46 21.2 ^nit Overhead x 3.235 = = 47 22.1 Unit Overhead x 3.340 =; 471/2* 22.6 Unit Overhead x 3.453 zz =: 48 23.0 Unit Overhead x 3.705 zz 49 24.0 Unit Overhead x 4.000 — = 50* 25.0 This is the third “ROBOT” CHART that combined both 1% and 2V2% steps. ** Any theatre can multiply its audited and approved unit overhead by the ratio figures and a.rrive at the unit gross that controls the sliding steps. *** Relationship of Theatre Profit to Gross is not a part of any SLIDING SCALE, but is shown here in order to help theatrenien analyze their profit position. SLIDING SCALE formula a basis for FAIR FILM PRICING. All of the foregoing has been submitted to several recognized industry leaders in advance of publication, and we will make an effort to carry a symposium of their views in an early issue. Following a close study of this published data, should any theatreman, or any distributor or pro¬ ducer, have views for or against this sug¬ gested formula, we will try to find the space to give them a fair airing. Or should there be specific problems or applications that theatremen would like to present, pertinent to this survey, we will try to answer, or get answers. Motion Picture Exhibitor, its publisher, and its staff, feel that a fair film pricing formula such as this could be the means of eliminating much of the ill will be¬ tween buyer and seller, and a good part of the flood of law suits that are now pending and are being filed almost daily. This is not wishful thinking! It results from many conversations with theatre executives, and from off-the-record que¬ ries of skilled exchange men, who have been most helpful in contributing their experiences and suggestions. Q Other Forms of PERCENTAGE SELLING In addition to the SLIDING SCALE method, there are dozens of variations of the STRAIGHT PERCENTAGE method; and it seems that every time a big picture is introduced some super-smart distribu¬ tion executive will come up with some “gimmick” that has not previously been tried. As a matter of fact, some of these super-smart distribution executives seem to have no other claim to super-smartness than the dreaming up of such “gimmicks.” And it is often the occasion for wry humor, when the supposedly big picture fails to perform boxoffice-wise as expect¬ ed, and the smartly angled sales “gim¬ mick” backfires, to the detriment of the distribution gross. That is also the occa¬ sion for a quick switch to some high straight percentage and -no review ( dis¬ tributor participates in the gross from the first dollar, and no adjustment even though the theatre does not recoup its overhead from its share) sales policy. This latter is probably the toughest of all sales policies, and, other than a large, high-admissioned first run, in a large city, capable of grabbing a big gross, the thea¬ tre never existed that could operate day in and day out on such a policy, and show a profit. Of all pictures produced and dis¬ tributed in any one year, the percentage of hits as related to goods, fairs, and flops, is very low. So the average theatre, stretching for straight -percentage -and no-review, will suffer such losses on the latter three categories that it will never be able to recoup on the few of the first category. Straight-percentage-and-no-review usu¬ ally signals a picture in which the distri¬ butor or producer have no confidence. Such lack of confidence normally results from poor success in some carefully handled, and probably expensively adver¬ tised, test engagements. Sales policies are seldom nailed down until after such test engagements prove the “want-to-see” or “don’t-want-to-see” of the average paying patrons. Exceptional grosses in the test engagements, currently seem to signal a “roadshow” approach at 70-30-10% (70% film rental, 30% theatre share, with a 10% of the gross guaranteed to the theatre as a profit); or even a 90-10-10% (90% film rental, 10% theatre share, with that 10% of the gross guaranteed to the theatre as a profit) . In a restricted market, with a scarcity of strong features, many now re¬ ceive the acolade of “roadshow” that aren’t entitled to it, either by stature or grossing ability. Mediocre or poor grosses in the test engagements, will usually re¬ sult in an effort to have theatres pick up a share of the loss, through a 40% or 50% straight-percentage-and-no-review policy. A little clumsy, perhaps, but it has been made to work time and time again! Another straight percentage method, that signals slightly more confidence in the grossing proclivities of the picture, but still not enough to let it set its own percentage return under SLIDING SCALE, is straight-percentage-with-apromise-of-review. Much of the success of this latter method depends on the con¬ fidence that can be reposed in the promise of the local exchange manager. If not in writing as a part of the contract, it also depends on whether the district manager, or the home office, faced with a poor dis¬ trict or national gross, will back up the verbal promise of the branch manager, and not reverse him in spite of his per¬ sonal honesty and good intentions. In some cases, producers or producers’ representa¬ tives who have never seen the particular theatre or been in the particular territory, have been known to refuse to allow a review or adjustment even when promised by the top general sales manager of the distributing company. A promise-of-review means nothing more or less than a promise to take an¬ other look at the deal after the picture has been played, and should the actual gross not warrant the percentage paid, to issue a partial credit. Many distributors require full payment at the contract price, before they will even discuss such an ad¬ justment, so that they are in the position November 16, 1955