Some exhibitors won’t agree to Disney’s “top-secret terms.”
We’re only six weeks away from the latest Star Wars film, Star Wars: The Last Jedi, and anticipation for the movie is building to a fever pitch. Disney provided fans a Star Wars fix last December with Rogue One: A Star Wars Story, but moviegoers have been waiting nearly two years for The Last Jedi to catch up with Rey, Finn, Kylo Ren, and Poe and reveal the fate of the Skywalker clan. And just as fans are preparing to geek out in movie theaters across the country, there are reports coming out that some theaters are refusing to run The Last Jedi, the year’s most anticipated film.
/Film is reporting (via The Wall Street Journal) that the Walt Disney Company’s acquisition of Marvel and Lucasfilm has given them an inordinate amount of power and influence over the exhibitors who screen their films. The article states:
For Rian Johnson‘s The Last Jedi, Disney is forcing theaters to agree to secret terms which many theater owners are calling “the most onerous they’ve ever seen.
Some theaters are pushing back against Disney’s demands by refusing to show The Last Jedi. The article lists Disney’s terms as follows:
Those terms include the fact that Disney will receive 65% of revenue from ticket sales, the highest percentage a Hollywood studio has ever demanded. They’re also forcing theaters to screen the film in their largest auditorium for at least four weeks. For previous Star Wars movies, the studio has required 64% of the revenue from ticket sales and four-week commitments, but typical Disney movies only require a two-week commitment.
Theaters breaking these conditions must face a penalty, dishing out an extra 5% of their ticket revenue, bolstering Disney’s cut to 70%. Typically, studios require that theaters provide 55-60% of ticket sale revenue for domestic releases.
According to Box Office Mojo, Star Wars: The Force Awakens averaged $59,982 in ticket sales per theater and Disney’s extra 1% cut of profits amounts to $599.82. That 1% increase may not seem like a lot to ask for, but there are plenty of other factors you must consider regarding Disney’s demands. First off, Disney is a corporation in the business of making profits. If Disney can raise their percentage to 65% now, what’s stopping them from jacking up ticket prices above average rates every time they release a hot film? And if Disney can keep raising the percentage of their ticket sale revenue, what’s keeping other studios from following their precedent?
Additionally, not every theater is a sprawling multiplex with a dozen auditoriums. Smaller theaters and theaters in isolated areas will remain stuck screening Star Wars well into its run and long after demand for the film dies down. And if theaters must run Star Wars in one of their prime auditoriums, it means that’s one less screening room to run other major holiday releases.
With summer ticket sales down from previous years, both studios and theater chains are looking for ways to make extra cash. And if theater chains must eat more expenses then they’ll pass the costs down to moviegoers. It’s clear the theatrical entertainment model needs an overhaul, but no one has figured out how the industry should move forward. The only certainty is that increasing ticket prices will drive customers away. I get the feeling that we’re only seeing the beginning of these types of studio versus exhibitor squabbles.
Jinkaz1985 on November 3rd, 2017 at 19:45 UTC »
Defiant theatre owner here....
The 65% ticket sales is nothing. Doesn’t bother me one bit. The four week commitment when I only have two screens in a small town of roughly 6000-8000 People is what kills me. No movie can sustain four weeks of profitable capacity. Two weeks is our limit to which we can hold a movie, making exceptions to go to three weeks every now and then. Last time it was required was for beauty and the beast and even then after two weeks there was a huge dip in attendance.
What these film companies (Disney and others) don’t tell you is that during the summer time and during blockbuster movies when business is booming they come to us smaller theatres begging us to show their films but when it’s the off season, fall and spring time, we reach out to them to show one of their products and they ‘can’t accommodate a smaller theatre such as ourselves at this time’ or ‘we’re not producing enough prints’. These movies come on your standard hard drives these days, so you mean to tell me they can’t afford $60 to put a movie on it? They have to have plenty lying around from the summer time when they were pushing their movies on us.
My theatre was built by my grandparents back in ‘41 and handed down through the generations. It’s getting to the point with some of these stipulations to where I honestly don’t know if it’ll be worth my while to keep it going or if there will even be anything left to pass down to my children.
I hope this gets some attention, it’s something that not many people think about but is actually a pretty big issue for us smaller theatre owners.
dhwga on November 3rd, 2017 at 14:20 UTC »
Perhaps taking a moment to proofread would lend more credibility to the article...
SQUEEEEEEEEEPS on November 3rd, 2017 at 13:42 UTC »
I wish any of these articles would actually name the defiant theater owners in question. I'd like to know how widespread this phenomenon is.