Tag Archives: theatrical release

Distribution, Film, Independent Film, Rights

Broken Windows

2 Comments

Fred Wilson wrote a piece on his blog today complaining about the film business’ distribution model. Fred wrote in part that:

denying customers the films they want, on the devices they want to watch them, when they want to watch them is not a great business model. . . . [Studio executives] insist that they need their windows. They argue they need to manage access to their films to extract every last dollar from the market. That just doesn’t make sense to me. If they went direct to their customers, offered their films at a reasonable price (say $5/view net to them), and if they made their films available day one everywhere in the world, I can’t see how they wouldn’t make more money.

While I have no allegiance to the current business model, I understand it. Producers of any new film hope to see it distributed in a number of distribution windows starting with an exclusive theatrical release and continuing through to wide release on multiple distribution platforms typically over the course of 12-18 months.

Wilson advocates simultaneous “streeting” across all distribution platforms. As technology improves, the lines of each traditional distribution window are blurring and will be replaced with something more akin to what Fred is advocating.

Even so, I can’t help thinking that audiences might lose something valuable in the process – maybe even movie theaters themselves. That would be ironic since movie execs sounded similar alarms when television was the disrupting technology in the 1950s. Then as now, movie theaters survived – but for how long?

What follows is most of what I wrote in response to Fred’s post with grammatical tweaking and references to other commenters omitted:

There are two . . . significant obstacles to simultaneously “streeting” movies across all distribution windows.

1. Movie theaters are a limited high-value distribution channel. There are only so many movie theaters and so many seats in those theaters. Only a small fraction of the movies produced each year get a theatrical release in the US. Foreign distributors look at a US theatrical release as a quality marker (this, despite the fact that international revenues generally account for 70% of a film’s budget). So a domestic theatrical in it of itself drives the value of foreign distribution rights up. This kicker in international revenues could not exist in its present form under a simultaneous street paradigm.

2. Allocation of marketing dollars. Movies and virtually every other product with novel elements have a distribution cycle, with demand for a well regarded/well marketed product highest at or near inception (e.g., the latest incarnation of any Apple product or Star Wars sequel). The costs of striking prints of the film – which are coming down as more theaters use digital projectors – and advertising (also called “P&A”) on a typical domestic release of a 1,000 screens or more are substantial. Studios/producers require millions in marketing dollars, sometimes in excess of the cost to make the movie, to theatrically release a movie in the United States.

The goal is to fill each and every seat of every screen in which the movie is shown to justify these marketing expenses (which, if successful, drives up the value of international revenues as noted above). That would not be possible if consumers had other, possibly more convenient choices that might dilute audience share at movie theaters. Although each exploitation window requires additional marketing spend, a successful US theatrical release can have a halo effect on subsequent windows (e.g., Titanic, the Twilight movies).

3. History of Industry Resistance to New Technologies. Lastly, the industry has always been hostile to new technologies. Silent movies were adverse to talkies which were against television which bristled to home video and so on to the present day.

The advent of on-demand viewing of movies in theatrical release is already part of an evolving theatrical release window. The industry needs time to adapt its model to the new demands of its audience. Change in the film business is inevitable even if it won’t come fast enough for the Fred Wilsons of the world.

Actors, Celebrities, Distribution, Film, Financing

Box Office

3 Comments

The Coen Brother’s Burn After Reading starring George Clooney and Brad Pitt is an awful movie that, despite being awful has been critically acclaimed (for the most part; my opinion notwithstanding). The budget for the picture was $37 million and as of this writing, has already grossed over $57 million during its theatrical release. The picture stands to make substantially more when (and if) it goes into wider theatrical release internationally and through ancillary exploitation on video and pay/free TV.

This disconnect of a mediocre film doing well at the box office got me thinking of my UK client Fred Hogge’s post on his blog cinelogic about how box office success builds audience interest regardless of the merits of a particular motion picture. With respect to the interest in the latest Batman sequel, Fred said:

The Dark Knight, just won big. Sure, it helps that they opened on over 4000 screens, but people are excited to see it. The reports coming back from those that have are overwhelmingly positive. So more people will go. And this is regardless of all the side-bar hype, largely focused on the late Heath Ledger, his death having, sadly, been turned into a marketing tool.

I responded that:

The general public follows weekend B.O. performance like a Wall Street stock index for one simple reason. People like horse races and the weekend box office is just that. This isn’t about quality pictures; it’s about “who’s winning now.” B.O. stats used to be restricted to Variety and other trade publications. Now they’re found in virtually every major news source around the world (at least those in countries that distribute motion pictures from the West).

To be sure, more people will buy tickets to a movie based on a horse race mentality because they “heard” the movie was good (just based on the initial B.O.). The fact that the horse race might be a fiction or, to be more charitable, of limited use as a barometer of [sic] quality picture is largely irrelevant to most of them.

There really is no accounting for taste. Which is why bad movies with “bankable” stars are easier to finance and distribute than high quality, material-driven pictures with little or no recognized talent attached. Indeed, that why Beverly Hills Chihuahua was – as Variety put it – “top dog at the box office” this weekend.

Then again, it might be really, really good despite the bad reviews. I’ll have to see it and get back to ya on that.