Variety (Nov 1928)

Wednesday, November 14, 1928 VARIETY 11 W. L's WIRING Clauses in Agreement Vir- tually F o r b ids Inter- changeability Without Electric's Approval—Got- t^sman of Conn. Tells His Experience With W. E. and Independent Devices FIRST TIME DETAllLS standard forms of- installation contracts between Western Electric and exhibitors, which the company has successfully secreted from the press, and ainiazing details of in- timate-dealings with some of the leading independent talker heads, tend to clarify the talker atmos- phere by giving bewifdered exhib Itors the inside of the equipment end of sound. With Western Electric installa- tions in four of his six New England houses, where, in Connecticut, he'is the only first run indie bucking Fox, and hi? first wiring having been made oyer two years ago, Alfred Gottesman, head of theatrical en- terprises bearing his nannie, and of 11 other corpiorations, corh.es through with tlie firist inside facts and views jon the. big electrics. Whilo hie charges W. E. with be Ing partial to chains with producer effiliatipns to .the point where he decided to seek service in the in- dependent field, he states It was this investigation which satisfied him that the two W. E. and RCA tallcers will survive,, regardless of the, price they set. Of these two, Gottesman state.^ that RCA has the better tonality He bases this on interchangeability oyer W. E. equipment dating from the time the radio company- first etarted to produce. There has never been any question as to interchange ability between the two companies, he said. In substantiation of this he produced a letter from FBO's general sales manager, Lee Marcus, dated August 13 and reading In part: "In connection with the pur chase of six synchronized (Photophone) pictures' fOr use In your theatres in New Haven, Bridgeport and New London we guarantee that these pictures can run on any Movietone sound projector without changing any of tlie pquipment." The letter furtlier assures guarantee of legal protection and defrayment of such costs in the event of a challange on in terchangeability. Servicing the talkers, Gottesman ^-described, as : seconda^^^ ance only to the Equipment... Clfing his experience with W. E. equip- ment in his Bridgeport house of 1,600 seats, where he said the weeldy service charge is $43.75, and of his New Haven 2,200-seater where the. charge is $59:50, Gottesman says that W. E. has had a service nian on the job within the hour any time he ha3 called. As the, result, he states, he has not had to call off a per formancc during the two years he has had W. E. wiring. This, in his opinion,, is a move important con-. Bidoratioh for the exhib shopping airpund than ahy assurances on in- ter changoability;' ■ As an illustration, ho stated "I called, up Western Electric for another installation yesterday (Wed- nesday) and they said the best they could do would be in June. Fox can open a house this month and it will be wired" this month. The cir- --cu I ts-wil U.get--th c^hraai^ jiYery^UB^' I know because I am the only In- dependent exhibitor bucking Fox in Connecticut." . . •In-tlie case' of th^ Plymouth, a hou-fe of-abo.ut'.2,000 seats which will open on November 24, Gottesman said he has $12,500 worth of W. E. equip ment installed and yet can open only with hon-synchronoua, which does not accommodate dialog films That non-synchronous can be in stalled for only $3,00,0 is true in houses of about 500 seats, he said. In his case .he said,, the only differ- ence between thie two was an ad • ditidijal $5,000, making the aver age non-synchrpnous outfit around $12,000. This sum is allowed for wiring, which 'Western now ar ranges at a later time.. The price of a turnta,ble tor sound on film (Movietone and RCA) Is an ex- tra $2,000, he said, making wiring with all attachments range from $19,00.0 to $21,000. This arrangement Includes two forrns of con.tract. The first is for non-synchronous. Oct. 11 Gottes man secured this contract for his Plymouth.; By the terms of this agreement he made a paynient upon signing of $1,230 and another of $l,8i45 upon installation with the agreement to jpay v$l34.55 per \yeek for 104 weeks when the non-syn- chronous devise would be paid for Thei-eafter until the ioth year aftc^r the installation a service charge will be' levied. Another Contract Gattesman's second contract: for complete wiring, was signed Oct. 27 Under it WE sets the date "on or about" May 14, 1929. .So far he says he has;, succeded . in getting every- thing, but the turn table which thf electric says it. cannot deliver until February. By the second contract moneys paid! for the" non-syn- chronous revert to the wiring charges and^are included in the inl-~ tial payment, under it. This totals $4,950. The weekly payments thc;n. jump to $221,85;. per week,- credit being . allowed for those . already made on non-synchronous. The total of these payments, he explains, are only for isound on disk with an ex- tra $2,000 assessed for sound on film. Independents Ori the matter of indie devices Gottesman touched on Bristol phone, Phonofilm and Clnephone. On the first ho said that two years ago Bristol had visited his Cameo In Bridgeport, then Just wired with Western.. He said that he person ally knew .the inventor but that he considered his device impracticable for installing because it had never been tested oh its ability to inter- change; that one showing at Hag- erstowh meant 'ling, „ Then, that it would take too long to service it when once installed.' Again, that until It has been effectively tested an exhibitor faces the danger of not being able to book product from Westei-n and RCA licensees, re- gardless of the court matter which he cohsiders "talk." . Regarding the DeForest device, Gottesman said. that he had talked to M. A. Schlesingcr, head of phono- film under the new regime. "Schlesin.ger offered mo an im- mediate installation," he said. "Price," he told me, "meant nothing to him." All he wanted me to do to get his device was to sign a con tract agreeing to use all pictures his company might produce after it had made 1,000 installations. He couldn't tell me how many this would be or when he would start productlbhr "HS jnaTS^^^ changeability with other talkers and said he. would provide me with a turntable." This conversation with Schles inger occurred a month ago, he said. Only last week it was stated by a Schlesingcr -official- that -he could sign up several hundred exhibitors immediately but that all deals of thi.j kind were being hold up, ap pa'rently until nfter the DuForest action against Fox-Ciase set for trial in Now .York on Nov. 20. At .the s.'irne time Gottesman aald he - Interviewed Pat I'owers and that Powers-told him he. won)d, soli clnephohe for ' htilf the Western price, (about ' $7,000, Gottesman stated) and that the in.stalhitloh could be made within the. following month. W. E.'s 21 Clauses Contrary to what seems to bo the .g.enei;ai^imnressiQn^jam{mg..=i?xh^^^ tors and others who are not famil- iar the W B contract formulas have 21 -clau.sos. and. are practically I ldohtlca-1.'' While higVi'ly tcf.hni'cal, neither is as cumbersome as the or- dinary distributor contract with the exhibitor for old fa.shion silent film. 'Where the theatre owner de- cides to switch from non-synrhron ous to regular wiring an additional clause, termed 17-a with four pro- visions, is; Iniserted in the second (wiring contract). . According to Gottesman, Western iS: how requiring exhibits to take ncn-synchronous first. If for ho Other reason than ; for form but more apparently to stall tho wiring as long as possiljie in order to catch up with the mass of already un- filled orders for the complete works. Clauses. 2 and 17 are the highlight clauses- of both contract The first provision is .th© one which has caused the greatest discussion and uncertainty ^in the industry. Variety is not attempting to in- terpret it because of the, state of uricerta;inty. It presents it in West- ern Electric's own language as fol- lows: . "The exhibitor Agrees that it win use and employ the equip- ment only ;in the. theatre,, and that it will at all times during : the period of this license keep, maintain and operate the equip- ment in the manner from time to time prescribed by Products (Electrical Research Pi^oducts, Inc., W. E. subsidiary), and in no other manner. "The exhibitor recognizes the highly technical mechanism arid art involved in the inventions and cohstructiori of the equip- ment, and in tho making of sound record, (in any; form) for use therewith, and that the: prestige and business reputation of Products might be seriously affected by Imperfect operation of the-equipmfent or by its use with sound records which are not suited to it or which produce inferior results wlien used with the equipment,, and that use of said equipment otherwise than as lierein licensed may Involve infringement , of patent rights. Tlierefore, in order to secuire and insure the functioning of the equipment to the .satisfac- tion of the parties , hereto, the . exhibitor shall not,, without written consent -of .Products, move, alter, changie: or modify . the equipment, nor add anything . thereto, nOr take : anything therefrom; nor break the seal upon any part or collection .of parts which is or may be sealed by Products; nor operate, use or employ the equipment in any manner in conjunction with any soiand record not made under license from Product? for such . use,; unless such, sound record is of such character that the equipment will operate properly, reliably and efficiently to repro- ducP sound from such sound record with accuracy of quality and adequacy of volurne. 'Also, in order further to se- cure proper functioning of the equipment as aforesaid satis- factorily to the parties hereto, it is agreed that all additional and renewal parts and assembled parts for the equipment shall be obtained from Products. 'Nothing herein contained, however, shall be construed as prohibiting the exhibitor from taking all reasonable steps con- sistent with the general Intent hereof, either alone, or fogether with Products, to protect, cor- rect or repair the equipment in the event of an accident or a breakdown. "The exhibitor agrees that prior to the first public use In the theatre of each film and, or, sound record, it;will cause such films and, or, sound records to be run privately xipon the equip- ment for the purpose of ascer- taining that the eijulpment is In' satisfactory condition and ad- justment for the particular, film and, or, sound record, it will cause such films and, or, sound record. ':The exhibltbr . expressly, agrees that if at any time the efjulpmont fails to function sat-. Isfactorily, it will Immediately notify Products by registered mail and tolograph, and the ab- sence of suQh notification, shall be conclusive as satisfactory, functioning of the equipment" Clause 17 having a direct bearing on Clause 2, which is titled "Patent Protection" in both, contract -form.% roads: . ' . '.'Products agrees that BUbject to the provi.'iions hereof it will at its own expense defend any - :.fvncl^?i,H -n.ctlfjna and sults- whlch . may during the term herf^of be brought against the exhibitor for infringement of patents by rt-'tiHon of. the' use. by ^the o#)ilh- itor, for tiio purpose and in the "manner oontriniplated by this agroernent of apparatus and ofiulpmfnt furnished by Prod-' U' ts hf-rf^undfr, and will pay or .satl.sfy all jUf-K'ments and de- crees for profit, damagea and, or,. costs which may be finally awarded against exhibitor by the court of last resort In any such uction or suit On accofint of any such infrihgenieuts,.proT vidcd tliut the exhibitor shall give Products inunediate writ- ten lioticc of such action or suit, full information and all reason-, able co-^oporatioh in connocti.ort therewith and full opportunity to defend the samO,' and pro- vided further, that this agree- ment shall hot extend to any in- fringement or claim of infringe- ment arising from any use of said equipnient In combination with any apparatus or thing (not including films or records Of Products licensees) not fur- nished by Products, and that, the liability of Products on account of any such Infririgomont or claim of Infringement shall be limited to its agreements In this paragraph contained and shall in no case exceed.; the total amount paid hereunder by ex- hibitor to Products. "To the end that Products, may protect ittielf and the ex- hibitor froni claims for infringe- ment of patents,- it is agreed that Products may at any time substitute fOr any of the equlp- meiit or parts theerof which may have been furnished to tlic exhibitor. ' hereimdcr, other equipment or parts which. Prod- ucts shall after test' determine to be equally suitable. for per- forming the function required, sucli substitution . to be made without additional expense to the exhibitor and with the least possible Inconvenience to it or Interruption of its busiriess." ; : Other Clauses . Among the other clauscis are W. E. declarations that Its licohscs are non-as.slgnable but that an exhib- itor with more than one theatre Can have equipment renioyed to an- other of his houses, providing he pay entire costs of the change. Such a change also requires a; new con- tract.. The exhibitor also must agree to inspections of the equipment at any time, in addition to regular: periodic visitations by Western experts. Before in.stallation th© theatre owner must agree to remodel his theatre in accord with the; findings of Western engineers, if any charigcs to benefit acoustics are ' declared necessary. This; expense is also on his. shoulders. Another clause requires the . ex- hibitor to assupie responsibility rf all interruptions or injuries to eni ployees. which may be occa.sioned by the equiprnent, Should fire, through no fault of the exhibitor's damage the equipment or ruin .'t, then Electrical Research Products stipulates that it will repair or re- place the equipment free of charge. This is made on condition that the exhibitor be up on his payments and rebuild or continue operating the theatre. Gomplcte title to and ownership of all equipment arid its details will remain -vested In Electrical Rcaear.ph Products, but the exhibitor will puy all personal property taxes on the equipment. The licen.se for the equipment is good for 10 years. Nothing is men- tioned in the contract after that time.- - "The contract may be termi- nated by the exhibitor after ; the first two years, but he must give Six mon'th.s' notlco.-^t. Under paragraph 14, which is termed "Events of Default," formal conditions are . stated. The / follow- ing are given attention in view of Clauses'2 aiid 17; : "Upon..a breach by the exhib- itor of any of the covenants herein contained relative to the use or maintenance of the equipment, continued for more . than 14 days after notice there-. • of by registered mail frOm J.'rod- ■ uct.s-. ."IVpon the removal of the equipmf'nt or any. part thereof without the consent of Products from the location and position in which it is Installed I)y I'rod- ■ UCtH. ".Should the exhibitor d<;fa.Lrlt - under , any of the six pr.oVi.slona In Clause 14, then thf; entire balance of weekly payments for :^==^^_thc^flrst=tLW.o- j«!acs_J5halLJjiCiiluc=. and payablf ff)rthwith at the op- tion of I'rofl.iJotH, and whether i or not It terminate.^ this liefri.s»''\ or^ removes- the.-"jequ.lp'rn^nt as' . herelfjafler t)rov!(le'i; Tli"' IN oenso hereby grarit'-d . and all obligations Imposed upon I'ro'l- uctH by virtue of this agroemerit shall b^ ,«u.Mp''Mdf(l during th" continuance of any event of default.'' Good Year's Report By Canadian F-P . - Toronto, Nov. 13, An increase of 33 percent in operating profits is announced In the annual report of Famous Play- - ors Canadian Corporation. This covers the year ending Aug; 25, .19 2S;.';;,.- . ;i)evel6pinents during this period included capital reari-angeinents in which the ;first and second preferred issue.s and the old bond Issue were replaced by new gold debenture bonds;; Earnings of $1.44 per share wore Tcported after the; old stock was split four for one, ., \ Operating :profit was $1,507,008 as compared .with .$.1,191,878 in 1927 and $800,582 in 1926, an increase in the two yoa'rs Of almost 100 percent. ijhniid aascts are valued at $1,- 079,173 against liabilities Of $323,075 whilo total assets have iticreased $3,000,000 to over $20,000,000. - President Adolph Zukor and Vice President J. P. Blckeli In presenting the report point out that the cor- poration did not receive fuir benefit. fronV the nev^ financing during the year. If; they had done so profits would have been considerably high- er. Tho corporation how operates 146 Canadian picture arid vaudeville houses, ah advance of 20 over 1927.. Houses are under construction in. Toronto, Montreal, Ottawa, Quebec, Saskatoon and other growing' centers. "I'oronto and Ottawa houses, whlcij win be linked in a stage unit chain, will bo the largest in tlieir; respective cities. /The Toronto house to seat more than 4,000 will be the largest In all Canada. Eating at Home Los Angeles, Nov. 13.' : The reopening of Madame Hclene's restaurant, opposite Paramount studios^ is causing the executiyes of that studio worry. The eat shop was only open 10 days when notices aplTifared on the , studio bulletins for Inference, that It yvas necessary for all em'ployeies to patronize the; intramural restaur rant, which Paramount;established over a year, ago ait donslderable cost.. ;■ . One of the notices criticized thia eriipldyecs for reporting to work in the morning, 'then leave the studio for breakfast. The other informed the studio workers that a limit of 7Cc. had been placed on swindle checks for imcials, and these riiealB; must be obtained from the studio restaurant. Producers' Trailers Los Angeles, Nov. 13. National Screen Service, with a monopoly on the trailer buslnes.s. Is due for a cut in revenue as each producer begins to make hl» own aoimd trailers. Heretofore, ,the producer sub- mitted a number sales punch cut; Outs from the featui*e picture arid the National would make up the trailers, distributing them to the exchange. ■Now It is ricces.sary for the; pro- ducer to make hhs own trailers When the picture contains sound or dialog effects. U LETS OUT 20% studios Workington Sound Stages Only Until Feb. 1. . LoH Angeles, Nov. 13, Universal has laid off about 20 per cent of its ompl.oyoes. No .shoot- ing at Universal Cltt except on .sound stages and on now pieturo just started with Conrad Vc.idt, rJeorge Melf(jrd dlreiitlng. U will clean up oij. It.s lulkerH be- fore r-'csnrn^ng fuM man-powr; That will [)vo]>nh]y not be before Feb; 1. POMEROY EAST Los Angeles, Nov. 13. Koy Pomeroy, I^arampunt. .sound;. .e.ni:i(i"ei', eh route to'Ncw Vorh: to adeiid Crlt.-rlon opening of "Inter- r'Ti-noe," . Whilo in '-.i.-it It is un- derstood lie will Hi)fnd almut a ni'.nlli. ..at A.'Uo'rIa .'^(ndlo, in.stalUng iiiH JoeihoU.s of sound production..