Boxoffice-March.26.1949

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207 H -FOX CALLS FOR AN END
TO DOG-EAT-DOG FILM SALES
New Rental Formula Asked
By Company in Series of
Exhibitor Conferences
By SUMNER SMITH
NEW YORK—A new rental formula that
will eliminate the "dog-eat-dog" method of
trading is being sought by Al Lichtman,
newly named vice-president of 20th Century-Fox,
who, Spyros P. Skouras, president,
said March 21 will act as his chief adviser.
For the present Lichtman will concentrate
all his efforts on distribution
problems.
With Andy W. Smith, recently named
vice-president and 20th-Fox general sales
manager, and Sam Shain, director of exhibitor
and public relations for distribution,
Lichtman left New York March 22 on a national
tour of exchange areas to meet exhibitor
groups Boston was the first stop.
POINTS TO BIG PROFITS
To point up the need for a new formula,
Lichtman said that while film companies
have had to struggle to break even, exhibitors
grossed $400,000,000 in 1948 and netted better
than $200,000,000. He saw danger to the entire
industry in a situation where there is an
"unfair division somewhere along the line."
Commenting on independent producers,
Lichtman said he had heard that only one
is still active in Hollywood of the 27 operating
there last year, because of credit restrictions
imposed by banks.
Lichtman agreed with Smith that they do
not have any "magic" formula, but through
conversations with exhibitors will try to arrive
at an arrangement that will mean more
income for the company. One possible method
may be adoption of a sliding scale of percentages
which was tried out in 1936 and
which some distributors and exhibitors still
use, though not to the extent "hoped for."
He expressed regret that the method is not
in universal use and that in too many places
the exhibitors prefer to trade, "as they have
been doing since the inception of the industry."
He told of successfully launching the
plan with "Gone With the Wind" and said
that it resulted in both exhibitors and distributors
making money, but that there have
been some instances where exhibitors could
have paid more for their films.
ON A PRO RATA COST
A second possibility, Lichtman said, is apportionment
of a pro rata cost to each theatre.
He felt it could be worked out. A third
possibility he called revolutionary. Admission
tickets would be made the basis for rentals.
If a film was thought to be worth 25
cents a seat, or even 50 cents, to a theatre,
the exhibitor would be charged accordingly,
and, if necessary, the exhibitor would increase
his admission prices. This would be in line
with ordinary merchandising where a store
pays a fixed amount for an article and adds
a sum to arrive at a sales price that will supply
a profit. Producers and distributors
gamble in making and handling films, he said,
and the exhibitor must take some risks him-
Here are four 20th Century-Fox toppers who attended home office meetings this
week: Left to right are A. W. Smith jr., rice-president and general sales manager;
Al Lichtman, vice-president; Spyros Skouras, president, and Charles Einfeld, vicepresident
in charge of advertising, publicity and exploitation.
self. He pointed out that, of course, the
company can't fix admissions.
While he was with United Artists, Lichtman
said, Publix Theatres guaranteed the
company a split dollar for dollar. The old
First National setup, with exhibitors as owners
of the company, worked for a long time,
he added.
'For the good of the industry," Lichtman
said, "the theatre must come ahead of production
and the huge profits that exhibitors
have been making are all to the good but
New York ITO Blasts
20th-Fox Proposal
New York—The New York Independent
Theatre Owners Ass'n Thursday
(24), passed a resolution sharply criticizing
the series of regional meetings
started Wednesday in Boston and continued
in New Haven Thursday by Al
Lichtman, Andy W. Smith jr. and
Charles Einfeld, 20th-Fox vice-presidents,
in an effort to convince exhibitors higher
rentals are necessary.
Harry Brandt, ITOA president, said:
"This action will serve to destroy all the
goodwill that Spyros Skouras has endeavored
to build up since his ascendancy
to the presidency of the company. Lichtman
sold Skouras a bill of goods here,
but he will never be able to sell it to the
grassroots exhibitors."
The resolution used these words, "This
membership of independent exhibitors
condemns the unconscionable, arbitrary
and unfair pricing of film on the part of
20th Century-Fox."
The resolution also invited Skouras to
attend an ITOA 1 for open discussion
of "their unilateral practices," and
asked that the company present "actual
fact and figure" to prove "that unfair
and one-sided pricing is necessary to prevent
the producing and distributing
branches of 20th-Fox from taking a
loss."
film costs now are so terrific that it seems
that our returns from the public are too light.
There is danger to exhibitors in the situation,
which could endanger the source of supply
of good pictures."
Charles Einfeld, vice-president in charge
of advertising, publicity and exploitation, interposed
the statement that production costs
are up 200 per cent, but that they are still
not as much out of line as other manufacturing
costs.
Lichtman, who spent 11 years at the MGM
studio, termed production expenditures not
extravagant but "terrifically economical." He
pointed out that competition for stories and
promising talent necessarily drives costs up,
said that labor costs have "skyrocketed,"
found film production nowadays an "exact
science" and praised producing groups in
Hollywood as among the hardest workers in
any industry.
Smith said he wanted to make it clear that
20th-Fox does not intend to take a complaining
attitude with exhibitors and has no intention
whatever of resorting to threats. A
limited number of accounts on a sliding scale
basis are now being sold, he said, and he
said he felt that while the sliding scale protected
the theatre owner, it doesn't protect
the producer and distributor to the same extent.
He looked forward to a better method
of distribution under which all could live
happily, and said that if a new formula could
be found, Lichtman was the man to find it.
FOR INDUSTRY RELATIONS
Lichtman became mildly critical of the
present-day film salesman, saying that where
he was once an "evangelist" who aroused an
exhibitor's enthusiasm, now he simply talks
rentals. He thought the old spirit could be
reinstilled. Smith told of the old days when
he took stills of a film to a town, had the
firebell rung to draw a crowd and displayed
the stills. Lichtman commented that "nothing
carries itself. There is always need for
effort."
Both Lichtman and Smith said a secondary
purpose of their tour will be to aid the industry's
public relations. Lichtman found
them "very poor." He said too many persons
take great delight in panning pictures. Another
objective will be to find ways of stimulating
theatre attendance. Einfeld will aid.
BOXOFFICE :: March 26, 1949