You are correct as to the distribution controlling. One factor you did not mention is that, whereas in the past, a movie would open in New York, LA and maybe a few smaller markets shortly after that. The distribution would widen as "word of mouth" spread that the movie is good. Today, however, movies open on thousands of screens all over the country on the same weekend, heavily supported by advertising campaigns and marketing tie-ins. As a result, the number of prints needed and upfront cost for prints are dramatically higher. Digital distribution can cut the expense greatly and is efficient in view of the time frame involved.
I don't buy your figures on the split. The movie industry is notorious for its accounting practices, something akin to the Russian Rule Against Perpetuities: All moneys go to the distributor or there shall be no lives in being. Nevertheless, your three way split points out that by comparing to the cash cost of prints, etc., the industry should be able to come to an agreement on how to split the cost between the distributors and the operators. However, part of the problem arises in the way that movie contracts and finances are structured in the above and below the line costs. If I recall (it's been a few years since I did one) distribution costs under traditional contracts are charged against the movie. The producers and many of the major talent (actors, directors) may have to agree to a special way of calculating distribution costs to make it work. As to the latter, why should they give up their percentage in order to fund the new equipment? My point is that there may be contractual stumbling blocks to simply cutting a deal between the distribtuion companies and the operators.
Perhaps there are some lawyers or agents from California on the thread who have a better handle on the current details than I do; like I said it's been quite awhile since I practiced entertainment law. |
