PROBLEMS FOR STUDIOS

Southland Times, Issue 24210, 21 August 1940, Page 8

PROBLEMS FOR STUDIOS

LOST REVENUE FROM EUROPE' NEW IMPORTANCE OF HOME MARKET A loss of approximately 2,500,000 dollars in annual revenue is being suffered by American producers as a result of the closure of over 1500 theatres, due to the German invasion of Poland, the Netherlands and France. Except for South America and the East, what remains of America’s foreign market is further dangerously threatened. Britain is practically the only Western country that is still open. Recently in New York, the European general manager for RKO- Radio said the changed conditions would necessitate an entirely new formula for operations in Europe. Other foreign department executives consider that the outlook could hardly be blacker than it is at the present moment. Turning to maps of Europe, they point in succession to Germany, Austria, Czechoslovakia, Poland, Italy, Denmark, Norway, Sweden, Holland, Belgium and the Balkans. PROPERTY LOSSES One foreign head declares that the foreign market should be written off entirely, and considers that there is little possibility of compensating for European losses in the Latin-American field. Most of the major distributors have been concentrating important sales activity in those countries for some years. Besides the immediate and future disappearance of revenue, the war has brought important losses in physical assets. A report by William C. Bullitt, United States Ambassador to France, indicates that all the American companies’ assets in Poland have been confiscated by the conquerors of that country. Several ships carrying films to ports in Western Europe were sunk by submarines or mines. Up to the middle of May last, losses in Holland and Belgium were not known in New York, and could not be estimated, because of the disruption in communications. Communications even from France and England, at that time, were subject to long delay. The position at the present moment must, therefore, be worse.

Revenues from the British Empire, already reduced and restricted by war

conditions, have been further affected by the agreement between American distributors and the Australian Government whereby 50 per cent, of their revenue is to be retained in Australia. FACING THE FUTURE What changes in American production plans do all these conditions portend? The aim is to increase America’s domestic revenue by 40 per cent, since that is the percentage loss estimated in foreign revenue. The position is thus briefly stated by one executive. ' With foreign revenue cut off—with a prolonged war threatening finally to shut off every dollar from abroad except in Central and South America—we are faced with the necessity of living within our American revenue, if we are to live at all; and the question as to whether or not we can sustain ourselves will be pretty largely determined in the coming year by what we are able to show with the new season’s pictures.” The effort toward higher quality in pictures, with a view to increased earnings in the American home market, must, therefore, be the policy of American producers generally.