|
EntertainmentIndustry.name
Once the exclusive domain of industry trade papers, box office figures have now seeped onto prime time news and late night stand-up routines as an indicator of the growing and deepening fascination the general public has with the entertainment industry.
Studios and economic forecasters rely on opening box office weekend numbers as a surprisingly accurate measure of what the total domestic box office will be for a film. These figures play a dominant role in negotiating foreign distribution and rental agreements.
Well-strategized theatrical distribution can thus make or break a film. Experienced distributors license and market films for exhibition in theaters on a rental basis. The distributor is responsible for development and placement of advertising, publicity and promotional material in appropriate advertising media as well as the purchase and delivery of film prints to theaters.
Although the terms of a film’s theatrical distribution vary greatly, there are certain fundamental economic relationships that are constant.
The actual theater showing the film is called the “exhibitor” (AMC, Pacific, Loews, Edwards, etc.) The exhibitor retains a percentage of the picture’s box office receipts (called “rentals”) and disburses the balance to the distributor (often a studio functioning as a distributor in a joint venture arrangement with an independent production company). The exhibitor keeps all the income from concessions (popcorn, candy, drinks, etc.).
A major studio release usually has a 50/50 split while independent films average 49 percent (up from 47% in 1997 and 45% in 1994).
When a film has been financed and distributed by a major studio, the studio usually divides its gross film rentals in a number of ways. The studio pays itself a distribution fee. Ordinarily this fee equals 30-35% of the U.S. and Canadian theatrical rentals, 35% of those from other English-speaking countries and 40% from the remaining international markets. In addition, the studio reimburses itself for all costs related to the advertising and promotion of the film.
|
