The Battle for Canadian Film Control

JAMES A. COWAN October 1 1930

The Battle for Canadian Film Control

JAMES A. COWAN October 1 1930

The Battle for Canadian Film Control

A rapid-fire review of the “screen war” which has resulted in virtual domination of the Canadian motion picture field by a gigantic United States corporation

JAMES A. COWAN

EVERY Saturday night, nearly a million Canadians fill the pews of the film temples. They are being entertained by Hollywood, and they pay from a quarter to half a million dollars for the evening. They attend dramas which have been shipped about the Dominion in cans. There is no doubt but that they enjoy doing it.

To the Dominion’s thousand theatres, there is added for these closing performances each week, a miscellaneous array of town halls and lodge rooms which go movie at regular intervals. This is the big-money evening. But any night in the week, the totals would be impressive.

Seating'capacity of 1,800 is considered adequate to care for the picture-going needs of an average Canadian city of 20,000 population and its surrounding territory. Customarily, there are two shows nightly or 3,600 seats at the disposal of the fans. This accommodation is not usually taxed to the limit but if this average city’s theatres are reporting weekly paid admissions equivalent to half the civic census, they are doing good but not record business.

Five to six millions were spent on 240 sound installations in Canadian houses within 18 months and the jump in receipts paid this large sum back almost

immediately. A surprisingly high percentage of Canadians, obviously, must be screen addicts and fortunes flow through the box offices every few days.

As these synthetic dramas have unrolled by the thousands of feet, another one has been staged behind the screens. It has no love interest. This drama is not done in celluloid but in dollar signs. It is the battle of the box offices and the stakes run to millions.

The prize is control of Canadian theatres, domination of a rich industry, for entertainment is big business. But, as it influences public opinion and even sets styles in thinking, it is tnuch more than business. Even its internal uproars become matters of general concern.

The Big ‘'Boss” of Canadian Filmdom

NATION-WIDE control of the film business in Canada has for some time been vested in a single organization. Control of this organization, in turn, has just passed into United States hands, in other words, into the hands of Paramount-Publix, the giant of the

U. S. motion picture industry. The ruling group in Canada, Famous Players Canadian Corporation, does not operate even a majority of the country s cinema centres, so outcries about monopoly are incorrect. But it does hold the key houses from Halifax to Vancouver and takes the cream of the returns. In cities such as London, Hamilton, Kingston, Brantford, Guelph, Fort William, Regina, Saskatoon, Edmonton, Calgary and Victoria, its sway is virtually complete. In Toronto and Montreal, one first-run house remains outside the fold. Winnipeg is slightly more closely held than the two eastern centres.

This rule extends to the legitimate stage. For several seasons, no producer of spoken drama, musical comedy or operetta has been able to operate without the permission of the film moguls and the use of their theatres.

In August, a blanket ban was issued against the admission of touring stage attractions to any of the theatres in the Canadian chain. The idea obviously was that, having put a lot of money in the talkies, the moguls of Hollywood and New York were determined that the Canadian public must not be permitted to patronize any competitive form of amusement. This ban, to all intents and purposes, would have wiped out the stage in Canada. It meant that London attrac-

Gons could not come to Canada and that such stars as Sir John Martin-Harvey, Matheson Lang, George Robey, Seymour Hicks, Maurice Colbourne, Barry Jones* and Gordon McLeod, such organizations as the D’Oyley Carte Opera Company, the Stratford-onAvon Festival Company and the Birmingham pantomimes, would be barred. It meant that Toronto and Montreal might have whatever they could get from Broadway but nothing else; that Vancouver might get an occasional visit from a company coming as far north as Seattle; that if the veteran C. P. Walker determined to continue the strife, Winnipeg might see a few shows, but the rest of Canada would be blank. It meant that such Canadian enterprises as the Dumbbells would be impossible.

Though the order was made with extreme care, and any public announcement painstakingly avoided, the news leaked. The impressarios of bulk celluloid took a prompt panning from one extremely able editor in particular and, as the word spread, others were oiling the typewriters to join the crusade. There were hurried denials and retractions, most of them given in camera. As the leading New York trade journals of the film field point out, the situation was loaded with dynamite. It has since been announced that good road shows will be allowed in theatres owned by the chain. None, nevertheless, at the moment of writing, are being booked. In this muddled state, the affair now stands, but a policy of treading gingerly is being enforced by flicker lords.

A Movie Mussolini

THE whole world of galloping tintypes has been as unsettled as a balloon ride. This “legit” ban is only one rumble of thunder from a storm which, as far as the public is concerned, has been going on behind the clouds.

But that one official of a single concern, as seems to have happened, could wipe out, over-night, a form of art and entertainment which existed in this country when troupers made the Red River on rafts, is a peculiarly unusual situation. Whether or not the edict stands, the power is there, to be turned on when wanted.

Coupled with this, there is evident dissatisfaction with conditions as they exist in the land of make-

believe and make-money. Any clipping agency will furnish evidence in the form of a small bale of news items. There have been resolutions galore, committees of investigation, complaints in Parliament, angry comments, solemn addresses and letters to the editor. Much banana oil has been poured upon the troubled waters, thus serving to make their depths less clear. The subject offers an elegant number of ways to go astray and a superb opportunity for suggesting useless innovations. It is a welter of conflicting opinions.

It is possibly logical to believe that little of a permanent nature can be accomplished without trying to discover what it is all about. It is also probable that hotheaded outbursts may not accomplish much. Then there is the patriotic war cry, and, dangerous as it is to make any comments about patriotism, it must be noted, in all frankness, that flag-waving wmn t cure this condition.

There is a spectacular maze of goings-on in the background. It may sound confused and even turn out to be uninteresting but it is undeniably relevant.

Swift revisions and revolutions have affected the whole fabric of film distribution and left it as stable as a sponge. There has been a sudden succession of mergers, manipulations, amalgamations, acquisitions, financial and mechanical alterations, stunt plays with millions, rumored and actual expansions, bonehead blunders. Not all of these, nor even a small part of them, occurred in Canada, but film business is organized on the basis of world markets and events elsewhere affect the Dominion. In the realm of the sounding snapshots, national lines have been broken down. No country can be considered as an entirely independent unit, not even, with Hollywood dependent on foreign sales, the United States.

Out of the mêlée, Paramount-Publix has emerged as the owner of Famous Players Canadian Corporation. The paternal Adolph Zukor, who came from tiny Riese, in Hungary, to scale the flickering heights and sit in the seats of the celluloid mighty, rules Canadian filmdom, including much territory he has never seen and municipalities whose names he would not recognize. At his right hand, is the Chicago master-showman, Sam Katz.

Canadian stockholders, some of whom bought with the idea that they were helping to keep rulership of native stages at home, now find themselves with shares in an international mammoth, American-controlled, instead of a home undertaking.

Once, indeed, the feat of holding the reins here seemed on the verge of accomplishment but that was some months ago. If it ever actually existed, it does not any more. It is a dream which shows less and less likelihood of fulfilment in the near future. Much in the manner of an express disappearing down the track, it has been fading rapidly in the distance.

The switch to Paramount ownership was not achieved without a squabble. Echoes of it reached the newspapers and will thus be remembered"." Representatives of minority shareholders protested that it was a betrayal. They formed a protective association. Canadian directors also talked protection. I hey said an alliance with strong film interests in the United States was absolutely vital. The chance to consummate the potent Paramount tie-up was most opportune. Powerful competitors, said J. P. Bickell, one of the company s chief advisers, were threatening to invade the Canadian field. The safety of investors made action necessary.

Oratorical flurries about American monopoly marked discussion of the matter in the dying moments of Parliament’s last session. Investigation was suggested. But the deal went through. Picture moguls were told that the Ottawa addresses were pre-election eyewash. The protective association presumably faded, but a number of die-hard citizens are still clinging grimly to their stock and refuse to turn it in for Paramount -Publix certificates.

Another Battle Due?

WITH the purchase effected and the alliance completed, loiterers along the film rialto waited expectantly for the announced invasion to break loose. But it didn’t materialize. Earlier happenings had made its arrival an even-money bet, but nothing happened. Nothing has yet happened. Something else took place behind the scenes. Continued on page 65

Continued on page 65

The Battle for Film Control

Continued from page 7

But a large mark of interrogation comes up over the horizon at this point.

Can a single organization hold undisputed film control of an entire country without a battle? Is a war for supremacy imminent? Will an attempt be made by or on behalf of Canadians? Will a second Hollywood producer combination be the aggressor?

To the first question, the answer is obviously in the negative. Sooner or later, somebody else will make a grab for part of these box office millions, all spot cash and no credit. The unsettled matter is whether it will be sooner or later.

Till midsummer, the date of hostilities seemed to be immediate. Now, the struggle is not in the offing. That is, not today. Next week someone may get around it and start the strife. Movie moguls are a bunch of restless Alexanders except for the fact that they have yet. to run out of worlds. An eventual attempt to shake the virtual dominion of Famous Players is almost inevitable.

During the hot weather, the situation changed almost daily. An article written today was out of date the next morning. Now, in early September, the most general prediction is that the warfare is indefinitely postponed and that nothing is apt to break for a year. The two most logical competitors are momentarily out of the picture.

Plans for the move on Famous Players’ entrenched position had been complete. It was to have been a drive of Canadian shock troops backed by the heavy artillery of a powerful American producerdistributor-exhibitor combination. The heavy backer might have worked either in the open or behind cover. Details had reached a point where headlines appeared in the newspapers. Then the campaign blew—without benefit of publicity.

To see what it was and how it grew, it is advisable to go back a few years and look at the development of the national cinema giant, Famous Players.

As far as the average Canadian was concerned, it all seemed to have happened overnight. He suddenly became aware that key houses in leading Canadian cities were being operated under one control. Wreckage of the Allen crash and the illstarred Trans-Canada Theatres had been salvaged and worked into the line-up. Actually, it took some years.

Enter Nathan L. Nathanson

TNIRECTING activities and acquisitions was a driving executive whose genius for amassing theatres, flair for organization, ambition and ambitious enterprise, made him one of the most colorful figures of Canadian theatrical history. This was Nathan L. Nathanson, Napoleon of the Canadian screen before most Canadians knew his name.

Juggling lands, leases, options, stockinterests, booking agreements, contracts and affiliations in a fashion that appealed to bystanders as fantastic, he stepped to one-man leadership of a whole industry. He had held a minor position in outdoor advertising and gone from that to the management of one or two little grind theatres of no importance. He stacked holdings on holdings. He built new theatres, took over old ones and either operated them or kept them shut and bolted to eliminate competition. He dictated to Hollywood on Canadian bookings. No few old-timers in the show business were tossed to the sidelines in the rush where, dizzy and shaking their heads, they predicted a resounding crash.

There was no crash. More and more accumulations led to bigger earnings till, at last, the “talkie” wave sent receipts skyrocketing. The financial structure of the Nathanson organization and its network of companies, seemed to bewildered observers to be tangled beyond the lay-

man’s analysis, but each shift invariablyleft the chain in a more commanding position.

N. L. Nathanson was the czar of the Canadian cinema and the dictator of the Dominion’s screens. He wsis the Mussolini of entertainment in six provinces. All these terms were freely used to describe him. Men in his own organization spoke of him proudly. Independents, who had felt the avalanche of opposition, used the same phrases with extreme bitterness. But no one ever swept competition aside and climbed to eminence without an accompaniment of wails as well as cheers.

In staging this parade to leadership, Mr. Nathanson did not work without Hollywood help. Early in the drive, he ! interested Adolph Zukor of Paramount. I Bit by bit, however, American financing | was replaced by Canadian money till Mr. Zukor’s holdings were finally declared ' to be merely nominal. The astute New Yorker, nevertheless, retained a voice in the company’s policy which would enable him to assure this Canadian outlet for the films of his producing company and head off other Hollywood competitors.

N. L. Nathanson built Famous Players to a point where it could invade any Canadian community. The concern had its pick of pictures. Every producer of importance knew that he had to depend on the chain for the bulk of his Canadian revenues. He was not anxious to jeopardize friendly relations. If the chain announced its intention of entering a city where his distributor representative already had a good customer, it would he anything but good business to refuse the big buyer first choice—even to allow it to keep out of circulation films it could not use, if necessary. There were not many places, obviously, where the expanding chain was unable to put through satisfactory arrangements with existing theatre-owners.

As it grew, the situation led a trade organization, Exhibitors’ Co-operative Association, to retain J. Earl Lawson, M.P., and demand a probe under the Combines Investigation Act. It represented the little fellows, according to its brief to Ottawa. In the summer of 1929, an investigator duly prowled about Toronto, but his mission seemed to peter out and the results were nil.

Only a few weeks after this splurge of opposition, came the blow-off. Mr. Nathanson, returning from England, announced the birth of a great Empire plan which would shake Hollywood’s grip on British markets. British film independence was the ultimate goal. Sale of Famous Players to Gaumont British in London hut at a very good price was to be the first step. Patriotic aspects of the idea were emphasized. It would strike a staggering blow at Americanization via California studios.

The Storm Breaks

SERVING with Messrs. Nathanson and Zukor as a voting trust of three in charge of company affairs, was Isaac ! Killam, of Montreal. He said, without any sugar coating, that the plan was simply a thin disguise to turn over the Canadian theatres to Mr. Zukor’s strongest rival, William Fox, and that, GaumontBritish was a red herring. William Fox was one of its chief shareholders. This, Nathanson supporters vigorously denied.

Argument was brief but contradictory and Mr. Nathanson resigned. The czar | stepped down. But the more than substantial interest of Fox in GaumontBritish, then not officially confirmed, has since become known.

With the erstwhile ruler, temperamentally unsuited to inactivity, off the throne and a free agent, theatrical circles were

all agog. In dozens of theatre offices there hung his framed and autographed photographs. The pictures were not turned to the wall. It was reported that Mr. Nathanson had sufficient theatres under his personal control to begin a second campaign for Canadian film supremacy.

Then it became quite obvious that negotiations were in progress with the Fox interests in the United States. William Fox had just purchased, first a one-third interest and, then in the open market, enough shares to give him practical control of Loews Inc. Not only did this include the great drama factory of Metro-Goldwyn-Mayer and 300 theatres but, from the Canadian point of view, it gave him the only existing chain of first-rank theatres in Ontario and Quebec still outside the Famous-Player fold — the nucleus of a second nation-wide string.

Mr. Fox had then gone on and bought the Gaumont chain of 300 theatres in the British Isles for twenty millions, taking across the Atlantic the key to film distribution in the Old Land.

It was a great moment for the exEast Sider son of Jewish immigrant parents. He was sitting on the earth, controlling 1,500 theatres, buying them by chains and no longer by single properties, biggest figure among producers, apostle of the lone hand, international cinema sovereign, hard-boiled showman looking for more conquests.

The moment looked particularly ripe for a Canadian invasion. There was Mr. Fox with theatres, pictures and ambition. There was Mr. Nathanson, tried and experienced general with Canadian financiers reported willing to provide sinews of war. There was the GaumontBritish name and the Empire angle. It looked like a nearly perfect alliance.

At this strategic moment, with plans all laid, there came the month of last October bringing with it the lamented collapse of the stock market. With the crash went William Fox, crushed under short term notes to the tune of seventy millions; more than sixty millions away from meeting them.

Definite announcement had been made that a rival movie chain was about to enter but now the Canadian drive hung fire while, for months, a bitter struggle raged between lawyers, showmen, brokers and business leaders. It ended in April when William Fox made a separate peace. He gave up control to his financial backers. It was a tough year for czars with Canadian film connections. Emperor Fox, to all intents and purposes, bowed himself out.

Other Potential Rivals

"pOR a short time, it seemed that his -*• successors in command would take up the battle. But that, recently vanished. They are peaceful men. It was possible, too, that Warner Brothers, risen from the peanut class to world prominence through their belief that sound was sound, might be the invaders. They already own the largest firm of sheet music publishers in Canada and the second largest phonograph company. They recently started to go after Paramount with axes and to buy theatres helter-skelter. But an insignificant thirtyword item sent over the Canadian Press, a few weeks ago, reveals that this is unlikely. It stated simply that an agreement had been completed with Canadian Famous Players for the showing of Warner pictures in the company’s theatres.

Radio-Keith-Orpheum, another potential competitor, owns theatres in Canada, spotted strategically from Saint John to Vancouver but an active, if vague and indistinct, working arrangement with the ruling Canadian forces, eliminates this possibility for the time at least.

What seems to be happening in film industry is a steady drift toward two mighty combinations including everything from manufacture of music, pic-

tures and sound equipment to ownership of theatres. That trend has been halted by the much press-agented depression and the unwillingness of the general public, at this juncture, to absorb great issues of stock. When and if it eventually becomes a fact, the second aggregation will undoubtedly cast eyes on Canada.

That, incidentally, does not bring purely Canadian control any closer.

There is another weird feature of film industry. Banking and business interests of the highest international rating are now mixed in with Hollywood. The trail leads around and back to such enterprises as noted Canadian producers of salt, musical instruments and motor cars. But show business has always been somewhat crazy and is apt to remain so. Mixed in with the solid kings of industry are a number of comparatively -wild men

who are always apt to pull something spectacular. But the term, “Hollywood producers,” nevertheless, includes these same solid kings of industry, busily engaged in protecting their investments and making them pay dividends.

Not till all this somewhat involved framework and supporting structure has been noted, is it possible to get down to cases, to try and talk about dramas instead of the changing business of getting them here and to see if anything practical can be done before the present race of matinee goers grows old and feeble.

Editor'8 note: In the second part of

this article, to appear in an early issue, Mr. Cowan will discuss the question of Canadian and British films and the hindrances placed in the way of commercial film production within the Empire.