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Topic: Can someone explain the business behind the renting of 35mm prints?
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Paul Linfesty
Phenomenal Film Handler
Posts: 1383
From: Bakersfield, CA, USA
Registered: Nov 1999
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posted 09-02-2002 09:46 PM
What you are purchasing is a licensing agreement to show a film. Hollywood maintains ownership of the film's print (even though prints sold off for "silver extraction" end up in private collector's hands).In the old silent days, exhibitors did buy film outright, but that changed when films started becoming big box office attractions, such as The Great Train Robbery (basically a short) and Birth of a Nation (aka The Klansmen). There have been experiments to change distribution practices. THE SAVAGE IS LOOSE (1974), with George C. Scott, Trish van Devere and Scott Campbell featured prints sold outright to theatres, but this film bombed big time. Another different distribution pattern invbolved General Cinema theatres co-financing ITC films (Voyage of the Damned, Cassandra Crossing, Capricorn One, Hanover Street, as well as others). The arrangement was that any US distributor that picked up these films (Avco Embassy, WB, Columbia) were required to service GCC theatres with prints and advertising materials (posters, ad slicks, etc) without collecting any rentals. I think Capricorn One was the only film that did any decent biz, and this didn't last long.
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Scott Norwood
Film God
Posts: 8146
From: Boston, MA. USA (1774.21 miles northeast of Dallas)
Registered: Jun 99
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posted 09-02-2002 10:14 PM
Presumably, prints are rented (licensed) rather than sold because most films have a relatively limted "shelf life," and can rarely return to mainstream theatres and make a profitable run after the film's initial release. Thus, it isn't worth the up front cost ($1-2k per print, on average) for the exhibitor to purchase the prints, nor is it worth the trouble and expense to store them, especially since a film like "Glitter" or "Cool as Ice" didn't do business in its initial run and certainly won't have many repertory bookings, either.  The situation is different for IMAX and many other special-venue operations, where prints are often purchased. These films do tend to have a long shelf-life and can be profitably shown even decades after their initial releases (well, maybe not the Nsync film, but certainly the space and nature documentaries).
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Paul Linfesty
Phenomenal Film Handler
Posts: 1383
From: Bakersfield, CA, USA
Registered: Nov 1999
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posted 09-03-2002 12:48 AM
Well, it depends on what you mean by too much. My guess is that the payment of guarentees and advances by first-run theatres is pretty much dead, since megaplexes seem to get every major film, as opposed to the days when single screens had to bid against each other for films (although the illegal practice of product splitting went on in many markets). One thing that hurts is that movies have a much shorter life in theatres than they used to. So the distributer, who has always gotten the lion's share of the box office for the first few weeks, really cleans up. Titanic was that rare film that was still drawing first week business when the theatre was getting the lion's share of the box office.Variety reported in the seventies that the aggregate rental percentage in the U.S. was 37 percent. But that took into account all the secondrun, third run and flat rental houses that still existed in big numbers in those days. Today, with most of those non-first run engagement thetares eliminated, and with shorter first runs, the percentage is more in the 55 percent plus category. To put this in historical perspective, David O. Selznick's Hollywood book (highly recommended, IMHO) said that Selznick's usual distributor, United Artists, always got around 35 percent of the boxoffice for first-run engagements (it should be noted that back in the 30's and 40's, snack bars were rare, especially in the big first-runs). MGM was the top moneymaking studio, and their "A" pictures commanded 50 percent. But they were able to demand and get an "unprecedented" 70 percent for the first-tier reserved seat engagements of Gone With the Wind. Today, a first run contract is usually 90/10, which means that after an agreed upon house allowance ("nut")has been subtracted from the total, the distrib gets 90 percent and the theatre, 70 percent. However, the distrib has built-in "floors" based on actual boxoffice without alowances subtracted. For example, 70 percent for the first period of time (measured by a week or weeks), then 60, 50, 40, and 35 out the door. It becomes a case of whatever is higher. The nut may or may not reflect actual theatre expenses. There have been exceptions. The NYC first-runs, for example, had no floors built into their contract. Variety used to report on individual theatre grosses, and always listed the nuts for Manhattan first-runs because of this rule. Example, a theatre such as the Ziegfeld might have a $30,000 nut (this was back in the 70's), the theatre grossed $31,000 for the week, the distributor would get only $900. Only in New York. In the rest of the country, the 70 percent would have kicked in. Co-opt advertising was also a racket in Manhattan. If a movie played in 5 or less theatres in Manhattan, a first run would get to place the ad, charge the distributor a 10 percent agency fee AND charge the regular one-time rate for the ad, even though as daily advertisers the chain would get significant reductions in ad cost. But NYC theatres were called "loss leaders." International distributors would look and see what specific theatre got a booking and based on that would decide how much to pay for the rights. In this day and age of the megaplex, I have no idea to what extent this practice still occurs.
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Martin Brooks
Jedi Master Film Handler
Posts: 900
From: Forest Hills, NY, USA
Registered: May 2002
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posted 09-03-2002 06:06 PM
quote:
Variety used to make a note for the Manhattan gross section each week that explain the subtraction of the "nut" from the gross, and many articles about the business written in the seventies commented on this practice.
Variety was still printing the "nut" in the early 90's, but they did not explain the subtraction of the nut, and frankly, I do not remember ever seeing that. What they did print was: "The "nut" refers to the theatre's physical operational costs-rent, personnel, maintenance, taxes, insurance and other overhead items-on a per-week basis." Here are a few sample numbers of Manhattan grosses from the May 18, 1992 issue of Variety. The number in parens represents the number of seats and the average ticket price. Angelica 2: (264, $7) Nut-$9750 "Mediterraneo" 5th week $22,392.
Angelica 3: (264, $7) Nut-$9750 "Night on Earth" 2nd week $39,167
Art Greenwich 1 (350, $7.50) Nut-$9000 "The Player" 3rd week $29,139
Astor Plaza (1525, $7.50) Nut-$25,000 "Sleepwalkers" 5th wk $9068.
Beekman (538, $7.50) Nut-$16,900 "The Player" 5th wk $46,471
Criterion 3 (398, $7) and 7 (191, $7) "Basic Instinct" 8th wk $16,951
Embassy 3 (300, $7) Nut-$7000 "Wayne's World" 7th wk $4333 in 6 days
Festival (545, $7) Nut-$13,000 "Casablanca" 5th wk $6191
Fine Arts (586, $7.50) Nut-$19,000 "Howards End" 9th wk $58,242
Gemeni 2 (441, $7) Nut-$12,000 "Basic Instinct" 8th wk $15,001 in 6 days
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Bill Gabel
Film God
Posts: 3873
From: Technicolor / Postworks NY, USA
Registered: Jan 2002
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posted 09-03-2002 08:32 PM
The company maybe out of business, but someone owns the rights.
That title shows about 6 different labels on video (tape and DVD).When National Film Services in Los Angeles closed a few years back.
There was a few hundred prints of titles from companys that went
out of business. Like a movie called "Night of the Comet", it was
released by Atlantic Releasing Corp. (Out of Business), but the
video rights were at CBS/Fox. Now the video rights are at Paramount. I would check to see who owns the copyright to the film, to be safe.
That's if you plan to show it to the public.
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