Film-Tech Forum ARCHIVE: How does licensing work for free film showings?

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Posted by Mike Hillyer (Member # 7436) on 01-08-2017, 02:04 AM:

Hi All;

I was talking to someone recently about a small town theater that did free movie nights on occasion. They said the films were obviously shown off Blu-Ray, and were free with concessions purchase.

What I'm wondering is how does the licensing work on such a night? What kind of flat rate is paid on a post-theatrical film shown off consumer media since I assume it's not a revenue split?

Posted by Scott Norwood (Member # 30) on 01-08-2017, 08:59 AM:

I don't know how it works in Canada.

I have done these in the US and it is a flat-rate deal (usually around $250 or so, plus shipping). You have to tell the distributor up front that it will be a free screening. There is no boxoffice report or anything like that--you just send in a check.

This would probably not be allowed for current releases. I have only done it for repertory titles.

Posted by Leo Enticknap (Member # 534) on 01-08-2017, 11:14 AM:

For paid-for movie theater screenings of repertory titles, the distributor sometimes gives you the option of a minimum guarantee plus box office percentage, or a flat fee.

There is a separate category of distribution - so-called "non-theatrical distribution" - for movies shown to a large assembled audience, but not in a movie theater, hence the copyright warnings that used to appear on British rental VHS tapes in the 1980s, that they must not be played "in oil rigs, prisons and schools" (presumably the biggest markets for NTD at the time). Swank in the USA and Filmbank in Britain are two major players in that market. They used to supply 16mm prints back in the day, many of which now circulate among collectors, but nowadays they typically sell you a license to screen a BD or DVD that you buy separately, from Amazon or wherever.

Posted by Martin McCaffery (Member # 37) on 01-08-2017, 11:58 AM:

Just an addition to Leo's post. When you pay for the exhibition rights to a movie from Swank or other non-theatrical distributor, they make a point of warning you that you do not have to right to show the DVD/BR "extras".
Outtakes, director's commentary,sometimes even "Director's Cut" are under a separate copyright agreement and are not supposed to be publicly exhibited.
Chances are pretty slim of getting caught, unless you are working in the middle of LA, like Leo. Still, don't do it.

Posted by Frank Cox (Member # 6258) on 01-08-2017, 12:49 PM:

I am in Canada.

I have never played a movie for the public off of a blue ray or dvd.

I occasionally do a free admission show for Santa Claus Day or a church or whatever, and in those situations I get a DCP (used to get film reels) from the movie company in the usual way and pay a flat fee for that day.

90% of the time that's all there is to it. On a few occasions I have had to count the people who came to the show and submit that number to them but it's never seemed to make any difference to the amount that I pay for the movie.

If I have to count the customers for a free admission show, I just hand everyone a ticket as they come in since that's the easiest way to keep a count.

You won't get a current movie under those terms. Stuff that's out on video or very close to being out on video is usually available, and nothing from Disney is ever available for that.

Posted by Mike Hillyer (Member # 7436) on 01-08-2017, 02:15 PM:

So could a small theater run entirely on free showings, depending entirely on concession sales? It would have to be entirely repertory films but would the distributors even go for something like that?

Posted by Carsten Kurz (Member # 5396) on 01-08-2017, 05:09 PM:

They wouldn't get enough content for that business model.

- Carsten

Posted by Justin Hamaker (Member # 2165) on 01-08-2017, 05:35 PM:

Another point is Disney is usually much more expensive to license for free shows. Most of the other studios are about $350 for a DCP booking, but my understanding is Disney is about $2500.

I don't know Disney's reasoning, but I think they are leaving a lot of money on the table by charging so much. With digital there are a lot of theatres doing the free summer kids movie series. If they made their titles available for even $500, you can almost bet there would probably be at least 1000 theatres who would license the movie for half a million in revenue for doing little more than shipping hard drives and emailing keys.

Posted by Leo Enticknap (Member # 534) on 01-08-2017, 07:41 PM:

quote: Martin McCaffery
When you pay for the exhibition rights to a movie from Swank or other non-theatrical distributor, they make a point of warning you that you do not have to right to show the DVD/BR "extras".

Supremely ironic, in the light of my last experience with a Swank BD.

It was something the Gay and Lesbian Film Festival brought in for a rental - they'd got it from Swank. This BD had no less than eleven minutes of snipes, copyright warnings, logos, ads and trailers before it would let you at the main menu to start the feature. The BD was also authored such that pressing the stop or menu button would start them over.

Of course, after the guy introducing the screening left the stage and it was time to start the movie, I accidentally hit eject instead of play, and the audience had to wait for 11 minutes.

They only brought the disc on the day of the show, or else I'd have ripped it and DCP-ized the feature, to prevent the risk of that happening.

What was even more bizarre was that the feature was basically a gay porno, but the trailers were mainly for G-rated, kid-friendly titles. At least it wasn't the other way round!

quote: Justin Hamaker
I don't know Disney's reasoning...

I don't either, but would guess that it's consistent with their "premium brand" marketing policy: they'd rather make their movies, even their rep titles, a bit difficult to see and therefore create a buzz on the rare occasions that they are shown, than have them play on cable TV, $4.99 DVDs and every Sunday afternoon for discount shows at arthouses and on campuses. They used to have a policy (don't know if this is still the case) of only doing theatrical re-releases of their iconic titles once every seven years for a few weeks. Their retail video releases also seem to be time-limited, in premium packaging and a lot more expensive than the norm.

Posted by Brad Miller (Member # 2) on 01-08-2017, 11:04 PM:

quote: Mike Hillyer
the films were obviously shown off Blu-Ray, and were free with concessions purchase.

Hmmmm, something there doesn't sound right. I am not a booker or a studio rep, but if the concession purchase is mandatory, then I would bet that mucks up the contract because unless it was a flat rate fee, most of the rep pricing I've heard is along the lines of "$250 flat fee vs. 50%"...meaning wouldn't that mandatory concession purchase becomes a legal issue?

Posted by Allan Barnes (Member # 5178) on 01-09-2017, 06:08 AM:

IN CANADA.. you can (must) book all Free Showing with Audio Cine Films Inc. out of Montreal. They represent 90% of all the major film companies. Prices range from $100 to $500 plus HST... Disney animated films 90 days off release / pre-release DVD Cost the most.

It can be your own BluRay. 16mm, 35mm or DCP print. They don't care, they just want the cash.

HERE IS THE CANADA ONLY data ..www.acf-film.com/en/index.php

Audio Cine Films film distributors in Canada - copyrights management ... ACF film one of the major non-theatrical film distributors in Canada.

BRAD IS CORRECT... DON'T MENTION THE CONCESSIONS SITUATION AT ALL.

Posted by Greg Routenburg (Member # 1742) on 01-09-2017, 10:20 AM:

ACF and Criterion are the two major Hollywood reps for Non-Theatrical presentations in Canada. This includes anything screened for profit or not in any venue, inside or out, that is not a commercial movie theatre. Bottom line is that if it's going to be screened in a movie theatre, the theatres film booker should be acquiring the rights for the screening from the studio's local distributor. This is regardless of whether admission is charged or not. That's why they do the flat rate or percentage based on the box office revenue. If you don't charge, you pay the flat rate and hope that your concession sales make up the difference. The only exception is content that is in the public domain. Any film booker worth their salt should be able to tell you whether your particular title applies under that category.

Posted by Mike Blakesley (Member # 26) on 01-09-2017, 11:38 AM:

quote: Justin Hamaker
Another point is Disney is usually much more expensive to license for free shows. Most of the other studios are about $350 for a DCP booking, but my understanding is Disney is about $2500.

I don't think Disney does free shows AT ALL, except maybe for super-special occasions but I can't even remember the last time I heard about one of those.

I agree with the previous poster who said they're leaving a lot of money on the table with that policy. They're trying not to cheapen their product by making it premium-priced.

Posted by Mike Hillyer (Member # 7436) on 01-09-2017, 11:44 AM:

Sorry guys, I phrased that wrong, I meant that all they had for revenue was concessions, because they didn't have ticket sales. Concession sales were not required.

Posted by Jack Ondracek (Member # 1466) on 01-09-2017, 12:05 PM:

quote: Mike Hillyer
I meant that all they had for revenue was concessions, because they didn't have ticket sales. Concession sales were not required.

Yahh..... You're still getting into that gray area, where the studios will want to know how you make money. If you really don't charge admission, meaning anyone can just walk in the door and see the show without buying anything, then you might get the flat rate (as described earlier). If you even go so far as to sell concessions from the same register that you use to keep track of who comes in, the studios are likely to see that as admissions, and will want that documented.

Whether you mean to or not, this is just one idea among thousands that people have come up with to get studio content without really having to pay for it, which I find curious-to-offensive. The studios feel that if you use their content to attract customers, then part of what you make should go to them. Come to think of it, it's not all that different with the background music industry, which feels you're creating an atmosphere with their content that makes people comfortable in your business. Value = money, which they naturally want a piece of.

This is long-winded, but really... if you want to run a serious business, I think you ought to include the studios' content as a legitimate part of your expense model. If you have a concept that's marketable in your area, you should be able to charge enough for it to pay for the movie.

Posted by Dennis Benjamin (Member # 1137) on 01-09-2017, 12:39 PM:

quote: Mike Blakesley
I don't think Disney does free shows AT ALL, except maybe for super-special occasions but I can't even remember the last time I heard about one of those.

They do not.

I've known several exhibitors in the past that have tried to run Disney movies for free. Whether it was a current, booked title, or an older "blu-ray".

They only thing those companies got was all their Disney titles yanked and no titles allowed for a few years.

Posted by Scott Norwood (Member # 30) on 01-09-2017, 12:47 PM:

quote: Mike Blakesley
I don't think Disney does free shows AT ALL, except maybe for super-special occasions but I can't even remember the last time I heard about one of those.

That probably depends upon how "Disney" is defined. I am sure that it applies to their major animated titles, most of which are unavailable, anyway. That said, they definitely let us do it in 2012 with Mary Poppins in 35mm as part of a re-opening of a restored older theatre. I made clear to them what we were doing and they let us do it for a reasonable price. Disney has since moved these sorts of bookings to Swank; this was arranged through Buena Vista directly.

[ 01-09-2017, 02:01 PM: Message edited by: Scott Norwood ]

Posted by Mike Blakesley (Member # 26) on 01-09-2017, 01:24 PM:

I think the studios would argue that even if concession sales aren't "required" as a prerequisite to get into the theatre, the movie is still the attraction drawing people to the venue (at least equal to the concessions) so they're going to want their cut...and as Jack noted, they are entitled to it.

Posted by Mike Hillyer (Member # 7436) on 01-09-2017, 01:29 PM:

As in a free theater they would want a cut of concessions, or they would want the flat rate they charge for the license?

Posted by Mike Blakesley (Member # 26) on 01-09-2017, 01:43 PM:

Depends on the movie and the studio. Things like the age of the film, popularity of it, etc. all play in. For example, Warners used to license all their kid-friendly stuff for $250 but Polar Express was $400, due to it being popular. It has since come down in price, so I hear.

I think you would find in general that an archive title would be a flat rate, but anything that's still in theatrical release would be a percentage.

Posted by Mike Hillyer (Member # 7436) on 01-09-2017, 02:00 PM:

Cool. I was mainly thinking cheap due to the small town and the relative proximity of first-run theaters, which is when someone mentioned free nights and that is what got me curious to the idea of a just plain free theater. Question was whether concessions would cover the flat rate licensing on older movies.

Posted by Scott Norwood (Member # 30) on 01-09-2017, 02:08 PM:

I have never seen anyone do "free movie with concessions purchase." This seems wrong, as others have pointed out, and has a bit of a "bait-and-switch" air to it as well.

Usually, free movies are done as promotional events for the theatre or are sponsored by a local business or other organization.

You really need to talk to distributors about what you are planning and see if they would agree to it. My guess is that they would only do it if "free" actually meant "free" and without other required purchases.

Posted by Mike Hillyer (Member # 7436) on 01-09-2017, 02:16 PM:

Sorry I may not have been clear, the idea was a free theater, where it's assumed that concessions would cover all costs without admission, the question was around A) Would distributors even agree to it, just flat rates for a commercial theater for post-theatrical films, and B) Roughly what they would charge flat rate, assuming probably a week's run on a free release.

Both of those answers would likely have to come from a distributor, ACF was mentioned for Canada but they seem non-theatrical oriented and I assume if it would be a theater then that would not fall under them. I'll try and figure out who the western Canada distributor is.

Posted by Scott Norwood (Member # 30) on 01-09-2017, 02:21 PM:

Let us know what you find. My guess is that, even if you could get distributors to go along with the plan, you would still have at least two problems: a) you probably do not want the type of customers that would be attracted to a free movie theatre and b) you would probably be unable to draw enough of them with the titles that would be available to you.

To put it another way: if this were such a great idea, then someone else would probably alrady be doing it.

Posted by Mike Hillyer (Member # 7436) on 01-09-2017, 03:07 PM:

quote:
To put it another way: if this were such a great idea, then someone else would probably already be doing it.

I'm with you till that point, Jeff Bezos would never have started Amazon if the qualification for a good idea is that someone else is already doing it.

Posted by Leo Enticknap (Member # 534) on 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.

Posted by Justin Hamaker (Member # 2165) on 01-09-2017, 04:01 PM:

quote: Jack Ondracek
Yahh..... You're still getting into that gray area, where the studios will want to know how you make money. If you really don't charge admission, meaning anyone can just walk in the door and see the show without buying anything, then you might get the flat rate

Since we went 100% digital, we have been doing a free admission summer kids series of 8-9 weeks. We pay a flat fee for the licensing. We don't print tickets, we just open the door and let people in. Of course we have the snack bar open, and this has never raised a question.

I agree with Brad about how making a specific concession purchase might be problematic. In fact, I could see the studios saying that requiring the purchase of a small popcorn is the same as charging a $5 admission, so they expect you to pay 35% (or whatever the percentage is) on $5 per head.

Posted by Martin McCaffery (Member # 37) on 01-09-2017, 04:03 PM:

quote: Scott Norwood
Disney has since moved these sorts of bookings to Swank; this was arranged through Buena Vista directly.

Up until last year you could get the Disney non-animated films through Swank. Sometime in the last year they pulled the rights. I'm not sure what the status is of some of the non-Disney things Buena Vista owns.

Posted by Frank Cox (Member # 6258) on 01-09-2017, 04:26 PM:

Mike: Talk to Sarbjit Singh whose phone number is 416-228-2081. If she doesn't know the answers you need herself, she will know who you should talk to.

Tell you that I told you to call her if you like.

Posted by Mike Hillyer (Member # 7436) on 01-09-2017, 04:39 PM:

Thanks Frank!

Posted by Monte L Fullmer (Member # 2797) on 01-10-2017, 05:46 PM:

On this topic, there also have been the slight increase of "Pillow Movie," or "Movies in the Park" movies where there is an open field, an inflatable, or a tent pole screen raised, projection equipment, along with portable generator(s) in the back of a van, folks arrives with lawn chairs and the similar, and sit an watch a optical disc movie of whatever chosen by the proprietor of the event.

..and it gets advertised via almost any form of media.

What gives on this one?

- Monte

Posted by Mike Blakesley (Member # 26) on 01-10-2017, 07:09 PM:

It's happened here. A civic group showed "Grease" downtown on a Thursday night, just about a half block from my theatre. I decided not to raise a stink about it. About 30 people came in and bought popcorn from us and carried it to the free show, so it was actually a win for us. We had a decent crowd that night for our regular movie as well.

This is one of those "pick your battles" scenarios. The only way I would protest one of those shows is if they were showing a pirated recent movie that isn't already out on video.

Posted by Leo Enticknap (Member # 534) on 01-10-2017, 08:20 PM:

An open air movie show in Montana in January???!!!

If they make a habit of this, you might like to consider offering frostbite remedies at your concessions stand!

Posted by Frank Cox (Member # 6258) on 01-10-2017, 09:20 PM:

It's been done here a few times as well. The Chamber of Commerce pays someone (I've never been entirely sure who) to bring an inflatable screen and set it up in the playground at the high school. It has been done once ever summer for about the past three or four years.

I would be rather surprised if whoever it is that's showing the movie has any kind of copyright clearance from the movie company (especially since he's played Disney cartoons), let alone has paid SOCAN fees or anything else like that. But I really don't care enough about it to squawk. I stopped being a member of the Chamber of Commerce several years ago for "reasons", and I guess that's just one more.

Posted by Kenneth Wuepper (Member # 1174) on 01-11-2017, 09:55 AM:

During the Summers here in Michigan, there was a traveling show that went around the inland lakes and showed feature films for free to the vacationing audience.

The traveling show had a portable screen and a 16mm carbon arc projector. The speaker hung at the side of the screen and it was set up on an open lot. The projector was bolted to the floor of a van and showed out the back doors.

These shows were funded by the local grocery/gas station/convenience store. The films came from the non-theatrical exchange and were certainly paid for by the traveling operation.

Last year there was a traveling digital show in the county park. Portable metal framed screen and car radio sound in the parking area. Projector during the show was placed on top of the van without covering or weather protection.

The local West Side merchants association here in Saginaw holds free movies on Sunday nights in a parking lot. The "Lawn Chair Film Festival" is very successful. There is a roll down screen on the side of the building facing a parking lot. Projection is set up on scaffolding. These movies are after the free Eddy Concert Band concerts in the downtown pavilion performance space.
Titles are booked by a commercial booking person and are played from DVD type material.

Posted by Manny Montes (Member # 5639) on 01-19-2017, 01:53 PM:

Most of the places that do "movies in the park" type events do not do them correctly nor obtain the proper permissions to do so. I think most times it's honestly out of ignorance not malice, at least from the ones i've seen its either a small business or local government doing it and they assume since they aren't charging for it/not doing it for profit and they physically bought the DVD then its kosher.

Posted by Mike Blakesley (Member # 26) on 01-19-2017, 06:26 PM:

quote:
An open air movie show in Montana in January???!!!

I said it was "a Thursday." It was in the summertime. Even Montanans wouldn't watch an outdoor movie in January! (Canadians, maybe, but not Montanans!) [Smile]

Posted by Rick Cohen (Member # 6140) on 01-22-2017, 06:21 PM:

These "movies in the park" or whatever you choose to call them, are classified by the studios as "Non-Theatrical Venues" and must obtain a licensing fee for any screenings which are open to the public. The licensing is usually obtained through Swank, or a similar post-theatrical distribution company which is authorized by the studios to license their movies.

Many places which set up these "pop-up" venues, will advertise their screening without any licensing, sometimes out of ignorance, but more often out of the hope that nobody will notice, so why pay the fees?

If you are an exhibitor with non-theatrical pop-up venues cropping up near you, the best course of action is to contact Swank directly, after which they will verify if the appropriate licensing has been obtained or not. In the absence of such licensing, Swank will politely "suggest" to the venue operator the advantages of using their licensing services, if they wish to avoid a potential lawsuit from a studio for violation of their copyright.

Even if there is no admission fee being charged, a license is still required for all public showings. It is ironic how most of these non-theatrical pop-up screenings seem to disappear after the people organizing them discover there is a $250-$400 licensing fee involved.

Posted by Martin McCaffery (Member # 37) on 01-22-2017, 08:48 PM:

I get plenty of calls from people who want to show a movie for a private party of something. I tell them they have to pay a fee to the distributor and they ask "Can't I just bring my DVD?"
The best line I have that gets through to them is "You know that FBI warning at the beginning of every DVD? That's what it's about."