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TOPIC: VPF's Directly to Independents?

Re:VPF's Directly to Independents? 11 Feb 2010 22:25 #33342

  • rufusjack
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Leeler,

Preivously you played move-over 90% of the time? If yes, then that print had very little to no cost to the studio.

Why would they pay you money now? Why would they increase their costs?

Keep in mind that 90%+ of a typical film gross comes from the full-time first-run theaters.

For example: 2012 played at 95 theaters in my district. 12 of those did less $500 or less.
Last Edit: 11 Feb 2010 22:32 by rufusjack.
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Re:VPF's Directly to Independents? 11 Feb 2010 22:50 #33343

  • leeler
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simply because it would spell doom for all the moveover theaters. When has a studio left any money on the table willingly? Wouldn't they be better served in both the short and long term by giving the moveover theaters like mine a smaller amount and keep the money flowing?

By the way, those 12 theaters that grossed less than $500 for 2012 are probably not going to be able to self finance anyway and so aren't in category one.
"What a crazy business"
Last Edit: 11 Feb 2010 23:14 by leeler.
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Re:VPF's Directly to Independents? 12 Feb 2010 01:05 #33344

  • BWT
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My two cents:

The biggest problem that keeps digital and associated VPFs out of smaller later release theaters is that if you look at the screen distribution, the single and two and 3-screen operators just don't make up enough of the of the exhibition industry (from a screens standpoint) to truly worry about. Once the DCIP funding goes through, the studios will have upgraded over 50% of the industry to digital within 24 months of rolling it out. That doesn't even account for the larger independents who are using the CBG or their own pocketbook to do it concurrently alongside the top 3 chains.

Again i'm using NATO data, but if you look at the total membership, out of ~830 or so members, ~630 of them are single location predominantly single or dual screen locations. If i were sitting on the studios' side of the table, what is my real motivation to work on getting VPFs to those last few holdouts and small town operators?

Even if every single location exhibitor had 1/2/3 screens, we're really only talking about 630/1260/1890 screens out of an industry total in the US of ~39,000 indoor screens. The fact is that the studios just aren't going to work that hard to upgrade locations that could (at best) possibly amount to maybe ~4% of the industry's screens. On a revenue basis, I would wager that those single screeners probably do even less than their screen share of the total US box office.

Once the bulk of the industry moves over to digital, my guess is that the leftover 35mm operators will probably be left on the vine to wither away. With digital enabling the studios to cut ~$7-10 million from the cost of distributing a wide release (once a critical mass of theaters have digital capability), I (as a studio) would find it difficult to justify the cost of printing up and distributing celluloid for the remainder. Using the 1/2/3 screen counts I was talking about before, that's ~$630,000/$1,260,000/$1,890,000 in P&A costs to provide content for those theaters at the current rate of ~$1,000 per print.

If a theater is playing films on the break or as a sub-run, there is even less potential for payback (for the print/distrib costs) because the rents are lower that far out. If the studios raised the film rents for the remaining 35mm folks to try and recoup their costs from those who are doing stuff later than day/date, then that is likely opens up another can of worms because it probably wipes out the exhibitors' profitability.
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Re:VPF's Directly to Independents? 12 Feb 2010 10:04 #33345

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I agree that the smaller theaters are, in general, not big enough for the studios to worry about. I was writing about the theaters that did the upgrade or are planning on doing the upgrade in the near future. these are the ones in option 1 mentioned above. I seriously doubt that we're going to get rolled by the CBG and Cinedigm with respect to the pass-through VPFs. This has been a source of debate between rufusjack and myself for some time now. Having said that, BWT is exactly right that some (many?) of the smaller operators who are waiting for the CBG to come in and pay for their upgrade when they mean so little to the studios bottom line is a dicey proposition at best. It could happen, but I would be coming up with another path forward very quickly if I were in their shoes.
"What a crazy business"
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