Comments

riredale wrote on 6/26/2005, 8:04 PM
Interesting read. I'd heard that there was nothing slippier than a movie studio accountant. Movie stars that negotiated contracts calling for a percentage of "profits" soon discovered that, no matter how successful the picture, there were hardly ever any "profits" left over to split.

I personally hate going to the theaters to watch a movie. Obnoxious people, sticky floors, 48Hz flicker, wildly overpriced snacks--forget it. OTOH, if I were on a date, then the movie would be the secondary attraction. Maybe that's what keeps the theaters going.
Spot|DSE wrote on 6/26/2005, 8:12 PM
Good article. Other than the size of the numbers, this is a similar story to the record industry too. Massive numbers mean so little. But it's the reverse story. CD's make little money, tours rake it in. So while DVDs keep people in their homes watching movies, CDs serve as support mechanisms for tours.
Thanks for the link, I'd not seen that particular story.
p@mast3rs wrote on 6/26/2005, 8:21 PM
"So while DVDs keep people in their homes watching movies, CDs serve as support mechanisms for tours.
Thanks for the link, I'd not seen that particular story."

Sadly enough, consumers OVERPAY for all of it.
Coursedesign wrote on 6/26/2005, 8:30 PM
Sadly enough, consumers OVERPAY for all of it.

Well, if you pay nearly five bucks to rent a DVD at Blockbuster, that's expensive.

But buying one for $15-20 (discounted) is really not bad.

The saddest thing about the movie industry is that the creative people get a royalty on theater income (which is 20% of the gross), but zippo from DVD sales (which is 80%).

I can't imagine they will accept this much longer, but then I couldn't understand why they swallowed this in the two most recent negotiation rounds (DGA, WGA) either.
busterkeaton wrote on 6/26/2005, 11:24 PM
I'm not so sure I would rely on this article. He talks about four "confusions" about box office grosses. The first is

Is anyone really confused by that? Does he think people assume that movie theaters don't keep any of the ticket price? That they are motivated by a love a cinema and the profits of overpriced popcorn? Does he think people don't know the concept of "gross" in business?

He continues

This seems really high to me. 28.1 millions dollars on a single film? So almost 12% of the box office of a single movie, 22% of the studio's share goes to the MPAA? Does the MPAA then go around to the studio executives and hand out wallets full of cash? Or does the MPAA have a billion-dollar operating budget based on last years $9.4 billion domestic grosses.


TheHappyFriar wrote on 6/26/2005, 11:45 PM
This shouldn't be as suprising as it is..this happens with EVERYTHING we buy. AMD, for example, gets a small fraction of the CPU price I paid. The retailer gets some, the delivery company, the guys at the plant, etc. etc.... and it's taxed all the way through.

It should also be pointed out that even if the studios DID own the theatures things wouldn't be any cheaper... they'd just get more of the $$$ from the sale but would have higher expences (people still need to be paid & items upkept). Like buying Vegas on this Sony site. It could be gotten cheaper on 3rd party retailers even though it's comming from the source. Shows how much markup there is!
Coursedesign wrote on 6/27/2005, 5:25 AM
the reported "grosses" are not those of the studios but those of the movie houses

I don't know any other industry where a company reports as "its gross" what their distributors take in. Certainly they will not be using that gross when filing their business taxes. It's all about showing a bigger number, and it's a gross exaggeration (no pun intended).

Here it looked like the MPAA fees were $10.6M out of the studio's $112.2M share, so 9.4% (not 22%). Still, I wouldn't assume wouldn't assume it's a straight percentage. This may be another case of evaporating the bottomline profit of a movie by allocating all kinds of charges to a film so that the net profit participants get nothing. I have seen many creative examples of this; net participation is a total joke if you don't control the accounting standards.