JMM434 Exam 2

Theatrical Traditional Windows

Theater: day 1 - 140 Home video: day 140 - 185 PPV/VOD: day 185 - 275 Pay TV: day 275 - 365 - longest theatrical window - home video starts much later evolving

Theatrical Evolving Windows post covid

Theater: day 1 - 90 Premium VOD: day 18 - 45 (ex: mulan $25+sub) SVOD: day 45 - 90 + 225 - 365 VOD: day 90 - 225 Disc: day 90 - 365 EST: day 90 - 365 Pay TV: day 225 - 365 - premium VOD added bc theater is losing - SVOD broken up early + later

Theatrical Evolving Windows pre covid

Theater: day 1 - 90 SVOD: day 225 - 365 VOD: day 90 - 225 Disc: day 90 - 365 EST: day 90 - 365 Pay TV: day 225 - 365 - evolution of streaming changed windows - no home video

international box office

UK, France, Germany, Italy, Spain, and Russia

3. Co-Productions

When a studio wants to offset risk, it will often enter into a coproduction relationship with another studio. In such a case, each studio will agree what percentage of the budget it will contribute, and will, in turn, keep certain exclusive distribution rights. The simplest and most frequently used mechanism is to split domestic and foreign rights. On occasion, this scenario arises when the project involves talent tied to different studios (e.g., famous director vs. lead star), and the only way to move forward is sharing

Rental Vs. Sell-through

When does each model make sense financially or from a marketing perspective?

Move-overs

When exhibitors "move" a film from a large screen to a smaller one: - Smaller "nut" - More intimate experience for viewers

Vertical Integration - history and market evolution

When production, distribution and exhibition are controlled by the same company

Concessions

- "The theater keeps the popcorn" - Excluded from all calculations of film revenue - Many unsuccessful attempts over the decades by distributors to get a share of concessions

Box office concerns:

- (incorrect reporting of revenue numbers) - inflation - price differentials: (matinee different from evening, children and seniors pay less, 3D is more than regular...etc) are not reflected - some countries use "admissions" (how many people went to the theater)

Length of runs

- Almost as important as splits in negotiations - Typical engagements: *Six to eight weeks (rare) *Four weeks *Two weeks - The above are minimum commitments from exhibitors Distributors may "grant relief"

Compelling Value Proposition - home video

- An asset worth $70-$100 million to make, in our homes for approximately $20 (retail) or $3-5 (rental) *Even electronically, $29.99 for PVOD - Watch where and when you want - Technological improvements - Home video was the most revolutionary invention in Hollywood since television

How do you choose what you will consume?

- Artistic value or entertainment? - Awards? - Critics? - Friends (word of mouth)? - Prior knowledge of artists/talent? - Suggestions online?

How would you minimize risk when green-lighting projects?

- Back successful producers - Some actors have Box Office appeal (Gender disparities) - Directors - Research/data Reliance on past behavior

Content that "travels" -internationally (4)

- Certain stars - Types of movies aka locations (westerns, native american...) - Genres (humor, war/patriotic) - Dubbing (voice unions, actors, some dubbers are bad and ruin film for audiences)

Ways studios/producers look for ways to mitigate risk

- Co-productions/Co-financing - Selling off rights: equity (participation) and/or share or rights

Once location strategy has been determined by distributor, actual screen count is the key to negotiations:

- Determines "nut" calculation for overhead total - Determines number of "prints" (or hard drives) to create - $1,500 per 35 mm print - Creating a digital master costs between $1,500 and $3,000 per film, each additional copy costs between $150 and $300

4. Four wall structure

- Distributor rents entire venue in exchange for a fee - Exhibitor keeps concessions sales and handles staffing Why? - Independents - Particular venue (if distributor wants it to be played in certain venue - Perhaps future of truly independent distribution - Social media, web celebrities with millions of followers

Transition from rental stores to sell-through:

- Growing trend to collect - ex: star wars fans or action films - Decline in pricing - Studio push for mass selling - disney led this charge with kids market - Kids' market growth (led by Disney) *Only release for limited time so parents had to rush to buy copies *eventually transitioned to sell through more popular

2. Finance (in-house) production slate

- IP rights secured by studio and then producer hired on work-for-hire basis - Bank debt, often production slates - Other financial structures (equity funds, limited partnerships, foreign capital financing, etc...)

product diversification

- In addition to the typical current feature film release on DVD/Blu-Ray, some distributors diversify to other products. - Classics (still goes back to dig these up to this day) Collector's Director's cut Unrated - TV product Advantage - like selling library titles to netflix, icing on the cake, revenue you didn't expect but receive

International Box Office growth vs domestic:

- International BO is showing more growth than domestic - With equal number of prints, international yields better BO figures than domestic *International markets are more concentrated in urban areas - International exhibitors "skipped" the multiplex stage of development (hence avoiding the rash of bankruptcies the US saw in the late 90s)

Betamax Vs. VHS ("The format wars")

- Matsushita, parent company of Panasonic/JVC launched VHS - VHS ended up dominating the marketplace and Matsushita acquired - MCA/Universal (hardware/software) and it's domination dealt with internal politics of the studios

Online "Majors"

- Netflix - Amazon - Hulu - Apple

Impact of digital on theatrical distribution

- Not as affected as other windows - Web promotional presence Including social media "Word-of-mouth" is a more global and faster process Big data: aggregate critics

How to know how long to keep a movie in theaters? consider:

- Opportunity costs (distributors have other films to play in theaters, if movie showing empty on sat night they'll pull it) - Relationship with exhibitors - Marketing expense to promote film while in theaters Guaranteed weeks in theaters: - Distributor and exhibitor sometimes agree on a specific amount of time, this is rare though in case the movie flops/risky and rare

1. Production-Financing-Distribution Deal (PFD Deal)

- Outside (independent) producer develops a property (script, talent, etc...) and presents project to studio who agrees to produce, market and distribute the film - Agents play an important role at this stage (packaging fees) - Typically rights are acquired (secured) by independent producer and then transferred to studio (Copyrights, distribution rights for all media, in perpetuity) Regardless of whether a studio enters into a PFD agreement or some other structure on a particular picture, from a macro standpoint, studios need a strategy to finance their overall production slate. The simplest and oldest method of financing is via bank credit facilities covering a slate of films. Disney, for example, worked with Credit Suisse First Boston (2005) to structure its $500 million Kingdom Fund.18 As the business grows ever riskier and more complex, however, studios have sought a variety of methods to secure production financing, acknowledging that they need to cede some upside to offset the enormous risks taken.

Decay curves and predicting box office:

- PhDs have been written in ways to predict box office - Goal: minimize the "decay" or week-to-week drop off - Compare apples to apples: Jurassic World Vs. Blue Jasmine? - Start with as high an opening weekend as possible 50% drop from $50 million is better than a 50% drop from $8 million - Marketing efforts to minimize decay *Social media *Traditional advertising

Revenue sharing model:

- Post-independent market, dominated by Blockbuster and Hollywood Video. Accounting for this was so difficult because of late fees differing per amount of days, fees for the movie to rent/buy..etc so there was a company that started keeping track of it called "Rent Track" for accounting at the cash register level - Studios began foregoing initial cost of "rental" copies in favor of revenue sharing models because they had rent track now - Also revenue sharing for "off-peak" titles in sell-through market

Online and digital factors that contribute to release strategy and timing

- Pressure from review sites "Instant" word-of-mouth through social media and sites such as imdb Big data or aggregate reviews (imdb metascore) - Online release Two types: "Instead of" or "day-and-date" with theatrical Consumer experience - Opening weekends Affect studio's bottom line (stock price, compensation, bonuses) Calculations vary (opening weekend, three-day weekend, Thursday night, Friday night, etc...)

5. Off Balance Sheet financing

- Similar to debt/equity financing but investors are limited partnerships - Silver Screen Partners (Disney 1980s) (Track record?) - Hedge Funds and Private Equity - Studios retain rights and obtain financing - So how do these deals work economically? Although each has its nuances, in the simplest scenario a studio and fund would each share production costs 50/50. In parallel, the studio and fund would similarly share profits 50/50. - What films are included?

4. Debt and equity financing

- Stock or other debt/equity offerings Examples: Pixar and Dreamworks animation went public Downside: - Expensive - Need track record to lure investors This is a difficult strategy because: (1) there are off-the-top offering costs that can be significant; and (2) investors are usually looking for a particularly strong track record or brand, which can be hard to illustrate with a diverse studio slate (something that both Pixar and DreamWorks Animation achieved within the niche of computer graphics-based animated films).

Given the level of risk, how do studios/producers project accurately?

- They don't - Based on past experience - Data, data, and more data! - Somewhat Intuition

The Betamax Decision: Universal Vs. Sony 1976 - 1983

- Universal, Disney saw Betamax as infringement of their copyright - Betamax had superior VCR system quality (from VHS) - Supreme Court ruled in favor of Sony (Betamax) Fair use Repercussions today: DVR - On Sony's side: Sports leagues Corporation for Public Broadcasting Mr. Rogers

Decay curves and drop-offs

- Week-to-week decay: how much revenue drops from one weekend to the next - Make sure you're comparing apples to apples and you look at number of screens/theaters very closely - 50% decay from week 1 to week 2 is acceptable

characteristics of financing ONLINE production

- deep pockets and partial distribution in place - front heavy talent deals Disney pushing for the elimination of back-end deals for talent -Guilds push-back

pushing towards day and date release strategy

- globalization/web/social media - piracy (want to avoid) - create world-wide events

demand following expansion evolution in film screen history:

- increase in screens in late 80's - screens peaked in 1999/2000 (over 30,000) - multiplexes, megaplexes and amenities created - demand did not follow this expansion - resulted in bankruptcies of many major theater chains (AMC bought most chains)

against day and date release strategy

- technical and dubbing requirements - publicity tours

Rental Video Store evolution

1) Dominated marketplace in early days (1980s) 2) Neighborhood stores dominated Simple financial model and marketing ex: Mom and pop stores had to buy a lot of copies to advertise having the movie but wasn't enough for the demand (50-80$ per copy) - had to have a lot rent to make money and by the time you got there to rent a movie it wasn't in stock because of limited quantity 3) Chains began acquiring independents - Mainly due to marketing - Initially, consumers were OK with independent outlets not having every current film in stock - Eventually, they had to purchase considerably more copies, so the financial model didn't make sense for independent stores, they needed deeper pockets! - could get a deal buying more in bulk (~$30)

Studio financing

1. "negative financing" 2. PFD 3. in-house 4. debt/equity 5. off balance sheet 6. concept of "slate" - a producer brings a developed picture to a studio and the studio agrees to fund production and marketing costs, as well as distribute the film. - the studio typically acquires all copyright and underlying rights in and to the property, as well as worldwide distribution rights in all media

Types of Split Deals: (4)

1. 90/10 film guarantee deals 2. Aggregates 3. Firm terms Vs. settlement 4. Four-wall structure

biggest international market for US films

China - Has such a large influence that won't release a film if it will be highly censored in China

Box office

calculated by gross some countries use "admissions" - how many people went to the theater

Independent producers list definitions: co-funded or fully: 1. Bank financing 2. Pre-sales 3. Negative pick-ups 4. Debt/Equity financing structures Fully funding using: 1. "Angel" financing 2. Crowdsourcing

co-funded or fully: 1. Bank financing If a producer has a sufficient track record and consistent volume of production, a direct bank credit line may be able to be secured. The economic advantage to a bank line is that it is all about money. The bank will only be concerned with the financial securitization and recoupment of its loaned sums and will not want to retain rights. 2. Pre-sales Foreign pre-sales are either full or partial sales of specified rights in a particular territory. 3. Negative pick-ups A negative pickup is a deal structure where the distributor guarantees the producer that it will distribute the finished picture and reimburse the producer for agreed negative costs (i.e., production costs), subject to the picture conforming to terms detailed in the negative pickup agreement. With distribution and reimbursement of production costs secured, the producer will then borrow money from a third-party lender using the reimbursement contract as collateral. The advantage to the distributor is cash flow and the elimination of risk: nothing is paid until the picture is completed to the satisfaction of stipulated contract terms. 4. Debt/Equity financing structures Another mechanism by which a studio will finance films is via stock or other equity/debt offerings. Fully funding using: 1. "Angel" financing - financing from wealthy individual in which they want return and objective of passion/ego - high risk players - polar express fully funded by investor who partnered w warner 2. Crowdsourcing - funds niche projects - individuals contribute via the internet and offer perks (as opposed to actual stock or profits): - Kickstarter website = all funding or you don't get any money from site - Indiegogo offers option of keeping funds raised even if target isn't hit

How does DVD technology work?

compression

Independent producers (co-financing + fully funding)

Co-financing or fully funding using: 1. Bank financing 2. Pre-sales 3. Negative pick-ups 4. Debt/Equity financing structures Fully funding using: 1. "Angel" financing 2. Crowdsourcing Occurs in a situation in which 1) studio won't commit to fund project 2) producer doesn't want to take studio's money: IP rights are secured by the studio, then they hire a producer on a work-for-hire basis - involves bank debtand other financial structures

Transition to DVD

Competition : Toshiba with warner brothers vs Matsushita with Universal Copies are easy with DVD - Studios worried about piracy - Followed music transition to CD - Advantages of CDs: Sturdy (compared to cassettes) Better quality Smaller size - Technology wars (whose coding/encryption to use?) Matsushita/Panasonic (Universal) Vs. Toshiba/Warners - Hardware investment

Cross-platform adoption of DVDs

Computer users started using DVDs to store information, rather than floppy disks - CD / DVD player in computers adoption -> Coincided with penetration of laptops

Direct-to-Video Vs. Made-For-Video:

Direct-To-Video titles are not created for the video market: - They don't test well prior to theatrical release and distributor may decide to forgo theatrical altogether (bypass theatrical window) - The "duds" that don't get released in theaters Made-For-Video: Titles made exclusively for home video consumption - Flourished as sell-through market exploded - In particular children's titles - Sequels - Spinoffs - Disney dominated but also Fox, Paramount (Charlotte's Web), Universal (Land Before Time) - Barbie had a lot - Independents (Barney)

Niche made-for-video markets:

Exercise Concerts Stand-up comedy Toy companies (Lego, Barbie) Documentaries - Self-help - Do-it-yourself

2. Aggregate deal

Film Aggregators provide a service to help you get your movie, short film or series distributed on platforms such as Amazon, iTunes, Google Play and Sony PlayStation Network - Fixed split on gross box office receipts - No house "nut" applied/deducted - Simplify accounting: Distributor knows that at the end of the day, its share will most likely be very close to 50%

3. Firm terms vs Settlement

Firm terms: negotiate terms of split deal before the theatrical release Settlement: agree on terms of percentage earned after release - Based on relationships: long term view (Distributors are viewed as middle people protecting the interests of talent/participants, the bottom line (fiduciary duty), and exhibitors' interests) - Leverage - Precedents - Customary practice

Tech wars:

HD-DVD Vs. Blu-Ray Sony: Blu-ray Toshiba: HD-DVD Between 2006 and 2008 it was technological wars, studios and tech companies taking sides and the consumer in the middle! By 2008 Warner Brothers once again took sides and tilted the scale in favor of Blu-ray

Booking frenzy

High pressure on days/weeks preceding release - Other movies "drop" critics and exhibitors screen and review films - Last minute changes on number of screens and other terms

why does uncertainty remain when looking at the average cost to make an action movie, for example?

The average cost of making an action film between 2018 and 2020 was a little over $78 million (keep in mind, this is an average); but if you look at the additional marketing costs (P&A) PLUS with the average cost to actually make the film, to release a film world wide, that figure goes up to approx. $135 million

Accelerated decay for blockbusters

The larger the opening, the larger the drop

What did the market do to adapt to loss in theater chains

d-cinema (digital production rather than via film print) - d-cinema allowed conversion ability to make 3D and live events - 60 screens by 2002 - studios set standards in 2005 (digital cinema incentive) - adoption was slow with only 1,000 screens out of the over 30,000 studio set standards - class example: Studios said if you cant play the digital movie at the theater instead of the 35mm film being used (if the theater wasnt updated) then they cant play it so it got the ball rolling on d-cinema

Is it easier to find a financier or distributor?

easier to find a financier

Film and TV are labeled as ____ because the consumer cannot judge prior to consumption (financing with risk)

experience goods

box office earnings are called

gross revenue (salary)

Financing feature films ad TV series follow similar steps:

heavy upfront investment, recouped over several years - TV series minimizes risk by financing pilot or limited number of episodes to "test the waters"

Total Costs = _ + _

negative + p&a = total cost Negative costs (costs of making the movie - filming, editing,casting...etc) + P&A (print and advertising marketing costs) = Total Costs

"rentals" earning is called

net (paycheck - how much you take home) to distributor ~50%

ROI Calculation

net share / initial investment x 100

Rentals

net to distributor

can costs be recouped in theaters

usually no

high print

where studios send the most copies of film

zones and types of theaters

zones: geographic break-down (regions, cities, districts) types: 1. first run 2. second run (often located in smaller towns, pre-digital prints would be bicycled over to the local cinema after it has had its multiplex/wide launch. 3. Arthouse (niche) 4. Specialty (drive-in)

1948 supreme court ruling - US vs. Paramount consequences

1. Antitrust ruling (broke Sherman Antitrust Act in their total control over movie distribution and exhibition) - Paramount, MGM, RKO, Fox, Warner bros : ruling forced these defendant studios to sign a consent decree and divest themselves of theater ownership, while retaining distribution and production 2. Movie theaters divested (sold) 3. Consent decree not only made studios divest of their theater business, it also outlawed block booking and blind bidding this included all studios not just ones that owned theaters - block booking - "Package" deal: distributors (mainly studios) forced theaters to exhibit all films produced - can no longer "tie" products, where a party uses the economic leverage of one product to force a buyer to also buy a second unrelated product that it does not want. - Blind bidding - Asking exhibitors to license your material without watching it Theater owners agreed to terms on a feature or package of features without seeing the feature - now must screen all films first

When to drop a film? 4 factors:

1. Balance between distributor's needs (financial, talent, relationships, "gateway" window, etc.) 2. exhibitor's needs, which are more narrow: attendance 3. Contractual terms (guaranteed weeks, nut, split) 4. Competition

Highest print markets, in order:

1. Germany 2. France 3. UK

Components of film rental agreements in split deals - between distributor and exhibitor (5)

1. House nut: The theater's overhead costs, including rent, maintenance, utilities, labor costs, equipment, insurance, etc. 2. Film rental: The distributor's share of the gross box office receipts. (net) 3. Runs: Lingo for how many theaters a film is booked in - times shown in theater (but can also denote the first run of a picture). 4. Guaranteed weeks: How many weeks a theater commits to a film. (rare) 5. Zones: The level of exclusivity in the market is defined by competitive versus noncompetitive zones.

Intermediate formats

1. Laserdiscs - (look like vinyl records) 2. VCD (Video Compact Disc) - never really made it

problems in mitigating risk with financing (Two fold)

1. Mitigating risk in an uncertain forecasting environment 2. Green lighting projects and knowing how to have a greater chance of success How to predict the outcome of an "experience good"?

Concerns in early stages DVD Technology:

1. Piracy 2. Parallel Imports 3. Warner Effect Piracy: - Each DVD had the potential to become a digital master - Worried people would see the movie before by buying in other countries because DVDs were easy to copy (ex: people in Italy pirating godfather before it came out in their country) Parallel imports: - DVDs released earlier in North America than the rest of the world - Studios adopted regional digital encoding to combat these concerns (6-8 months for europe) - ZONES in which playing DVD in another country wouldn't work to combat Warner effect: Warner Brothers (Warren Lieberfarb, Godfather of DVD - decided warner brothers would only use toshiba technology and if you don't like it too bad and the studios followed that because customers hd to buy the technology to watch) adopted DVD technology early on

"Booking" negotiation to theater between distributor and exhibitor (split deal) will include: (3)

1. Playing time (two-week increments) 2. % Box Office split (by week) 3. Minimum distributor share

1. 90/10 film guarantee deal includes

1. Playing time —the number of committed weeks (sometimes in two-week increments). 2. Percentage split of box office, after deduction of specified house nut 3. Minimum percentage/floor for distributor from box office, by week Example of 90/10 Deal: - Guaranteed weeks: 6 - House expenses (nut) capped at $5,000 per week (overhead subtracted from BO revenue) Splits: Week 1: 60/40 (60% to distributor) Week 2: 55/45 Weeks 3 and 4: 50/50 Weeks 5 and 6: 45/55 90/10 minimum guarantee deal means the distributor is guaranteed 90% of BO after $5,000 exhibitor expenses

Studio Financing Types (5)

1. Production Financing-Distribution Deal (PFD) 2. in-house production slate 3. Co-Productions 4. Debt and equity financing 5. Off Balance sheet financing

Categories of home video/DVD: (5)

1. Rental 2. Sell-through 3. Made-for-video 4. Direct-to-video 5. Niche

Who has replaced each category of home video/DVD?

1. Rental - Replaced by itunes and Amazon Prime video) 2. Sell-through - Replaced by itunes and Amazon Prime video 3. Made-for-video - Replaced by anything streaming 4. Direct-to-video - Replaced by Streaming and Youtube 5. Niche - Replaced entirely by Youtube - Exercise - Concerts - Stand-up comedy - Toy companies (Lego, Barbie) - Documentaries

Why study home video? (4)

1. Revenues still (somewhat) significant 2. High margins 3. Started Made-for-video content 4. Historical significance (betamax case)

Types of Releases (theatrical booking)

1. Saturation reserved for "tentpole" or big budget films to go into 2,500+ theaters 2. Wide (most common) in over 600 theaters 3. Limited stays in limited # of screens 4. Platform "test" film (in limited theaters, if has good word of mouth then expand)

Principle methods of financing films

1. Studio financing 2. Independent Producers

Highest BO, in order:

1. UK 2. France 3. Germany They are opposite - the least copies get highest box office (UK) because there's a more dense population in and around London UK has one very popular city, london, while germany for example has 3 large cities that are well known

tech wars in order

1. Won by VHS 2. Won by Warner Brothers (Toshiba) 3. Won by Sony (thanks to warner brothers - took Sony side)

release strategy factors to consider when thinking about dropping into theaters? (3) - theatrical release used as a loss radar to impact revenue in windows

1. Word of mouth 2. Qualify for Award seasons (split windows) 3. "Staged" release - Create buzz - Limited geographical release Ex "million dollar baby" - did a staged release and waited for word of mouth to see what happened, if it got big they'd release it to a bigger audience, and if not they would only keep them there

Studio financing minimizes risk by

1. co-production - major studios sharing rights - each studio agrees what percentage of budget is contributed (often done with famous director or star tied to another studio) - international - Marshall Plan post WWII Europe 2. selling off rights - when cost grows sometimes sell a piece off - ex; fox sold piece of titanic to paramount

Release Strategy and Timing (no rule book but factors include:)

1. day and date (international/domestic) Used to release only domestic first and internationally months later BUT with the globalization of the world, instant access from the Internet, and growing threats from piracy, more and more event films are being released simultaneously around the world—in film parlance, a "dayand-date" release. - also to limit piracy 2. Increased economic performance of international box office factor - money talks but influential critics still focus on domestic performance When international box office invariably starts to account for the majority of worldwide box office (see Figure 1.6 in Chapter 1), and in extreme cases represents 70 percent or even 80 percent of the total, then the issues of day-and-date, piracy, and the ability to adjust marketing campaigns take a backseat to the absolute numbers 3. Competition Other studios/distributor OR coming from same distributor 4. Outside Factors - planned : sporting events, political elections - unplanned: wars, acts of terrorism 5. Acceleration of Revenues - focus on initial release

90/10 deals make sense for what kind of films and why

90/10 deals make sense for everyone if the film is a blockbuster: 1. The higher the BO, the higher the likelihood that the 90/10 clause or deal will apply 2. Distributor gets higher share 3. Exhibitor has (virtually) guaranteed seats/concessions

(studio financing definitions) PFD = debt/equity financings = off balance sheet = concept of "slate" =

PFD = production financial distribution agreement studio will hire the production company to produce a particular film and pay them a fee - In return, they will finance and distribute the film in contrast to an in-house only needs to be green lit, but with PFD deal may entail an assignment of underlying rights to the studio in return for agreeing to move forward but comes ready to produce with talent just needs to be set up at studio) debt/equity financings - finance via stock or equity offerings ex: pixar becoming public to invest - difficult because investors like to see positive track record in return and off-the-top offerings can be significant off balance sheet - Funds available for financing films will be loaned pursuant to the Loan Agreement and invested in the Joint Venture to pay film costs, which include direct film cost, overhead payable to Disney and to the Partnership for the benefit of the Managing Partner and a contingency reserve. Disney and the Managing Partner will receive overhead of 13.5 percent and 4 percent, respectively, of the Budgeted Film Cost (excluding overhead) concept of "slate" - studios need a strategy to finance their overall production slate. The simplest and oldest method of financing is via bank credit facilities covering a slate of films.

Window Terms PPV VOD SVOD AVOD TVOD PVOD FVOD

PPV: Pay per view - have to start at a pre determined time - like a boxing match VOD: Video on Demand (includes SVOD and AVOD): SVOD: Streaming or subscription video on demand (hbo max, netflix, prime video) - allows users to consume as much content as they desire at a flat rate per month AVOD: Advertising-based video on demand - free to consumers but must watch advertisements - ex: daily motion and youtube and peacock free TVOD: Transactional Video on Demand - buying a movie on demand purchasing on TV - ex: buying a season of a show on amazon PVOD: Premium video on demand - basically online movie theater, can get access sooner to movies - Split it 50/50 with movie theaters - ex: Disney's Mulan, you needed a subscription to Disney+ and then you had to pay an additional $25 to watch Mulan first-day-first-show FVOD: Free on demand ex: free VOD (Hulu non plus, YouTube)

Creative accounting or studio accounting or Hollywood accounting

Refers to the "creative" accounting practices studios undertake to avoid paying "back-end" participations and residuals As far as a profit-sharing mechanism that protects the investor first, and shares an upside with the people that helped make the project a success purpose is to screw participants (actors, directors, writers..etc) over - cheat them out of their money (not illegal)

Recordable DVDs were viewed as a threat

Slow to adopt but eventually hardware manufacturers won the battle and were able to roll out recordable DVDs All different channels with MVPDs and people can record it and duplicate it with 10's or thousands of copies - recorded from live television Similar to PlayStation 3 console being blu-ray compatible

1948 supreme court ruling summary

So after the 1948 ruling, theater chains became independent from the major Hollywood studios To summarize, 1948 Paramount ruling resulted in the divestiture of movie theaters, and discontinuation of block booking and blind bidding as common practices in theatrical distribution In November 2019, DOJ moved to terminate the consent decrees and reverse the 1948 decision - in August 2020, the restrictions were officially lifted

Marketing efforts to minimize decay

Social media + Traditional advertising

Format wars 1970s

Sony: launched Betamax VCR - Initially marketed to "time shift" television (can watch it later) - As such, its popularity exploded, in part due to the advent of cable TV Why record the same old network TV programs? Recording cable TV programming was more attractive - Rental outlets popped everywhere as a result of the popularity of the rental model (under $3/title), community almost gave you advice for what movies to rent based on what you like - Studios felt threatened by this new way of consuming content: If consumers could watch videos at home, they would stop going to movie theaters and they would stop watching TV

"rental" definition in film distribution

Studio's share of profits The amount of money that the studio/distributor keeps from the box office is all-important, because this is ultimately the "at-thesource revenue." The industry rule of thumb is that the studio keeps roughly 50 percent of the cumulative box office: 1. House nut: 2. Film rental: 3. Runs: 4. Guaranteed weeks: 5. Zones: