Film-Tech Forum ARCHIVE: Terms for this summer's pictures

This is topic Terms for this summer's pictures in forum Ground Level at Film-Tech Forum ARCHIVE.

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Posted by Charles Everett (Member # 889) on 04-13-2002, 10:18 AM:

Did anybody read the lead film section story in the 3/25-31 print edition of Variety?

Summer again risks fast playoffs
Exhib'n terms in flux with more super-saturated releases due

Yes, movies that break super-wide (3,000+ theaters), open big, and burn out fast. Kind of like summer the past few years.

There's gonna be plenty of product to go around -- at least 2-3 new releases every week through Labor Day. If bookers are smart, they're not gonna get suckered into any 12-week minimum for anything the way they got suckered on Star Wars Episode 1. Somebody hinted in another thread that Lucasfilm's brand of extortion sent quite a few chains into Chapter 11.

The Variety story also raised the likelihood that terms would change:

Splits for most releases might go from 70/30, 60/40, 50/50-out to 70/30, 50/50, 40/60-out.
Event pictures will likely no longer have an 80/20 split for opening weekend.
Some chains may go for "aggregate splits" with the chain getting a fixed percentage in all weeks of a picture's run. Instead of 80/20, 60/40, 50/50-out, the chain would likely wind up with 60/40 for all weeks.

Also of note: WB, Universal, Sony, New Line, Fox and DreamWorks have adopted "firm terms" locked in prior to release date. If you remember last summer, Regal refused to open Rush Hour 2 on the break because that chain would not accept "firm terms".

That said, let's bring it on!

Posted by Ken Lackner (Member # 1002) on 04-13-2002, 01:48 PM:

What are firm terms?

Posted by Jerry Chase (Member # 660) on 04-13-2002, 02:28 PM:

Firm terms means no negotiation of terms after the run of a film. Generally the distrib makes out better with firm terms, because if a film tanks, the high rental terms can't be negotiated downward.

When agreeing to firm terms, the exhibitor needs to be reasonably certain the film will live up to expectations. The less experienced exhibitor or booker is more likely to get burned.

When one distrib is doing firm terms with questionable product, it is easy to walk away. When a group of distribs are using firm terms, that may not be possible, and there is a chance that the wrong booking choices can seriously damage the bottom line. Firm terms can also damage "relationships" and make bidding more cut-throat.

The line "Somebody hinted in another thread that Lucasfilm's brand of extortion sent quite a few chains into Chapter 11." is pure hyperbole. Lucasfilm's terms and the subsequent performance of the product not only hurt exhibitors, it hurt Lucasfilm's ability to ask for such terms in the future. You can only steal a man's bread so many times before he starts avoiding you. It is obvious to everyone in the industry with eyes that the bankruptcies were forced by overbuilding and bad leases. Film terms may have been the final straw in some cases, but fiscally responsible companies wouldn't have seen those terms as more that a minor blip in the bottom line.

80/20s were crazy. 60/40 on all weeks is another attempt to swing higher from the 50/50 aggregate or 55/45 aggregate split many circuits see. 60/40 with limited run could work to create more cash by freeing up screens earlier. The key to success would be lots of alternate product and the guaranteed ability to drop the feature after week 2 or 3 if it didn't perform. I suspect the Easter Bunny would be the one to deliver such terms. Distribs usually want pictures held until Hell freezes over and the last little old lady no longer wants to attend the discount matinee.

Posted by Michael Brown (Member # 890) on 04-16-2002, 04:30 PM:

The ratios is that

cinema/film company or
Film company/cinema ?

Posted by Aaron Sisemore (Member # 145) on 04-16-2002, 04:53 PM:

Film Company/cinema.

-Aaron

Posted by Michael Brown (Member # 890) on 04-16-2002, 05:02 PM:

I guessed so

Posted by Adam Fraser (Member # 1074) on 04-17-2002, 11:12 AM:

The 12 week minimum was the reason we did not play EP1 in our 1 screen, could you imagine how pissed off our customers would be if we played the same movie from memorial to labor day. I guess there would have been a few happy Star Wars fans, but the regular customers would have found something else to do. Also, in our theatre in the past few months the terms for getting out seem to be getting a little bit better. i.e. Smaller non-blockbuster films we have been getting out of in 2 to 3 weeks if we get them on break. It used to almost always be 4 unless we really bombed.

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Adam Fraser
www.pinestheatre.com