The document discusses film distribution and exhibition. It notes that major studios are vertically integrated media conglomerates that dominate the film industry. It also discusses how major studios distribute their own films both domestically and internationally, controlling a large percentage of box office revenues. The document outlines various distribution windows studios use to continue generating revenue from successful films through things like DVD/Blu-ray, TV, downloads, soundtracks, merchandising and more. It also discusses how conglomerates use synergy across their businesses and how marketing budgets for major studio films now often exceed production costs.
2. Major Studios are vertically, horizontally and laterally integrated and are now part of massive media conglomerates which has created an ‘oligopoly’ in the film industry, the so called ‘Big Six.’ Big budget Blockbusters often follow the ‘high concept’ model in order to appeal to a mass audience. Films are often sequels, prequels and remakes or based upon a successful book, TV programme or even video game to minimise financial risk and to increase profit. Ownership and Production – The Hollywood Majors
3. Most Hollywood films are distributed directly by the studio which financed the film. In the UK the cinema box office is dominated by a handful of major distributors. In any year, the 5 major distributors will account for 90% of the box-office rentals. Film Distribution in the UK
4. Distribution is the most important sector of the industry. Studios create numerous ‘distribution windows’ in addition to theatrical exhibition to generate more revenue; A successful film brand can be ‘sold’ in a number of different ways apart from theatrical exhibition, for example: DVD/Bluray On Demand TV Network TV Internet Downloads Soundtrack albums Video games Novelisations Merchandising Distribution – The Hollywood Majors
5. Conglomerates will try to use synergy within sectors of the corporation to maximise profit. For example a soundtrack album could be produced by the record company, a novel could be produced by the publishing house, a video game could be produced within the computer software division etc. Synergy is where multiple products and services are created on the basis of a successful brand within the same corporation. Every ‘spin off’ product or service helps create interest in the film, hopefully improving box office receipts and DVD sales. More money is spent upon marketing and advertising a major studio film than was previously the case. Press junkets are organised by distributors to generate press interest. For a major blockbuster the marketing and advertising budget may will exceed production costs in order to stimulate demand and get people into the cinemas/buy DVDs. This would have been unthinkable during the studio era. Distribution (cont) – The Hollywood Majors
7. The Exhibitors (cinema chains) in 2004: Only Showcase remains in American hands, but all the other chains are deeply committed to distributing American films.
8. A Hollywood blockbuster is released ‘wide’ (or ‘blanket’ or ‘saturation’)with one or more prints sent to each multiplex. Typically 400-500 prints, each costing £1000. So, a significant investment. The wide release depends on blanket promotional and advertising coverage for the first weekend to create a ‘buzz’ about the film. Free trailer packages and electronic press kits are sent to radio and TV stations and newspapers. Preview screenings for journalists are arranged. Stars give interviews and newspaper and TV advertising guarantees exposure. Cost – over £1m but rely on opening £2m or more at box office Typical Practice: Wide Release
