With the reorganization of First National Exhibitors circuit into Associated First National Pictures, Incorporated, there came into existence the sub-franchise. This sub-franchise is a contract between the distributor and the individual theater owner, which obligates the distributor to supply a certain amount of pictures to the exhibitor each year and the exhibitor to pay for and show these pictures. As a one-sided document, this sub-franchise is in a class by itself. The theater owner must pay for every picture delivered to him by the company whether he wishes to run it or not, or whether he has open dates or not; he must pay for each picture 14 days in advance of the exhibition date; the exhibition value of each picture is fixed by the distributor company, and the rate of payment of each exhibitor is in accordance with a percentage schedule fixed by the distributor company. The exhibitor is bound to run all pictures furnished by the distributor company on the dates set by said company and to run them for the number of days fixed by the distributor. There is a provision whereby the exhibitor may allow the distributor to exhibit surplus pictures in rival theaters in his territory, but he must pay for the picture himself and take the chance of the distributor making a deal for its exhibition. Furthermore, the exhibitor is bound by his contract to run all pictures without alteration, to use only the advertising furnished him by the company and for which he is compelled to pay.
In other words, the exhibitor by accepting one of these sub-franchises signs away his independence as a theater owner.
His only control over his theater is to count the receipts, pay his rent and hire the employes. He has no choice in regard to what attractions he may show. If the distributing company sends him such a picture as Passion, a German-made film depicting the licentious life at one of the early French courts, he must show it no matter if it offend every patron of his theater.
On the other hand, the theater owner's patrons no longer have any control over him. The force of public opinion, the strangest and only weapon of the community, may beat itself in vain against the iron-clad contract with which the theater owner is bound. He can only shrug his shoulders and say, "I can't help it neighbors; I am forced to run these pictures whether I desire or not."
To continue in business the exhibitor must keep his theater open and must be assured of a steady supply of pictures. His overhead expense is a fixed quantity and except in very small communities, he cannot afford to close up even for a day or two. Especially is this true where he has competition.
Therefore, when a franchise salesman appears on the scene and informs him that he can have a guarantee of say 36 pictures a year and shows him a list of stars and big producing companies under contract, he is apt to jump at the opportunity of procuring at least a portion of his bookings. Many of the exhibitors scarcely read the agreement, relying on the glib statements of the salesman.
This franchise system is not essentially vicious in its workings if the exhibitor is given a choice as to accepting and running certain pictures. It is not so much the cost of the service to which the exhibitor makes objection, because he can regard it as a sort of insurance to keep his theater open. It is the fact that he is compelled to run the picture whether he wishes to or not. He is thus not only debarred from an opportunity for extra profit, but he runs the risk of offending his patrons by running pictures that may be distasteful to the community in which his theater is located. While the distributing companies undoubtedly endeavor to obtain pictures of wide appeal they inevitably do get some that would meet with approval in a mining town and be offensive to a refined community.
The First National representative assured the writer that his organization made no attempt to dictate to the producing companies it has under contract as to the theme or method of treatment of their photodramas. Whether the exhibitor had an option to run a picture or not this arrangement would be ideal, because no producing company could long continue in business if its pictures were put on the shelf and not shown, even if it were paid the agreed rentals. But this club of the exhibitor, and incidentally, the general public, is denied him when he is compelled to run a picture against his wishes, as he is under these First National franchises. It is the principle of the sub-franchise that is wrong, the principle which compels exhibitors to show all the distributor's product regardless of the local conditions. It is this principle which by depriving public opinion of its weapon against the local theater owner, gives rise to the censorship and so-called "blue law" agitation about which the leaders of the motion picture industry are so bitterly complaining.
The Famous Players-Lasky Corporation has spent millions in the national magazines and big local newspapers to popularize its trade name of Paramount. This cost has been added to the price of its pictures and thence to its rentals, so that the motion picture theater owners are really paying for the weapon that is used to induce them to contract for the product of Famous Players.
But there are other methods. Take the case of an independent theater owner who owns the only theater in a good-sized town. Paramount makes an especially fine picture, for Paramount does make some splendid pictures, as well as a lot which are "not so good."
The exhibitor, however, concludes that he will make an effort to obtain this particular film. He goes into the exchange and makes known his wishes. The salesman turns to his books.
"Ho, Hum," he yawns. "Let us see, Mr. Exhibitor, you have not been buying many pictures of us lately. Now, we will be glad to sell you this picture, but you understand it is one of a series of eight. To get it you must buy the whole series, or if you don't wish to run the other seven pictures in the series you can just pay for them and run this one alone or as many of them as you wish."
In other words, to obtain one good picture with which he can make some money, the theater owner must also buy seven stickers on which he probably will lose or at best break even.
Supposing that the exhibitor decides he doesn't wish to do business on such terms and he quits buying Paramount pictures altogether. Then what happens?
Let us cite the case of Mr. Uran, an exhibitor in Mattoon, Illinois.
Uran was a user of Paramount service. When his contract expired he was asked to renew. But, he says, the new contract showed an increase of 75 per cent over the old one. For such pictures as Heliotrope and Forbidden Fruit he was asked a rental of $400 and $550. These prices were confiscatory, Uran asserts, as such rentals would take all his receipts.
When he refused to sign a new contract an attempt was made by Gerald Acker, manager for Paramount in St. Louis, to buy his theater. Uran refused to sell. Then a campaign of advertising was begun in the Mattoon newspapers. The following is a sample of one of these advertisements:
Mattoon is a good town BUT-These advertisements were not specially devised for Mattoon. They were part of a set of seven form advertisements prepared by the Famous Players advertising staff for use all over the United States. This form left blank space, as indicated, to be filled with local data. You will note how insidiously they are worded so as to stimulate local pride, and put the proprietor of the local theater "in bad" with his patrons by insinuating that he was too cheap to buy good pictures for his audiences.Yes that is the way visitors talk about Mattoon. It is a good town but-
Why the but? Business is good. The people who live here are all right, town is well laid out; good roads.
(Insert copy concerning local improvements and so on.)
Surely it is a good town BUT-
Well, how is it that it is about the only town left in the state where you can't see Paramount pictures?
You can see Paramount pictures in New York, Chicago, Frisco (insert three names of towns near by where Paramount pictures are shown). In all these places you see Paramount pictures, see them frequently and regularly.
Why not in Mattoon?
Lack of appreciation? Hardly that.
You know what Paramount means in motion pictures, the seal of quality and the standard of achievement. You've heard about Paramount pictures; you've seen Paramount pictures in some other town or city maybe; you've certainly read about them in the "Saturday Evening Post" and the "Ladies' Home Journal," "the Literary Digest" and the other national magazines.
And still no Paramount pictures in Mattoon.
Is it your theater manager who is at fault?
Maybe he doesn't quite get your real viewpoint in the matter of better motion pictures.
Maybe you haven't made it clear how you feel about it.
But there is no reason to prevent Mattoon having Paramount pictures if Mattoon really wants to see pictures as good as they give in New York, Chicago, Frisco (insert names of three towns near by where Paramount pictures are shown.)
Suppose you talk to your theater manager about it?
For example, Mattoon can't see these Paramount pictures:
(Exchange will list here some of the first Paramount pictures that will be shown in event of sale.)"
There Must Be a Reason Why Paramount Pictures Are Not Being Shown in Mattoon.The advertisement concludes with a list of big feature pictures, which it says, "are not Paramount pictures" and are coming to Mattoon.Is it because the greatest of directors and the biggest stars have quit Paramount?
Because D.W. Griffith has quit Paramount?
Because Marshall Neilan has quit Paramount?
Because Thomas Ince has quit Paramount?
Bemuse Mack Sennett has quit Paramount?
Because Charles Ray has quit Paramount?
Because Marguerite Clark has quit Paramount?
Because Mary Pickford has quit Paramount?
Because Pauline Frederick has quit Paramount?
Because Douglas Fairbanks has quit Paramount?
Because all these people are making wonderful pictures for other companies and we are running them?
Because inferior foreign-made pictures are being imported by Paramount and foisted on the public under the Paramount banner?
Because the president of Paramount is reported to have bought control of nearly 200 German-made films?
Because the exhibitors' organization has condemned Paramount for unfair and dishonorable practices?
The people of Mattoon knew and had confidence in Uran. They did not know the people behind Paramount pictures. So the tactics failed in this town. But it is of record that they have not failed in other towns, where the exhibitor was driven through threats and intimidation either to sell out his theater or to play Paramount pictures on the Famous Players-Lasky Corporation's own terms.
In some instances where it was absolutely necessary Famous Players has purchased theaters outright through its agents. But the usual method of procedure is to offer to purchase a half interest. The corporation offers a good price for this half interest, one that interests the theater owner at once. But when the method of payment is mentioned, then comes the joker. The first payment is to be made three months after the deal is consummated, the second six months and the third a year later. In other words, it is going to buy a half interest out of the receipts of the house. The original owner might as well make the corporation a present of it in the first place.
The favorite plan, however, is to buy the lease from under the local exhibitor. It is always easy for a rich and powerful corporation to outbid a small theater owner, who maybe making but a bare living from his house.
There have been half a dozen or more specific instances of this being done, and two will be cited, the two which Adolph Zukor has admitted and in which, after pressure had been brought to bear through the indignation of the Motion Picture Theater Owners of America, he made a belated restitution.
The first case was that of a widow, Mrs. Pauline K. Dodge, of the little town of Morrisville, Vermont The story can be told in no better words than it was related by Sydney Cohen, president of the Motion Picture Theater Owners of America, at the convention held by that body at Minneapolis last June:
"Mrs. Dodge owned a 250-seat house and her profits were barely sufficient for her to eke out a livelihood for herself and little boy. Her husband had died suddenly and left this little theater to her as her sole inheritance and means of support. Now, it seems that a Famous Players-Lasky Corporation subsidiary, headed by Alfred S. Black, who was acquiring theaters in New England in partnership with Famous Players-Lasky, coveted this little theater. No claim was ever made by him or his principals that Famous Players pictures could not get adequate representation in Morrisville."There was a hearing on the facts involved in this case on September 15, 1920, before a committee of your body especially appointed to inquire into it. Senator James J. Walker acted as counsel for the organization. Mr. Black was repeatedly urged to attend the hearing and rebut any evidence that might be presented. The influence of Mr. Zukor had been sought to have Mr. Black appear. Nothing availed, however; Mr. Black chose to stay away.
"The evidence brought out that Mr. Black during the lifetime of Mr. Dodge, had negotiated with him to purchase his lease and equipment and later secured an option from the owner of the property on which the little theater, the Bijou, was situated. Armed with this option, he went back to Dodge and offered the alternative of taking $200 or losing the equipment of the theater. How had he secured this option?
"Black, according to the evidence, told the owner of the property, that, unless he gave him the option and eventually control of the property, he would build a competitive theater in Morrisville, although there were only 800 people in the town. He made his intimate relationship with the Famous Players-Lasky Corporation very plain to the owner, telling him he would be unable to stand the competition of the foremost producers of this country, and the theater on his property would have to be converted into a garage. This hearing, it must be remembered, was attended by the personal representative of Adolph Zukor, president of the Famous Players-Lasky Corporation. As the evidence I have just set before you was developed in the course of the hearing, Henry Salsbury, the personal representative of Mr. Zukor, proclaimed his indignation. He said that neither he nor Mr. Zukor knew that such conditions had been permitted to exist. He said there would be a house-cleaning and carbolic acid used, if necessary.
"When Mrs. Dodge applied to this organization for advice and assistance, it seemed to us under the mandate you give us at the national convention in Cleveland last year, it was our plain duty to protect to the best of our ability the interests of this widow."If our slogan, 'An injury to one is the concern of all,' means what it says, Mrs. Pauline K. Dodge, an independent exhibitor whose existence was threatened by unscrupulous and coercive methods, was entitled to our fullest protection and we could do no other than place the entire strength of our organization back of her cause, which was, of course, honest and meritorious. We therefore got into communication with Mr. Zukor, both by letter and personally, advised him in writing of the facts of the case, and reminded him on a number of occasions of his solemn pledge made to our committee and his promise of redress. He told us that this little theater would be returned to Mrs. Dodge.
"The time limit for the fulfillment of Mr. Zukor's promises expired with the lease of Mrs. Dodge on her theater, January 11, 1921. We waited in vain that day for any word and then the following telegram was sent to Mr. Zukor:
"'Mr. Adolph Zukor,
"'President, Famous Players-Lasky Corporation,
"'485 Fifth Avenue, New York, N.Y.
"'Dear Sir: This is the 11th day of January, 1921, the last day of the present lease of Mrs. Pauline K. Dodge on the Bijou theater, Morrisville, Vermont, and we are just advised by wire from Mrs. Dodge that she has received no word from you, your company nor Mr. Black relative to turning back to the Bijou Theater by way of lease for a term of years or by sale at the price paid for same by your associate, as per your pledge and agreement made to our organization. May we not have some written expression from you in view of your several declarations in regard to this matter?
"'Signed
"'Motion Picture Theater Owners of America,
"'1482 Broadway, New York, N.Y.'
"The lease expired and Mrs. Dodge's occupation was gone. What were we to do?
"It was in the depth of a New England winter. The case was urgent. Red tape was out of the question. We therefore decided to help our fellow member.The check for Mrs. Dodge for $5,016 and one for $3,500 for Mr. Schwartz were accepted finally by the convention after heated discussion, in which Zukor was unsparingly condemned. It might be noted also that although Zukor had disclaimed any responsibility, for himself and the organization of which he is head, in the matter and had told the committee that he would personally make up the loss out of his own pocket, the checks when received were Famous Players-Lasky Corporation checks."We immediately obtained for her the use of the town hall in Morrisville, and to make sure she would have a drawing card for her opening day, we went to D.W. Griffith, set the facts before him, and modestly asked him to give us the use of Way Down East for the opening day in the town hall at Morrisville.
"It seems Mr. Griffith understood our position, for not only did he agree to give Mrs. Dodge Way Down East, in this out-of-the-way New England theater, but he also went to the trouble of sending his best publicity man to see that it was properly advertised.
"He also sent a special operator and a special musical score, which was played by an expert pianist on Mr. Griffith's staff. We lost no time in notifying every citizen in Morrisville of all the facts in the case and urged them to do their bit by patronizing the show in the town hall. We kept Mrs. Dodge's theater going and are still keeping it going at this very hour. I am glad that the Motion Picture Theater Owners of America have so promptly and nobly stood the test in a crucial hour and have shown the world that they will always try to protect their own under any circumstance.
"But ladies and gentlemen, this is not the end of the story. A miracle happened, last Tuesday, June 21, 1921, after we had begun to reconcile ourselves to the Dodge situation. Mr. Adolph Zukor, who had so persistently ignored all our appeals and protests for the past 12 months, sought an audience with the exhibitors' organization in New York City. I do not believe he came in any penitent mood, because even to the last hour he disclaimed all responsibility for the fate of Mrs. Dodge's theater. That night, however, brought a great change. The next morning, Wednesday, Mr. Zukor sent Mr. Salsbury, his personal representative, to our headquarters prepared to make such restitution to Mrs. Dodge as the circumstances warranted.
"A check for the amount to cover her losses and to reimburse ourselves for the expenses incident to protecting her interests is now in my hands and awaits your action. We also have a check to reimburse H. Schwartz, of Willimantic, Connecticut, and our organization in a similar case. Neither the case of Mrs. Dodge nor that of Mr. Schwartz will in any way be considered as closing the incident."
"Your Theater Owner Must Show What He Gets," Baring The Heart of Hollywood Part IV, The Dearborn Independent, November 19, 1921, pages 6, 11.
© 1998, David Pierce, on editing and revisions (if any)
Return to the Silent Film Bookshelf Home Page