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Box Office

Theater Screen Inventory and Average Annual Take by Screen

November 30, 2020 By JNH 4 Comments

What in Holy Hell Are Indie Films Facing in 2021?

First, I’m Not A Seer

I do not style myself a future predictor, so, I want to say that I do not KNOW exactly what things will be like in 2021; but the following are not just random thoughts, they are based on detailed study.

Having spent a good bit of my life listening to, processing, and trying to understand the large and small signals of the film industry, I have learned a lot about how the gears of the industry mesh, grind, package and deliver entertainment, and how it is marketed and monetized. I use this information daily in my work, and it informs the financial models I create and the business plans I write. I try to mirror the real world, but, of course, we are reaching into the future with this work.

Too D**n Many Screens, Guys!

First, I want to say what I have been telling a lot of people for some time: The theatrical business has been over-built, with far more screen capacity than necessary, for more than 20 years (yes, 20 years!!), and the bill for all of this real estate and technology has been coming due for a long time. Now, a paroxysm of a pandemic has forced everyone’s hand; and the over-capacity of screens has caused exhibitors to hit harsh reality, and chains are being crushed under debt. This is not merely a function of Covid-19, but Covid-19 brought it to a catastrophic place.

Chart showing the Number of Screens Each Year and the Total Box Office for the Year, (inflation adjusted)

As we can see in the above chart, Inflation-adjusted box office showed the screens punched above their specific weight for half a decade, then began to track almost precisely with the number of screens, except for the abberation in 2004, based on The Passion of the Christ. Then began to track almost precisely to the number of screens again until things started to trend down in the 2010’s. .

The following chart clearly illustrates that, starting in 1987, the annual take per screen was over $450,000, with about 23,000 screens available (including drive-ins), and ending in 2019, when there were about 43,000 screens (Cripes! Nearly double!) available (including drive-ins), with less than $300,000 per screen annual income. Unless each screen is being built at less than 65% of the cost of each screen in 1987, money is certainly being lost on the overall transaction.

Theater Screen Inventory and Average Annual Take by Screen

Volume or Margin, Again!

I have talked often of the volume or margin equation. Movie theaters are items with too big a ticket on them, so why would you play them for volume? Anyway, that is what we have now, too many screens and (forget Covid-19 for a minute) not enough rise in sales to maintain a margin.

With less income per screen there is nowhere to go but further into debt. Now, with the collapse of sales due to Covid, it is causing chains to have to innovate and re-negotiate debt on facilities. Overbuilt with screens, no income, theater chains have had to become innovative, but even more importantly, start to rethink their previous extremely hard line on release windows. OMG, windows strategies are crumbling! Only months ago, one letter from an exhibitor chain explained their unmovable position:

“For 100 years, XXXXX (Exhibitor) has served as a strategically critical and highly profitable distribution platform for movie makers, and for all that time the exclusivity of the theatrical release has been fundamental.”

That sentence was kind of the introduction to the ultimatum that any abrogation of the relatively rigid theatrical window: “is categorically unacceptable.” But now, we have a lot of theater chains making deals with the studios that allow various mitigations of theatrical windows. Covid broke the theatrical window’s back.

Further, with a vaccine on the way, it is likely, as Anthony Fauci has said, that after the second quarter of 2021, theaters will be able to open much more normally, and audiences, hopefully, will begin to be confident to start going back to the movies.

But this post is not about over-building, is it? Not really, but to understand the pickle the big chains find themselves in due to Covid, and due to their exuberance, is to understand the potential opportunity for Indies who want to be out from under (at least I would think so) the thumb of the dumb entanglements of the theater chains and the studios. This is the background of the situation in which we find ourselves going into 2021.

The Perpetual Indie Conundrum — Always Following in The Wake of The Studios

Can I add another layer hinted at above? Indie films have been living with the devil-deals of the studios for years and years, from DVDs at commodity pricing, to restrictive release windows that can choke films off from reasonable market timing. Theatrical release is expensive, and indies have been hampered by these studio deals that cram the indies into a financial corner with few really good choices.

Shite, Sounds Like a Disaster!

Maybe, but indies, filmmakers and exhibitors, have been innovating the way mom and pop stores the world over have been doing forever, trying to keep their foothold on the dream of making and sharing interesting films with film fans, aficionados, and the adventuresome.

Before Covid indie theaters were already under stress, trying to update their projection equipment to digital at costs that were prohibitive for them, and even dealing with geographic blocks on distributors giving their films to local theaters because of a large chain’s prohibiting contracts.

During Covid, small indie theaters have set up their own digital channels, put mini drive-ins in small-town parking lots, while smart indie distributors like IFC, RLJE and others have booked drive-ins during social distancing, and become almost the only players on the box office charts this year. And IFC did Day and Date VOD and Drive-in releases. Innovation in thinking, and innovation in action are our path forward!

What Do I Think We Might See in 2021?

Because of the stress on the chains, I see the windows erosion unstoppable. Large chains, instead of throttling the windpipes of distributors, will be much more amenable (while grumbling) to windows that are not so restrictive, and I, for one, would be pushing very hard to enable and pursue hybrid release patterns that blend Box Office and Digital in recipes that are different for each film or film type. And that includes many more players pursuing Day and Date releases that enable a consumer to see a film where they want to see it. Of course, the Digital Subscription model is going to not only emerge as king, as it is now, but it will solidify its lead with many film types. That does not mean that SVOD is the be-all and end-all platform for indies. The theatrical release that puts so much pressure on the opening of a film does not understand that many indie films have long shelf-lives, not at all like the slam it at the theaters and scoop up early dollars while the value of the film decays right before your eyes.

This is what that kind of wide release decay chart looks like:

Up First Ten Weeks

You’ll notice in the Up box office chart above that by Week 5, something like 83% of box office take has come in, and by Week 10, the box office cumulative is in the upper 90% range. The film, which earned a lot, has burned out at theaters. This slam it at the wall strategy has made all of these releases immediate do or die scenarios.

Let’s look at an indie like Winter’s Bone, and see what it’s 10 week box office trend looks like:

Winter's Bone First Ten Weeks

We can see that Winter’s Bone was at only 41% of its total box office in Week 5, and at only 77% in Week 10. Winter’s Bone held on in theaters for 45 weeks (BTW, close to a year!), giving audiences a chance to learn about it and catch up with it, while not burning through all of the world’s cash in marketing. While Up was in theaters in some form for 23 weeks, it was really burned out by Week 10. Certain kinds of fast and hot releases are right for certain kinds of films, but most indie films require more detailed and attentive handling, like Winter’s Bone. I want indies to have the maximum leeway in their choices, Day and Date if necessary and wise, and long slow roll outs if that is necessary and wise, and I believe the soft market will be much more viable for this kind of hybridization, as I call it.

My Models Now

Almost all of the financial models that I have crafted for smaller indie films since about May or so of this year, plan on some kind of hybridization of Theatrical and Digital, and plan on a very attentive release pattern. This is the way of the future. There will no longer be, I believe, a “one-size-fits-all” pattern for releasing indie films, and each needs to be planned for, modeled to the real world, and should take significant advantage of the soft spots that we will see in the markets for some time to come.

Onward and Upward

Jeffrey Hardy

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–If you would like to learn more about our services for Indies, or discuss in detail how we might help you, especially in this new complex climate, please fill out our project submission form as fully as you can.

Filed Under: Our Thinking Lately Tagged With: Box Office, Covid-19, Independent Film, SVOD, VOD

August 29, 2019 By JNH 1 Comment

Comparable Pictures (ROIs) List

This Table Lists All the Film Titles Currently in Our Database

But don’t let that stop you from asking for a film, as we are constantly adding titles.

You can download this pdf and peruse, search, take you time with checking for the films you desire, or get ideas about films to choose. They are arrayed by budget ranges.

FilmProfit List of Films Available CompListDownload

Filed Under: Our Thinking Lately Tagged With: Ancillary Income, Box Office, Foreign Ancillaries, Foreign Box Office, SVOD, VOD

June 14, 2019 By JNH Leave a Comment

Booksmart Release – Is This the New Way We Distribute Indie Films?

Having read quite a few mentions of the Booksmart film not performing up to snuff, or to expectations, and even discussion as to whether this augurs weakness for women-themed films, or women-helmed films, I wanted to look.

The Booksmart Duo

A Wide Release

Then I started to look at the release that was playing out for the comedy, and quickly came to my own conclusion that there seemed to be a disconnect between the movie’s most likely audience and the way it was booked and marketed. Why was a film that requires a core audience with educated and generally open-minded sensibilities, funny and even at times raunchy though it may be, released more like it was a teen horror movie? 2500+ opening screens? If it can’t perform under these conditions, then doom can only be skirted by prayer.

I have also seen some discussion that there are tendencies to move in this direction, away from indie platforming. This doesn’t yet appear to be an overall tendency, but, even if others are jumping off the bridge (as our mom’s always used to say) doesn’t mean it’s smart. Are we heading toward only wide or all-digital indie strategy? Can’t a theater audience have a chance to catch up with a picture anymore?

Serious Critical Acclaim

Critics seemed to love the film, with all the upper echelons giving it a 90 to 100 rating. But the release team must have let it all go to their heads, because critics speak to a very particular audience, not the entire available movie audience. Oh, and, by the way, there is a large swath of the movie-going public that likes to stick a thumb in the eyes of the critics. They are not the typical audience for these kinds of films, by the way. So, if the critics love it, the movie will not be for them, and if the critics hate it, some want to see it even more.

Smart movies are primarily for smart people, and critics are generally (not always) themselves, smart people. I mean, the word “smart” is in the title, and they aren’t trying to be snarky using that word.

Booksmart Is a Smart Movie

The story is that, when two girls, best friends and academic superstars, Molly and Amy, who have focused single-mindedly on their studies for four years, learn on the eve of high school graduation that the kids who partied while they worked, got into the same elite schools they did. What was all that for? Now, they have decided to cram everything else they missed in those four years, all into one night. Booksmart is rated R because it looks and sounds like real life!

Market and Release Smart

This film is rated R, so it is not for teenagers, though there are some, when they hear about it, who will aspire to attend. It’s for adults, and since when, if it wasn’t schmaltzy, was a film about booksmart people for people who are not educated, primarily urban, primarily upscale. This is not a creature feature. All of these items scream that the film would very likely have a smart audience, primarily made up of women, only partially because it is about women, and that they would of necessity be older than 17. This describes what we used to call a “Specialty Film,” or an arthouse film. Well, the arthouse audience is generally two thirds female, and it trends largely mature, and this audience generally goes out to the movies, not exactly on Friday or Saturday date nights, but the days and nights they can fit it into their schedules. Oh, one more thing, they often wait to see a movie after the first weekend, even often after the second or the third weekend. They are not in a teenage hurry. They need to be wooed, and allowed to find out more, and to fit it into their schedules.

So, Was Opening on 2500+ Screens a Smart Move?

In the right hands, a film like this might have found an audience growing and growing and growing, instead of watching it dwindle. Why didn’t it open on 50 or 200 screens and build on the critical acclaim and build its word of mouth? This film, if handled correctly, could have been a great little “Art House Plus” film.

Art-house audiences are already primarily women, are already adult, trend mature, and are a stable target for smart films. Expanding on that, we have other urbanites and near suburbanites who hanker for a wide perspective, different sensibilities, LGBTQ characters, and different looks at life. These audiences respond slower, attend in following weeks, and are loyal to films that please them. In fact, women especially want their friends to also see a film they enjoyed and to love the experience, too. That can’t happen opening weekend. They embrace topics that can be taboo or racy or wistful, even raunchy, and they are agnostic about sexual content in films. They want to see some life in front of them. So, why did the bookers and marketers spend so much money releasing this film like it was Lights Out or something?

Over-amped Release Costs Can Crush a Film’s Value

The truth is, every film type has a different arc of upswing and downtrend, and well-handled Art House Plus films are in careful, nurturing hands, managing the opening theaters, targeting the audience, teasing them out and allowing them to become familiar with it across time. Comedies go up fast, like rockets, and fall to earth the same, fast. But smart films do a slow windup, and then stick with their target audience over time, allowing them to get to it, and keeping a tight rein on the marketing spend so that the tickets you sell don’t just all go to paying off marketing spend. I wish Booksmart’s team had thought through this film’s release strategy better, and then, I suspect, there would be less carping, hand-wringing and worrying about what this film augurs.

Some Numbers:

  • -$6,000,000 Budget
  • -$20,000,000 at least Prints & Ads (2500+ screens)
  • +$18,000,000 three weeks BO
  • =$17,000,000 in the hole today
  • Needing another nearly $40,000,000 million in BO to get out.

Oh well, exuberance! I wish I was saying, fantastic, discipline, and here come even more certain chances for women. Bravo on the film, I just wish the release had nudged it toward a rolling success, instead of bludgeoning it with exuberance.

Coda: When I read or hear that a new filmmaker has had their low-budget picture picked up at Sundance, or Toronto, or wherever, and they crow that the distributor promised to spend $20 million on marketing, I usually go “Uh-oh, there goes value out the window.”

Another Coda: We were down due to hacking for a bit, and happy to be back, we are offering a Thank You discount. You can use if for Filmmaker’s Financials or Producer’s Financials, limited time, limited number, so if it fits you, use it! Use it here: https://shop.filmprofit.com/

If you are new to us, you can get our Newsletters by signing up here: https://tinyletter.com/FilmProfit (powered by TinyLetter)

Onward and Upward!

Filed Under: Our Thinking Lately Tagged With: Art House, Box Office, Demographics of Moviegoers, Female Moviegoers, Release Planning, Wide Release

January 14, 2019 By JNH Leave a Comment

Retreat from 2017 Panic!

Box Office Returns to Form in 2018

In late 2017, the biggest story was whether box office was falling off of a cliff or not, after the somewhat disastrous Summer and weak Fall season we discussed in last year’s Box Office Panic! series.

We’ve Seen This Before

We witnessed this same kind of slump back in 2005, when the box office fell from 2004’s $9.22 billion to 2005’s $8.6 billion. It took two years for it to climb back above $9.25 billion ($9.4 billion in 2007); and there was a lot of hand-wringing, then, too.

There was another slump in 2014, but without as much hand-wringing, and then an anxious replay of the fears of 2005 reared its ugly head in 2017. Now, only one year later, we have re-entered growth territory, as usual. 2018 brought a return to annual box office growth, with total ticket sales of $11.86 billion. The industry, though, is still in an uncertain mood, continually worried about the fantastically successful SVOD business taking their lunch. But what does the relationship between Box Office and Home Entertainment look like?

Box Office Steady State, The Action is in The Home

From the above, we can readily see that there is no corresponding serious drop in Box Office, which has been (generally) rising slowly. And this, all while Home Entertainment has been rising on the back of SVOD. How do we know it’s digital entertainment? The following chart illustrates it for us.

And The Action at Home is in Digital

It is obvious from above that digital goods, including electronic sales (EST), video on demand (VOD) rentals, and subscription video on demand (SVOD), are picking up the slack lost through the retreat of packaged goods (DVD, Blu-ray, etc.). So, Digital Goods are on a strong rise, while box office is maintaining, at least, if not growing by leaps and bounds.

What is the real “problem” in this landscape? The opportunity for indie films. It has always been true that a small indie film will get far more eyeballs on television than in theaters; and the same is true for the made-for-late-night-T.V. blockbusters. Look at Bird Box as an immediate example of this. For this reason I welcome the hybrid release strategies of films like Manchester by the Sea, or Roma, very much like art films with an immediate chance at wide audience dispersion, along with financial security.

Don’t Let The Studios Set Pricing for Indies

I may be tilting at windmills here, but in my next missive I want to lay out the case for differentiated pricing of content, like in the era of VHS cassettes, I will save it for the next post, where I want to talk about the fine wine of indie film-making and release, as opposed to a market that wants to treat all the films as perfectly equal commodities. I think indie distributors and theaters should sell their unique films as handcrafted artisanal products, carrying the premium price a handcrafted beer or cheese or unique item of clothing does.

By the way, I wanted to alert you to the fact that we have rolled back the prices on our comparable pictures reports to levels not seen in nearly a decade. We want them to be indie friendly. You can check them out here.

We are also offering a 15% discount on any service or report through Sundance and January. The entirety is on sale with this discount, but you can only use it once, so get everything you need. No code necessary for you, the special discount will be added automatically.

If you are new to us, you can get our Newsletters by signing up here: https://tinyletter.com/FilmProfit (powered by TinyLetter)

Onward and Upward.

Jeffrey Hardy

Filed Under: Our Thinking Lately Tagged With: Box Office

August 21, 2018 By JNH Leave a Comment

Announcing A New Product, Statistical Confidence Modeling in Film Projections

Bootstrapping Our Way to Confidence and Probability

Over our 25 years of financial modeling for films and slates and funds, we have developed sophisticated methods for modeling a film or films in distribution. Because of our hard-won proprietary data and years of deep diving into markets arcana, leveraging our baleen whale tendencies toward information, we have modeled hundreds of films, from the quietly beautiful “Sweet Land,” to the challenging comedy of “Sleeping Dogs Lie” and the blockbuster-sized upcoming “The Meg.” All of these films were modeled using all of our skills, but we are continually seeking to enhance the quality of our work, and now we have again.

We here at FilmProfit have devoted significant time and effort into formulating a statistically meaningful approach to estimating Confidence and Probability (two different things in statistics) in our modeling for a single film (Illustrated below at different potential budget targets) and for slates of films. We have performed these analyses and refined the output tools to where we can now confidently share them with our clients.

Above is an illustration of a projections model we have developed for illustrating Confidence Levels when studying the potential performance of your film across a range of markets.

Our models take bootstrapped datasets and estimate these confidence levels based on target fee and costs structures. This can be done for a single film, for a slate of films, or for a fund strategy. We can divine market performances for a range of budgets determined by the data, so as to target maximum potential ROI and effective budget, or targeted to a single budget, based on bootstrapping thousands of iterations from our dataset.

The bootstrap method is a re-sampling technique used to estimate statistics on a population by sampling a data set with replacement.
It can be used to estimate summary statistics such as the mean or standard deviation.

https://machinelearningmastery.com/a-gentle-introduction-to-the-bootstrap-method/

In our continual striving to provide clients with quality information and effective guidance, we have begun driving our Monte Carlo Bootstrap Analyses to higher standards of predictability.

In this pursuit we have developed algorithms which take key data through thousands of bootstrapped iterations that can be used to derive two levels of analysis.

Confidence Intervals.

In performing a Confidence Study, we are trying to ascertain within a high degree of confidence, the possibilities that a film will perform within a certain range of market parameters, for example, box office, foreign box office, various aftermarkets, and so on.

A study will typically consist of collecting a pool of Comparable Pictures Data, and then subjecting the market characteristics of that pool to a bootstrapping (Monte Carlo) that randomly generates thousands of iterations of each studied parameter. The resultant data will give us clear indications on each parameter as to the outside edges of Confidence, and at each Confidence Interval, what the different market parameters would be: for example, at 99% Confidence Interval, we might see that the highest box office could be $100 million, and the lowest box office could be $25 million in one study. In another, those same parameters at 99% Confidence could be $10 million and $2.5 million. The Confidence Intervals, say at 90% would give us a narrower range of possibilities, but could be sufficient for purposes of the target study. What it would also tell us is what performances have a very low Confidence of happening, those outside the 99% Confidence Fence as illustrated just below. These are not outside the realm of possibility, but they are very improbable. We calculate that improbability and give you a number for it.

Discrete Event Probability

If I was using typical statistician speak, you would begin to hate me and hate what I am saying, and with reason, because much of statistical talk becomes gibberish among those who are not statisticians. It does not reduce the value of their work, but it makes it not understandable to people who also need to understand it. A Discrete Event Probability is a higher level of Confidence that an event will transpire (domestic box office +plus foreign box office + domestic and foreign aftermarkets + cost to achieve those, both in production and marketing, could be called a discrete event in this parlance for us). Probability is typically a lower percentage, because it has an even higher potential for happening than confidence. It pulls the fences in, and in the illustration above, we have achieved a 99% Confidence Level, and with the same data achieved a 90% Probability (for a Discrete Event).

Discrete event simulation (DES) is a method of simulating the behaviour and performance of a real-life process, facility or system.

https://www.ncbi.nlm.nih.gov/books/NBK293948/

If you think the business plan for your film or slate could benefit from this kind of robust analysis, then check out our Statistical Confidence Models page at www.filmprofit.com/confidence and probability_studies.

Or fill out our Project Intake Form

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Filed Under: Our Thinking Lately Tagged With: Box Office, comparable pictures, projections, Statistical Analysis

August 13, 2018 By JNH

Comparable Pictures: How to Choose ‘Em and Use ‘Em

I get a lot of clients who find it difficult to choose comparable films right off the bat. I wrote this article to help them, and help others, even if they do not become clients. Bona Fortuna to all!

How I Go About Choosing Comparable Pictures

In a given year I might prepare projections and financials packages in which I have to help producers choose hundreds, even thousands of titles for comparison to their prospective film. Every producer comes to this a little differently, but I thought it might help some of you if I talked about my own point of view when approaching this task. Whether I am involved in your process or not, I hope this helps in the way you approach it. First, the comparable films chosen should be seen as “models” for your film. They can be creative models, but they are also business models, and we are seeking insight from the information those models bring to us. In my case, mostly business insight for strategies and value. So, what are some key questions I think you should be asking and answering to discern comparable titles.

1. I like to start with films of Similar Themes.

Many producers think they need to use films with similar stories. This is often, in my book, a real stumbling block. A film uses its plot elements to explore themes, rather than themic elements to explore the plot. So, focus on the theme. If your film is a kidnap, then choosing only kidnapping films, for example, could actually miss the mark of your film, and make your choices far narrower than they really might be, than if the positioning of your film was as a drama of how an individual can get caught up in events that snowball unintentionally into great tragedy.

2. Of course we want to start in the Budget Range of your film.

There is a little bit more I will have to say about this later. But the lower the budget of your film, in some ways, the narrower the range of budgets we might have to work in. So, a $5 million film, we might look at titles from $3 or $4 million, to $10 million. If your film is $100 million, then we can reasonably look at films in the $70 to $200 million range, for example. Of course, with lower budget films, there could be reasons why we might broaden the range of budgets, some of them might include a sharper comparison in target market, for example. Sometimes, we may be dealing with a film that has few thematic, story, target market, and so on films that are in the same budget range of our film. In that case, we may need to choose higher budget films, or some at our target budget, and one or more at a completely different budget level.

3. If possible, we would like to work with films Released More Recently.

Various elements of the release and markets in these changing times may be much more indicative of how your film might perform as we go forward, than a film released ten years ago.

a). Still, however, your film might be so unique that similar films come along relatively seldom, so that we have to take them from the time periods in which they have appeared. That might lead us to choose films from fifteen or even twenty years ago, if they also fit in other ways.

b). As well, if we understand the range of the domestic box office, at least that can give us a starting point for understanding the possibilities of our prospective film’s value.

4. Understanding Your Film’s Target Market.

This is an important element in helping us determine good comparable films. Just today I was working on a middle ages Action Adventure with a relatively low budget, but when studying the target audience of two higher budget Action Adventures, and analysis of Action Adventure audiences from an exhibitor overseas, it was remarkable the similarities in audience breakdown. Understanding your film’s target market is crucial in many other ways that will serve you through the whole process, including the range of target distributors and the distribution method.

5. Style of Release or Distribution Method.

The viable selection of distributors, the possible number of screens in release, the size of the target market, all are encompassed in the understanding of the style of release of your film, and its comparables. At certain budget levels, a Producer Controlled Release is viable, even if it is not your preferred method and you go a different way. At others, unless you can mount a studio-style release, you must find and work with a studio partner to achieve the market dispersion your film and budget needs, and your target market(s) can support.

6. What is the Look and Feel of Your film?

The style of your film can tell us a lot about where it belongs in the continuum. That continuum encompasses Budget and Target Market. A comedy that is quirky, or a film that will be cut with a fast pace will likely have a younger-skewing audience, and may be less suitable for an older audience, unless there are thematic elements that are more suitable for older audiences. I suppose, then, what you see from my answer to this question, is that these things are all inter-related.

7. What is the Target Cast or the Negotiated Casting of your film?

Of course, given that you can achieve and afford your target cast, what does this say about target market, and, commensurately, what does that say about the style of release. Now, sometimes, a producer will think it might be easier for me than for them to make choices of comparable films. In many cases, it can be much harder for me. And, then you might understand why I charge for this service, and why it is better for you to start with your own choices, and then I might be able to help you refine that list.

Let me tell you some of the reasons why:

1. You probably know your film better than I do.
2. You likely know what about your film inspired you, better than I do.
3. You know your own influences and desires for your film better than I do.

The influences for your film, whether you are the writer, the producer or the director, or some combination of the three of them, are likely the most insightful place to start. So, I always like to start by asking you to help me see the film the way you see it. No matter how smart I might be, my goal and job is to help you achieve your film, and comparable films that I deliver are a suit of clothes you will wear, not one I will wear. The following is a set of questions we ask our clients to think about in choosing comparable titles. This comes from our Project Intake Form for packages where we are doing Comparables and Projections, Business Plans and the like: Comparables – in look and feel, market, budget, cast, distribution strategy, story, or a combination thereof. These should be films you think are the best matches for comparables, but be assured we look them over fully, and make sure we don’t think others might be better (Our criteria for choosing comps are:

1. Does it share target audience
2. Is it story style comparable, not story comparable (many get hung on this)
3. Is it distribution comparable (studio, methods, etc.)
4. Is it budget comparable
5. Does it evidence broad or deep interest in the subject matter
6. Did it come about the same way (outsider production, or insider production)
7. Is it casting level comparable
8. Certain other items may include production methods, etc.
9. Does your team feel comfortable with it, can they represent it)
Onward and Upward! Jeff

Comparable Pictures Available ListDownload

If you would like to learn more or buy Comparable Pictures Reports, go here: Comparable Pictures ROI Reports

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Filed Under: Our Thinking Lately Tagged With: Box Office, comparable pictures, SVOD, VOD

August 9, 2018 By JNH

FilmProfit Glossary of Film Terms

This is a Glossary of Key Terms

Above The Line

Budgets for films usually begin with a section that covers creative talent such as: actors, directors, producers, and writers. This section is followed by the rest of the budget, or Below the line. This term also refers to the part of the budget which includes costs and fees associated with this division of talent.

Accrual Accounting

Whenever an ad or expense for a film is incurred, the account is charged, and if interest is being charged, all of the expenses collect interest charges as of the day they are incurred, even though cash payment for the expenses is made at a later date.

Acquisition(s)/(Acquisitions Execs)

Distributors buy or acquire films with cash, or deal parameters that portend cash. The act of buying the film is the acquisition, and the distribution executives that commit the buy are known as Acquisition execs. They often travel to film festivals (such as Sundance, Cannes and Toronto) to find films to buy.

Advances

  1. a) Production Advances
    Distribution companies will often advance money for, or guarantee loans for the production of a film by an independent producer. In most cases, the independent producer does not have any general liability for such an advance or loan. The loan is usually only repayable from the revenues from the film. The motion picture company bears substantially all the risks of ownership, though the producer may sometimes retain the copyright.
  2. b) P&A Advances
    Distribution companies also generally expend funds to release a film, including P&A costs, and other costs associated with distribution. These costs are treated by the distributor as an advance, or a loan to the film. The loan is usually only repayable from the revenues from the film, while the distributor bears substantially all of the risks of loss.
  3. c) Distribution Advances
    Distribution companies may provide the independent producer with a cash payment as an “advance” against revenues from the film. These advances can be treated by the distributor as a loan. These loans are usually only repayable from the revenues from the film.

Against(In Step Deals)

When a script is referred to going for a “low six-figure offer against mix-six figures.” Meaning the screenplay’s actual purchase price was a low six-figure offer (ex. $200,000), but the writer will receive additional funds (let’s say another $450,000), bringing the total to $650,000 or mid-six figures if the movie is produced.

Agent

A handler who represents above- or below-the-line talent. Their primary function is to secure work for their clients.

Ancillary Markets

(see Domestic All Other Rights under Distributor Revenue)

Arc

The movement of a story line from beginning to end.

Assistant Director

The crew member responsible for delegating the director’s instructions and making sure the cast and crew are in their required positions at the right time.

Associate Producer

Associate Producers carry out significant functions which might otherwise be performed by the Producer, Executive Producer or Co-Producer. These responsibilities may range from helping to raise production finance at the beginning of the production process, to supervising the final stages of post-production. At times Associate Producer titles are agreed upon before filming, and at others are bestowed upon those who have performed above the call of their conventional task.

Attach

Often a producer seeks to make a “package” (to package) their film, to pack or to illustrate the value and validity of the film they want to make. In this “package” are more than the script, it may contain one or all of the following list of “elements”: name stars, director, writer or producer, along with other items, including budget and schedule, and so on. This packaging may include compensation for some of the elements, and may or may not include legal commitments of any of the elements.

Availability/Artist’s Availability

If an artist is free to work. In Letters of Intent (LOIs) there may be references to an agreement being according to an Artist’s Availability.

Back End (Backend Rights)

Also Participations. Usually expressed as some percentage of a film’s profit. The Back End is the share of profits (usually expressed as a percentage) that a person (or even an entity) holds the rights to. This may be expressed as gross participations or net participations (and both must be defined). In FilmProfit, producer’s gross profit is considered before any deductions for backend rights of the net participants, but after backend rights of gross participants. There is a Paul Simon song which says that one man’s ceiling is another man’s floor, and in that respect, too, one man’s gross may be another man’s net. Backend is also a term used on its own, or in conjunction with other terms to describe any postponed action, such as speculative income from profits, delayed payments, delayed rights sales, etc. (see also Net Profit Participants)

Barter (or Trade)

A method whereby a syndicated television program supplier retains a portion of the advertising time, say in the case of a movie, 10 or 12 minutes across the movie’s air time, and then sells that advertising time as the way in which they make money off the movie. In these barter/syndication deals, the film may be provided to the station for free (all barter), or for some barter and some cash, or barter in the first window, and then all cash in a second, or “backend” window.

Below the line

Those below the line are all the workers on a film crew that are not part of the theoretically “bankable” creative talent of actors, writers, producers and director, for example. This includes all the technical categories and ancillary activities (legal, marketing, etc.) Also includes the part of the budget that includes costs and fees associated with all of this work and these workers, such as cars and drivers, hotels, care and feeding, and so on.

Blu-Ray

The industry-adopted High Definition DVD (optical disk) format. It beat out the DVD-HD format to become the standard. It was developed by the Blu-ray Disc Association (BDA), a group of the world’s top consumer electronics, personal computer and media manufacturers. The Blu-Ray format offers more than five times the storage capacity of traditional DVDs and can hold up to 25GB on a single-layer disc and 50GB on a dual-layer disc, offering consumers an unprecedented HD experience.

Box Office, Box Office Gross

Box office gross represents the total revenues taken in at movie theater box offices (ticket sales). (also see Domestic Box Office Gross)

Budget

The actual money spent to produce a film. It does not include prints and advertising. (also see Negative Cost)

Cable

Vernacular for Cable Television, or television delivered to homes via a direct wired connection. Cable TV has been a staple of revenue for motion pictures, including those made for theaters, made directly for television consumption, or even Direct to Video. Cable revenue includes all “Pay Cable” services and “Pay-per-View” services that deliver over this wired system. It is often determined contractually as a percentage of Theatrical Box Office revenue.

Cable Distribution Fee

The fee a distributor charges to distribute a producer’s motion picture to any or all of the cable carriers in the Domestic Territory. The fee could range from 15% to 30%, but is often about 25% of the revenue generated from Cable sales.

Cash Accounting

The case when an exhibitor sends a check from the box office for a film’s receipts, the distributor waits until the end of the quarter to credit the account for the revenue, and no interest is paid on the revenue balance for the period it was actually in the account. Not all distributors use cash accounting for a film’s revenues. Some credit when actually received.

  • In FilmProfit all expenses paid are charged and all revenues are credited as of the mid-point of each quarter.

Co-op Advertising

A distributor and exhibitor may share the cost of an advertising campaign that also features the exhibitor’s theater or theaters. In this way they are co-operating. These co-ops are arrived at through individual negotiations, and are usually short-term, on a week-by-week basis.

  • In FilmProfit, co-op advertising costs incurred by the distributor are included in the amount input for P&A.

Delay in Payments by Distributor

Playing the “float” is common in the Film industry. Although distributors can put pressure on exhibitors to make payments on a timely basis, producers generally do not have much leverage to force a distributor to make timely payments. A typical cycle for a distributor is to make payments to a producer initially on a quarterly basis but thereafter on a semiannual basis.

  • A distributor usually accounts for revenues and P&A expenses on a quarterly basis. After the end of the quarter, the distributor summarizes the revenue and expense data. The Distributor then submits the processed numbers to his accounts payable department for payment. The accounts payable department issues checks one to two months thereafter.
  • Accordingly, the producer’s portion of revenues (Producer’s Net Rentals) collected at the box office in July may not be summarized until near the end of the next quarter (November/December) with payment by the accounts payable department to the producer in the subsequent quarter (January/February). When the cycle moves to a semiannual basis, this delay can be even longer.
  • In FilmProfit, this payment delay process is referred to as the Delay In Payments by Distributor. (see also Float and Float Penalty – For a more full discussion see the chapter of the FilmProfit Guide to Distribution Deals chapter, INTEREST-BEARING ADVANCES/LOANS)

Direct-to-Video

A film which is released into the video market before being made available to consumers through any other medium. It may be because the film was created precisely for the video market, or because it was unable to find distribution in other markets first.

Distribution, Distributor

The entity or person who takes on the responsibility of selling, licensing or renting a film to its various markets, including but not limited to theatrical, home video, pay/cable and other television markets domestically and overseas. Some distributors specialize in individual markets, while others distribute in all of the available markets.

  • The independent producer may contract with one distributor for all markets, or several distributors in the individual markets.

Distribution Expenses (see P&A)

Distribution Fees

Distributors charge fees which are usually based on a fixed percentage of their revenue from exhibitors and others.

Distributor Payment to Producer

Final payment of net rentals to the producer after deductions by the distributor for Interest-Bearing Advances/Loans and for interest. (see also Delay in Payment by Distributor)

Distributor Revenue

FilmProfit specifically uses this term to describe the proceeds of the film paid to the distributor before any deductions by the distributor.

Domestic includes the United States and Canada (North America), and represents proceeds from:

  • Theatrical: distribution proceeds paid by exhibitors to the distributor for the box office

The term Rentals as defined by Variety and others is often used to describe this income, particularly from domestic box office.

  • Domestic Video: proceeds paid by video retailers to the distributor for videocassettes and videodiscs
  • Domestic Pay TV: proceeds paid by cable and other pay TV companies to the distributor for the rights to broadcast
  • Domestic Public TV: proceeds paid by the Public Broadcasting Service, by public television stations, or by producing entities such as American Playhouse, to the distributor or producer for the rights to broadcast. (In FilmProfit this does not include outright grants from other agencies)
  • Domestic Network TV: proceeds paid by network and independent television companies to the distributor for the rights to broadcast on nonpublic free TV These proceeds are derived from the first runs of the films in free television. Subsequent reissue or reuse is referred to as syndication

Domestic All Other: proceeds paid for TV syndication and all other ancillary markets, include:

  • Syndication represents the license of rights by the distributor, usually in packaged collections of films, to independent television stations for broadcast on free TV
  • Ancillary Rights includes sales to libraries, schools, airlines, ships at sea, hotels, clubs, prisons, military, and includes such market spin-offs as music rights, toys, posters, T-shirts, clothing, etc.
  • Foreign includes all regions outside the United States and Canada, and represents proceeds paid to the distributor by subdistributors and exhibitors for all theatrical, video, pay TV, public TV, network TV, TV syndication and ancillary market rights and income

Because FilmProfit is structured to relate to the producer who will own his or her own film, as opposed to the system that favors studio or distributor ownership, we have designated the producer’s revenues as Net Rentals, and the return to the distributor from the exhibitor as Distributor Revenue.

Domestic

Includes the United States and Canada (North America). All other areas are defined by industry practice as foreign, though not in any nationalistic sense.

The domestic markets are:

  • Theatrical
    • Distribution of films in movie theaters
  • Home Video
    • Distribution of a film via videocassette or disc that may be purchased or rented for viewing through VCR’s
  • Pay/Cable
    • A programming service for which consumers pay a separate fee, and which is primarily delivered in the United States over cables wired into the consumer’s home
  • Public TV
    • Free television which operates without “advertising revenue.” Financial support for public television is primarily through government funding, contributions and corporate and private grants
  • Network TV
    • Also called broadcast TV and free TV. Supported by advertising, it is distributed over the free airwaves by networks and independent stations

Domestic Box Office Gross

Domestic usually refers to the combined US and Canadian markets (North America). Box office gross represents the total revenues taken in at movie theater box offices (ticket sales)

Exhibitor

An owner or operator of a theater that shows films

Exhibitor Share of Domestic Box Office Gross

In FilmProfit, the amount of box office gross receipts retained by the exhibitor to cover the exhibition expenses and profit margin.

Financial Interest and Syndication Rule

US networks have not been allowed to have a financial interest in their own programming, or been allowed to participate in the after-market syndication of their programming, in order to prevent the networks from favoring one of their program offerings (specifically those which they own) over others in time-slot placement, in promotion or in other means. The Federal Communications Commission created the financial interest and syndication rule in 1970. In 1993 this rule was eased again.

Float

The amount of money that a distributor holds for the period between the time the distributor receives the money and when it is paid to the producer. (see also Float Penalty and Delay in Payments by Distributor).

Float Penalty

(see also Delay in Payments by Distributor –For a more full discussion see the chapter, INTEREST-BEARING ADVANCES/LOANS in the FilmProfit(r) Guide)

Foreign

All areas other than the United States and Canada.

Foreign Revenue

The total of funds paid to distributors for exhibition and other rights outside of the United States and Canada.

  • FilmProfit assumes that all foreign distributors have deducted for their P&A and other direct and indirect foreign distribution expenses, as well as their foreign distribution fees before remitting to the primary distributor, if any, or before remitting to the producer.

Free TV

(see Network TV)

Grants

Any funds given outright to the producer, which carry no interest charges, and are not expected to be paid back. Some grants, however, do carry stipulations as to certain market windows, etc. For example, a National Endowment for the Humanities grant could stipulate that the film would receive one airing on Public Television, or some other like stipulation. (see also Presales and Noninterest-Bearing Presales/Grants)

NOTE: It is important that the producer who is receiving, or anticipating receiving grant funds, particularly those with public television stipulations attached, NOT enter those funds on the Public television data entry line and also enter them on the Noninterest-Bearing Presales/Grants data entry line. This will result in DOUBLE ENTERING, and will accordingly affect the accuracy of your FilmProfit results.

Gross

Gross is a reduced form of the term Gross Box Office.

Also a term used generically to denote any revenue before being reduced by expenses. (see also Domestic Gross Box Office)

Gross Deal

A type of deal between the producer and the distributor in which advances (if any), with interest charges, are deducted by the distributor. Then the producer’s portion of the revenue is remitted before the distributor recoups his expenses and calculates his profit.

Gross Profit Participants

Those individuals (often actors, though male actors more than female actors) and companies which are entitled to a percentage of the gross distributor revenue, unreduced, or only marginally reduced by expenses or fees. Usually a deal made with the distributor taking part.

Guarantees

The sum a distributor agrees to pay a producer for his film, no matter what the market performance may be. Sometimes these guarantee payments are made in lump sums in the production phase, or in a lump sum after production and upon the delivery of the negative, or they are spread out in progress payments, a portion during production, a portion during distribution. In FilmProfit, such guarantees received before release are treated as Noninterest-Bearing Presales/Grants if they bear no interest, or if they do bear interest are treated as Interest-Bearing Advances/Loans. After production, or after release, such guarantees are treated as Negative Pick-Up Guarantees. (see also Interest-Bearing Advances/Loans, Noninterest-Bearing Presales/Grants, and Negative Pick-Up Guarantee).

House Nut

The Exhibitor’s calculation of what it takes to lease his theater, to staff and to run it. In use, this figure may really include some hidden profit for the exhibitor.

Interest

Banks and others charge borrowers a percentage rate on the money they loan as a fee for the loans.

The interest rate banks charge to high quality borrowers for low risk loans is known as the prime interest rate (prime rate). (see also Risk Factor).

Interest-Bearing Advances/Loans

A distributor may advance a lump sum to the producer, to be used for production.

  • If this advance is treated by the distributor as a loan, and accordingly bears interest, FilmProfit calls these advances Interest-Bearing Advances/Loans. These advances will usually be recovered by the distributor, usually along with interest charges on the advances, by deducting them from the distributor revenue before remitting to the producer.
  • Distributors view such advances as high risk investments, and accordingly generally charge interest rates in excess of the prime rates. FilmProfit calls the additional percentage points above prime the Risk Factor. (see also Noninterest-Bearing Presales/Grants and Negative Pick-Up Guarantees).

Library Value

One of the most significant considerations in the long-term health of a motion picture distributor is the value of the programs which they own, their “library,” so to speak. If a program is perceived to have this long-term value by a pay/cable distributor, they will most likely be more willing to invest a larger sum in the production of the film, and want to hold all or most of the rights.

License, Licensor

A contract between two parties, giving one the rights to distribute, or exhibit a program in a certain market, or in all markets. Licenses generally operate within certain time periods, with the rights reverting to the owner (licensor) at the end of the time period.

Long-Form

Describes television shows generally of 90 minutes to 2 hours or more in length, as opposed to television series segments. Applied particularly to television movies and mini-series.

Made-Fors

Movies made for television.

Negative Pick-Up Guarantee

A distributor may advance a lump sum to the producer after production and upon delivery of the film negative.

  • If this advance is treated by the distributor as a loan, FilmProfit calls these advances Negative Pick-Up Guarantees, as this sum is assurance that the producer will reap a minimum of return on their film from the markets included in the deal. These advances will usually be recovered by the distributor, usually along with interest charges on the advances, by deducting them from the distributor revenue before remitting to the producer.
  • Distributors view such advances as high risk investments, and accordingly generally charge interest rates in excess of the prime rates. FilmProfit calls the additional percentage points above prime the Risk Factor. (see also Interest-Bearing Advances/Loans)

Net Deal

A distribution deal wherein distribution fees, P&A (including overhead on the advertising portion), advances (both production and distribution), and interest on advances, are subtracted from distributor revenue before arriving at the producer’s net rentals.

Net Profit Participants

Those individuals or companies entitled to a percentage of revenue after it is fully reduced by all expenses (including production negative cost), distribution fees, overheads and interest. Since FilmProfit is primarily focused on the distribution stream, it makes no provisions for calculating net profit participations.

Network TV

The “Big Three” (ABC, NBC and CBS) have now become four with the advent of the Fox Channel, and there is now a stab at a fifth channel in the Universal TV Network, which is, like the Fox Channel, an amalgam of independent stations, primarily providing Universal with a constant TV distribution stream for their movie packages. Television program distributors who supply programming to their affiliated stations across the country in turn for advertising time on the air during the programs. These four make up the bulk of what is often also called “Free TV.”

Non-interest-Bearing Presales/Grants

A distributor or granting agency may advance a lump sum to the producer, either to be used for production, or after production.

  • If these advances do not bear interest and accordingly are not loans, FilmProfit calls these advances Noninterest-Bearing Presales/Grants.
  • In FilmProfit all funds received for production which do not have to be repaid, would be properly entered as Noninterest-Bearing Presales/Grants. (see also Presales, Product Placement and the chapter DOMESTIC TELEVISION DISTRIBUTION in this Guide).

Other Funds Needed for Production

In FilmProfit, the resulting cash needed to cover the Negative Production Cost after deducting any Interest-Bearing Advances/Loans, and after deducting any Noninterest-Bearing Presales/Grants. This figure is the amount of money the producer still needs to provide in order to produce the movie. It may be provided by private investors, by deferring fees or expenses, trading profit participations for goods or work, or any number of other methods.

  • As FilmProfit is for analyzing the distribution aspects of a film, it makes no provisions for analyzing any of these methods or any alternative methods of providing for these funds.

Output Deal(s)

A deal usually between a producer or producing entity and a distributor (in any market), in which the distributor has exclusive access to the producer’s future products. Can be restricted to time, to types of projects, etc.

Overhead

A factor, usually a percentage of costs incurred by the distributor, which is intended to cover the distributor’s indirect costs such as maintaining an office, paying regular staff, etc.

  • There are two prime instances in which the producer will incur overhead charges with the distributor:
  • Overhead on Production Advances: When a distributor directly advances money, material, production equipment or space for a film production, they will usually also charge a fee based on a percentage of that advance which is meant to cover the distributor’s indirect costs.
  • Overhead on P&A: When a distributor who distributes films to theatrical exhibitors incurs direct costs for advertisements (the A of P&A), they will usually also charge a fee based on a percentage of the direct advertising costs to cover the distributor’s indirect costs.
  • In FilmProfit, it is always assumed that the overhead account will incur interest.

P&A

The actual costs incurred by a distributor in producing the screening prints (the P) of a film, plus the actual costs incurred for advertising that film (the A), which usually also includes overhead on the advertising.

  • In FilmProfit, there is a separate entry line for overhead on P&A. As well, P&A costs would also include certain other expenses distributors charge to the producer’s account, including: Taxes, Checking (auditing of box office income, etc.), Censorship (rating seal, etc.), Transportation, Guild payments and royalties, Trade association dues (MPAA, etc.), Claims (from any litigation, etc.), Bad debts.

Pay/Cable TV

A television system in which the consumer/subscriber pays a fee for the delivery of programming. The delivery of programs can be through direct wiring to the receiver, or through use of satellite technology.

  • There are three primary types of cable channels:
    • Basic cable included in a “base-price” to the subscriber.
    • Premium cable which are channels not included in the “base-price” of the cable service.
    • Pay-per-view, in which each program has a separate price for access.

Post-Release Direct Sales

In some instances, a producer may make a direct sale (or license) to a particular market, or markets. These sales (or licenses) would not incur any distribution fees, and would be the occasion for direct payments to the producer.

Presale

The practice of licensing all or certain rights to a film project before it is produced, or while in process of being produced. Generally used in speaking of licenses (“sales”) to overseas markets. FilmProfit treats presales that bear interest as Interest-Bearing Advances/Loans. Conversely, FilmProfit treats presales that do not bear interest, and which accordingly are outright advances, as Noninterest-Bearing Presales/Grants.

Producer, Executive Producer

An individual or company that selects a film project, arranges financing for the film’s production budget, and causes the film to be made.

Producer’s Gross

In FilmProfit, the amount of funds in the producer’s account with the distributors after deduction for all gross participations, distribution fees and charges for P&A. (see also Producer’s Gross Profit)

Producer’s Gross Profit

A term used by FilmProfit to denote the actual cash paid out to the producer by the distributor, after all expenses, charges, and interest are deducted (Distributor Payment to Producer) and after addition of any Post-Release Direct Sales and deduction of Other Funds Needed for Production and Presales/Grants.

Product Placement

Quite often independent producers will get a light in their eyes when they think about product placement as a way of funding their film production costs, or even as an area for profit from their film.

  • Now, the producer is actually selling advertising space in their movie, rather than what is euphemistically called “placing product,” and product placement often brings in far less than some producers anticipate, and quite often nothing at all.
  • For an instructive look at product placement see “Products for Nothin’ & Your Drinks for Free: Corporate Support…or Sell-Out?” in The Off Hollywood Report (magazine of the Independent Feature Project), April/May, 1990.
  • If you do receive product placement money, and would like to account for it in FilmProfit place the entire sum in the Non-interest-Bearing Presales/Grants data entry line (added to any other presales or grants, if any). Otherwise, deduct the amount of product placement money from the production negative cost before entering the production negative cost in the program.

Production Negative Cost, (Budget)

A generic term referring to the cost of producing the film (producing the actual film negative, from which screening prints will be struck), and includes the development, preproduction, production and postproduction costs.

Profit Participation

Compensation based on sharing the revenues from a film’s performance in the market. Much compensation (or incentive compensation) in the motion picture industry is based on this method of sharing income. (see also Gross Profit Participants and Net Profit Participants)

Public TV

Public TV could conceivably be called the “Fifth Network” if looked at as free TV. Public TV is free to its viewers, though they are often asked to ‘donate,’ or ‘become members.’ Public TV receives its revenue neither from advertisers nor subscribers, but rather from federal funds, from ‘donations’ and from corporate, foundation and individual sponsorship. (see also Domestic)

Release

The process of advertising, promoting and physically distributing films to theaters or other media.

Risk Factor

A distributor may charge interest on advances, on P&A, and effectively, on overhead. In contrast to the lending rates of banks, a distributor typically charges interest rates above the prime rate, with the added percentage their consideration for taking the “risk.” FilmProfit calls this added interest percentage above the prime rate, the “risk factor.”

Royalty

Payments made to a producer’s account from proceeds of videocassettes. Usually calculated as a percentage of the wholesale price of each cassette.

Specialty Film

A film which will be or has been distributed to “niche” markets, as opposed to being exhibited through general or “wide” release. Some films are designed to be specialty films, and some films just turn out to be specialty films.

Syndication

Motion pictures receive income from independent television stations through the practice of selling the films station by station. This method of selling of movies is done by specialized Distribution companies, or by specialized arms of large Distribution firms. The films are often sold in packages, and each film is individually priced for each television station, according to the size of the station’s market and according to the film’s box office and other previous exposure. The films are not usually sold individually.

Third-Party Gross Participations

(see Gross Participations)

Timing, Timing Model

A term used in FilmProfit to express the relationship of market revenues to the quarter of the year (such as year 2, quarter 3) in which those revenues would be received by the distributor.

Vertical Integration

In the film industry, used to describe the situation where the producer and the distributor are one entity, but even more particularly where the distributor and the exhibitor are one entity. Particularly distressing in the business of film distribution and exhibition as it can lead to freezing-out competitive films from the marketplace. (for more information, research topic Consent Decree of 1949 – 1952).

Wholesale Share

As used in FilmProfit, the home video wholesale share is that portion of the distributor revenue which is not passed on as royalty to another distributor or to the producer.

Window

The specific time period during which a film is allowed to be exhibited by a rights buyer, such as a television network, or pay/cable exhibitor.

  • Also used to denote time periods which relate to the general sequencing of a film to its various markets.

Other glossaries may be of interest, including:
–Hastings Communications and Entertainment Law Journal Comm/Ent, published Fall of 1991, Volume 14, Number 1, published by University of California Hastings College of the Law
-Dictionary of Marketing and Related terms in the Motion Picture Industry, by Donn Delson, Bradson Press, Thousand Oaks, CA.

Filed Under: Our Thinking Lately Tagged With: Box Office

December 14, 2017 By JNH Leave a Comment

Key Risks In Making A Film, & How to Manage Them

If you’re in the film business there’s a good chance you’ve read a statement like this before:

Statements like this usually go on half a page or more, listing a pile of risks, including competition and the like. But I am focused here on the specific risks a producer confronts when birthing and bringing a film to market. These key risks are confronted in each film, and are events against which you can forge a viable campaign of mitigation and defense.

In general, in life, to the risks go the rewards. Risk, and this potential for rewards, are both inherent in the business we have chosen to pursue. However, I am very much against running wildly into the risk storm, yelling, “Wow, this is risky, but fun!” We must understand and inspect the risks, and we must take measures to control them and to control the relationship of our projects to those risks, while not limiting the potential for reward.

These Risk Points
Are Met at Key Tasks and Their Attendant Decisions

  1. Creation of a quality script
  2. Effective development and packaging of the property to make a quality film
  3. Fully financing the film
  4. Completing the film at a level commensurate with its budget and market
  5. Gaining adequate distribution in the marketplace
  6. Achieving effective marketing for the target audience
  7. Achieving consumer uptake or sales levels, thereby achieving financial goals

Each Film Has Many Risk Points

Every risk point I list here is actually a decision point and an action point. The act of planning the business of your film is the act of learning about, understanding and gaming out your moves in advance so as to minimize risk and maximize potential. You pre-visualize the creative plan of your film to mitigate production risk, so why not pre-visualize the business plan of your film and mitigate the business risks. Mitigating the business risks protects the precious creative asset you are producing. This is to the benefit of all stakeholders in the asset, including you!

The result of this approach to answering the risks will be an effective and powerful business plan. https://filmprofit.com/what-is-a-film-business-plan/

There are, of course, very complex business moves that people might take, all meant to target and neutralize financial risks. These are good and viable, but most of the items I want to highlight in this series of articles are easily do-able by any producer, and are primarily focused on how information and preparation will enable you to be ready for the key risks in front of you, risks you can manage without being a hedge fund manager.

This Is An Ongoing Series

I will be discussing these risk points in future installments of this blog. To go on this little journey with me, you can subscribe here:

Check your inbox or spam folder to confirm your subscription.

Key Risks in Making a Film, & How to Manage Them, Part II
Key Risks in Making a Film, Part III – Greenlighting Yourself

What originally caused me to begin FilmProfit® was my noticing that the studios and big players had lots of folks to help them figure out how to make their films profitable. Indie producers were in a gunfight with rubber stage knives. I wanted to give them some weapons to begin to level the playing field a little. The things I do, whether for rump indies or mid-level players, or even the studios are meant to get down under the hood, not just numbers, although numbers tell a story, but to get at the functions, of moviegoers, exhibitors, distributors, and all the working parts of the industry, and help my clients see better what they are getting into and how to prepare for it.

Onward and Upward
Jeffrey Hardy

https://filmprofit.com/blog/

Filed Under: Our Thinking Lately Tagged With: Box Office, Film Audiences, film business plan, Films and Risk, Video On Demand

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  • Retreat from 2017 Panic!
  • Key Risks in Making a Film, Part III
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