Motion Picture Herald (1954)

MOTION PICTURE HERALD MARTIN QUIGLEY, Editor-in-Chief and Publisher MARTIN OUIGLEY, — . IR-, Editoi Vol. 197, No. 5 October 30, 1954 Relief for Small Situations A PRINCIPAL support for Allied’s proposal for Federal regulation of rentals comes from exhibitors operating theatres with small grossing potentials. These exhibitors wield political influence far out of proportion to the rentals earned in their theatres. And this is as it should be. There are thousands of these small situations and every one of them is a “grass root,” close to the heart of members of Congress. Moreover, most of these theatres are vital to the business life of the small communities which they serve. Rental term relief should be considered for some of these small theatres, not because Allied is agitating on the subject but because the best welfare of the industry requires that the grass roots be in a healthy condition financially. Any further withering away at the broad base of the exhibition structure in America is a grave threat to all theatres of whatever size. The individual who does not have the opportunity to attend a theatre this year in a small community may eventually be living in a large town or city. Once deprived of the opportunity of regularly attending a theatre, the inclination to moviegoing may die altogether. This is a fundamental factor that must be taken into account, irrespective of any threat of an Allied campaign for Federal control of dis tribution. Conditions in a number of localities apparently cry out for a policy decision that an attempt be made by each of the major distributing companies to try to keep in operation as many of the small grossing theatres as possible. This is a decision that in the case of some or all of the companies may lie outside the sphere of the sales department. Wherever a “liberal” sales policy for the small class of theatres requires a directive from the company president and the concurrence of the board of directors, it should be sought. THE distributing companies obviously and properly are in business to make money. Their continuing obligation to the studios and to independent producers, as well as to stockholders, necessitates that the maximum earnings consistent with good business practice be obtained. Clearly the requirements of production— on which every branch of the industry depends — may not be served through any decrease in over-all film rentals. Quite the contrary, all present indications point to the necessity of constantly making pictures of greater box office appeal in order to maintain the theatres’ position against television and all other form of competition. This means “better” films are required and frequently “better” also means more costly. No successful attempt can be made to keep alive theatres that are truly economically expendable. There is a wide area of debate on what type of theatre is or is not economically expendable. Certainly the only theatre in a town — or the theatre or drive-in wherever situated which does not have substantial exhibition competition — should never be viewed as expendable. One concrete suggestion that may deserve consideration is that all theatres which do a weekly gross under some established figure be sold film on a special basis, independent of the regular sales policies of the particular distributor. The special basis should be enough to provide recovery of the distributor’s actual costs attributable to each particular contract and, where feasible, a small “distribution profit" to apply toward an infinitesimal part of the production cost. No exchange or home office overhead or other indirect charge should be figured when setting terms for the theatres in the lowest grossing category. The exact figure that would qualify a theatre for the special category might vary from company to company, and to a lesser extent be subject to some geographical fluctuation. It might be as high as $1,000 weekly or as low as $500. THE ultimate benefits of such an approach to relief for small situations would be several: 1) A few thousand small theatres would be removed permanently from the field of trade practice strife, in which they have no proper place; 2) Some of the situations thus assisted eventually would prosper and become subject to regular selling terms ; and 3) Those theatres that never built up average grosses over the lowest category would at least continue to bring the best screen entertainment to millions of customers who otherwise would be lost to the industry. Those same patrons or their children over a period of time would pay into box offices of theatres in larger communities enough to return to the distributors tenfold what might be “lost” in working out relief for small situations. In fact, if the time and trouble — and threats of court and Congressional attacks are taken into consideration, it is possible, perhaps even probable, that the removal of several thousand theatres in the bottom group from normal selling efforts would result in an immediate, definite, dollars and cents, net profit to distribution. CJ To exhibitors who might think far off hills are green the current situation in the automobile industry may be food for thought. That is an industry that has not had a “product shortage” but a “product longage.” Although Ford has had its best record in years, if not ever, Henry Ford, Jr., this week said that eight percent of his dealers are operating in the red ! — Martin Quigley, Jr.