V I D E O • A G E OC T O B E R 2 0 1 1 48 BY ERIN SOMERS America is certainly the land of plenty, but when it comes to show business, it tends to become the land of scarcity, especially for independent film production and distribution companies. This statement could apply to almost any aspect of the business. But particularly challenging for the indies is theatrical release. For studios, which have deep pockets and often own theater chains, theatrical distribution is no sweat. Indies, on the other hand, must negotiate the high costs of theater booking and release prints on a shoestring. That’s why, as Frank Sinatra said in a song a long time ago, “If [you] can make it there, [you] can make it anywhere.” Let’s see what it takes, starting with the facts: Each release print (or the copy of a movie that’s delivered to theaters) of a 90-minute feature takes up multiple reels of film and costs approximately $1,500-$2,500. Cost per print varies according to the length of the film and the number of copies. Katelyn Lieber of L.A.-based indie film production company New Films International said her company has done anywhere from five to 400 prints for a film. “It depends on the theatrical bookers: Who they can show the film to and where they can get you in.” Doing the math, that’s a window of $7,500 to $1 million in print costs alone. And although Lieber said that she has seen prints “bicycled” before (meaning as soon as one theater is done with a print it is shipped to the next theater, cutting down on costs), for New Films International this is not the norm. “They usually have a sufficient number of prints for all the theaters,” she said. In general, commented Lieber, companies like New Films International use a middleman to manage the nuts and bolts of theatrical release. Cindy Bond, president of Los Angeles-based Mission Pictures concurred that “theater bookers” are the way to go for indie companies. Most recently, Bond has teamed up with Salt Lake Citybased Rocky Mountain Pictures for her company’s theatrical release needs. “The way it works,” explained Bond, “is we structure a flat fee for them and then based on the collection of revenue for a film, they get a bump or bonus.” Bond estimated that bookers receive a ballpark of low six figures for a feature Mission Pictures hopes to place on 600-800 screens throughout the U.S. Additionally, she emphasized the importance of the bonus: “It incentivizes the bookers to get it on more screens.” Asked to estimate how many screens a standard indie aims for, Bond was practical. “It depends on the film,” she said. But she also added that it is not uncommon for a film to gain steam or buzz after it has begun screening and get booked to additional theaters midrun. “Suddenly, as you’re booking it, requests start to come in,” she added. So what does the booker’s job entail? First and foremost is finding interested theaters. Then comes negotiating the house allowance, or “nut” with the theater. This is the amount that covers the theater’s costs to screen the film each day. Also to be settled is the percent of the split of profits between the theater and the distributor (this is often a pre-set price the theater bids for the film in advance, rather than a percentage of the box office), as well as the length of the film’s run. Finally, it’s up to the booker to physically get the film to the theater. New Films’ Lieber also stressed that a lot is changing due to the growth of digital cinema. With digital delivery, movies are stored on hard drives or optical discs or even sent by satellite and then projected in theaters using digital projectors. The technology has been gaining ground since its introduction in 2005 and advancements in postproduction indicate that big, bulky film canisters will soon be a thing of the past altogether. Cinedigm is a Los Angeles-based company that is leading the digital cinema revolution. Established 10 years ago under a different name, the firm has pioneered the transition of theatrical distribution from analogue to digital. Chairman and CEO Chris McGurk explained that about half the screens in the U.S. are currently digital and by 2012, he expects there to be more than 30,000 using digital projection nationwide. While storing a film on a hard drive costs a fraction of the price of producing and shipping analogue reels, the big expense in terms of digital delivery is not the cost of the copy of the film, but of converting theaters to digital projection. Such a renovation can cost theater owners upwards of $150,000 per screen. According to McGurk, this cost is the reason that it has taken digital this long to catch on. He said, “The transition to digital has come to the industry five years later than it should have, because everyone was trying to figure out who should pay for it.” The studios thought the theaters should pay for the upgrade, and vice versa. The solution to that conundrum came in the form of a compromise. Distributors screening their films at theaters agreed to pay an additional fee for each feature screened that was used to help fund the pricey conversions. Challenges aside, digital cinema has a lot to offer distribution companies, especially the indies. According to McGurk, the technology will save studios billions, but the little guys stand to gain even more. “Right now the environment in independent film is not very healthy. To be able to distribute your film in a much more efficient or cheaper way without having to go through a studio is worth its weight in gold to independent theatrical producers,” he said. And, he added, Cinedigm is working on a distribution strategy catered specifically to indie companies to be rolled out January 1, 2012. Plus, further advantages are on the horizon. Delivery by satellite will soon enable films to be screened overseas on the same day they are released in theaters domestically. “It really enables day and date release on a worldwide basis,” said McGurk. “Right now they repurpose domestic prints after the domestic release. With digital you can do same-day release overseas.” New Films’ Lieber also pointed to a reduction in piracy as one of the pros of the new technology. “There is a specific key that goes along with each print,” Lieber explained, “so only the theaters can unlock the content.” McGurk concurred, calling digital cinema “100 times safer” than the old system, where film canisters would go missing on a regular basis, or would simply not be returned by theaters. To combat piracy and other potential pitfalls, Digital Cinema Initiatives (DCI) was created. The organization, based in Hollywood, was formed in March 2002 as a joint venture of Disney, Fox, Paramount, Sony Pictures Entertainment, Universal and Warner Bros. Studios. DCI’s mission is to standardize the specifications for digital films and projection technology to ensure quality control from theater to theater and to promote digital cinema. With the studios behind it, the rise of digital cinema is a safe bet. At the moment, attendance at the box office is on the decline due to the rise of Internet streaming and downloading. McGurk reported that around 20 percent of movie theater seats remain empty annually. With diminishing box office returns, theatrical release has become less and less viable for independent companies. However, some distributors think that digital cinema will turn all this around. Said McGurk, “Increasingly one of the alternatives is not even going theatrical,” adding that from a marketing standpoint this is not advisable. However, he noted that with digital cinema gaining ground, “this is an exciting time for everyone.” And that includes the indies. For Indies, Digital Cinema Is More Real than Reels Theatrical Distribution Costs Chris McGurk of Cinedigm
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