Movie Houses, Television’s Challenge, and the Profit Problem of 1971 America
When readers picked up the July 1, 1971 issue of Forbes Magazine, they found an article that posed a deceptively simple question: “But Where Are The Profits?” The story examined the American movie theater business at a moment of cultural transformation. By the early 1970s, theaters were packed with new suburban audiences, chains were expanding aggressively, and Hollywood films still drew millions. Yet for public investors, the bottom line was troubling: theaters generated revenue, but profits remained elusive.
This was not just an industry story—it was a window into how postwar consumer habits, suburban growth, and television’s rise reshaped the American entertainment economy. Forbes, true to its mission, cut through the glamour of Hollywood and examined the cold financial reality: even as the industry rebounded from its post-TV slump, stockholders were left asking why their returns lagged.
By the early 1970s, American movie theaters had already weathered one of the most dramatic challenges in their history: the rise of television. After World War II, suburban families brought the TV set into their homes, and by the mid-1950s, nightly programming threatened to kill off the traditional movie-going habit.
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In 1946, nearly 19,000 theaters attracted 82 million weekly customers, grossing $1.5 billion.
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By 1971, the number had fallen to 14,500 theaters, drawing only 15 million weekly customers for $1.25 billion in grosses.
The numbers tell the story of contraction and reinvention. The grand Moorish palaces and art-deco movie houses of the 1930s gave way to more economical 800-seat suburban theaters, often tucked into the rising shopping centers that defined postwar America.
Forbes highlighted another telling figure: the average ticket price in 1971 was $1.65, with some urban moviegoers paying as much as $5 for X-rated screenings. This revealed both inflation in urban markets and the difficulty of attracting mass audiences across America.
The article underscored how this was not just a cultural issue but an economic one: television had permanently altered consumption patterns, forcing theaters to adjust or die.
What set Forbes apart was its refusal to glamorize the industry. Where Variety and Hollywood trades focused on box office hits, Forbes traced the balance sheets.
The article profiled several of the era’s biggest players:
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E.D. Martin, the Atlanta exhibitor who once lived like a king, sold his 150 theaters to Fuqua Industries in 1969, reflecting how entrepreneurial families cashed out to conglomerates.
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General Cinema, under Richard Smith, was one of the largest operators with 256 theaters grossing $70 million annually. But profits were slim: $7.2 million, or just 78¢ per share. Smith reinvested heavily, building auditoriums and buying real estate rather than paying shareholders.
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ABC Theaters, with 434 screens, leveraged its media empire to cross-promote films and TV properties.
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Loew’s and MGM theaters, still connected to Hollywood’s studio system, juggled lawsuits and corporate restructuring.
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Walter Reade, the theatrical entrepreneur with a glamorous Manhattan office, embodied the paradox of the industry: style and confidence, but financial underperformance. His quote summed it up—“I’m not a mere movie exhibitor, I’m a theatrical entrepreneur.”
The analysis revealed a stark truth: movie houses could generate revenue, but the expansionist model, reinvestment strategies, and thin margins made them poor stock market bets.
Forbes supported the article with images that symbolized this clash of showmanship and economics.
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One photo showed Walter Reade seated confidently in his office, decorated by his wife (a great-niece of Oscar Hammerstein). The caption wryly noted that his company was losing money, yet his personal style remained flamboyant.
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Another shot displayed Reade’s Manhattan office, complete with theatrical flourishes, underscoring the gap between appearance and shareholder returns.
These visuals reinforced Forbes’ editorial style: the magazine didn’t just deliver numbers, it painted a picture of business personalities, their environments, and the contradictions between image and financial reality.
The cover design of Forbes during this era followed its tradition of serious, understated presentation. Unlike the colorful or artistic covers of consumer magazines, Forbes covers symbolized business authority, wealth, and leadership. They reminded readers that inside, they would find rigorous reporting and sharp-eyed analysis.
The Winter Weapon – The article described how blizzards and subzero temperatures slowed German tanks, froze supplies, and immobilized troops. Nature itself became an ally to the Soviets.
General Zhukov’s Counterattack – The feature credited Zhukov with orchestrating the push that drove the Germans back from Moscow, a critical morale boost for the Allies.
Cavalry in a Modern War – Remarkably, LIFE showed Russian cavalry units fighting alongside tanks and artillery, proving that even “old-fashioned” tactics could still play a role in modern mechanized warfare.
Captured German Equipment – Photographs showed Russians turning German weapons against their former owners, symbolic of resilience and adaptation.
The Human Face of War – Close-up shots of soldiers receiving orders, carrying supplies, and braving the cold gave readers a sense of the courage and endurance demanded by the front.
Each of these images and captions combined into a larger narrative: the Soviets were not defeated, the Nazis were not invincible, and the global fight against fascism had a chance.
For collectors, issues like Forbes July 1, 1971 are highly valuable.
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Historical Timing: The article captures a turning point for both Hollywood and Wall Street—the era when suburban theaters replaced downtown palaces, and when TV permanently reshaped moviegoing.
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Profiles of Leaders: Figures like Walter Reade, Richard Smith, and E.D. Martin illustrate the colorful personalities behind the business.
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Cultural Significance: This was the moment when the movie industry faced its identity crisis—caught between art, commerce, and Wall Street expectations.
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Collector Demand: Vintage Forbes magazines that cover major shifts in entertainment, finance, or global economics are prized by collectors, historians, and investors.
Owning this issue isn’t just holding paper—it’s holding an artifact from the battle between Hollywood’s glamour and Wall Street’s demand for profits.
Forbes earned its reputation by digging beneath the headlines. While the entertainment press celebrated hit films and rising stars, Forbes examined balance sheets, return on equity, and dividend policies. This commitment to hard financial reporting blended with profiles of business leaders made Forbes one of the most trusted voices in business journalism.
Today, the magazine is remembered not just for its later innovations like the Forbes 400 list of wealthiest Americans, but also for these deep dives into specific industries during transitional eras.
If you’re a collector, business historian, or simply fascinated by the intersection of Hollywood and Wall Street, this vintage Forbes magazine offers an unparalleled snapshot of 1971. It shows how television, suburbanization, and shareholder capitalism reshaped one of America’s most beloved industries.
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From the 1940s through the 1980s, these magazines document not just business deals but the spirit of entrepreneurship, the drama of markets, and the personalities who defined an era.
The July 1, 1971 Forbes article “But Where Are The Profits?” remains a landmark examination of the movie theater business at a cultural crossroads. It explained why television, suburban expansion, and corporate reinvestment strategies created an industry that could generate revenue without rewarding shareholders.
Holding this issue today is more than a reminder of box office numbers—it is a historical artifact of America’s entertainment economy, when glamour and profitability didn’t always align. For anyone who values business history, entrepreneurship, or the cultural economy of the early 1970s, this is an issue worth collecting, studying, and preserving.