Hundreds of requests have been received by the editors of Photoplay
Magazine from persons who contemplate investment in moving picture companies
and who seek advice on the subject. In many cases investigation showed
that these people were being solicited to invest money in concerns that,
in the face of existing conditions, did not have one chance in a hundred
to succeed. Mr. Davis will be glad to answer any inquiries from readers.
There are two sorts of criminals; positive and negative.
The positive criminal is a rough gent who smashes you for your watch, breaks your window for the silverware, or pours thunder-soup into a hole in your safe.
The negative criminal has none of his tough-skinned brother's dubious virtues, but he more than cubes his resultant evil. His name is Bunk. In his most primitive form he does business with a set of shells, a tripod stand and a little rubber pea. In his latest style and flowering he may sell your opulent Aunt Miranda some motion picture stock.
Today there are a lot of slickers who, had they been in business twenty years ago, would have been selling gold mines these slickers are piously selling picture-company paper, and hold up their hands in horror whenever the fraudulent mining deals of the past decade are as much as mentioned.
These persons do not attempt to sell stock to "business men." As usual, they work a "sucker list" carefully made up of people who have a little money to invest, and very little knowledge of investment.
Their game is an old one. Their methods are not new. Safe-blowing is not new, even though the electric drill has supplanted the steel bit and the hunk of soap.
A man who is a large holder of Mutual stock told me of an interview one of these "salesmen" had with him recently.
He was selling stock in a company which had nothing but a charter and some very prettily designed stock certificates. As a solid foundation for their progressive photoplay organization they had engaged the services of a director who had been fired from a very poor company.
My friend, despite the fact that he made his wealth as a manufacturer, and is still a manufacturer, is exceedingly well versed in the motion picture industry. He turned to photoplays, first, because he liked them. And his investment when first made was purely an artistic gamble. Though he has had no reason to regret this investment, he knows that dividends are as rare in photoplay making as snow-storms in California. Yet the "salesman," speaking with the utmost freedom of the big profits being returned by all motion picture companies today, murmured in a casual, apologetic way that he had just received a $500 dividend from his holdings in the Mutual Company.
Now it happens that Mutual, in an attempt to make its programme stronger, and fortify itself at all points, is not issuing any dividends at this time.
But this fact didn't bother the "salesman." Contradicted, he persisted in his bare-faced lie. It was my friend who was mistaken, or misrepresenting, or something!
Why won't people everywhere remember that the dear public is not being invited in the good things of the motion picture industry, in wholesale manner, any more than they are in any other business? When the veritable good thing appear, with fair prospects of success, capital is not lacking! Further, it is only privileged capital, "inside" capital, which is allowed to get in.
It may be well for me to repeat here, in brief explanation, what I said many months ago about marketing the films. Making good pictures is only half the battle. Unless there is a perfected market for your pictures, what are you going to do with them? Hire a hall and show them to your friends? Or hire another hall and run your own money-making exhibition?
Remember that the man in Colorado Springs and North Philadelphia has his arrangements for pictures already made. He can't take on your pictures at will. He's getting a service. So is every other exhibitor among America's 22,000. What are you going to do about this? You must either form a mighty alliance with some distributing company, or have as much nerve as William Fox did, and start your independent system of exchanges from coast to coast. This takes money, and thousands of dollars spent every week until the new system is absolutely under way.
I have gone over this point, in condensed form, so that you may thoroughly understand how many difficulties the juveniles among picture-makers face. In the first place, it is a nine-to-one shot that they aren't going to make good pictures anyway- the giants are fighting desperately for the actors and directors, and trying to bottle the authors up in a single container, but if they do, they enter another struggle when they try to sell them.
In a previous paragraph I spoke of my friend from the Mutual, who, when confronted by a vapid lie about easy-money dividends, was in a position to promptly refute such a statement. To tell the truth, my friend is only the representative of the average motion picture stockholder anywhere in any company you might name. There are no motion picture companies today paving bonanza dividends. There are not many motion picture companies paving any dividends at all! Some of these no-dividend companies, it is true, are making money but are turning the money back into their own channels in a praiseworthy endeavor to enlarge their scope, facilities and general artistic resource. I know of on1y one or two motion picture companies today which are paying steady profits, and these companies are almost entirely owned by a very few individuals.
Don't believe everything about the motion picture business that you happen to see in print. In a legitimate endeavor to provide interesting reading for their subscribers, all the magazines today are delving into some phase or other of the photoplay industry. First to the hand of the magazine editor is the enthusiastic but generally misinformed free-lance. Often he has an odd "slant" on the game which appeals to the editor in search of bizarre copy. But where does he get his information? Perhaps by a little hasty personal observation. Perhaps through the experiences of some disgruntled director. Possibly via some posing actor. A camera prima-donna may have aired her imagination as well as her grievances in the direction of his ear.
Possibly the magazine itself sends out trained men to inveigh against some evil which the magazine sees, or thinks it sees.
At any rate, much that is false- hundreds and hundreds of columns of it- concerning the motion picture industry has gone into print in the past twelve months. This has concerned all sorts of topics, front the morals of the actors to the sudden and dazzling fortunes of the promoters. Quite naturally, a great many people have been deceived hereby and it will take more than a passing word or a smiling assurance to restore their faith.
One of the most interesting, because it was at the same time heartfelt, calm and sane, reviews of this periodical treatment came recently from Samuel Goldfish, vice-president and general manager of the Lasky Company. Mr. Goldfish was interviewed by The Morning Telegraph, New York.
In the course of his talk Mr. Goldfish said: "Against the magazine writers who are misrepresenting the motion picture industry and misquoting the purposes and aims of the men engaged therein I have no personal feeling. But I do feel- and in this respect I believe I am reflecting the opinion of others- a very personal concern that these misstatements and misrepresentations should be permitted to pass uncorrected. One of the greatest factors in the growth and development of the motion picture industry has been the absolute faith which the public has extended to those engaged in the industry. I mean this statement in a broad way. Consequently any sustained criticism that is unjust and untrue might serve to weaken this strong bond which the years have built."
Paul H. Davis, "Investing in the Movies," Part Eight, Photoplay Magazine, March 1916, pages 71-72.
© 1999, David Pierce, on editing and revisions (if any)
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