(I worked for Landmark a long time ago, some facts may be rusty).
Theaters bid for the right to show movies, it's an up front cost to then. This cost is recouped primarily through ticket sales. Revenue beyond that is derived from sales of concessions.
This is why big players like Cinemark dominate the landscape. Through economy of scale (# of theaters && screens) they can drive attendance and concessions. Very much a volume approach and so they show they movies that have a broader appeal.
Indie chains like Landmark have fewer locations and screens, but they target metro areas with people who are more into "niche" films. They usually end up charging a bit more for concessions but they make their money through a loyal customer base. So for them it's important to be seen as stewards of good artistic movies.
Yeah, I used to drink the Kool Aid big time. : )
But really, it's hard for all movie theaters, but particularly the art houses.
(That's why the Stanford in Palo Alto is such a treasure. It has wealthy backing and so you get a cheap ticket and cheap concessions. Seeing movies there is a real experience).
Interesting... I wonder if the theaters bid on contracts to show the movie, where the contract includes provisions for the cut the studio gets of ticket gross.
I say this because I found, by googling, that the studios get 100% of gross sales for opening week of a big release. Then this percentage goes down over time.
Generally it's a percentage cut that goes down over time, as you say.
I've never heard of 100% gross to the distributor (studio), about 85% is the highest I've heard of, and that was for super-high demand premiere weekends. I think most blockbusters are closer to 70% on opening weekends. But it's all case by case, with a number of factors at work. There can be minimum run length guarantees (this many weeks on this particular screen), which can sometimes be conditions for getting other movies from the same distributor. Each deal really is individual.
The rule of thumb is about 55% of box office goes to the distributor over the entire run of the film. The distributor then takes a cut before the rest is passed on to the production entity. Of course, it's often the case that the distributor and the production entity are two divisions of the same studio, so welcome to the accounting games.
I had a friend who was assistant to the president of distribution at one of the giant studios. He would tell me that the dist. head would be able to discuss individual theaters and even screens with the big chains. They knew the demographics, seating capacity, all of it. The exhibition could be negotiated on a very fine level of granularity.
Theaters bid for the right to show movies, it's an up front cost to then. This cost is recouped primarily through ticket sales. Revenue beyond that is derived from sales of concessions.
This is why big players like Cinemark dominate the landscape. Through economy of scale (# of theaters && screens) they can drive attendance and concessions. Very much a volume approach and so they show they movies that have a broader appeal.
Indie chains like Landmark have fewer locations and screens, but they target metro areas with people who are more into "niche" films. They usually end up charging a bit more for concessions but they make their money through a loyal customer base. So for them it's important to be seen as stewards of good artistic movies.
Yeah, I used to drink the Kool Aid big time. : )
But really, it's hard for all movie theaters, but particularly the art houses.
(That's why the Stanford in Palo Alto is such a treasure. It has wealthy backing and so you get a cheap ticket and cheap concessions. Seeing movies there is a real experience).