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Topic: vaguely threatening letter from 20th Century Fox

Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99

posted 11-12-2011 12:34 AM

The ones who haven't ,kept up with the times will probably go. The ones who have stayed current on the news and planned ahead will be around.

quote: Mark J. Marshall
I'm sorry. How does this make sense? How much money has been saved by sending HALF of your prints as 2 lb hard drives instead of 45 lb prints all over the country? How many Fed Ex planes have been parked due to half of the prints not being shipped anymore? How much warehouse space isn't needed anymore? I'm sorry, but this statement just doesn't make any sense at all.

The shipping thing has almost nothing to do with digital savings. Theatres pay for the cost of shipping prints to and from. The only time the studios see shipping costs is from the lab to the distribution point. There are probably some savings but I would guess it's not too significant in the big picture.

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Pete Naples
Phenomenal Film Handler

Posts: 1565
From: Dunfermline, Scotland
Registered: Feb 2001

posted 11-12-2011 04:21 AM

And in good old rip off Britain, I am constantly hearing exhibitors telling me that shipping charge for digital hard drives are higher than for a 35mm print! Also for repertory, usually it's cheaper to reant a 35mm copy than a DCP.

Where is the sense in that?

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Jonathan Goeldner
Phenomenal Film Handler

Posts: 1360
From: Washington, District of Columbia
Registered: Jun 2008

posted 11-12-2011 09:22 AM

quote: Mike Blakesley

The ones who haven't ,kept up with the times will probably go. The ones who have stayed current on the news and planned ahead will be around.

The shipping thing has almost nothing to do with digital savings. Theatres pay for the cost of shipping prints to and from. The only time the studios see shipping costs is from the lab to the distribution point. There are probably some savings but I would guess it's not too significant in the big picture.

I have a similiar question in regards to that. Do film festivals front the bill for 35mm prints as well? Two movies at last weekend's Virginia Film Festival were Fox Searchlight movies, 'The Descendents' and 'Martha Marcy May Marlene' were 35mm even though a DP system was also available. Wouldn't it be a more cost effective decision for festival's overall budget if studios provided and shipped the films as DCP and not 35mm?

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David M. Leugers
Film Handler

Posts: 43
From: Fairfield, Ohio, united States of America
Registered: Jan 2005

posted 11-12-2011 09:28 AM

quote: Mike Blakesley
The ones who haven't ,kept up with the times will probably go. The ones who have stayed current on the news and planned ahead will be around.

Lots of the theaters I was referring to are more works of love than a profit generating business. They don't have the customer base to justify the large expense to go digital. Many only show films on the weekend for once or twice a night. I hope you are right, but if I were a betting man, I would bet in two years from now you might be singing a different tune. Good luck.

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Carsten Kurz
Film God

Posts: 4340
From: Cologne, NRW, Germany
Registered: Aug 2009

posted 11-12-2011 09:38 AM

Well in that case there is something wrong with that specific business model. They are operating without a business model or more like a non-profit organization.

Yet they are dependant on and DEALING with the studios which are clearly a profit-making organization. This can only work for a limited time under very specific conditions.

We are running such a screen ourselves. But am I the guy telling our major distributor: 'Listen, we don't make much money for you if any. But would you please support us for the sake of the independant cinema operators and cross-finance us from the profits you make with the big chains'?.

If conditions change, we have to face that and act accordingly.

- Carsten

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Scott Norwood
Film God

Posts: 8146
From: Boston, MA. USA (1774.21 miles northeast of Dallas)
Registered: Jun 99

posted 11-12-2011 09:41 AM

quote: Jonathan Goeldner
Do film festivals front the bill for 35mm prints as well?

Independent film festivals generally pay outbound shipping. Inbound shipping is typically paid for by the previous theatre that played the film in question. The idea is that the prints or tapes typically travel from one festival to another directly, without going back to the filmmaker or distributor between festivals. Generally, the filmmaker is expected to pay the difference if a print/tape needs to be shipped faster than ground shipping would allow.

In the case of festivals that play films that have distributors and where the prints need to return to the depot between screenings, they typically pay round-trip shipping, unless the screening in question is sponsored by the film distributor as a promotional screening, in which case the distributor pays for it.

The people who program film festivals are often not very technical, and it is not unheard-of for festivals to program titles in formats that they cannot show with the equipment at hand, which often results in a last-minute scramble to rent or borrow the necessary equipment. [Frown]

Fortunately, 35mm and HDCAM have been more-or-less standard for festivals for the last couple of years. No one asked about Blu-Ray until about a year and a half ago, yet it has become popular as well. But it would not surprise me to get a last-minute request to screen something in 16mm or DVCAM or some other random format. I have yet to have a festival ask about DCPs, however (not that any festival venue where I have worked could screen them, anyway, and the equipment cannot easily be rented on short notice).

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Carsten Kurz
Film God

Posts: 4340
From: Cologne, NRW, Germany
Registered: Aug 2009

posted 11-12-2011 09:55 AM

Over here, studios pay for inbound shipping, we pay for outbound shipping. We have already noticed that here, digital shippings cost half as much or even a third of 35mm shippings, so even for us it would be a cost saver, especially the logistics of drive collection and sending back mean less effort than scheduled pick-ups of 35mm copies. Of course, this would still not play a significant role in financing digital, but nevertheless...

I am quite sure, giving up 35mm completely would gain the distributors a significant amount of money in the long run. If this approaches 50 millions per year for a specific distributor, what should keep them from going this way?

- Carsten

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Martin McCaffery
Film God

Posts: 2481
From: Montgomery, AL
Registered: Jun 99

posted 11-12-2011 10:42 AM

Two weeks ago we ran a DVD feature that was delivered by Technicolor/UPS. Cost exactly the same amount as a 35mm print. The distributors have volume deals with Tech, which has a deal with UPS, so the exhibitors are just paying a delivery fee, not the retail cost of shipping a film.

As for rep titles, depends on the distributor. Some use the regular Tech/UPS delivery, while others insist on overnighting the prints back and forth from LA via DHL, which is roughly five times as expensive.

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Jake Spell
Master Film Handler

Posts: 294
From: Johns Island SC
Registered: May 2009

posted 11-12-2011 06:54 PM

Most we ever paid to Tech was to get two replacement reals for Pirates 4. They got them here in two days from Canada. Cost over $400 IIRC.

However most shipping charges are in the $20-$30 range

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Barry Floyd
Phenomenal Film Handler

Posts: 1079
From: Lebanon, Tennessee, USA
Registered: Mar 2000

posted 11-12-2011 07:43 PM

We got the letter too. I saw last weekend at the DITA meet where 52% of the nations screens have converted to digital, - but that 52% of screens probably represents 80% of the total money brought in. There’s going to be a point somewhere when the studios define for themselves what they’ll consider an acceptable loss? I would think that when that money number hit a magic level of 90%-95%, they’ll cut production on 35mm – justifying that 5%-10% of the money lost on the non-converted will be more than cost beneficial to them not to deal with the hassle of logistics on 35mm. What you’ve got to decided for yourselves is when the digital rapture comes…. Will you be left behind?

Had some local drive-in fans come thru my place last night and they were telling me they had visited another local drive-in just south of Nashville last weekend. The owner there told them “he didn’t have to convert to digital – it’s not going to be required for drive-ins”. Sorry, gonna miss that place… but if I were in my 70’s, operating on leased land… I wouldn’t convert either. Since coming back from Texas, I’ll fully admit to drinking the “digital kool-aid”. I’ve even been described by one drive-in owner over the phone as sounding like I just got back from an Amway meeting. Don’t see how I’m going to make any money with these new machines, but the reality is if you want to remain in the movie business… start planning now to convert. It truly is going to be a survival of the financially fittest.

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Louis Bornwasser
Film God

Posts: 4441
From: prospect ky usa
Registered: Mar 2005

posted 11-12-2011 10:07 PM

Looks like a good time to retire! Oh, yeah! I just did that. Louis

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Brian Guckian
Jedi Master Film Handler

Posts: 594
From: Dublin, Ireland
Registered: Apr 2003

posted 11-13-2011 02:28 PM

quote: Martin McCaffery
Seriously, what percentage of a $250million budget is the cost of prints?

Ten years ago, the average spend on prints seemed to be about 4% of production budgets, based on MPAA data.

Also, apologies for the bad example I gave previously in the thread, where I quoted "50,000" prints for "$ 35 million". Obviously in the real world, prints cost nothing like that, and the screen count in the US was just over 39,000 in 2009 (Source: NATO).

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Carsten Kurz
Film God

Posts: 4340
From: Cologne, NRW, Germany
Registered: Aug 2009

posted 11-13-2011 04:49 PM

It's not only the cost of a single print. It's higher transport cost, replacements, storage, disposal/recycling, general logistics, Dolby SR/DD/DTS licensing, etc.
No one will argue that these are much lower with reusable harddiscs which cost 20-30US$ at the quantities requested by distributors. Mass duplication of discs incl. verify is very easy once a distributor/service company really dedicates themselves to it.

There are also small independent producers who do this all on their own. Have a master produced, then copy to USB drives and ship from their desk. If 35mm would be cheaper, they certainly would continue to use it.

Think logical - why have we lost 70mm and 16mm?

- Carsten

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William F Green
Film Handler

Posts: 84
From: Brighton, East Sussex, UK
Registered: Jun 2005

posted 11-15-2011 10:30 AM

I feel torn on this whole issue..
On the one hand, I can see that conversion to digital is essential for the long-term (like it or not).
But on the other hand it IS hard to justify the expenditure. I got off relatively lightly by buying used digital kit outright - but the screen we operate is actually a labour-of-love operation. In other words, in conventional business terms it shouldn't exist - it only exists because I give my time for free.
It's a screen that is highly valued by the locals and if it had to fund conversion by itself.. well it just does not have enough money. So I had to borrow money myself against my other business to fund a digital machine that will eventually find its way to the screen that can't currently afford it.
I had to borrow £20k which in the scheme of things is not a vast amount and I didn't find it hard to raise the funds - just a phone call to the bank and it was agreed. The other side of the coin is that I had to personally take responsibility for the payback of that finance.
I never thought VPF's were either desirable or workable for us.
Rather ironically I feel I have future-protected one screen but I still have no viable alternative for our touring cinema business (currently portable 35mm) which actually generates the most income.. so the jury is still out on how we proceed on that one (and the digital clock is ticking).

Whatever the rights and wrongs there is no choice but to convert if you are to stay in the game of mainstream movie exhibition.

We are in a unique business in the sense that we don't own the material that we sell to the public - we only license or rent it. So that makes us far more vulnerable to changes imposed from the top down.
Apologies if the above is a bit of a ramble - just my thoughts.

By the way, although the letter from Fox may seem vaguely threatening I think that it's actually quite helpful to able to start to put some sort of 'deadline' on this whole issue.
We have started to fundraise to raise funds for the above mentioned screen and were accused by one local group (a film club) of scaremongering and exaggerating the imminent demise of 35mm - it's clear from the Fox letter that we were right. Being cautious we are estimating 35mm supply to be 'good' until the end of 2012. Beyond that, who knows?

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Brian Guckian
Jedi Master Film Handler

Posts: 594
From: Dublin, Ireland
Registered: Apr 2003

posted 11-16-2011 07:38 AM

Reading the letter again, it does use (from a legal point of view) non-absolute language, with words like "expect", "advise" and "hope".

Separately, it's not clear whether a Supplier of a Product can legally compel a Retailer to start selling a different version of that product where it can be shown that this would place an unacceptable financial burden on the retailer, to the extent that the continuance of their business would be jeopardised.

Provisions in Contract Law that could apply in that case are those relating to Undue Influence and Economic Duress.

Since a side-effect of theatre closures would be more Unemployment, this should also have a bearing on the legal arguments, particularly in the current climate.

Also, while many will say that this is no different to the introduction of Sound, there has on the other hand been considerable development of Corporate and Case law over the last 80 years, so the legal context is very different today.

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