Theatrical distribution has a lot of naïve assumptions attached to it.
Many filmmakers assume that if they make a truly great film then ultimately that film is bound for the big screen. It’s as if in the minds of many filmmakers their film releasing in theaters is a validation of filmmaking achievement.
The reality of theatrical distribution, even on a limited release basis, is that it’s a very expensive effort and very often a loss leader.
A film being released in theaters is not a judgement of the quality of the film. Rather it’s something that is typically pre-determined and there is a significant cost component to facilitate the theatrical release.
Even on a studio level, the theatrical release, more often than not, is a break-even effort.
What the public typically doesn’t get clued into is the actual cost to release and market a film’s theatrical run beyond the cost of producing the film itself. Studio films may often spend almost as much releasing and marketing a film as they do actually producing the film.
Theatrical Release in the Indie World
In the indie world, a limited theatrical release can be a double-edged sword – there are upsides and down sides.
The major downside of course being the significant and highly risky investment involved.
Additionally, due to quotas of theatrically released American films, releasing on the big screen can actually prevent a film from being licensed in key European territories.
There are, however, some upsides to a limited theatrical release for an indie film.
If released on enough screens in key cities throughout the US, the premiums on the film’s digital release can increase. This is typically the motivation for independent distributors to release a film theatrically.
In addition, there is the cache of releasing theatrically. In theory, having a theatrically released film in the US can give a film some additional value in certain foreign territories that are not hindered by quotas.
What This Means For Investors
I’ve often had prospective investors who are not educated about the business of filmmaking inquire about whether a film will be theatrically released. It’s my responsibility to educate them on the upsides and downsides and why I’ve chosen the path I’ve chosen.
On the flip side, I read countless investor proposals for independent films that dangle the carrot of theatrical distribution, even if a theatrical release is highly unlikely. The prospect is tantalizing to the egos of both the filmmaking party as well as the investor.
Understanding whether or not the film you are producing is conducive to a theatrical release or not is important for the purpose of creating a proper and viable business proposal to pitch.
Producing a non-theatrical film does not mean or imply that you’re making a lesser quality film. To the contrary, grooming your project for TV or the digital market or the foreign market can illustrate that you are a savvier producer rather than a pie in the sky producer.
Theatrical Release in a Post Pandemic World
As the pandemic rages on, theatrical releases are being restricted at every level. We are seeing major motion pictures either being held back, or we are seeing them release directly onto the networks and streaming platforms at a price point that would supplement traditional ticket sales.
So what is the future of theaters in the US? I have two predictions for the possible evolution of domestic movie theaters.
We have already seen many theaters close locations or fold all together. It is very likely that AMC, the largest theater chain in the US with over eight thousand screens, will remain as the last theater chain, although even they will ultimately have far fewer locations.
Aside from AMC, a smattering of independent mom and pop theaters will persevere and continue to celebrate the indie spirit.
The larger theaters will likely continue to operate but only show the largest blockbuster films. So basically, larger films occupying more screens per theater rather than many films occupying 1-2 screens.
It’s quite likely that in the near future when you visit an AMC theater there may only be three to four films to watch rather than eight to ten. Those bigger films will occupy more screens per theater, especially if social distancing becomes a long-term practice.
An Opening For Studio Owned Theaters?
My other prediction for the future of movie theaters is that studios like Disney and Warner Brothers will acquire the theaters and turn them into miniature theme parks. Not necessarily with rides, but with merchandise and a experiential approach specific to their brand.
In the near future instead of going to an AMC and choosing to watch one of an array of films, you might go to a Disney-owned movie theater. At this theater, only Disney films will be available to screen and the theater will have all of the merchandise available to buy, no different than you would at a Disney store or theme park.
In 1948 the Paramount consent decrees were put into place by the US Supreme Court banning major studios from owning their own exhibition venues. As of last year, however, this rule has been overturned. This allows for a likely opportunity for the major studios to become their own theatrical exhibitors – much the same that they are already launching their own proprietary streamers in your home.
Regardless of how things pan out, the theatrical experience is an American pastime that will evolve, but not likely wither and die. Outside the US, in major territories like China and India the theatrical experience is alive, well and thriving, and I suspect that will be the case in the US as the dust settles.
If you’d like to learn more about the nuances of Film Distribution and how to set your film up for a good Distribution deal, consider joining me in my free training, 6 Ways to Not Screw Up Your Distribution Deal.