Motion Picture Herald (Dec 1932 - Mar 1933)

February 4, 1933 MOTION PICTURE HERALD 21 Parents Scored^ Action Trend Seen In Milliken Talks Carl E. Milliken, secretary of the Motion Picture Producers and Distributors of America, scored the parents of the country for their lack of effort in guiding the interests of their children to those films which have constructive as well as entertainment value, in an address this week before the Children's Theatre Conference of the Junior Leagues of America, Inc., at Cleveland. Earlier in the week Mr. Milliken, addressing the Woman's Press Club of New York City, indicated that current trends in motion picture production emphasize action rather than dialogue. Two factors were noted by the speaker as responsible for the trend : first, the studio realization that despite superficial similarity the screen is an entirely different medium from the stage, appealing to larger audiences, and second, technical improvement has progressed to the point where absolute silence is possible between portions of dialogue. "Unsolicited scenarios are never used," Mr. Milliken said, pointing out that "last year more than 78,000 pieces of literature were sifted to find material for 550 feature films." At the Cleveland meeting, Mr. Milliken outlined the preview methods now employed by which socially minded organizations are enabled to recommend films especially suitable for children, and expressed the opinion that definite approaches have been made to a "cinema of, by and for the child. . . . Although child attendance constitutes less than 10 per cent of general patronage, that 10 per cent is vastly important because it represents the entertainment taste of the potential audience of tomorrow." THEATRE AND TAXATION Cinema Patents IVins on Appeal The circuit court of appeals for the ninth circuit in San Francisco has reversed the decree of the trial court in the action of Cinema Patents Company, Inc., against Columbia Pictures and William Horsley Laboratories, holding the Gaumont & Thompson patents on film developing method and apparatus valid and infringed by the defendant. The suit involved legal construction of a lease and license agreement, under which Columbia claimed the right to alter and change a positive developing machine for developing negative film. Cinema Patents contended in its action that the agreement provided only for the use of the machine in its original condition for developing positive film. By the decree of the higher court, the defendant will be enjoined from using the altered machine for developing negative film, and the plaintiff will be awarded an accounting of damages and profits to be recovered. Cinema Patents also plans to continue its pending patent infringement action against Meyer-Rieger Laboratories, Inc., according to Harold Menken, representing Cinema Patents. Trial is expected to begin shortly in federal court, New York. (Continued from page 10) same patronage, he tries to license the more desirable and profitable attractions before his rival obtains them. This usually involves longterm agreements with the wholesaler. In contrast with other retail establishments, theatres cannot carry unsold goods in stock until sold. Every change in program means an entirely new line of merchandise to sell, with none of the previous day's goods carried over. Customers who want the picture that was on exhibition the previous week cannot be accommodated ; they must seek another theatre which has not yet exhibited that picture or accept an entirely different article. This unavoidable feature of the business requires entirely different methods of operation than other retailers pursue. Every one knows that few wealthy people are motion p.icture patrons. It is obvious that the picture theatres are not patronized by those suffering extreme poverty, nor the wholly uneducated, the illiterate and those who do not understand the language. Probably not over half of the population are regular patrons, though most people are at least occasional patrons. The regular patrons of motion picture theatres today are mostly working people, salaried workers and wage earners, people who earn their living by their own efforts, and the families of these workers — the class of people that are the most distressed by the depression, salary and wage cuts, widespread unemployment, decline in farm prices, and increases in other forms of taxation. Cannot Pass It On Now it is being proposed that these people should be singled out and asked to stand an additional tax burden, not because it is considered a fair tax, but on the theory that it is to be collected through a third party who will act as a shield for the Government in its role of nuisance tax collector. This raises the question of who will pay the tax after it is levied. Eventually, of course, the ultimate consumer pays any tax that is levied either in higher prices or lowered quality. Admission tax proposals are invariably based on the false theory that they can be added to the price of each ticket and passed on to the patron, the theatre standing only the cost of collecting the pennies, accounting for and remitting the amounts at regular intervals under heavy penalties for delays or errors. But the laws of economics are not so easily changed. Motion picture theatre admission prices, in the final analysis, are dictated by the public and by competitive conditions ; they cannot be raised or lowered arbitrarily without disastrous results. Admission prices are fixed by "market conditions" in the immediate community where the theatre is located. By market is meant the consumer-demand for the type of motion picture entertainment usually on sale at the theatre. There is a definite economic level of admission charges at each theatre, varying from time to time with local conditions and competition for patronage, that will produce the greatest total receipts. This price level is arrived at by the theatre management, sometimes unconsciously, through trial and error. If the admission charges are either raised or lowered from this level, the total receipts are reduced. When admission prices are raised the attendance falls off to more than compensate the increased price per ticket, and if reduced the increase in attendance is not sufficient to equalize the difference in price on each ticket. Faced with a 10 per cent admission tax, the theatre owner can either add a few pennies to the price of each ticket and suffer a certain decrease in attendance of 10 per cent or more, or turn over a flat 10 per cent of his gross sales every day to the Government in satisfaction of their special tax demands. Either may well mean a forced closing or bankruptcy. Every item of expense at the average theatre today has been pared to the bone; further reductions clearly will impair the quality of service of the quality of the show, with additional loss of patronage inevitable. If one cent for an additional tax is forcibly taken out of the box office dime, less than half of it can come from profit in even the most successful theatres. Theatre owners are certainly justified in feeling that special taxes levied solely on motion pictures are unfair and unjustified. None of these special taxes is used to aid or improve their business ; the money is raised for wholly unrelated purposes. Theatres have always cheerfully paid all general forms of taxation levied on all businesses alike, but feel it is most unfair to be singled out for a special and drastic tax burden not generally imposed on other lines of business activity. Theatres are now paying millions of dollars in real and personal property taxes on both closed and open theatres. The appraised valuation of motion picture theatre property for tax purposes in this country is well over $2,000,000,000. They now pay income taxes, corporation taxes, franchise fees and all other general taxes as levied. They also pay many special state and city taxes not levied on other businesses, such as license or privilege taxes, inspection fees, seat taxes, sign taxes, etc. 25% Now Dark It is evident that the motion picture business has suffered a steady decline since 1929, due primarily to circuijistances over which it had no control. More than 25 per cent of all of the motion picture theatres in the United States are now dark — closed because they cannot take in enough at their box office to meet their payroll, rent, film cost, taxes and essential operating expenses. A recent comprehensive survey shows 5,895 of the 19,311 theatre accounts in the country have already closed ; many others are in operation but one or two nights a week. No theatre remains closed if it can possibly operate and meet expenses ; the fixed charges have to be met by the owner even on a closed theatre. A heavy special tax burden cannot fail to increase the mortality rate. In the face of trying conditions, courageous and sustained efforts are continuously being made to keep theatres open, even where the receipts do not equal the minimum operating expense, to provide maximum employment, and to serve every community possible with essential low priced entertainment. The very nature of the local theatre's business contributes every day in an essential and important way to the welfare, morale and contentment of a large part of the population, so badly needed in these trying times. Sheehan In Easf On Production Winfield Sheehan. in charge of Fox production, arrived in New York this week to resume conferences with Sidney R. Kent, president, on next season's production schedule. It is understood that it will also schedule. It is understood that discussions also will touch upon any production policy changes arising from the deal with Educational.