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I've always been a little confused at "big screen" film distribution so I thought I would ask here.

How do movie theaters relate to one another in terms of what films they can show and their relation to film distributers and production companies? Take for example a short sample list of theaters like Regal Cinemas, Carmike, AMC, Cinemark, Edwards, Hollywood, and the United Artists Theaters. Are they all independent of the film production companies and studios that create/produce the movies, even United Artists Theaters (or are they a special case of a production->distribution->showing end-to-end film making company?), and what determines whether a film is shown "in theaters everywhere" or "in select theaters only" on limited release in terms of "winning" distribution rights (or simply interest to distribute)?

Do theaters have to compete for screening rights or is it simply interest based but available to all theaters?

Finally, are big screen movie screening rights in theaters related in any way to the rights for DVD/Bluray/disk distribution, such as when you see MGM as the distributer on the back of a DVD case? Or maybe in the case of United Artists?

Some clarity on those things would be appreciated.

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Related meta question: meta.movies.stackexchange.com/questions/1335/… –  iandotkelly Jun 13 at 14:18
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To see why United Artists has the same name as a theater chain, learn about the Studio System: en.wikipedia.org/wiki/Studio_system. Originally a studio had all of its directors, actors, and such under contract to produce so many films per year, which were shown in their own theaters. If you wanted to see Mickey Rooney, you probably had to go to a Loew's theater. UA was a reaction to that, as a means for independent artists to be able to make movies and get them shown. –  Gabe Jun 13 at 19:05
    
@Gabe Great info. I love historical details about stuff like this. BTW, for a tangential question: Is there a SE question about ticket discounting sites or opt-in memberships to things that give you discounts and how that works with the theater system? I've always wondered how companies strike deals with the theaters/distributers like that. If not would it be on topic for the Movies & TV section here to ask a new question about that? –  SeligkeitIstInGott Jun 13 at 19:19
    
If your question is "What organizations are movie ticket discounting sites buying their tickets from?", I think that's legitimate. –  Gabe Jun 13 at 20:32
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2 Answers 2

up vote 5 down vote accepted

There are no "end to end" companies. United Artists cinema chain is actually part of the Regal Entertainment group, while United Artists the motion picture company is part of the MGM holdings group. As far as I am aware (and have seen in a quick look) no company also owns a theater chain.

Theaters "can" show any movie that they can get a contract for. However, smaller or older theaters may not be able to secure contracts for some of the large budget mainstream releases, as they cannot guarantee enough revenue in gross tickets sales to get the rights to show a movie. Other houses brand themselves as "indie" and get independent or small run films (Cartoon shorts, short films, documentaries, etc.)

When a movie is created, it is sent back to the studio, who makes a licensing agreement with a distribution company. In some cases (Such as Paramount, MGM and a few others), the film studio is also a distribution company. In other cases, the distribution company is a separate entity. The distribution company is in charge of determining how many copies to make, and showing (screening) the movie to prospective buyers for the various theater chains, and sets a release date.

Once it is screened, if a theater wants to acquire the movie for performance, they make a contract with the distribution company outlining how many screens it will be shown on, percentage of gross ticket sales, when "passes" and other special items can be used (Paramount is notorious for never offering any kind of discount/pass during the initial few weeks of release).

The distribution company is in charge of getting the film to the studios a few days before release, monitoring the length of the showings (called the engagement), collecting revenues and retrieving the film copies after the showing. They are also responsible for determining the type of release, whether it's theatrical, video on demand (VOD), straight to DVD, etc.

There are companies that handle all releases, there are others that only handle home distribution, or DVD/Blu-ray distribution, and they may or may not be the same entity as the one that did the theatrical release.

Typically releases are timed so as not to overlap, and the "typical" viewing window for a theater release is 17 weeks, at which time the DVD is released. Originally it was around 6 months, but studios have been pressing for shorter and shorter theater runs, to get more out of DVD sales which continue to decline. Obviously, theater owners resist this as they depend on the ticket sales (and the concurrent food sales) to generate their revenue.

This is the general model for the bigger studios, who purchase film scripts and rights and produce. For others, they create the films and then "shop" them around to companies and distributors for interest, and/or submit them for consideration for film festivals (Sundance, Cannes, etc). They may also try to secure their own distribution contracts, but that is a broader aspect that isn't really related to this question.

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Excellent detail. +1 So for distribution companies like MGM, do they reserve the right to release straight to DVD and not allow theaters to show a film? Does the distributer become the last point of contact before going to screen, DVD, or any other medium (e.g. streaming)? And since you said that some theaters "cannot guarantee enough revenue in gross tickets sales" does that imply that all the revenue goes back to the distributing company (e.g. MGM) for those theaters that can generate the revenue? –  SeligkeitIstInGott Jun 13 at 15:09
    
@SeligkeitIstInGott - I believe (Never looked at it) that the avenue of release is part of the contract between the production and the distribution company. Distributor IS the last point of contact. And no, the theater gets a small percentage of ticket sales (Very little, actually). Most of a theaters revenue is in the refreshments area. –  JohnP Jun 13 at 15:14
    
slightly unrelated, but as I was expecting from the title of the question to touch on this, it seems there might be some degree of antagonism between theaters and distributors. specifically, as you brought up, theaters depends on concession sales, which really rubs me the wrong way since it basically means theaters can never make any actual money from me and people like me. –  Michael Jun 13 at 18:07
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Typically, the percentage of box office receipts that go to the distributor is very high for the first few weeks of the movie's run. So, for example, Big Movie opens and for the first two weeks, 90% of box office receipts go to the distributor. Most distribution deals offer better percentages to the theater the longer the film plays. So maybe week 3 it's 75% to the distributor, 25% to the theater. Maybe week 4 is 65%/35%.

But really it's between the theater booker and the distributor as to what kind of deal they work out.

Ideally, a theater's take of the box office receipts would pay all the utilities and maybe some of the payroll. Then the net profit from the concessions is where can they really make their money.

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so if one never buys concessions but is interested in not "shafting" the theater, it is better to go a few weeks after release, as the theater gets a higher percentage of sales (and is a win-win for someone who doesn't like the crowd/rush that often accompanies the initial showings)? –  Michael Jun 13 at 18:09
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-1. The "90%" figure is calculated AFTER the house nut is calculated. The house nut includes the cost to rent the movie, so those figures are slightly off from what you are stating. Of a $12 ticket for an opening day, the theater gets somewhere around $3. That percentage goes up as the film ages, but you also have less people buying tickets for older shows. –  JohnP Jun 13 at 18:13
    
@Michael - Your answer would be yes. However, often times after a few weeks, theaters shift movies from their larger, premier houses into the smaller houses in the theater to make room for the "new shiny". –  JohnP Jun 13 at 20:57
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