Script for Success

Telling Hollywood's fortune is a tricky job that depends on the angle at which one leans over the crystal ball--and everyone in Hollywood has an angle. "Conditions in the movie industry," says redoubtable Independent Producer Sam Goldwyn, "are worse than I have ever known them in the 47 years I have been connected with motion pictures." Says Paramount Pictures Chairman Adolph Zukor: "The future of motion pictures has never been brighter." Last week Hollywood could split the difference, find plenty of signs that the movie industry, for all its problems, is healthier than it has been in many a postwar year.

The figures most attractive to moviedom's magnates are the seductive black ones in their accounting books. Last week Loew's (MGM) reported earnings of $1.08 per share for the 28 weeks ended March 12, a gain of almost 1,000% over a year earlier. United Artists Corp. announced that it boosted revenues 20% and earnings 30% for 1958 to set new records. In 1959, higher earnings have been reported by Warner Bros., National Theatres, Inc., 20th Century-Fox and Columbia.

Wall Street has shown its faith in moviedom's future by sending stocks of producing companies steadily upward. United Artists has jumped from 15 1/4 to 32 1/4 in 15 months, Paramount from 30 5/8 to 50, 20th Century-Fox from 21 3/4 to 43 1/2, Warner Bros, from 16 7/8 to 40. Though Standard & Poor's recently prepared an analysis warning that movie stocks are "quite speculative," it gave bullish reviews to seven of the ten companies it examined. Says a leading Wall Street movie industry analyst: "There's a great deal of skepticism --but the Street is intrigued."

The Price of Alaska. Why is Wall Street intrigued? Hollywood has adjusted to the threat of TV far better than anyone expected. Box-office receipts have dropped some 20% since the high of 1946, but moviemen expect attendance to level off at its present 40 million a week. Though no one knows exactly how many pictures Hollywood will produce this year, the total will probably be about 250, far below the 600 of Hollywood's heyday, but hardly the output of a dying industry. Twentieth Century-Fox says that it is "enjoying the greatest production spurt in 13 years," in 1959 will spend $64 million on 32 new pictures, highest ever in a single year.

"The only reason for the cutback in movies at all," says Metro-Goldwyn-Mayer's boss, Sol C. Siegel, "is that we will not make pictures for the sake of making pictures any more." TV has killed the routine movie for most people (who can watch all the routine movies they want to on TV), forced Hollywood to concentrate on blockbusters--the big-screen, big-star, big-color extravaganzas that often cost upwards of $3,000,000. The blockbusters have no trouble luring people away from TV, are the favorites of the drive-in theaters, which have grown from 820 to more than 4,500 in the last ten years. The Ten Commandments, which cost $13.5 million, will have brought in more than $45 million by year's end. In the works: Metro-Goldwyn-Mayer's Ben-Hur (cost: $14 million), Hecht-Hill-Lancaster's The Way West ($8,000,000), and 20th Century-Fox's The Alaskans, whose cost ($7,200,000) is about what the U.S. paid for Alaska in 1867.

The trend to blockbusters means an inevitable cutback in middle-cost (between $500,000 and $1,000,000) and cheap pictures. But the middle picture with quality can still sell well, e.g., United Artists' The Defiant Ones. Cost: less than $1,000,000. Says Producer Jerry (Peyton Place) Wald, whose pictures brought in half of 20th Century-Fox's earnings last year: The Pride and the Passion, which Fox did not make, "cost $6,000,000 and lost $2,000,000. Charging horses or armies or camels are not important. What is important is eliminating the second-rate or inferior merchandise."

Confident that they can turn the trick, so many independent moviemakers have arrived on Hollywood's changing scene that movie finance has become an interwoven tangle, no more predictable than the color of a starlet's hair. Directors are producing, actors are directing, and almost everyone in Hollywood has his own corporation.

Oil Wells & Girdles. To make up for the cut in picturemaking--and compensate for what the independents are grabbing from the till--the big, established movie companies and even large theater chains have branched out into dozens of other fields, ranging from oil drilling and real estate to electronics and girdles. Virtually every major movie company has set up a record-making subsidiary, using it to stimulate sales of movies featuring their singing stars. Many companies decided to join up with their long-feared rival, have taken to producing TV shows (Warner Bros, alone is working on twelve TV series) or renting their facilities to TV.

TV is even giving many low-budget studios a second and profitable lease on life by using their facilities to make TV films fast and cheaply. Hollywood's best example: Republic Pictures, the first major studio to concentrate on TV production. Republic had been losing money regularly on its pictures, was heavily in the red when it finally got out of the movie business entirely last year, concentrated on making TV films. Result: in the year ended Oct. 25, the company reported operating income of $4.2 million compared to a deficit of $724,697 in the previous year.

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