Coquettish Rebirth

To know what we should do, Jia Hongjian felt that we should first understand how movie theaters make money.After some investigation, Jia Hongjian learned that through a longer history of operation, this American theater chain has gradually established a floating, flexible, and fully motivated account sharing mechanism. The price signal of the account sharing ratio encourages film producers to produce more blockbusters and series films. , and based on this "price signal", theaters and theaters are encouraged to show films for a longer period of time. ▲∴ In addition to box office revenue, another important source of income for theaters and theaters is food, beverages and advertising revenue. According to statistics, in recent years, the box office revenue of the US screening industry is about 2.2 to 2.5 times that of food and beverage revenue, but The latter’s profit margin is much higher than the box office revenue that needs to be shared with multiple parties, so food and beverages are actually the number one source of profit for theaters and cinemas.Since the development of my country’s theater chains, there is still a big gap between the performance of the American theater chains in this aspect. Take the Dadi Cinema Chain, which ranked fourth in the first half of 12, as an example—its box office revenue is food and advertising revenue. More than eight times that!

For theaters that mainly show movies, the most important source of income is naturally box office revenue.Screening schedules for films in the United States are negotiated individually with distributors by each theater, as is the split at the box office.Theaters and distributors typically sign two types of agreement, a long-term framework agreement and a separate "movie rental" agreement for each film when it is released.Such contracts vary according to the screenings of specific films.But almost all film exhibition agreements will include the following clauses: theater fixed costs, which refer to the recurring costs of the theater, including rent, maintenance fees, utility costs, labor costs, equipment costs, insurance, etc.Exhibitors generally negotiate a fixed amount with the distributor based on the geographical location of the cinema, the number of screens, the number of seats, and the status of movie trailers.

Movie rentals: The distributor's share of gross box office receipts, which usually varies with showtimes and has a guaranteed share.Theaters: The number of theaters that will be showing the movie in its opening week.Guaranteed Weeks: The number of weeks the theater is guaranteed to show the film.In addition, because box office revenue from theaters needs to be split with distributors, food and beverage revenue does not.As a result, exhibitors tend to draw lower ticket prices to attract more audiences.Therefore, distributors often require specific ticket prices to be stipulated in the screening contract, and there are three different ticket prices for different groups of people.It usually includes adults, children and the elderly, and also stipulates the highest discount for special tickets. However, since the minimum price is not legal in the United States, it will involve price monopoly and other issues.So these prices are often ostensibly offered by exhibitors to circumvent the law.Currently, the average ticket price for a U.S. movie is about $7.96.

Among these terms, the most critical is naturally the box office distribution plan between the exhibitor and the distributor.Generally speaking, exhibitors mostly adopt a stepwise decreasing system for the division of box office revenue, that is, after deducting the fixed cost of the theater from the box office revenue, they return the box office to the distributor in a decreasing proportion from week to week.In the first week of a mainstream film's release, distributors typically get 90 percent of box office receipts after deducting exhibitor-related expenses.Exhibitors get 10% or less.Next, the box office revenue available to distributors will be reduced by 10% every two weeks, while exhibitors will increase by 10% accordingly. The longer the screening, the higher the percentage of box office revenue.In addition, in actual operation, mainstream publishers usually require a guaranteed minimum share, that is, the weekly box office revenue cannot be lower than a certain percentage of the total box office, usually 70% in the first week.Then it can be reduced by 10% in the next week.

As an example, assume a US theater requires a weekly fixed cost of $1.It grossed $5 in its first week.According to the 9010 split system after deducting exhibitor costs, the distributor can get 90%, which is 36000 US dollars.According to the 70% minimum guarantee system of the total box office, the publisher can get 35000 US dollars.At this time, the publisher will choose to settle according to the first method, and get a box office of 36000 US dollars.By its fifth week, box office receipts were down to $3.At this time, follow the 7030 division system after deducting the exhibitor's cost.Publishers get 70%, which is 14000.According to the 50% minimum guarantee system of the total box office, the publisher can get 15000.At this time, the publisher will choose to settle according to the second method and get a box office of 15000 US dollars.

It should be pointed out that the above box office allocation ratio is not completely fixed.Exhibitors and distributors need to rely on their own strengths to compete with each other. If a blockbuster movie is released, the distributor will usually have an advantage, and may even impose some special requirements on the exhibitor, such as paying a certain "deposit" in advance.However, some small distributors other than the major Hollywood companies will be at a disadvantage in the box office division, and they will be able to share between 40% and 50% of the box office in the end.For some literary films screened in art theaters, the distributors' final share of the total box office may be as low as 35% to 40%.Usually at least 3 months before the film is released, the distributor will agree with the exhibitor on related matters, including the date and time period of the release, the number of screenings to be shown, the number of seats provided, the proportion of box office allocation, etc.

However, these agreements are not monolithic, and there is room for adjustments based on actual conditions. In terms of the box office distribution ratio, if the box office of the film is far better than expected or very dismal when it is released, the exhibitor can ask the distributor to provide certain "rewards" or "rewards". Subsidies", distributors usually agree, because after all, they have a long-term cooperative relationship with exhibitors, not a "one-off deal".But this kind of flexibility is also prone to some disputes. For example, in 2004, when Hollywood star Mel Gibson formed a company to release the blockbuster "The Passion of the Christ", the exhibitor Regal Entertainment initially agreed to split about 55% according to the standard of Hollywood blockbusters. The box office was paid to the distributor, but in the end, only 34% of the box office was paid according to the standard of art films, so an aggrieved Mel Gibson initiated a lawsuit.Although the two parties ended up in an out-of-court settlement, it can also give insight into the complex interest struggle between American film exhibitors and distributors.

When the movie is released, the exhibitor needs to provide the distributor with box office data in a timely manner, but the payment of the box office revenue to the distributor is relatively slow, usually 1-3 months after the movie is released, but in general, the screening The dealer will still honestly hand over the money to the publisher.Underreporting the box office is relatively rare.Because most movie theaters in the United States today belong to large-scale theater chains. These theater chains are listed companies and are closely supervised by regulators and investors. The development of information technology has also made it more difficult to conceal income. Movie theaters have adopted a networked computer ticketing system.Publishers will not only appoint third-party companies to monitor these systems, but also commission some companies to conduct sample surveys on ticket sales at certain times.For example, the theater entertainment service department of tns media intelligence group provides such services.They will secretly send people to the theater to count the number of viewers for a certain screening according to the requirements of the distributors, and then the distributors can compare this data with the number of tickets sold by the exhibitors to see if there is any under-reporting of the box office.

In addition to box office revenue, the second largest source of revenue for theaters is food and beverage revenue, and because this part of revenue does not have to be split with distributors, and the profit margins on popcorn and soft drinks are very high, as high as 80-85%.Therefore, food and beverage income has actually become the most important source of theater profits.As shown in Table 25.2, according to statistics, in 2009, the food and beverage sales revenue of US cinemas was US$38 billion.And in order to further tap the profit potential in this area.In recent years, major theater chains in the United States have adopted many new measures, such as opening more counters to reduce audience waiting in line, and setting up self-service catering, where audiences can choose food and beverages by themselves and then check out uniformly.Some theater chains have begun to open formal restaurants in theaters, instead of just setting up a small shop to sell some simple food.

For example, ebarre line, the largest theater chain in the United States, plans to develop into a high-end sub-brand.And AMC Theaters also plans to transform 375% of its approximately 10 theaters into such theaters.According to data released by the American Theater Owners Association in early 2011.Of its 5750 movie theaters, 400 already have restaurants offering more refined and more expensive food.The abacus of the theater is that for the audience, it is more time-saving to eat in the theater.If the price is right, it should be popular.Therefore, the price of the food is not too expensive. For example, the price of the food in the restaurant of the amc theater is comparable to that of the fast food restaurant outside the hospital. Try not to make the audience retreat because of the price.The restaurant will be decorated in a very emotional atmosphere, with artwork on the walls.Popcorn is usually given for free and often comes with a station.

Advertising is also an increasingly important source of revenue for theater chains.According to the report of the American Theater Advertising Council, in 2012, the advertising revenue of its member theaters was about 6.36 million US dollars.Cinema advertisements include on-screen advertisements and off-screen advertisements.Screen advertisements refer to commercial advertisements played before movie screenings. In 2011, screen advertisements accounted for about 90% of the total theater advertising revenue.At present, the screen advertising business in movie theaters across the United States is mainly monopolized by two companies: Vision has covered 2013 screens as of March 3.In contrast, there are more forms of advertising outside the screen, from popcorn and drink paper cups to displays in the theater hall, from the approval of promoters to enter the movie theater to sell to the audience, to cooperating with other brands to hold commercial promotional activities, all Can be a source of advertising revenue for movie theaters.But in general, off-screen advertising revenue is relatively limited, accounting for only 14200% of theater advertising revenue.

In addition to the three main sources of income mentioned above, in order to cope with the sluggish situation of the screening industry, various theater chains are also working hard to find new revenue growth points, such as making full use of the idle time of the theater to rent out the venue.For example, the above-mentioned edia company cooperates with churches all over the world to rent out movie theaters for Sunday morning worship. By 2009, it had signed contracts with 180 churches.Overall, however, the size of these sources of income is still insignificant compared to the previous categories. (To be continued..)