"One name is as good as another, don't you think?"
"Good. Call that settled. Then as to finances. Going on my own judgment and observation, I'm all for a small capitalization, just enough to give us working capital with a fair margin to insure against loss of time."
"I don't think I understand."
"Well, it's like this: My study of American studio conditions has satisfied me that production costs this side are normally excessive. Of course, allowance must be made for exaggeration; it seems to be a custom of the trade for the producer to multiply several times his actual outlay on a picture and broadside the result as if dollars made pictures and not brains. But I happen to know the average cost of a well-made picture today is between eighty and a hundred and twenty thousand—too much by half."
"Mr. Culp's secretary told me Alma Daley's pictures cost between a hundred and fifty and two hundred thousand each."
"If so, Ben Culp is throwing money away through ignorance or bad management or indifference. The returns are so tremendous from a really good picture, or almost any picture with a popular star, nowadays, the cinema financier can count on getting his money back and as much more in the first year of a picture's life and still have a going property, one that will bring in clear profits for a couple of years to come. So he isn't much inclined to worry about costs. Then again, in the big organizations, production costs are inflated by heavy overhead charges."
"I haven't the faintest idea what that means."
"Overhead means a proportionate charge against each production of the cost of maintaining the entire organization, including all expenses, many of which have nothing to do with the actual making of pictures. In a small organization, such as ours will be, overhead will be cut to the bone. We can make as good pictures as anybody at an average cost of not more than fifty thousand dollars; with care and ingenuity, once we get going, we'll be able to pare that down considerably. But say a picture does cost fifty thousand, its gross earnings, the first year, should be two-hundred and fifty thousand. Of that the producer gets sixty-five per cent., in round figures a hundred and sixty-five thousand. We ought to turn out not less than four pictures a year, which will mean at least four-hundred and fifty thousand clear profit to be split up between the star, the executive, and the capitalists."
"It sounds like a fairy tale."
"It is a fairy tale—come true in real life. Nothing else could account for the present-day tribe of motion-picture millionaires. Some of them have a certain shrewdness, almost all have business cunning of a low order, I daresay a dogged Diogenes could run to earth one or two who are honest, but precious few of them are men of either education, taste, artistic instinct or appreciation."