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Boxoffice-January.17.1953

REPORT TO THE INDUSTRY

REPORT TO THE INDUSTRY THE DONATE AS YOU LEAVE' PLAN The Score After Four Months of Testing: 2 Successes, 2 Failures Pour months ago. L. A. Gillespie, operator of the Avalon Theatre in Oakanogan and the Orado Theatre in Oroville. both in the .state of Washington, got nationwide pubhcity by abolishing the admission scale and introducing a policy of "donate-as-you-leave." This, he did in protest against both local and federal admission taxes. Customers got in free, donated what they wanted on the way out. The pubhcity Gillespie obtained apparently spurred theatremen in at least three other cities to try .similar plans, and generated discussion of the "donation" policy among many exhibitors. Those who tried it apparently had obtained .some as.surance from Internal Revenue Bureau officials that the donations could not be taxed, as there have been no reports of objections by the Bureau. This week, BOXOFFICE asked its field staff to report on the success or failure of the plan in the Gillespie situations. St. Paul. Columbus and Memphis. Correspondents report a standoff decision. The policy continues in two situations and has been dropped in the others. In Oakanogan and Oroville, where it all started, "the operation was a success but the patient died." The plan is doing well in Memphis and is improving in Columbus but it has been dropped at the State Theatre in St. Paul. Tlie Washington state theatres are cio.sed. but Gillespie says that by introducing the plan he called nationwide attention to the distress situation of many theatres because of admissions taxes, and the pay-asyou-please system brought many new patrons into the theatres. Following are reports from situations where the plan was tried out: he said, "so it came out about even—and without the tax," he added. He had no trouble at all with the Internal Revenue Bureau, Gillespie said. He reported his collections as "donations" and stated that no tax was included. Yet, even though he was satisfied with the way the plan was working, Gillespie closed his two houses the first of the year, explaining, "I refuse to be milked any further by this exorbitant tax; 27 per cent of my gross is too much of a load to carry. I am now negotiating with my city government for a reduction and hope to reach a compromise so that I can reopen." Columbus, Ohio COLUMBUS—Average receipts under the free admission plan at the Little Theatre here, operated by H&S Theatres, are on the slight upgrade after two months under the plan, said Lee J. Hofheimer, co-owner of the North High Street neighborhood house, which seats 321 patrons. "Following several days of above average business at the start of the plan early in NommilhmMmMm^.m^^ tive to audiences, said Hofheimer. Memphis, Tenn. MEMPHIS—Average per patron donation is 50 cents. The former admission was 60 cents. Crowds are definitely larger than before the plan was put into operation. Expenditures for confections have increased over the old admission policy. Per patron expenditures for confections have increased, too. And there are more people in the theatre at every show than formerly. After three weeks operation on a "pay as you please" policy, these are the results of the Ritz Tlieatre at Memphis, owned and operated by David Flexer, head of Flexer Theatres, Inc., Mr. Flexer told BOXOFFICE. How long will this DAYL (Donate As You Leaved policy continue? "We do not know," said Flexer. Will it become permanent? "It was never intended to be a permanent policy," Flexer replied. "We wanted to do two things. We wanted Oakanogan, Wash. OAKANOGAN, WASH. — "The 'pay what you please plan' that I started four months ago," reports L. A. Gillespie, owner of two Wa.shington state theatres— the Avalon in Oakanogan and Orado in Oroville— "certainly produced the desired effect: that of calling national attention to the iniquitious amusement tax. "But it did more than that," says Gillespie. "It brought into my theatres a whole new audience, people who hadn't been to the movies in years. They saw my previews and would then return and pay the regular admission charges to see the new shows." Gillespie worked his "donation honor system." as he called it, one or two changes a week, generally in the middle of the period, for two to four days, depending on the quality of the bill. His schedule was Sunday and Monday: Tuesday. Wednesday and Thursday: and Friday and Saturday. The average donation for adults came to around 30 cents, with 7 cents each for the children. He found that the teenage group was the only one who took advantage of the situation. They averaged only 18 cents each. Confection sales boomed, doubling in many cases, Gillespie found. "What they didn't pay in admission, they paid for in refreshments," THE RITZ, MEMPHIS . vember," Hofheimer continues, "receipts showed a leveling off as the novelty lessened. But in the past several weeks, we've noticed a slight increase. We're losing less money under the donation plan than we did with the conventional admission system." The net average per person has hovered around 27 to 29 cents at the Little. Previous net was 33 cents per adult patron and 17 cents per child's ticket. The city's 3 per cent gro.ss receipts tax still is in force and applies to the money received in donations, Hofheimer pointed out. The Little has had no word from agents of the Internal Revenue Bureau. The Little is one of five conventional houses and one drive-in operated by H&S Theatres. Albert Sugarman is a partner with Hofheimer. . . 'Donate os You Leave' Pays Off Hofheimer said that about the only patrons who have not given voluntary donations have been teenagers who "do it for a gag." Hofheimer said that attendance is "way up" over the previous average and that the concession busine-ss has doubled. The donation policy will be continued as long as it proves attracto call the Ritz to the attention of a lot of people who are not attending movies. We have succeeded in doing that. Second, we wanted more people to see the type of pictures we are showing and we have succeeded there too." Joe Simon, Ritz manager, pointed out that the Ritz under the DAYL policy has become an art theatre and ha-s been showing art pictures. "Oiir attendance has been better than average since the new policy started." Simon said. "We believed that if more people would see these pictures they would like them. And they do. They tell us .so as they leave." Children have been no real problem, it was learned from employes of the theatre. Some do not donate as they leave but it is because they have spent their money for confections during the show. Operations have been profitable up to now. A terrific "teaser" publicity campaign preceded the Ritz policy. Newspaper advertise- 14 BOXOFFICE :: January 17, 1953

ments, cards on street cars, billboards, radio and television announcements asked: "What is DAYL?" There was much talk about "DAYL," lots of guesses. Then on the Sunday before Christmas day, Ritz announced in the new.spapers and on the radio the answer was "Donate As You Leave" would be the Ritz policy starting Christmas day with a new picture. A big banner across the front of the theatre reads: "Admission FREE. Donate As You Leave. Admission FREE." A sign on the Boxoffice says; "Welcome Admi.ssion Free. DAYL." There is no cashier in the boxoffice. She stands beside a goldfish bowl at the exit. A sign beside the bowl says; "We will gladly make change for you." That is all. Some see the show and leave without making a donation. That's O.K., too. Nothing is .said to them. The advertisements .say come and see the show free, pay what you think it was worth. The average couple drops in a $1 bill as they leave. Some family groups, four or five, drop in only $1. Other couples drop in more than $1 and other family groups $1.50 or $2. St. Paul, Minn. ST. PAUL. MINN.—The State Theatre here, located just outside the Loop, has abandoned its experiment of one free night a week when the boxoffice was closed and patrons, entering the house without buying a ticket, could donate what they felt the entertainment was worth if they chose after seeing the show gratis. Management said that, helped by a considerable amount of free publicity and wordof-mouth, the plan did well the first week, the Tuesday proceeds from voluntary contributions and increased sale of popcorn and candy leaving the theatre better off financially than it had been on the same nights during preceding months. However, there was a falling off both in attendance and in contributions and refreshment sales on the second Tuesday. And on the third Tuesday the "freewill offering" fell off still further and was not offset by popcorn and candy profits. Accordingly, the plan was abandoned after the third Tuesday. The plan also brought into the theatre many undesirables, including young rowdies. Tuesday and most of the other nights are still a "problem" for the theatre, with the operation difficult here the same as at many other outlying houses, but it feels it's better off charging the admission and operating conventionally on Tuesdays now than it would be if it retained the free stunt. New Pact to David Lipton NEW YORK—David Lipton, vice-president of Universal Kctures Corp. in charge of publicity, advertising and exploitation, has been given a new three-year contract running to Dec. 31, 1955, calling for a salary of $1,000 per week until Dec. 31, 1953, with an increase of $100 per week for the remaining two years of the pact. His living expenses will be paid when he is not working in California. A ROSY REPORT ON STATUS OF INDUSTRY Wall Street Journal Finds Something to Cheer About NEW YORK—The Wall Street Journal, which has published some brutally downbeat stories on the prospects of the film business in the last several years, this week finds the outlook definitely on the bright side as of January 1952. In a nationwide roundup of theatre business, the financial paper comes up with this type of upbeat information: National Theatres, with its circuit of more than 500 theatres, sagged about 4 per cent in 1953 as compared to 1951 business, but December receipts ran about 12 per cent over a year ago. United Paramount Theatres, biggest circuit in the country, ran 11 per cent above December 1951 business, and its dip for the entire year was about 2 per cent. In Texas, Raymond Willie, general manager of the Interstate circuit, reported 1952 ticket sales were on par with those in 1951, but that Christmas business was 15 per cent over a year ago. Excellent product now available is given as the reason for the unusually heavy holiday and post-holiday business by exhibitors interviewed in the Journal roundup. The reports of record business during the holiday season substantiated reports published in BOXOFFICE early this month. Managers of key houses in several cities said they felt television had either reached a saturation point or viewers were becoming bored with the programs. An unidentified Chicago exhibitor was quoted as saying that the weeding out of some of the weaker houses was leaving more business for the theatres remaining in business, and a Cleveland manager suggested that filmgoers are finding more cash for entertainment after paying oft heavy debt loads for cars, refrigerators and other heavy appliances they took on after the .start of the Korean war. The industry will be helped by the anticipated admissions tax repeal, the introduction of three-dimensional pictures, use of 17 Neighborhoods Join In 2 for 1 Ticket Plan MINNEAPOLIS—In a move to boost business, 17 neighborhood and suburban theatres have started a co-op two-for-one admi.ssion plan. The theatres are selling "privilege books" at $2, each containing 68 tickets. One of these tickets, when accompanied by a paid admission, admits two. Only independent exhibitors are in on the plan, and they are merchandising the sale through display advertising and by opening a Loop office where they can be purchased. The Minnesota Amusement Co., UPT affiliate, is "studying" the plan before deciding whether to make a similar offer to patrons. improved larger screens and widespread renovation of theatres, according to the Journal. The roundup article, however, pointed to the steady decline which theatre receipts had shown since the top year of 1946. National Theatres was down 40 per cent from the peak, and claimed that nationally receipts were down 20 per cent under the 1947 take. WB Sells 37 Houses; Must Divest 24 More NEW YORK—The sale of 37 theatres, of which 31 were owned in fee, during the fi.scal year ended Aug. 31, 1952, is reported in the annual report of Warner Bros. This total included nine theatres required to be divested under the consent decree. One additional theatre, owned in fee and subject to divestiture, was sublet. Leases, on three, one of which was a divestiture theatre, were canceled, and the lease on one expired. Since August 31, three theatres have been sold, one of which had to be divested. Leases on two were canceled, the lease on one expired and one subject to divestiture was sublet. Contracts have been signed for the sale of three theatres, one of them a divestiture theatre, and another is a theatre mentioned above as having been leased. Since the con.sent decree was entered, 30 theatres subject to divestiture, including those listed here, have been disposed of by sale, sublease and cancellation or expiration of leases. The Department of Justice has extended to July 4 the date for the divestiture of the remaining 24 theatres. The decree also provided that a maximum of 27 other theatres might have to be divested. Eleven of them have been disposed of and no theatre is at present affected by the contingencies. The decree provided that no person affiliated with a theatre circuit can be elected an officer or director of the new theatre company unless approved by the attorney general and the court. That provision applies to S. H. Fabian, president, and Samuel Rosen, treasurer, of Fabian Enterprises, which is buying the Warner houses. The attorney general, as a condition to approving the election of Fabian and Rosen, has required divestiture of theatres in three cities where no first run theatres are operated by others than the company and Fabian Enterprises. Negotiations looking toward their divestiture are going on, and when closed, the approval of Fabian and Rosen as officers and directors of the new company is expected to be embodied in a court order, and the stockholders will be asked to approve the company's consent to the order. The decree requires that the distributionproduction and theatre companies must be operating independently of each other by April 4 and must not have any common officers, directors, agents or employes. The annual report also noted that Warner Bros, installed large-screen television systems in eight more theatres during the year, increasing the total to 13. BOXOFnCE :: January 17, 1953 15