Variety (Jan 1948)

W<id«ie8d*y» January 7» 1948 Porty-tecond ■ f^^SnS/FY Anntwrmry PI€TlJli»S Top Industry Leaders Stress Need for More Creative Films, 'Back to Work' Attitude for All \ •s- Toppers Disagree On Whether They Shoiild Make Serious Or Escapist Pix But Concur That Domestic B. O. Is Still An Enormous Potential— . Must Gear Quality Product to a Diminishing Market they are presently. N. J. Blumberg TSaie Blumberg Prescribes United Front, Believes Crisis May Bring Harmony Into Business fl, J. Blumberg, president of Univbrsal-Intermtioml, gtates: . This is a bad age for prophets. " "The world is moving so fast that it would be hard to make plfedictions even if the trends were more crystalized than "~ But one thing is clear. Millions of Americans demand entertainment, and are $Ull flble to afiEoKd it. Millions throughout the world w^nt entertainment and tragically cannot af- ford it. This tends to ■make as. an American business rather than the global business: - we were prior to 1947. ■ Man will have to live by bread alone In many parts of the world during 1948i This is one of . the Siid commentaries of this day. The problem is not easily re- solved. The Ameriian motion pictu^^ industry.must realise that until general world trade is rehabilitated, our for- eign income will remain static and in many cases negative. In-the meantime the motion picture industry is going through a precarious transition. Ho-v^ will we make up the 40.%-Income that is now lost to us in the world market? This is the big 64 million-dollar question for 1948. We must ■realign our economy and get our costs down to the new market conditions. We must also try to increase our do- mestic income. This last point depends upon the quality lof the entertainment we: tuni out, and also is closely related to the national economy. ■ Peceipts fell off in this country during 1947; Can we bring them back in 1948 and can we, also, successfully gain enough to make up the lost foreign market? . These are difficult questions and the only way we can at- tempt to answer them is for everybody in this business to realize that we ha've to work twice as bard as we ever did before.- : -". The. problem does.not rest alone with<producers and dis- tributors, but a good share of its solution must come from exhibition as well, If ever there-were a need for a united indulsfary, it is right now upon us! . My personal opinionj which has always been on the opti- . mistic side, leads me to believe that our industry will rally from this shock just as it has historically come back from all major reverses. There is no longer the possibility of running this business from patterns. Thepe wiU still be a necessity for experi- ments, and the need for flexibility in all branches of the busi- - vness will increase rather than decrease. The day has passed when any branch of the industry can assume that it knows* all the answers. Instead we should, indulge in more clinical thinking to demonstrate that what- ever problem confronts us becomes a common cause. Per- haps the present critical, situation will be the means of bringing more harmony into the business. If I were to make a hopeful prediction lor 1948 i would •ay that this U the time for the united front! embargoes further hampered our business in other parts of the world. Virtually the only thing in our business that continued ex- panding upward in 1947 as it had in 1946 wa.s—negative costs of pictures. The tool'.s paradise of 1946—the industry economy and organization built around the idea, of ever rising world boxoffices and ever expanding world markets —^suffered a big "shock and sock. Yes, 1947 has been quite a year! And it .may get worse in 1948! Yet personally I'm more optimistic than 1 was three or four, months ago. Why? Because the industry seems at least to have grasped its problems, to show signs of gettmg down to earth. .The adjustment from a luxury basis to an economy basis in keeping with narrower grosses'seem.s un- der way in most companies. Organizations topheavy in manpower are pruning and the return to the idea o£ deliver- ing an honest day's work seems to be coming back, as it must. I Cm CosIs-rrBnt Not Qttalit y ~~ - Cutting costs in 1948—rcosts of pictures and costs of op- erationa—seems to be the secret of security for any picture company in the coming tough year, even the secret ot stay- ing in busmess. Certainly no picture producer can afford to cut quality. The same top ingredients—story, stars, di- rector, etc—that have brought our product up. to its present high standard must be maintained if we are to keep our hold on the public. With courage, intelligence and hard work we can lick 1948, develop ourselves and our business constructively and perhaps even get to like 1948's toughness! v Pix Have Been Dumped Off the Gravy Train and tl^e Rude Awakening Is Upon lis—rBnritey Baiabmi Barney BAtaban, President of Paramount, is of the opinion: 1948 will be a tough and testing year—politically and eco- noijaically—for the world, America, American business—par- 'ticularly the American jmotion'picture business. The picture huslsess will -weather the ; 48 storm. But the going will be rugged, the financial rewards will be slimmer and there will be casualties among - those who haven't heeded the storm ■warnings hoisted in 1947, ' * s"'"^'ey the last couple of years »the picture business." Mosf of us look hack on 1946 as the best postwar year in the business. . From the profit angle that was true, irom the overall angle boomtime 1946 . ,J^|s bad for the industry. It got us »tO bad, extravagant habits. Domes- : ^^ijWy theatres were reaping top money « the boxofflce and playing even moderately good product lor unprecedented runs. The foreign market was expanding »n extent and returning good grosses. In the general atmos- Rnere of prosperity few. people worried much because Holly- wood negative costs of pictures were going up by leaps and pounds as everybody and everything needed for picture- ">?Kmg demanded and got substantially more money. Like- wise the costs of distributing and exhibiting pictures were ,™""g upward. Even the protracted and serious Hollywood irophe* seemed more of an annoyance than a catas- Tlien came the bad news of mid-1947. kept t in so many countries of the world, -and to tliose who have been aware of the gradual imposition of currency and other restrictions affecting tiie earnmgs from American films in country after country, only one logical conclusion has be- come possible; The job of fighting the continuous erection of economic barriers abroad is too "big for one mdustry to handle, especially when that industry deals in entertainment. It is an economic, not an ideological, battle. Our American Government should tackle this proble'm. No one in this industry can honestly say that he did not expect a gradual tightening up of the foreign market. iBric Johnston, president of the Motion Picture As.wciation, ex- pressed this fear a year ago, when he wrote: "In the year ahead we are certain to witness new and more widespread demands for barriers against the ti-ee flow of motion pictures from one country to. another.. The new barriers will take various forms,. One may ask for an in- crease in quota restrictions; another may ask certain films be banned because they are alien to the ideological views of the country they seek to enter; still a third proposed barrier may be in the form ot increased import duties for revenue purposes only^or, perhaps in anticipation of prote<!tlng a not-yet-bgrn, but prospective 'home industry'." The cost of living on rising and there was less money left for pleasure, aome of the easy , war cash vanished and a portion of the »^"P"'^*\ons gathered in the big centers for war-work pur- poses dispersed. The increasing numbers and uses of new «uwmobiles, the booming of outdoor sports and other forms wa^ "^'^ ""^^^ stronger competition for pictures. Tliere nrt ,^ i"'' ™ domestic boxoffice—still well above the eTr.«!f'"., .Y''^ somewhat of a shock to the optimists who somtu^, .^II" '""ated level of 1946 to last forever. For dPP ^^""^ reasonsKie boxoffice abroad started to Briti'a?'* , °^ ^'''s came the ihiposition of the 75% Bor r,o ?t^' the industry no choice but to cease ex- «»rung Its films to England. Taxes, Ireeaes, quotas und Bill Goeiz Bill Goelz Advocates as the Only Film Trend That " of Getting Back to Work Universal-International s veepee in charge of. production, William Goetz, thinks: The difficulty in setting down what you call "sage words on the Film Industry Outlook" is the danger of reading those words' six months after'publication and discovering that you were not as sstge as you thought you were; A prophet ■ sometimes finds himself without profit —a most unsagacious prospect for any executive in our business to contem- plate. However, at the risk of finding my- self out on a limbo I would Say that the chief trend in motioi. pidture pro- duction during the next 12 months will be to avoid trends.. Now, as never be-r fore in a number of years, subject inat- ter will be the most important adjunct of successful motion pictures. And that doesn't mean the same subject or the same story with different perform- ers each time. • We've reached the stage again in our business when the public generally is selecting its entertainment with dis- crimination. People aren't buying tickets just to "go to-a movie". They are going to certain motion pictures because the subject matter has interest for them. Apparently our business wiU either, have to come up with some new development as startling as sound, or refine its processes, both artistically and commercially, to the point where subject matter will count for the basic boxoffice value. Each picture will have to stand on its own and the picture that cannot stand will promptly fall flat on its face, j Boxoffice values, therefore, will depend upon each pro- duction as it is made. If individual motion pictures are attractive to the bulk-of our audience potential each picture will go well. The margin between a hit and a flop is widen- ing every day. As to any other personal conclusions, I am purposely elimi- nating such Topics A as foreign markets, investigations— and what-have-you. By the time this reaches you such items may belong to history or to Deeper Thinlcers than I. Of late my personal conclusions have been devoted to spread- ing the gospel that the success of our industry depends upon what might be caUed-''getting back to work." To me that's the- most important: item on the agendar-^getting Wk to work not Only physically but mentally. The leadership for a return to this method of business living should start at the 'top.: . ■ : Fears Come True . Jim Mulvey Can't Understand Why U.S. Govt. Doesn't Do More for Industry Abroad James A. Mulvey, presidenif of Samuel Goliwyn Produce lions, has this to say: Early in December, Spyros Skouras rose before an ex- hibitor audience in Chicago and chilled his listeners with a dollar-and-cents estimate. His company's foreign income during 1947 would amount to $20,000,000 he said. In 1948, he estimated, this total would, be cut down to an approximate ;)itt006,000 ■ level. What he was saying in effect was that ' 20th Century-Fox durihg the coming .year will have to do without 67% of its already restricted foreign earnings. This pessimistic outlook applies by no means only to 20th-Fox, All American producers and distributors Can aind do expect an approximate 6t% dieeline & the flow of sorely rtefeded revenue irdni abroad. in short, It is high time for everyone interested iti this industry to. «it up and take alarm. ' To those who have anxiously watched the slow hut re- lentless drive against the popular American motion picture Jiiu Holv«y Mr, Johnston's predictions have come true and, in fact, have been substantially exceeded. The very industry which,- ■ : for so many years has brought much-needed happiness and a idream of better things to come into the hearts of millions of men and women abrQad,-now is being lacked around like a football with not the slightest" consideration shown for its own needs. It is high time that the American producers and distributors realized what is at stake. ' . In 1946, Hollywood product abroad earned a hefty $125,- 000,000. Although the British sprang their 75% tax on us during 1947 and despite severe restriction.s on remittances from Australia and the Scandinavian countries, the 1947 U, S. film take from abroad still will come to- about $100;* - 000,000, an approximate 20%..drop from 1946. Partly this drop is due to a declme in British income which slid Scorn its normal- $68,000,000 'in 194$ to abouf $50,000,00a in 194H, And what about 1948?' This is the year of crisiSf Only now will the full effect of all the "quotas" and the "taxes" and the "freezes" really show up in the books. Unless an agreement is made with the British—and the outfook for a mutually satisfactory settlement is anything but cheerful at this moment—British income will drop sharply during the forthcoming year, Since the British earnings of the Ameri- .can companies normally represent about 50% of-all income from beyond the U. S. border, the loss of this revenue will, in most cases, almost equalize domestic profits from produc* . tion and distribution. Consequently, as the siluaWott looks now, all American producers and distributors must antieipatft . losses in 1948, and those companies with,theatre hpfaings will be depending upon the results of their theatre • opera- tions to bring forth an overall profitable result. It w'ould be folly on my part to claim ttr even to suggest that there is a definite solution. The vastness of the eco- nomic considerations involved alone makes-this impossible. But there is one thing left to do—fight. Only the American government with its infinite resources, its trained diplomats and experts "and the great econ'omic prestige that backs "up |ts every move,.can bring this struggle to at least a jjartiaily successful conclusion. ' : . , When, in time of war, the American Government turned to the motion picture industry for aid, that industry went all-out in unselfish cooperation. This time the shee is OB" the other foot. The need for energetic action is urgent. The time has come for our Government to reciprocate, and, by . so doing, help all American industry, as itr has been amply proven that in this era trade goes yrith. films not with boats. Even Whh Loss , of Foreign Market the Domestic B.O, Is an Enormous Potential-^cftdry Do're Schafy, executive veepee in charge of RKO Picture* production, obserues: ; - The American motion picture industry is the first in« dustry to feel a depression. This is because in recent years the industry built itself into a world industry as a result of a very lush market. With the imposition of the English tax and the collapse of a general world market, the industry found itself still manufacturing a pifpduct for' a world market, and limited only W .ia (l<imestic, , market. Because of this circumstahBe," a readjustment must take place. Til* motion picture business must reorganize' itself to its domestic market. In doin.^ ' that, the cost of films roust come down, and consequently t believe this Wilt re*i suit in less people un40 teriKi contract, stronger competitien for the aviailable market, and a real .drive to Cut dovsttt overhead and actual specific picture;- costs, - ... This program will present hardships tft many people In the industry until the readjustment is completed. I be* lieve it will result eventually in better quality pictures^ he- ^ cause as the public becomes more demanding and„les* casual in their choice of pictures, we will get better ;-B1b>< from everyone, and as we get better films, business •will Het\ better The domestic market has an enormous potential, and good;. pictures can make a lot of money in the domestic tn^rkei Pictures such as "Gone with the Wind," "Best Ywir» <•€ Our Lives," "Bells of St. Man-'s," and others have ttmg ajfe Dore Schary (Continued on next page)