The Monopolies Commission on Films
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By NICHOLAS DAVENPORT
IT was sharp practice—I must repeat it—to get the new Films Bill passed by the House of Commons before Members had the chance and time to read the report of the Monopolies Commission. Apparently, Mr Douglas Jay has had the report on his desk since July and the only possible reason why he withheld publica- tion until Monday this week is because he knew that it would upset Parliament. For it roundly condemns the film industry as monopolistic, re- strictive and rigid in structure, dominated by Rank and AB Pictures, and operating in numerous ways against the public interest. Yet this is the industry which Parliament has been asked to subsidise, keeping alive producers who ought to be dead and restrictive practices which ought to be abolished, and, what is more, sub- sidise by breaking one of the time-honoured canons of public finance, which is that a poten- tial source of revenue (in this case exhibitors' gross receipts) must not be pre-empted for a particular purpose of expenditure (film produc- tion) to the exclusion of other national claims.
I have no space to cover in detail the lengthy report of the Monopolies Commission on this highly complicated business. It applied itself strictly to its terms of reference under the Monopolies and Restrictive Practices Acts. It found that monopolistic and restrictive practices, as defined by the Acts, prevailed in the supply of films, (a) because Rank supplies more than a third of the total to companies within its own group; (b) because Rank and ABP supply more than a third of the total to cinemas controlled by their own groups in such a way as to restrict competition (i.e., each makes a practice of book- ing films from certain tied distributors and each refuses to deal with distributors who supply the other); (c) because more than a third of the films released are supplied by distributors (Rank and ABP) who restrict competition further by making the supply of a particular film conditional upon the acceptance of other films; and (d) because the exhibitors themselves restrict competition by the operation of time and distance 'bars,' which prevent distributors offering films to cinemas within a certain distance or time. The Kinemato- graph Renters Society, to which all the distribu- tors belong, also comes in for fair condemnation because it restricts competition by preventing ex- hibitors booking films on behalf of other exhibitors and by limiting the extent to which exhibitors can use their premises for purposes other than the exhibition of films (e.g., bingo).
Having established the legal fact that the film industry is riddled with restrictive and mono- polistic practices—the Rank Organisation itself taking a big enough share of the supply of films to qualify as a monopoly under the Act—the Commission goes on to consider what recom- mendations it can make to safeguard the public interest. It rejects revolutionary action to restore free competition. It dismisses the idea of dis- mantling the cinema circuits of Rank and AB Pictures, which at present dominate film enter- tainment by holding the best 600 houses out of a UK total of 2,000. To break the circuits would, it says, upset the finance of British film pro- duction (which depends on the big distributors' guarantees) and probably disrupt the entire in- dustry. It also rejects the American solution, which was to divorce the exhibition of films from the producing and distributing interests. It sees practical difficulties in creating a third circuit, in fragmented bookings (cinema by cinema), in making it compulsory to offer films to both big circuits in competition, in limiting the number of cinemas which can book a film as a group. It therefore ' contents itself with less drastic remedies. It recommends that the big circuits should extend the practice of 'flexible booking': that is, give trial runs to any film whose appeal to the public is in doubt and give limited or par- tial circuit booking to films which appeal only to a minority. It recommends that the industry should be invited to work out plans to enable an exhibitor to obtain films in competition with the circuits if he can offer a competitive return. Finally, it considers that the restrictions laid upon exhibitors by the KRS should be banned, that no distributor should make the hire of a film conditional upon the acceptance of others and that no cinema should operate a 'bar' on a film for more than four weeks after starting to show it. All that is to the good.
These mild recommendations may disappoint the ardent reformer, especially if he happens to be an independent film producer, but we must allow for the fact that the Monopolies Commission is merely a legal body set up to carry out an Act of Parliament and that it was not asked to put the British film industry to rights. It did, however, suggest that the British film levy extracted from exhibitors' gross receipts could be varied to produce different results; for example, a reduced rate for films which it was desirable to encourage, or a part used to finance a film school to foster new talent (as in Sweden). But, alas! it failed to see how wicked it was to allow this levy to go into the pockets of Ameri- can and other foreign producers who co-finance and co-produce so-called 'British films.' For me, it redeemed this lapse by making a very con- structive recommendation which will help young independent producers. It declared that Rank was exploiting its monopolistic position by giving regular weekly bookings in its cinemas to its own documentary films called Look At Life (some of which are good, some terrible). It re- garded this as an 'unjustified interference with the choice of films available to the public.' It recommended that Rank should discontinue this practice and book documentary or other short films on their merits. This would be a godsend to promising new producers, who often have to start their careers by creating a short docu- mentary or semi-documentary film.
So let us welcome the Monopolies Commis- sion's report. It has exposed the restrictive practices in the film industry—and Rank's mono- polistic position—and has made some construc- tive suggestions for easing them. And, above all, it has exposed the state muddle in films, the fan- tastically silly idea of subsidising independent British productions of indifferent quality in an industry dominated by two powerful circuit; which, as the Commission admits, are quite en- titled to refuse to show films likely to involve them in losses. How long, oh Lord! how long must we endure this expensive folly?
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