Boxoffice-Febuary.28.1953

"
. . . . be
"
Myers Opens Attack
On Prereleasing
(Continued from page 10)
specific clearance will be granted.'
"This," contended Myers, "assumes that
waiting time between different runs of a picture
in any area does not constitute clearance
unless the distributor says it is so. This is a
very convenient theory for those who want
to perpetuate the theatre monopoly that the
courts have said should be dissolved. Under
the decree clearance between theatres in substantial
competition 'shall not be in excess
of what is reasonably necessary to protect the
licensee in the run granted' and no clearance
may be granted between theatres not in substantial
competition. By the prerelease plan,
pictures are withheld from general release
Just as long as the distributors see fit. Thus
the clearance over the theatre playing first
run on general release, and over the subsequent
runs, not only is unreasonable but indeterminate."
CITES 'MOST FLAGRANT' ASPECT
Myers said, "Perhaps the most flagrant
aspect" of this is that the clearance granted
to theatres playing on prerelease over the
theatres playing on general release is not
measured for the protection of the licensee
"but solely in the interest and at the whim
of the distributors."
And this approach to the clearance problem
is not what the courts intended, he declared.
The courts actually rejected a plea
by the majors that in granting clearance they
be permitted "to take into consideration what
is reasonable for a fair return to the licensor."
Instead the court said : "In the setting of this
case, the only measure of reasonableness of a
clearance under the Sherman act standards is
the special needs of the licensee for the competitive
advantage It affords."
"Actually," Myers declared, "the companies
are extending clearance to noncompetitive
theatres which never were subjected to clearance
before."
'WERE ^fEVER IN COMPETITION'
"We all know of situations where theatres
in towns of less than 75,000 have played day
and date with the first runs in nearby larger
cities presumably because they were not
deemed to be in substantial competition. Now
they must wait until the city has its prerelease
run and the distributor sees fit to put the
picture in general release."
"All this is being done," Myers said, in particularly
strong language, "not in unwitting
violation of the decree but in Icnowing, wilful
and deliberate contempt of the court."
"A purpose to evade the decree is the only
PKJSsible explanation of Columbia's declaration
that 'no specific cleai'ance will be
granted.' The same purpose is to be found in
the provision that has just been called to our
attention in Paramount's printed contract
form. These printed forms are not subject
to negotiation. They are part of a form and
in order to get pictures you must sign on the
dotted line. Here is the new provision:
" 'Distributor shaU have the right to
exhibit or grant a license to exhibit any of
said motion pictures as a "roadshow,"
"tryout," or "preview" or a special midnight
exhibition at any time prior to the
exhibition thereof hereunder. Any such
exhibition shall not be deemed a run of
said motion picture, nor shall the run.
Loews Not Selling to TV,
Stockholders Are Told
NEW YORK—Loew's, Inc., has no present
plans to sell pictures to television, stockholders
were informed at the annual meeting of
the corporation Thursday (26). Short subjects
have not been made for TV because this
production has proved unprofitable for other
companies. Besides, said Loew's executives
at the meeting, the company favors the more
than 14,000 motion picture theatres that are
its customers.
All directors were re-elected at the meeting,
but not until after executive heard considerable
criticism of the company's management,
earnings and overhead costs. What the dissident
faction wanted to know was how the
management could increase dividends. Told
that salaries exceeding $1,000 a week had been
reduced materially, the group was not particularly
satisfied..
Charles C. Moskowitz, vice-president and
treasurer, told the stockholders that earnings
during the first 28 weeks of the fiscal year
amounted to 40 cents a share compared to six
cents a share in the first 12 weeks. He also
pointed out that Loew's foreign revenue is
estimated at 38 per cent of the company's
earnings, which is higher than that of any
other company.
The dissident group asked for more "outside"
representation on the board, but did
not make any nominations from the floor.
Then the group criticized directors for not
holding more of the stock. But, management
spokesmen pointed out, there had been no
decreases in holdings and Moskowitz had
boosted his holdings during the year from
availability or clearance provided herein
governed thereby or computed
thereon.'
Myers said that while this may seem merely
to protect the ditsributor, if it sold a picture
for exhibition on general availability and later
decided to make It a prerelease or roadshow,
"the real purpose Is to forestall any exhibitor
who licenses a picture on general release, subsequent
to its prerelease exhibition, from resorting
to arbitration, or the courts, or the
Department of Justice for the violation Inherent
in the prerelease practice."
"There you are ... a deliberate attempt
to make the exhibitor agree in advance to
condone and, in effect, to become parties to
flagrant violations of the decree and of the
law as a condition to the right to license pictures
in interstate commerce and trade."
In his address, Myers also attacked competitive
bidding as practiced by the distributors.
He also contended that the prerelease method
falls short of complying with the requirement
that "each picture be so offered and taken
theatre by theatre solely on its merits and
without discrimination."
In the first place, he contended, all theatres
in all cities and towns other than the key
cities expressly included are excluded from
consideration.
"In the second place, independent theatres
in the key cities desiring to play the pictures
prerelease, either exclusively or day and date
with the entrenched circuit theatres, face the
3,000 to a total of 4,500 shares.
Theatre concession revenue for the past
year was estimated at $970,000, compared with
$952,000 the previous year. Forty-five per
cent of this came from sales of popcorn and
25 per cent each from the sales of candy and
ice cream.
A breakdown of sales and profits of the theatre
branch of the company was put at 43
per cent, compared with 46 per cent the
previous year. Eleven theatres, it was reported,
were sold under divorcement provisions
for a loss of $134,824. Thirteen are still
to be divested—with the divorcement deadline
set at Feb. 6, 1954.
Advertising costs in 1952 were about $6,000,-
000, stockholders were told, a higher than
usual figure because of "Quo Vadls." They
are expected to be lower this year, except for
possible heavy advertising of the picture
abroad.
Moskowitz said the company had aided in
the technical development of Cinemascope
and had high hopes for it, as to what financial
arrangements had been made with 20th Century-Fox
to use it, he said he would tell the
stockholders privately but not in public.
All directors were re-elected. They are
George A. BrowneU, Leopold Friedman,
P. Joseph HoUeran, Eugene W. Leake,
Charles C. Moskowitz, William A. Parker,
William F. Rodgers, J. Robert Rubin, Nicholas
M. Schenck, Joseph R. Vogel and Henry
Rogers Winthrop. Each received more than
4,000,000 votes. The number of shares voted
was 4,056,000 out of 5,142,615 outstanding.
hopeless obstacle of the latters long purse.'
"Finally, and most important, competitive
bidding can be and many believe that it is
made a cloak for perpetuating in secrecy and
with an outward show of fairness the same
favoritism toward affiliated theatres and the
same discrimination against independent theatres
that led the court to impose the antidiscrimination
provision."
There is no way, he charged, in which bids
can be accurately compared, so the distributors
"are free to exercise an arbitrary choice."
The distributors, by refusing to disclose the
bids to exhibitors entering into the competition,
deny the exhibitors the opportunity to
protest.
"If anyone in this room can point out to me
wherein the prerelease practice conforms to
this provision of the decree, or any of the
others I have noted, I wish they would do so.
I do not say this facetiously, because it is a
very grave matter. No industry branch can
benefit indefinitely from unlawful acts and
in the end of all branches are liable to be
badly hurt."
TV Set Output for Year High
WASHINGTON—Television industry forecasts
show a strong consumer demand for
receivers this year, with production levels set
at 6,500,000 sets, the industry told the National
Production Authority on Thursday (18).
But NPA officials were skeptical about supplies
of some scarce metals needed for TV sets.
BOXOFFICE :: February 28, 1953 13