Hollywood Babble On & On #665: You Have Question I Have Answers

Welcome to the show...

Yesterday's post has netted me a question:

Blast Hardcheese asked...

D, if you aren't sick of this topic I would be curious to get your comments on something from the Deadline article on Smith:

"Smith said if he sold his $4 million Red State, a distributor would need to pay $20 million in P&A, and would then need to gross more than twice that $24 million just to recoup (Smith seemed to forget that P&A triggers ancillary revenues that often provide the profit margin). He made it all sound shady."

I know that the indie market is different than the 'mainstream' studios, but this still seems like a huge amount of cash to print and promote what is, at the end, an already-finished low-budget horror film. Does this seem reasonable to you?

Good question Mr. Hardcheese, or if I may call you by your real name BIFF PLANKCHEST!

Anyway, back to the business at hand.

As I am fond of saying, any idiot can make a movie, but it takes a special kind of idiot to get that film into theaters and making money.

Prints and advertising are expensive. Making film prints can cost around $1000 a pop, and maybe more if you're an independent distributor only making a few prints of a single movie for a roadshow, because there are no bulk discounts that you can get as a major studio with a fleet of blockbusters needing 2,000-3,000 prints each. Digital copies are cheaper, requiring a special hard drive to plug into the digital projector. Then there's booking the theaters, getting the prints to said theaters, and making sure that they're getting the screens and show-times you've agreed to.

All that takes people, time and money. And if you're doing a roadshow with it playing at one theater at a time, you're going to need backups because prints wear and tear with every showing, and there's always the possibility that a digital print's storage could get damaged in transit, etc...etc...

But that's nothing compared to advertising.

There are two types of advertising.

There is MARKETING, that's the stuff you pay for. I'm talking about print media ads, in-theater trailers, TV/Radio commercials, internet ads, websites, and give-away merchandise. This is freaking expensive, because these all have to be made by editors, graphic designers, and ad agency copywriters. Then you have to pay for the space on the print media pages, the time on TV channels, etc...etc...

Remember these very same outlets overcharge the studios that have the same parent companies, what do you think they're going to do with an independent distributor? They're going to ask you to bend over while they get the wire brush.

Then there is PUBLICITY. This is free advertising, basically getting your mug and your film's name into the media in the form of generating news stories. This could be in the form of interview junkets with the stars, reports on the movie, reports on controversies around the film, and stuff like that. However, while it's free advertising, it's not completely free. This sort of advertising needs publicist(s) to manage it.

Someone has to schedule the junket interviews, make sure that the big national/international outlets get the stars when they're awake and fresh, and not after 16 hrs of answering questions from local TV stations and newspapers like the Palookaville Post. Then there are the inevitable publicity stunts that Smith seems so fond of, they have to be carefully organized for maximum impact and minimal exposure to expensive litigation.

Now a good publicist that makes sure the media is putting out the story you want out is worth their weight in gold. However, they are rare birds, and the slightest mistake in managing said publicity can turn people away from the box office when you need them the most.

Then there's getting the money from the theaters.

The theaters get a little thing called the "House Nut." It's supposed to cover the costs of each screening of the film, and it usually takes up about half of the ticket price per person. If the film doesn't clear the house nut, the theater will drop the film for something more that will put bums in seats and the distributor is more than likely to get jack shit for his troubles.

Also the theaters are slow to pass the money onto the distributors. It's a little game the majors play where the theater owners can hold onto the interest that money earns, and the distributors can use the delay to fiddle with their books just a little bit more.

However if you're a small indie distributor with bills to pay, this game is a royal pain in the ass. Plus this game requires accountants, tax attorneys, and other experts to manage properly, and they don't come cheap.

All this adds up to some pretty big coin.

Now if you have a film that would translate well into toys, t-shirts, and other merchandise, you can assuage these costs, and probably profit from, licensing the film to merchandisers. The tricky part is that in order to make the really big bucks, you're going to need superheroes, spaceships, and/or monsters that appear in a G to PG rated film with guaranteed wide appeal.

In conclusion, after all this yammering I can say that it's possible for an indie distributor to drop $20 million on what would be the indie version of a wide release for the movie, which would still be much smaller than a major studio's summer blockbuster. However, I don't really think any indie distributor would have actually spent that much on the specific film in question.

If this was Mythbusters I'd be saying "Plausible" but "Very Unlikely."