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Topic: How does licensing work for free film showings?
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Leo Enticknap
Film God
Posts: 7474
From: Loma Linda, CA
Registered: Jul 2000
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posted 01-09-2017 03:56 PM
The studios simply want to maximize their revenue, and if it's a choice between a flat rate or percentage gross, will choose whatever nets them the greater sum.
That's why most theatrical bookings of archival and rep titles are done on a gross with minimum guarantee contract (e.g. 35% against $400 minimum guarantee, which is pretty typical for the 1930s and '40s classic era Hollywood titles we play).
If it's a real classic that will fill the house out, e.g. It's a Wonderful Life or Casablanca, we'll take a lot more than $400, and they'll want their cut of that. However, if it's some obscure B-movie Western played as part of a tribute series to the guy who had a walk-on part in one scene and only 20 customers show up, they'll take the $400.
The chances are that if your business model works in that it'll cover the costs of running the theater without charging for the actual movie ticket, the chances are also that you can afford to pay the studio a per person cut.
The only free admission model I know of that is used on a significant scale is that of film festivals, many of which do offer free admission to everything except the opening and closing night galas (which are usually done by an invitation list). For some of them, you can pay for a VIP pass that gets you into a priority line and a few other perks. However, festivals are sponsored up the wazoo, and that's mainly how they're paid for.
That having been said, other service provider business models have tried to change their charging structure such that the sticker price for the core service is "unbundled" and other things around it are sold as separate line items; hence resort fees in hotels and the legacy airlines charging you extra to check baggage, choose a seat ahead of checking in, etc. etc. And have you ever tried to rent a car using your own insurance and refusing to buy the rental company's? They make it as difficult and as bureaucratic as possible, because they make almost nothing on the $30 a day you pay them to rent a Nissan Versa, but margins of hundreds of percent on the other $30 a day you pay for their own comprehensive insurance.
Given the growing number of complaints about increasing theater ticket prices, I wouldn't be surprised if the big chains try to do something similar - for example, $5 for the basic movie ticket, but for $12 you get a soda and popcorn bundled in, or for $15 you get validated parking, or for $20 all of that plus admission in a priority line. The studios would want their cut of the add-ons to be on board with that, though.
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