Long_tail
Over at the Long Tail, Chris Anderson asks: "Pirates of Caribbean: Dead Man’s Chest has set an opening weekend record of $132 million. Does this mean that the blockbuster is back, contradicting my thesis?"   

Further noted was this overheard snippet of studio conversation:

"I happened to be riding to work with an exec from one of the major studios
this morning, and he mentioned that the studios are increasingly making deals
with theaters to inflate opening numbers. In particular, they will give the
theaters very high revenue share for the first X days of the movie (he mentioned
100% for the first 3 days), incentivizing the theater to maximize the number of
screens the movie’s shown on, inflating opening numbers."

Our eavesdropping friend claims this conversation was referring to Superman and Pirates; Specifically, the question is whether Superman’s decline was partially due to the theathers’ incentive period running out.

I personally doubt what he heard this correctly — but let’s look at the practice anyway.

What they were discussing is called Front Loading, and it has been around at least since the early 1990s. It may have become more pervasive over the past few years.

That said, I would be very surprised to learn that Disney "gave much away" the first few days. This was a widely anticipated sequel, one that was likely to be reasonably successful. The studios wouldn’t/shouldn’t give away the cash cow: the opening week gross.

There are two related items worth noting about this:  First is the 70/60/50/40/35/30 scale. When a movie opens, the
studios typically take the lion’s share of the ticket sales — 70% during the first weekend, leaving only
30% for the exhibitor. The following weekend the split drops to 60/40, then the next week it goes to 50/50,
then 40/60, 35/65 and eventually plateaus at 30/70.

A hot movie, with good previews and lots of word of mouth buzz (i.e., Snakes on a Plane) might
be a "double 70" — meaning the studio gets 70% during the first two weekends — including opening weekend, and the following weekend.

The 2nd item to remember is that theater owners are in the popcorn business; They make most of their
money not from selling tickets, but from the concession stand sales. They like a big movie with repeat viewers because they sell more concession products.

~~~

I will try to confirm if the studios made some deal to open Pirates or Superman "bigger" via incentives/concessions to exhibitors, and report back here . . .

Category: Film, Finance

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

21 Responses to “Are Studios Front Loading Movie Releases?”

  1. Chad K says:

    How does one of the worst movies of all time make so much money? Everyone’s now a pirate, everyone has a plot line…

    I asked the ninja… he agreed.

    http://www.askaninja.com/node/1175

    .

    BR I linked to this Tuesday — Hysterical!

  2. royce says:

    This is the problem with guys making broad sweeping generalizations like Anderson makes. Messy reality tends to come to cloud up the bold theories with qualifications and exceptions.

  3. Chad K says:

    Also, I hope you’re joking about “Snakes on a Plane”.

    My friend identified what appears to be all of the plot lines.

    1.) How did the snakes get on the plane
    2.) How did they get loose
    3.) What areas of the plane are they in
    4.) What kind of snakes are they
    5.) Are there any naked women on the plane
    6.) Are there any terrorists on the plane

  4. trader75 says:

    If the posters are any indication, this is clearly going to be one of the coolest movies of all time.

    http://blog.wired.com/snakes_on_a_plane/index.album?i=0

  5. cm says:

    Re Snakes on a Plane, I have seen one ad, and that has conveyed a very strong sense that I can imagine all the plot line there could ever be to it in a minute and done with it. No hot movie for me.

    But then the movie makers know a bit about their market, and I’m sure thery are going to make good money with it.

  6. 2L says:

    Chad K,

    SOAP has a *huge* internet cult following going on.

    Nobody is going to watch the movie for the plot, but instead will watch it because it’ll be funny as hell:

    “In recognition of the unprecedented Internet buzz for what had been a minor movie in their 2006 line-up, New Line Cinema ordered five days of additional shooting in early March 2006[8] (principal photography had wrapped in September 2005). While re-shoots normally imply problems with a film, the producers opted to add new scenes to the film to take the movie from PG-13 into R-rated territory and bring the movie in line with the growing fan expectation. Among the reported additions is a line that originated as an Internet parody of Samuel L. Jackson’s traditional movie persona: “That’s it! I have had it with these motherfucking snakes on this motherfucking plane!”.

    Beginning in May 2006, episodes of The Daily Show with Jon Stewart and its sister show The Colbert Report contained references to Snakes on a Plane title, and famous line, and general premise. Colbert usually accompanies the references with an imitation of Samuel L. Jackson saying something like “We’ve got motherfucking snakes on this plane.”
    http://en.wikipedia.org/wiki/Snakes_On_A_Plane

  7. jkw says:

    How does the revenue split between the movie theater and the studio affect how many people go to a movie? I have never cared about who is getting the money from me buying a ticket to a movie. The only way this would change whether I will see a movie is if the theaters lower prices because they get to keep more of the money. Unless a movie is selling out at all the times people want to watch it, showing it on more screens will make no diffeence. If a movie is selling out, the theaters should show it on more screens regardless of the profit split.

    How does anyone expect a transaction between the theaters and the studios that is not disclosed to movie watchers to affect a transaction between the theaters and the movie watchers?

  8. dsquared says:

    How would the revenue split between theatres and producers affect the question of whether the blockbuster was back or not? The opening weekend take still measures the amount of money people spent on seeing the film.

  9. Kevin says:

    If the theater was getting an extra large cut of the take, they would be motivated to run the film on more screens (more showings). Not sure how much this would actually boost attendance or how much it would just spread the people out in more rooms.

  10. august says:

    Barry: You’ve been reading too much of E. J. Epstein’ “the big picture” …

    A

  11. Michael C. says:

    Let’s get to the crux of this.

    Is this illegal, immoral, unethical,…?

    I always thought those weekend headlines were bogus, just more hype for the movie business. They just quote sales numbers and hardly ever account for inflation, number of screens, cost of advertising, overall budget of the film, etc.

  12. Truth says:

    I think your percentage split formula is the exception, not the norm. I repeatedly read about a standard studio/theater split of 55-45 in the entertainment press. This is backed up by Regal Entertainment’s public prospectus (http://sec.edgar-online.com/2002/04/19/0000912057-02-015824/Section10.asp), as well as a lawsuit Mel Gibson filed over “Passion of the Christ” (http://au.news.yahoo.com/040608/11/pd5u.html). It seems to only be on the internet where I read about these crazy formulas that don’t make any sense.

    There WAS a time a few years ago when George Lucas, riding the incredible anticipation of new Star Wars episodes, extorted a highly front loaded split (IIFC, it was for ‘Episode 1,’ and the split was 90-10 the first week, and tapered down to 50-50). Two things happened. One, theater owners just sold tickets to other movies to people going to “Episode 1,” so George got cheated out of lots of money (few people look closely at their tickets). Second, theater chains started declaring bankruptcy.

    As long as theater owners are responsible for both selling the tickets and checking the tickets, they can “game” any front loaded system. Also, the pattern of opening every film very wide deprives the studios of negotiating favorable deals by leveraging one theater chain against another– if one large theater chain refuses to give away the majority of the first few weeks take (which is when these films make most of their money), the studios are screwed.

    What exactly is it that gives the studios the leverage to keep such a system in place? A handful of theater chain owners can quietly decide to say no, and the studios would have to yield.

    I also think the bit about theaters being in the candy and popcorn business is overstated. Take a look at the expenses of running a modern multiplex, both fixed costs and labor. Selling a few dollars worth of popcorn and coke of a small subset of your audience isn’t going to get you to profitability.

    Finally,if the sliding scale you list is true, theater owners are constantly working against their economic interest. They should be limiting the number of screens/seats on new movies, causing lots of opening week sell-outs. Few people leave a theater if the show they want is sold out — so the overflow crowds will go in to movies that generate a bigger cut for the theater, and that “overflowed” audience segement will likely also come back the next week or two to see the movie they missed, when the theater owner will get a bigger cut of the pie.

    They should also be lowering ticket prices, to increase their audience, since the majority of their income is based on concessions, and larger audiences means more concessions means more profit. Most theaters are far from full at any given screening. If it’s really all about concessions, theater owners should be doing something about bumping up attendence. Instead, ticket prices keep creeping up, while attendence stagnates.

    And they should stop dropping screens on films after four or five weeks, since those are the films that are finally generating a big cut of the ticket price from them. Check theater stats, which are widely reported. Movies start disappearing from theater screens after a short time, and those screens are given to the new films, which supposedly generate most of their money for the studio.

    But we see the exact opposite of all that behavior. Are theater owners such idiots that they work to maximize studio income, and minimize their own income? Not bloodly likely.

  13. Bearish says:

    Boys and girls, the movie of the year is going to be Borat, aka Ali G, aka Sacha Baron Cohen.

    The early reviews are that it is funnier than anything put together on film. Ever.

    Ali G is a genius. He got Pat Buchanan to discuss the threat of BLTs. Check out the Ali G interview with Pat on Youtube.

    And the trailer to Borat (quicktime) is here:

    http://www.apple.com/trailers/fox/borat/trailer/

    Genius.

    I’m going to see this movie opening night.

  14. Michael C. says:

    Truth – all sound advice, but personally I don’t think it is that easy as I’ve witnessed quite a few theaters go out of business locally, from those that seemed to do well (crowded most weekends) to the dead ones.

    I’ve spoken to a few in the theater business and it is extremely difficult to balance ticket prices and number of seats with regard to attendance. I’ll just bring up a few examples they’ve stated. High ticket prices result in lower attendance and lower concession sales. And you cannot lower ticket prices too much as the cost of running a theater is too high. The number of seats is higher because the cost of building theaters is high and a better movie going experience attracts attendance.

    One thing that sounds feasible but actually is the death of a theater is pushing your crowd out to the future to see a movie. Sales drop off dramatically and do not make up for the higher margins. Video store owners would also agree.

    I don’t know of a solution. And I would certainly not open one as a business owner.

    As a theater goer, I know that I go to the theater for an experience. All those drab theaters with lower ticket prices will eventually all get crushed by the megaplexes with higher ticket prices, IMO.

  15. Michael C. says:

    >>>Ali G is a genius.<<<

    I agree with you there.

    From showing him to my friends, though, I’ve found out that he is an acquired taste. As funny as I think he is, I’m surprised by the number of my friends who don’t think he is that funny at all.

  16. Bearish says:

    Michael C: Yeah, I have friends who also don’t “get” Larry David.

    Both Larry and Cohen, in their own way go about exposing the ridiculousness of our culture.

    I knew Ali G/Cohen was blessed by god himself as a comic genius when he appeared as one of Larry David’s heavenly guides in last season’s finale.

  17. fatbear says:

    A little more info about the “cut.”

    Barry left out of the equation “over the nut” – which is important. The cut is “90/10 over the nut” then “80/20 over the nut” etc. At a certain negotiated point “over the nut” disappears.

    The “nut” is the cost to open the venue: what investors commonly call operating expenses.

    While fraud is omnipresent in venue box offices, it is much less a problem now with computerized ticket sales. In the good old days there was a distrib specialist who would show up and “count the house” on an unsuspecting venue. There were many ways to do this, the easiest being buying the first ticket of the day and the last; my favorite was the stake-out (only done in single screen venues), which was ruined more than once by the cops being called by little-old-ladies to find out why some guy in a trench coat was hanging around outside a venue for 12 hours.

    All this is aside from “front loading” and other blue-skying the opening weekend grosses. A long time ago as I made my way up in the biz I learned not to take very little in the trades for gospel; those who do so do at their own risk.

  18. fatbear says:

    Addition to above:

    “Over the nut” is also why one sees 55/45 splits in SEC filings and lawsuits – the nut takes a big bite out of the 90.

  19. fatbear says:

    damn typos (or is it age…):
    I learned not to take very little in the trades for gospel should obviously be:

    I learned to take very little in the trades for gospel

  20. Hissy fit says:

    Hissy fit

    Is the upcoming “Snakes on a Plane” another sign of Hollywood’s demise or a triumph of the blogosphere — or both?

    By Aemilia Scott

    http://www.salon.com/ent/movies/feature/2006/07/17/snakes/:

    Jul. 17, 2006 | If you were in the audience for the opening-day screening of “X-Men: Last Stand” last May, you would have seen a movie preview that begins with a series of silent, ominous title cards:

    “AS THE SUMMER MOVIE SEASON BEGINS / YOU WILL HAVE THE OPPORTUNITY TO SEE / MOVIES THAT WILL HAVE / HUGE STARS / SWASHBUCKLING PIRATES / ELABORATE CODES / INCREDIBLE SUPERHEROES / AND ANIMATED ADVENTURES / BUT THERE’S ONE THING / WE GUARANTEE YOU THEY WON’T HAVE … / SNAKES / ON A PLANE.”

    Seeing this trailer on the big screen was, for much of the audience, the culmination of months of rumors, party conversations, YouTube: searches and endless jokes. It was a moment of collective consciousness on a par with the “Lazy Sunday”: phenomenon. The word “snakes” was greeted with applause more raucous than for the feature presentation itself. The clapping exploded into arena-rock-caliber cheering because with every clap, each person in the audience realized that the person next to them saw what they saw. Snakes. On a plane.

    Was being in the theater that day like seeing the Stones at the Altamont, or watching Lloyd Bentsen tell Dan Quayle that he was no Jack Kennedy? Were we part of one of those cultural high tides recounted romantically by Hunter S. Thompson? “Snakes on a Plane” is no Altamont, that much is certain. But it is a phenomenon unlike any other. For those who are unfamiliar with this surprise hit — this improvised explosive device on the highway of pop culture — let this article break the seal and pop open the can of Snakes. On a Plane.

    Snakes on a plane is actually “Snakes on a Plane,” the title of a movie to be released Aug. 18 and starring unlikely cult hero Samuel L. Jackson. The question one should ask is not what — what is the movie’s plot? what is the action like? what the hell were the screenwriters thinking? The answer to all those questions is, of course, “snakes on a plane.” The real question here is how “Snakes on a Plane” became so much more than just a shitty movie.

    Although its anticipated cult status is high, the film doesn’t seem to have been created as a ready-made cult classic. It began like many other action films, as a god-awful B-movie script with a simple premise and simple thrills that needed some rewrites. It was filmed to be a PG-13 snoozer with the working title “Snakes on a Plane.” A groundswell of Internet love for the title emerged. The title was changed by New Line Cinema to “Pacific Air Flight 121.” The Web erupted into e-riots. The studio, realizing the golden, rotten egg upon which it sat, restored the original title and shot new sequences to push the rating from PG-13 to R.

    And like a snake shedding and re-shedding its skin, “Snakes on a Plane” was born and reborn.

    Everyone who hears about it loves “Snakes on a Plane.” And yet no one has actually seen it. There are countless
    homages and parodies: of all levels of production value on the Web that millions have enjoyed — from film mash-ups: using previous footage of Samuel L. Jackson and nature shows, to camcorder images: of white college-age males in their garage. None of these are based on the movie. This preemptive attack of fandom was caused by the four syllables that make up the title.

    The appeal of the title does not derive from its simplicity or its specificity but rather from the existential truth of it. It’s as if the author read the screenplay aloud to his two sons and asked them what the film should be called. The first son might reply, “Death Flight! Wait, wait, no! Poisonous Air!” The second son, if he were autistic, would reply, “Snakes on a Plane.” The second son would be right.

    Many think that “Snakes on a Plane” is a phenomenon because its title is immeasurably stupid. This is untrue. Keeping with the analogy about the two sons, the autistic son has a clearer, if more unromantic, grasp on the essence of the movie than the first. This clarity is at the root of the phenomenon. People are fascinated with the idea of the film precisely because of the title’s lack of artifice. This is because all the really bad movies have really good titles. The correlation is so strong that most media-savvy moviegoers can judge the quality of a movie by the slickness of its title alone. “ConAir.” “Species.” “Anaconda.” Across the aisle, film buffs lovingly embrace the awkward linguistic gropings of the art-house title. “Born Into Brothels.” “An Inconvenient Truth.” “Breakfast on Pluto.”

    The underlying assumption here is that if a movie is an underwritten, overproduced turd kept afloat by an evil and powerful network of producers and distribution studios, the title has probably been expertly cleaned and perfumed to a degree greater than or equal to the shittiness of the film itself. A good title is the smooth gelatin capsule within which the feces will be swallowed. Conversely, the assumption about the art-house film title is that it was revealed by the Muse and banged out on an old typewriter by a frenzied author clutching a cigarette in one hand and a bottle of Jack in the other. Thus when people see a super-slick title, they are understandably wary. Like Indiana Jones’ Holy Grail,: good things almost never come in good packages.

    If blockbuster movies were named in accordance with what they actually are, “Harry Potter and the Goblet of Fire” would have been called “Cute Kids Who Can Do Magic.” “Beverly Hills Cop” would have been called “Wacky Black Police Officer.” “Rush Hour” would have been called “Wacky Black Police Officer 4.”

    On one level or another, people do understand that blockbuster movies are less than their titles would have you believe, and the difference between “Species II” and “Sexy Alien Lady Again” represents a deception of the public by the film industry. It’s a deception we willingly go along with. This is mostly because it seems better to be deceived by Twentieth Century Fox into watching “Glitter” than to be deceived by your government into believing that a war was justified. Maybe.

    The producers of “Snakes on a Plane” tried to keep up appearances by surreptitiously changing the title to “Pacific Air Flight 121.” The public, including star Samuel L. Jackson, was understandably outraged. By then we had already received the revelation of “Snakes on a Plane,” and the producers were foolhardily trying to put the scales back over our eyes. If the title had stayed “Flight 121,” it would have ended up in the dustbin of bad, bad movies. But the studio reinstated the old title, turning bad movie into cult classic.

    This reveals the meaning of the cult classic. The C factor lies not in the shittiness of the film but in the agreement between moviemaker and moviegoer on the film’s shittiness. The moviegoer goes to see a movie and thinks, “Wow, this movie is going to be terrible for X, Y and Z reasons.” The bad movie delivers reasons X, Y and Z. The cult film responds, “Oh yeah? You think you know X, Y and Z? We’re gonna show you some X, Y and Z!”

    “Snakes on a Plane” is an agreement, but one born of an unlikely power shift. It’s an agreement between moviegoer and Hollywood. It’s an agreement between David and Goliath, where Goliath slips up and calls himself a knuckle-dragging retard giant.

    Thus the moviegoer’s love for “Snakes on a Plane” is not infantile, because in New Line’s decision to reshoot and repackage the movie to suit public demand it looks as though Goliath has lain down before David. This is scary not only for all Goliaths out there but also for critics, like Chuck Klosterman, who worry: that filmmaking is becoming a spectator sport. The film should be an unadulterated nugget of gold presented by the artist and enjoyed by the viewer, they contend. How dare movie studios treat the blogosphere as a massive focus group, and their movie as a product to be sold? For shame!

    Except that is exactly what a movie is. A studio-produced film does not hit the silver screen without being shown to test audiences multiple times and shaped by people with MBAs who love box and whisker charts. Most comedy writers and directors use audiences like guinea pigs, running them through the jokes and analyzing the size and timing of their laughter — then re-editing and re-presenting everything to a new set of guinea pigs. Sure, it’s a dirty shame that studios treat movies like soda and audiences like taste testers. But “Snakes on a Plane” is neither the first nor the last time it will happen. If viewers want a movie that hasn’t been run through the market research grinder, they are invited to see John Waters’ most recent film, “A Dirty Shame” — a pure, uncut gem.

    But “Snakes on a Plane” as a concept is not a reaction to John Waters; it is a reaction to Jerry Bruckheimer. The appeal of “Snakes on a Plane” has nothing to do with the dignity of honestly produced bits of cinema; it has to do with the shamelessness of the studio film. It has to do with the changing standards of the people who watch and make those films. Those standards have not been lowered. Standards have actually become more stringent — in the sense that the blockbuster audience wants a film with more and more flavor and fewer and fewer calories, and the movie studio works tirelessly to create the perfect soft drink.

    This is a race toward what Klosterman might call the bottom, but is really toward a perfection of sorts — just not an artistic perfection. Again, artistic perfection: “A Dirty Shame.” Marketing perfection: “Anaconda.”

    In this sense “Snakes on a Plane” is more than just a title and more than just a cult movie. It’s an exposure of the inner workings of Hollywood. It’s an admission on the part of movie writers, directors, producers and distributors that this movie is, as Samuel L. Jackson has put it, “Motherfucking Snakes on a Motherfucking Plane!” Through a tiny crack in the façade of the movie industry, moviegoers saw that the industry itself doesn’t believe in its own magic. It’s not just that the emperor wears no clothes when he parades through the streets; it’s that everyone inside the palace freely admits that he’s naked.

    This is why “Snakes on a Plane” turned into Snakes on a Plane. It is shorthand for that crack in the façade. It is the exposure of what philosopher Theodor Adorno called the culture industry. “Movies and radio need no longer pretend to be art,” Adorno wrote in his essay “The Culture Industry: Enlightenment as Mass Deception.” “The truth that they are just business is made into an ideology in order to justify the rubbish they deliberately produce.” Scathing words from the 20th century’s hardest-working pop-culture hater. But while Adorno was right about the cause, he was wrong about the effect. He probably thought that the public’s pulling off the movie-industry product label (“New Movie”) and exposing the label underneath (“Fresh Turd”) would inspire riots, not fan clubs. Even Adorno can’t be right every time.

    Americans don’t just love the culture industry; they fetishize it. But Americans are also savvier than most theoreticians believe. The lamest and most transparent attempts of the culture industry to deceive us are defeated not by outright rejection, but by assimilation. The worse the slogan, the better the T-shirt. A secular humanist wearing a T-shirt that says “Jesus Is my Homeboy!” is the same as a movie fan loving “Snakes on a Plane.” It’s an act of dissent that also strangely supports the establishment. It’s like cheering for the emperor’s nakedness.

    Can we cheer the wall down? Probably not. The criticism and the impossibility of criticism are both part of Snakes on a Plane. The power of this phrase is manifest everywhere. It is more than just something for you to scream on a crowded flight during rush hour; it is a Zen koan for pop-culture enthusiasts, a question and an answer in one. In conversation it has become a response to unanswerable questions and a universal declaration of the unknowable. Question: “Why would anyone want to steal my old, ugly bike?” Answer: “Snakes on a Plane, right?” Statement: “Al Jazeera reported that the Haditha killings are Iraq’s My Lai massacre.” Declaration: “Dude. Snakes on a Plane.” What is the sound of one hand clapping? “Snakes on a Plane.”

    – By Aemilia Scott