TOPIC: Rich Peterson's Exhibition 101
Rich Peterson's Exhibition 101 27 Jun 2002 20:39 #24803
Posted by Rich Peterson on February 01, 1998 at 11:52:30:
In Reply to: OPENING YOUR NEW THEATRE posted by RICH PETERSON on January 31,1998 at 20:59:33:
The evil FLASH NET pest is at it again. I'm going to answer you in sections.
My wife has suggested I write a series of textbooks on the subject of opening theatres. There's certainly plenty of information that could be put in them. I guess I could write the book between the hours of midnight and 7 A.M. (Just kidding). Maybe when I retire.
DO NOT give out your location.
You can confide in your wife if you have one, but be sure (in a polite way) she does not talk to people when she is having her hair done, visiting with neighbors, has a social relationship with friends at church, water cooler pals at work, etc. If your location gets out, and it IS a good location, you just gave it away. "Wolves have good ears, my dear."
You can talk to me about your city or town, but even I should not be given your actual location. My interest is for demographic study only. To see if you are safe to consider your actions.
Next item: While I opine on this business, I am sharing what I have found over the past 31 years. There are many ways of doing things in this business. You can see this by looking at the end results of AMC, CINEPLEX, UNITED ARTISTS, CINEMARK, ACT 111, and others. You have the spread from "just fair" to very nicely done. But there are also some perplexing problems. Example, AMC builds a very nice theatre with lots of bells and whistles. So why, I ask, do they cut comers in the booth? AMC has nice seats, great concession ideas, good senior management, fine locations, better than average "project" follow through. But with millions and millions of dollars spent on each new theatre, why cut comers on picture and sound? That (as I say) is all they have to sell.
Have you heard of their Super High Intensity Theatre System? That is a red herring. It is their way of giving you some "bs" about hoping you will think that there is a difference in their presentation. Well folks, the short end of the answer is -- You won't find a CP500 in 1 percent of their theatres. The amps "ain't" QSC's. Their "Torus" screens have been such a disaster they are now eliminating them in about 80% of their auditoriums and going back to the way the rest of us do things. The "Torus" screens are solid plastic held in place by a vacuum cleaner motor behind the screen. (You should see these things when someone turns off the wrong switch at night and the next day the opening manager is having a "stroke" hoping he/she can suck the screen back into shape before they have a visit from their D.M.) The plus side of a Torus screen is you get a 15% to 20% higher "gain" and thus you can buy smaller and cheaper Xenon lamps. Down side is murder. The parabolic surface makes for an "unpleasant" echo chamber. Talk about echo. You can (honest) hear a woman talking in a low voice sitting 30 feet away from you. If you clear your throat and then slurp your drink, you might see someone reacting to your sounds that arenâ€™t even close to you. It's an interesting "thing" to watch, but not when you are looking for a great "movie going experience."
Another problem. The industry, since the late 1920's has had its speaker(s) behind the screen. All movies are mixed to account for this. With AMC's Torus auditoriums, their (got to save that money) brand of speakers are above (HF drivers and horns) and below (LF) and are so "bright and crisp" they can split ears in half. AMC engineers adjust for this when they install their equipment. The end result, depending on the engineer, can be limited dynamics, poor stereo imaging, and that "dang" echo.
According to AMC's advertising, you are hearing your movies in Dolby Stereo. Don't buy it. AMC uses mainly SMART and ULTRA stereo with only a very few Dolby stereo units. They justify this by using the Display ads placed by the film company ad agencies as the "scape goat" -- never in their own ads. From my point of view, SMART is an excellent sounding analog system. ULTRA does not play true Dolby analog tracks back as well as Dolby units or SMART units, but they are well built. I guess my opinion is this ... if AMC wants to cut corners on presentation and save money, why the "fraud" of trying to gain name recognition.
Anyway, I'm not picking on AMC as a company. They have done some fine things as well as some really strange things. When you go to your favorite theatre you need to keep notes on just this kind of thing and keep records of what you LIKE and DON'T LIKE about your area theatres.
More on this next time.
Posted by Rich Peterson on February 01, 1998 at 17:30:33:
In Reply to: PART I posted by Rich Peterson on February 01, 1998 at 11:52:30:
Well, FLASH NET allowed me to get on the web in less than 15 minutes. What can I say.
System allowing, here are my additional opinions on what to do while deciding if you really want to work seven days a week in this business.
While you are visiting any theatre, look at everything (even the movie). While you are in the auditorium, keep in mind that an average theatre has about 15 to 16 square feet per seat on the footprint of the building. For example, a 2,000-seat theatre will have "about" a 30,000 square foot "footprint." The 30,000 square feet will include any interior box office space, lobby, concession and scullery, halls, auditorium entry areas, etc. The auditoriums will have about 12 sq. ft. per seat of the total 15 sq. ft. per seat of the footprint.
Example: 30,000 sq ft foot print x 12 sq ft per seat allows about 24,000 sq ft for auditoriums. You will have about 6,000 sq. ft left for the other things you want to have on your first floor.
RENT in theatres is almost always based ONLY on the theatre footprint. Everything above the first floor (booth, office, storage, etc.) does not pay rent. Don't feel funny about this, it's the way the real world works.
While visiting your favorite theatre, make notes on the auditorium in your notebook. Ceiling tiles are usually 2 x 2 feet or 2 x 4 feet. Count tiles before the movie starts to determine the size and ratio of the theatre. If the theatre is 1.5:1 or less, you are in a good theatre. If the ratio is 1.75:1 or more, you are probably wondering why you spent your money on this theatre. If the theatre is 2:1 or 3:1 you are in what our industry calls a bowling alley or "tank town". Yes, it means what you think it means ... you are in a toilet theatre ( perhaps Louisiana or Mississippi?)
If you are considering stadium or riser seating, your auditorium will require more square footage and your rent will be higher. So will your income,
Also, keep notes on the HEIGHT of the auditorium you are in. Your exit DOOR is probably about seven feet tall. Using the exit door as your guide, look at how tall your auditorium is. If it's 20 feet or more, you are in good shape. If it is less than 18 feet clear, you are probably sitting in a toilet. This is no kidding -- I know a guy who is so self-serving, he puts theatres in existing buildings with 14-foot ceilings. When you take off 5 feet for drapes below the screen and bottom masking, plus another 2 feet above the picture for masking and drapes, you have a screen the size of a big TV set.
This brings me to my next point. Don't build for today. Build for your customers who will be buying from you ten or fifteen years from now. For those of you who have no respect for your patrons or yourself--you know whom I'm talking to. You're the guy who buys his speaker (Mr. Mono) from Radio Shack and covers it with a black cloth in front of the screen. Why not behind the screen? Well, folks the screen is white paint on the screen wall. This guy wants to sell his toilets before he goes down for the last time... but the industry shuns him as the looser he is.
If you go cheapest way, your patrons will find a theatre close to you and drive there to see a movie done properly. If you're in denial on this topic... go ahead and build one. Five years from now I'll build across the street from you and we'll let the public decide whom they want to spend their money with.
Read this word ...
If you treat your patrons well, good and fresh food, nice seats in a clean theatre, sharp clear bright picture and better sound than they can get in their car, you will do well.
Give back to your community. They support you, you should support it. Be honest in your dealings and walk away from people who have other ideas.
I have some interesting pictures of a theatre in Dallas that had food shipped into this area in trucks that were not air-conditioned. This operator had his "summer" and "winter" menu. The manager of this place pointed out to me when I visited the place that a box of Jr. Mints didn't rattle when it was shaken. The case had fused into a solid mass.
This same operator would take delivery of soft drinks (BIB) from an outfit in Alabama. The syrup (some of it years old) was purchased from places going out of business. There might be 50% syrup in the bags. Some had no labels. It would make you sick. Some of the "things" in the popcorn were NOT black corn.
Anyway... if you buy your food like this, don't think that just because it's being shipped to a state where you don't live that the word won't be on the street. The theatre in question has had hundreds of employees... and man do they talk.
If you look in the mirror and see a chicken s--t, that's probably the way you are perceived by the community. A word to the wise ...
Two more things and I must end.
You will want to determine the size and aspect ratio of the screen you are watching using the exit door and ceiling tile method. If it looks great, you know what you like. If it doesn't, you know what you want to avoid later.
Last opinion of the day. REVERSE SLOPES are the auditoriums that have been "floated" like a bowl. The front seats are tilted up toward the screen. After the previews, you think you are damaged goods. After the feature in one of these places, you will be looking for a neck brace.
A clue to this is when you walk into a theatre and the exit door is UNDER the screen. Example: if you have a 7-foot door and 2 feet of drapes and one foot of masking below the screen, the screen must be 10 feet off the floor.
Short end of this lesson, look at other theatres and keep notes on things you like and things you don't.
That's it for now.
PART 3 Posted by RICH PETERSON on February 02, 1998 at 22:28:09: In Reply to: PART 2 posted by Rich Peterson on February 01, 1998 at 17:30:33: I had a fellow theatre person in my office today who asked how in the heck I was going to transform my library of 300,000 or so pages of documents into 40 or 50 "parts." He's right, this isn't my posting board and to go into great detail would take an encyclopedia of information to be fair to all of the good ways of doing things in this business. Plus, I can't help taking a shot at the riff-raff who takes advantage of honest people who are just trying to learn this business. Answer: YOU GOOD FOLKS ARE GOING TO HAVE TO DO YOUR HOMEWORK. I am giving you some web locations that are, in my opinion, very worthy of a look or two. You might even want to place a bookmark for later use. READING IS VITAL. Your education on the film industry (or any other) must never stop. I suggest you read: HOLLYWOOD REPORTER www.hollywoodreporter.com/index.asp BOXOFFICE MAGAZINE www.boxoff.com/ WEEKLY VARIETY can't find the address INTERNATIONAL FILM JOURNAL (I really like this one for exhibitors) issn 0199-7300 Sunshine Group Worldwide Ltd 244 West 49th Street Suite 200 New York, New York 10019 Oh, before I forget--these are my opinion of everything. I'm no smarter than anyone else. You might agree or think I'm full of crap. But if you think I'm full of crap, I want you to explain your view right her on the SMART page for the world to see. And one other thing--don't talk about your location. There are wolves out there. Moving right along... Top 100 grossing films. They might not be what you think. http://lonestar.texas.net/-amt/thrsdir/top10ever.html (these Texans) Cinema Sound System Tour www.seas.upenn.edu/-psun/mstour.htm Perry Sun is one of the top men in the field. My favorite speakers (so far) JBL Professional www.jblpro.com Lenses - these are THE top of the line www.schneideroptics.com/projection/mppro.htm Demographics - a key to your success www.smartdev.com/www/board/missages/305.html (Hey, get this guy off his soap box) Drive In Theatre Workshop www.win.net/~ltreed/di/index.htm Cinema Equipment www.Cinema-Equip.com BEST PROJECTORS IN THE WORLD AND OTHER GOOD STUFF Strong International www.strong-cinema.com/ Check this out. XENON BULBS www.meyerinst.com/html/osram2-info.htm Osram is a fine grade of bulb. Others I think are top of the line are Christi Sylvania Hanovia and one or two others. Key with buying any bulb is the warranty. These things are expensive and if you have a failure, the explosion can take out some expensive glass as well. Don't buy cheap ($) lamps thinking you will save something. Go for good light, good warranty, good brand, at the best price you can get. You should be able to get 40% off list for a cash purchase. Film storage white paper http://lcweb.coc.gov/film/storage.html You may not store any film, but there are some good fundamental info worth knowing. Security PLOTKIN [url=http://www.plotkingroup.com?]www.plotkingroup.com?[/url] QSC amps. Maybe the most bang for the buck. Have the cooling fan added to the back when ordering these. www.bell-theatre.com/brochures/qsc/qsc.html#qscmx1000a Smart also has amps with the cooling fans. Have not heard a Smart unit yet, but specs look good. I also have Hafler and have had very good luck with them. Crown is also good. FILM RELEASE SCHEDULE http://home.dti.net/egcarter/ ISCO LENSES www.kki.org/projekt/abgelaufen/isco/hightec.htm ANOTHER MUST-SEE THE AMERICAN WIDE SCREEN MUSEUM & FILM TECHNOLOGY CTR. simplecom.net/widefilm/ IBM PATENT SEARCH For those of us doing patent searches http://patent.womplex.ibm.com/ THE GUYS WHO TELL US WHAT WE ARE SUPPOSED TO DO. The Society of Motion Picture and Television Engineers, long for SMPTE www.smpte.org/ Last one for this lesson THE MOVIE SOUND PATGE Very good reading. And what can I say (blush) if you look at the Casa Linda Theatre under the Texas listings under "Best Sounding Theatres In The World" (Did I remember to send those guys their season passes?) Just kidding. Enjoy your research. And buy something from SMART for having the courtesy of providing all of us this board.
Posted by Rich Peterson on February 05, 1998 at 12:06:49
In Reply to: Slide shows for fun and profit! posted by Jeff Knoll on February 04, 1998 at 17:35:07
I can tell you how I do it.
At first, I contacted National Cinema Network and their "On-Screen Entertainment". This is a widely used program. Their "clients" are Loews/Sony/Etc., AMC (owns this program), GCC, and others.
I found them to be (my opinion) very slow, less than professional, arrogant, and worthless for my purposes. They are also obscenely expensive for the advertiser. In 1990, they charged each advertiser $79.20 per WEEK to have a slide on the screens of a four screen theatre. I guess that has doubled now. I don't know about you, but unless you are selling to national accounts or have advertisers who will barter in return for these rates, it's a moot point. But they would toss a couple of dollars your way for allowing their advertising on your screens.
Another place that's into slide production is
Showtime Slides & Signs Inc
2030 Powers Ferry Road
Atlanta, GA 30339
An undated letter from these people offers to provide you with the 80 slides for your projector for only $175.00 per year per screen. These are generic slides (keep your feet off seat, etc.) In addition, if you want to sell your own slides they will produce BASIC (lots of up-charges) for only $125.00 + 50 cents per dupe. In other words, if you sell 20 slides you are going to have a production bill of $2500.00 up front. A bit strong for me.
Who I use
I decided to go into the advertising business on my own,
1) As an in-house agency, I am able to get 15% back from radio or TV buys I make for my own theatres. Better than paying an agency to do it for me, and less expensive.
2) By selling our own slides, almost all the money is ours. I use an outfit SHARP IMAGES who will do any composing for $35.00 an hour. They can produce a complete slide in about 90 minutes. Never an up charge for multiple photos, color spreads, borders, multi colors or anything else.
They are fast, honest, and THE BEST. For a multi-screen theatre, he provides the first set of 80 slides (customized for that theatre) for $225.00 (plus his time) and each dupe set for that location is $75.00 plus shipping. He does accounting as his profession and just loves doing slides on the side. Low overhead, best prices in America, excellent quality. I have used them for the past five years and they haven't pissed me off yet. One of their people even does some of our accounting for us.
High marks. They're small, so expect 50% deposit up front. Phone 972-250-1796 (Dallas phone no.)
As far as prices go, I started out GREEDY like AMC's outfit and couldn't sell crap. So I ran a sale where you buy first six months for about $700.00 and get the second 6 months free. People jumped on it like mad. We are sold out.
We have used a number of projectors, but the BEST VALUE, for a GOOD MACHINE that COMES WITH A ZOOM LENS, and has been great quality has been:
Dang, I can't find the file. I'll get back to you with this. Bottom line, the place that sells these must be making very little and selling on volume. Great Kodak machine, has timer, great price. Sorry I can't give it to you now
Additional: A company called:
Unique Screen Ad Production guarantees they will pay you $5000. per screen a year. They say they will give you the equipment, pay you, sell slides, etc. I've never heard of them and don't know anyone who has collected $5000. per screen per year. Their ad does not say "up to $5,000. per year" it says $5,000 guaranteed". If you don't have the time to mess with your own stuff, that's fairly good. I wonder who has slide control and if they pay you "up front". Frankly, I would want slide control. No bars, no booze, no cigarettes, NOTHING THAT WOULD CREATE A LIABILITY FOR ME. Get me?
Run your slide projector bulb on LOW. The light is about the same and your bulbs will last 2 months or so. On high you will be spending $19 per screen every two weeks to replace the bulb.
BUYING & BOOKING - LESSON 5
Posted by RICH PETERSON on March 08, 1998 at 18:10:36:
In Reply to: Proposed theatre posted by Rich Peterson on March 05, 1998 at 06:02:44:
I've received a few requests for more detailed comments on buying and booking. Here are my usual comments. 1) This is my opinion. 2) Do your own homework. 3) Subscribe to a variety of film publications and read them. 4) Best way to learn this business is from the ground up. Even if you are 50 years old +, take a job at a well-run local theatre and do every stinking job you can. Learn on the job. There is no school with a level playing field for learning our industry.
BUYING AND BOOKING
THE BOOKER'S job is to date films for a theatre or theatres and write the deal down in the bookerâ€™s book. He also keeps up with the related papers associated with the booking and sees to it the print(s) are delivered to the theatre on time for the film to be inspected properly, no edge damage, no missing or double reels, the film actually is the correct film, etc.
This process can be living HELL if you are dealing with a film company who uses TECHNICOLOR to move their film. In time, the TECHNICOLOR issue will be resolved by a class action that will be smaller than the tobacco industry suit, but huge, nonetheless.
IF YOU ARE DEALING WITH TECHNICOLOR you MUST have
your theatre manager quietly document EVERYTHING that relates to these films. Companies using
and there could be others.
Among the things you face with TECHNICOLOR are:
1) Wrong movies delivered.
2) Constantly coming outside the window to pick up or deliver prints. This is when it is convenient for THEM not when they promise to do it.
3) Prints have been left with transients who did not work for us but who were looking for a job cutting grass. One film was from Disney and I guarantee Walt would roll over in his grave if he could see his protected property left with hobos.
4) In number three above, the transient was also left with two prints for a UA theatre.
5) If you call TECHNICOLOR, it is not uncommon to wait from 4 to 20 minutes for help.
6) TECHNICOLOR will give you a code like 2-13 to help you make the correct connection. Unless you know the name of the person who left you your original message, the TECHNICOLOR employees don't have a clue.
7) TECHNICOLOR employees will "guess" what you are calling about if you don't know what they called you for in the first place.
8) TECHNICOLORS facility was recently visited by a film company representative here who said there were thousands of cans of film belonging to other companies (Warnerâ€™s, Paramount, etc.) that had been picked up by mistake by TECHNICOLOR and then stored rather than returned.
9) In Film Company down sizing, the bookers for 100% of the companies represented by TECHNICOLOR don't care about your print problems. They refer you to TECHNICOLOR. No kidding. If you have any missing chickens, call the fox.
10) TECHNICOLOR will call and request you put an employee at a theatre outside a window and wait for a delivery. After the manager has wasted 5 hours of his day off, he might call
TECHNICOLOR to be told they will be by "tomorrow" at the same time or to stay until I or 2 in the morning.
11) TECHNICOLOR bills by theatre. So if you take over a theatre and there is money due TECHNICOLOR by the previous owner, they will bill YOU. They refuse to change billing addresses or work with you because they are instructed (really) not to believe you aren't the one who owes the money, even if you haven't operated the theatre in the last 50 years.
12) You are billed for picking up prints that you are still running. For picking up prints you have never run. For delivering prints you are not going to play. For attempted pick-ups of prints that were READY ON TIME but where TECHNICOLOR came outside the window or not at all.
And it goes on. We document everything that TECHNICOLOR does. At one location, we have started contra videotaping for later use.
It's a f***ing nightmare.
Anyway ... on to booking.
The film BUYER is the person who sets the terms for the theatre. Example, Paramount might sell you a film at 70% for each and every week of an engagement. After the film has run, the BUYER will negotiate with Paramount (or whoever) and settle at, perhaps one down in a major market. This is 70% first week, 60% second, 50% third, and 40% forth. In a smaller market, terms of 70% might end up with a two-week run at 60% first week and 35% for the second.
ADVANCES / GUARANTEES. Don't pay them. An advance is a deposit made against the earnings of the film. If the film is a dog, you get the unearned portion back. A Guarantee is an amount paid up front to play a film. If the film company made a dog, they keep your money. Too bad for you.
The reason I don't like advances, say xyz comes up with a movie about fighting roaches on another planet. You have been showing the trailer for 9 months and YOU become emotionally involved in the picture and just HAVE to show it at your theatre. xyz (or some other company) says they will be looking for large advances (a hot air trial balloon) of about $50,000 for each run in Dallas. You do not commit. Later, this guy calls back and tells you he thinks he can talk to his boss and get you a print for $25,000 soft money, and are you a "player?" You can't believe your good luck and cut him a check. A few weeks later, the film opens to awful reviews and your perfect date movie is like spraying all the women with d-Con. The movie grosses are killing you. Not only is the roach movie horrible, but it is taking up important playing time on your screen.
You call the company to tell them you are coming off early and they tell you they are holding you to firm terms and billing you for short-playing their dog. In this way they can keep most of your money. So you end up holding "roach motel" instead of opening "Titanic."
BLOCK BOOKING. Here's something else to watch out for. Film companies want you to play off their crap in order to get the steak. If you are having your feet held to the fire in a situation like this, document it and use it.
In a similar situation, I had lunch recently with a branch manager / sales manager whatever for the newest film company to go firm terms. They had a fantastic year last year but that may be first time in history and they "just can't get over themselves." He was actually gloating about raping Cineplex Odeon in Chicago because they hadn't treated him "right" twenty years ago when the company was called something else and had other owners. With people like this selling to you, you surely can book around their product.
FIRM TERMS is an expression used to say that the deal you make is the deal you live with. Only once in the last ten years have I been let out of a firm terms deal. I don't like firm terms because it makes the EXHIBITOR a partner with the film company. But you are only a partner on the DOGS that don't perform.
In the downsizing of the distribution end of this business, the plan for about the last 15 years is to shrink the staff needed and number of branches needed. This HAS BEEN DONE over the last 15 years. There are now only a handful of branches. Example: Pretend we have a make believe company called "Pare-of-Mounts" pictures. They decide to take five branches with a total of 100 employees and reduce it to 5 branches under one branch manager and only 15 employees. Rather than five branch salaries they have one manager for five branches making probably something like $15,000 per branch per year plus bonus. $75,000 salary, car, $10,000 bonus. He's happy. 85 jobs are eliminated so bean counter is happy.
As the industry moves forward with firm terms, we will be less than 5 to 10 years away from doing away with sales/settlers and this will be done and billed by computers.
Suddenly, in a few years from now when this guy who loves to screw Cineplex Odeon is out of a job at 50 years old, he might show up at the front door of HARI KARI STUDIOS acting like a pissed off "postal worker"
But, anyway, that's the way it works.
BID. Don't bid. Bidding is where two exhibitors or more are offering "terms" to a film company to have the right to show a movie. Bidding is LEGAL but it runs up the cost of doing business. MUCH of the film sold today is too expensive for what it returns to the EXHIBITOR.
ALLOCATION is an alternative to bidding. Allocation is done by the film company and allows each exhibitor in a "pocket" "zone" call it what you will, an equal change to show films from a given company. If you get two good movies by mistake and your competition gets no good movies, there will be an adjustment made next year to even things up. This works ok.
I have seen an even BETTER system that was created by SONY PICTURES. They are not doing it in all areas yet, and I know some exhibitors might have a problem with my talking about this, but this is Sonyâ€™s approach. Where some of these MONSTER PLEXES have been built, (my definition is 20+ screens) they are just asking, by nature of the greed of any business, to have one built within a few miles. SONY is only making the same number of prints, 4 for example. But each theatre gets two prints rather than all four going to one theatre. Then the public decides who to support.
I might as well add, at this point, I DO NOT support the MONSTER PLEX. They are VERY dangerous and we are pulling or have pulled out own personal money out of all companies who are building more than 18 screens in a given location.
SPLIT PRODUCT. This isn't legal. The justice department has determined that two theatres deciding what to play or not play constitutes a conspiracy to keep film rental and ticket prices low.
YOUR POSITION, if you're like me and playing in an aggressive market (Dallas is) you are willing to play with anyone. Even the guy who is 3 miles away.
CLEARANCES are not to be requested unless you are bidding. A clearance stipulates a given theatre is being cleared BY YOU and can't play a movie with you.
"The boss" says dinner is ready and I never miss a meal. Thanks for reading. More later.
EXHIBITION 101 - PART 6
Posted by RICH PETERSON on March 08, 1998 at 20:48:24:
We just had a wonderful dinner with the Division Manger for a local film company. He had a few points that I agree need to be made so as not to lead you in the wrong direction.
Also, the question came up since I am involved as a Consultant in a company who will be entering the theatre business within the next two years. Am I "spilling all the beans" here? That, to me is like asking a sick patient if he is going to do his own heart operation. This business is not an "open" one where there are books everywhere. It is complex and not very forgiving. I GUARANTEE the greatest ideals I have been working on for the last several years will not appear on this board. Do continue with your homework and do not consider my little writings here to be all I have learned in 32 years in this business. I would hate to see someone jump into this business and get hurt because they have read postings on SMART's board and think they are now Henry Plitt.
Remember, this is my opinion, some is a parody, and do your own work.
When we were talking about TECHNICOLOR over dinner, everyone was laughing and all nod in agreement. His company has no plans to go with TECHNICOLOR but notes they have heard reports of delivery of prints to LIQUOR STORES, 7-11 type stores, and more. Everyone passes the buck to someone else and the end guy tells you to call TECHNICOLOR to work things out.
What a sham. NATO isn't on top of it and all I can say is "rest in peace, Walt Disney." No one knows how those videos are on the street the same day the film opens.
I MADE A MISTAKE. Under number 8 I said CANS and I should have said REELS. But more on this... the local film company rep brought the film to the attention of the TECHNICOLOR employee who was taking them on the tour and the TECHNICOLOR employee said the "old and battered" cans were empty and just waiting to be painted TECHNICOLOR ORANGE. The person who told me this said the cans were full of film company property -- prints TECHNICOLOR doesn't move.
On page 6 of our last session, under YOUR POSITION, I didn't word this well. This is my position:
I will play my theatre with any theatre in the market. I will play with anyone. I didn't express this well, but that's it.
New stuff ..
Don't feel bad about the poor old film company. They consider the theatre as a necessary form of marketing to act as a vehicle for video sales. I have (no kidding) been paid to run film at our drive-in theatre to assure a video sale that the film had actually run in Dallas (and other markets) theatres with a media campaign.
ANCILLARY rights are frequently far larger than the film rental paid by theatres. For example, going back into the 1930's a great film pioneer, Walt Disney, recognized the value of "tea sets" and toys surrounding his films. He might collect 15 cents a ticket from moviegoers and $10 times that much out of a related toy. Over time, he had a form of partnership with ABC who gave him air time for his wonderful world which was like a 60 minute commercial each week to sell Disneyland, coon skin hats, etc. Nothing wrong with this, but it is interesting.
Now, movies come out with high terms and the big dollars actually come later with video sales / rentals, toys, computer games, watches, sheets, you name it. The theatre is THE VEHICLE that gets the filmmaker from point a to point b.
This brings me to consolidation. In Dallas and other cities, blocks of theatres are being taken over by large investors. They appear to be looking toward owning blocks of theatres in a geographical area and arriving at a more realistic film rental arrangement (similar to what Loews has in New York). Bottom line, terms like 50, 40, 35, 30% out or the film doesn't get run in their theatres. No more high terms. And they ain't kidding. These monster exhibitors know the big bucks are no longer in the exhibition industry, but after it.
The up side for DISTRIBUTION employees is this will probably give them some much-need job insurance.
90/10. Most film is sold with a 90/1 0 vs. a floor of 60%. Sometimes even a 70% floor might be in place. Your 90/10 figure is a "created" house allowance that is often based on the number of seats you claim you have. Example, if you have a 400-seat theatre and company "A" allows $13.00 per seat, your house allowance with that film company is $5200.00. This allowance has nothing to do with reality. You set your 90/10 figure and if the film company doesn't want to honor it they will negotiate with you. If you reach an impasse, just don't play their produce. If you have 20 or more screens in your complex, you might be screwed.
Example: "Titanic II" grosses $20,000 at your theatre the first week of release. After all allowed deductions, say you have a net gross of $18,000. You have a first week deal of 90/10 over the approved house allowance of $5,200.00 vs. 70%. The greater amount is due the film company.
Take your $18,000. net gross
Deduct house allowance of $5,200.
Leaving you $12,800.00
Multiply x 90%
Answer $11,520.00 due film company.
Next, multiply your $18,000 net gross by 70% and come up with $12,600.00 due the film company.
In this case, 70% or $12,600. is MORE than the 90/10 calculation.
Further, if the company is not a firm terms company, you will be adjusting the terms if you don't hit the 90/10 split.
90/10 isn't really expected to be your real house overhead. FOX says they want it to be because it will benefit them. But to change your 90/10 every week or even every month is not realistic.
Some companies, Disney and Columbia are two, I think, will cap your 90/10 at $10 per seat. They don't care that our political â€œleadersâ€ drive up minimum wage or that just about everything goes up in price from time-to-time. In addition, capping 90/10's is like urging "mono" theatres, less legroom, etc. It's bad for the industry. With nice theatres and good grosses, it's a win win situation.
WHY PLAY FIRM TERM COMPANIES? Good question. You cherry pick. Unless you are in a MONSTER PLEX or a fiercely competitive situation, all things being equal, you will make screens available to your firm terms supplier only if you need a picture or feel the picture is too big to pass. This second part will kill you.
Several years ago, UNIVERSAL had Jurassic Park and rumors about unrealistic terms were floating all over the place. I opted, for several reasons (not the lease of which was not having available 6 track DTS units) NOT to play the picture. Two things happened.
1) The terms were obscene.
2) Two weeks into the run UNIVERSAL asked me if I would consider picking up a "second" print. I agreed to a two-week deal at 50% 40% firm terms. Other theatres in Dallas were playing 8-week deals three down.
I have since taken UNIVERSAL off service. I don't like to cut anyone off, but we played two pieces of **** from UNIVERSAL last year that cost more to run than the films GROSSED.
In looking at UNIVERSAL last year, I visited with some of the really large theatre chains to talk with their film departments and advertising people.
Film people don't know or even want to know about advertising people's problems.
Advertising people (marketing types) think their **** doesn't stink and they walk abound telling their boss how great they are.
UNIVERSAL bills firm term formula advertising terms also. But, as with firm term film deals, there are several firm term advertising deals.
What happens is something like this. Remember, one hand doesn't know what the other hand is doing and both hands don't care.
UNIVERSAL sets McHales Navy in a theatre for 60% 50% firm terms. Movie grosses $2,000 and film department agrees to pay $1200 film rental.
Advertising department is billed for 40% of the campaign (same ratio as film rental) of, say $1,600.00. Advertising person with the theatre company tries to hide this expense like a cat burying poop. Advertising person agrees to allow advertising charges against DOLLAR THEATRES who don't even get co-op support to HIDE half of the screw job the first run theatre had. All of the companies I visited in Dallas said they were doing this the same way.
The bottom line is UNIVERSAL is picking up close to 100% from one form or the other in early weeks. In my case, I paid about 120 percent for two of their films and took them off service. I have talked with my attorney about buying 1 share of stock and heading for their next board meeting.
As for UNIVERSAL'S advertising people, they say they are working as hard as they can to come up with the best way of billing and to stick with them. So far, they haven't kept their word and the definition as to what was better for who was not discovered.
NEW PROBLEM AREAS:
Some film companies are now looking for 14-day pay from theatres. This is hard, to say the least. In the case of General Cinema, they used film rental to build a chain of theatres by holding film rental for months or even a year or longer.
Be aware of 14-day pay. Anything less than 30 day pay puts that film company in line with firm terms and "all things being equal" go with the other guy's picture. Support the people who are supporting you.
I'm going to wrap up on this lesson soon. Let me go over a few final things.
FIRST RUN theatres play on the first day of availability of a new film.
In buying first run film, I wait until the film company has sold all the prints they can to the "big boys" and they still have 10 prints to sell or they'll get their butt kicked by their boss. When I feel I have a deal I can live with, we put the picture in if we want to support that company. In the case of firm terms, we fill those open slots last and only when I am sure there is no lower deal being made anywhere in Texas.
INTERMEDIATE runs are when a film company wants to AUGMENT a run that's already in place. See my "Jurassic Park" run above. To pick up an intermediate run, you will be paying LOWER film rental than other theatres or you need to walk away from it.
SUB RUN is for your local $1 theatre. These theatres are having a hard time now with some TWILIGHT prices so low the little (and not so little) guys are being squeezed. This, in the long run, will hurt senior citizens and all people who are on fixed or limited income because the $1 (discount theatre) will have a hard time flourishing.
VIDEO also, short windows from theatrical to video also hurts these discount theatres and less affluent citizens.
That's it for now.
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Re: Rich Peterson's Exhibition 101 28 Jun 2002 09:49 #24804
Hey, thanks for posting the whole enchilada!
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Re: Rich Peterson's Exhibition 101 23 Apr 2004 21:43 #24805
"Richard Peterson", does he Still post! He is a genius and would like to know his e-mail does he have a website?
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Re: Rich Peterson's Exhibition 101 24 Apr 2004 04:07 #24806
YEP, this is the straight poop!... Oughta be carved in stone, and be required reading for every newbie BEFORE he can register here... Hey MIKE, can you set that up?... I re-read this every 3 months or so, just so as to not lose sight of the trees because of the forest... It ALL doesn't apply to every situation, BUT it comes mighty close to answering everything you want to know about showbiz on the exhibitor's level!...
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Re: Rich Peterson's Exhibition 101 12 May 2004 06:51 #24807
Very informative! Thanks/
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Re: Rich Peterson's Exhibition 101 12 May 2004 07:19 #24808
They are right, Mike; Rich Peterson's mini-encyclopedia of exhibition is probably as close to real/reel life advice that one is likely to get. So why not establish it as a new link on your Attraction Board here with his permission? You might title it something like 'EXHIBITION 101' or 'KNOW THIS!' or 'READ ME FIRST' or something other than FAQ, since many people hesitate to scan all the long answers in FAQs just to find the elementary concepts. And a link such as I suggest will keep this data from disappearing down a long list as time goes on. You might think of it as THE BIG SCREEN BIZ SCHOOLROOM.
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Re: Rich Peterson's Exhibition 101 13 May 2004 02:46 #24809
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Re: Rich Peterson's Exhibition 101 22 Feb 2005 04:15 #24810
Alot of Newbies keep asking the same questions this needs to be looked at again for those people and will answer everything!
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