| Post-Theatrical Exploitation of Property |
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| Brad Pelman and Laurie May | |
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Page 1 of 2 The exploitation of post-theatrical revenue streams is the single most important component in the success of a film distribution strategy. But those revenue streams are usually driven by the film’s theatrical exploitation, and the connection needs to be understood.P&A (prints and ads) expenditures make theatrical releases a costly affair. The size of release and amount of P&A is often tied to the U.S. release of the film (if any), with costs ranging from $100,000 for a small film released in Canada, to more than $1 million. In fact, many theatrical releases are “loss leaders" – the film rental (monies received from exhibitors, as negotiated with distributors) often does not cover the P&A expenses. For more disscussion on P&A, please see Print and Advertising Commitments .) But you have to look at the larger picture. Advertising dollars spent on a theatrical release carry over into post-theatrical revenue streams, because they have created recognition of the film for post-theatrical audiences. The size of those up-front costs, and their role in driving other revenue streams, together explain the current debate about shortening the gap between a film’s theatrical release and its post-theatrical exploitation (including its DVD “street date” or release date). Exhibitors, obviously, oppose the idea. Post-theatrical marketsSubject to any rights reserved by the producer, a good distributor will exploit the film in as many ways as possible to increase revenues for all parties.The North American home entertainment market, a $21-billion dollar industry, is undergoing considerable change. The primary focus today is still DVD, but there will soon be two DVD formats – regular and High Definition or HD. All releases will eventually be in HD, but in this period of transition, many films will be released on both. One key consideration when producers are choosing a distributor for their films is the distributor’s reach to traditional and mass retailers. New release features There are two models in the home entertainment market for new release features: Rental (with its Revenue Share subset) and Sell Through.
Revenue expectations in the home entertainment market vary widely and are largely dependent on the film’s theatrical success. But there’s a successful new category in the home entertainment market, now: direct-to-video features. The size of the market, after all, is four times the size of the measured theatrical market. Repeat sales The home entertainment marketplace also provides repeat sales for titles when they become price reduced and categorized as "Budget" or "Library" titles. Continued... |
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