Theatrical Distribution in the Motion Picture Industry

When you're putting tens of millions of dollars into a movie, you want it to have a chance to reach the intended audience so your firm can make its money back and hopefully turn a profit. As we've seen, helping a movie get that chance is the job of the distribution company. The most powerful companies in the movie business have distribution arms that have the reputation of being able to place films in theaters in the United States and around the world. Their power to move films is enormous. The major distribution firms have offices around the world, and the mandate for their personnel is twofold: to get the films they distribute into theaters, and to market these films effectively to target audiences.

Finding Movies to Distribute

The first order of business for a distributor is to get movies to distribute. You might suspect that the major distributors would have it easy, as they are linked to studios that create their own films. Certainly, they have a simpler time of it than the independent distributors. Executives in those firms have to scour the world for the rights to films that will attract the audiences they know how to reach. But even the majors cannot afford to circulate only films that their studios make. They distribute several films from their own studio and get the rest from other places.

In recent years, the majors have collaborated on the cost and distribution of particularly expensive films to lower their risk of losing enormous amounts of money if those films fail. For example, Warner Brothers and Sony helped to fund the 2009 movie Terminator: Salvation, which cost $200 million plus marketing charges. The deal was that Warner would distribute the movie in the United States, while Sony would have international distribution rights.6 Because the firms expected the film would earn more outside the United States, Sony put more money into the deal than Warner did.

Releasing Movies

release date the day on which the film will open in theaters

day-and-date release a simultaneous release date for a movie in different countries

wide release opening a film in more than 2,000 theaters simultaneously, usually accompanied by a large publicity campaign to incite people to see the film; the most common release pattern in the United States

saturation release the initial release of a film in more than 2,000 theaters simultaneously

platform release the initial release of a film in a small number of theaters in a relatively small number of areas; executives use this approach when they believe a film has the potential for wide appeal but needs time for newspaper reviews and other media discussions of the film to emerge and encourage the film’s target audience to go see it

exclusive releases the release of a film to only a handful of carefully selected theaters and target audiences throughout the country

title testing conducting interviews with filmgoers in order to determine which of a number of titles (or names) for an upcoming film will draw people in the target audience to the theater to see the film

previewing a type of concept testing to evaluate newly completed films in order to determine what members of the film’s target audience like and/or dislike about the film

rough cut a preliminary version of a film, shown before its final editing process and formal release

P&A or prints and advertising the expenses that distributors incur in making prints of their films for theaters and marketing the films to the public

publicity the process of creating and maintaining a favorable “buzz” about the film among its target audience

word of mouth the discussions that people who see the movie have about it with their friends

tracking studies research on the public’s awareness of and interest in a film, beginning two weeks before the film’s release and continuing through the film’s first month of release

negative cost the total cost of making and editing the movie

Fueled by an aggressive marketing campaign and buzz over Heath Ledger’s last performance as the Joker, The Dark Knight grossed over $1 billion worldwide and is the second-highest grossing film in North America after Titanic with $533 million.

Once a distributor has set its slate of motion pictures and these pictures are com­pleted (or nearing completion), the challenge is to choose a release date and a release pattern. The release date is the day on which the film will open in theaters. In setting a film's release date and release pattern, executives take into consideration the kind of film it is, how popular its actors are, its target audience, and the other films in their slate. They also try to figure out when their competitors' movies will be released.

Typically, executives schedule the release of potential blockbusters in the United States during the summer or between Thanksgiving and Christmas. These are periods when students are off from school and when many adults spend extra time with their families. Because different societies may have different moviegoing habits, a film's release date may be different around the world. In recent years, though, movie distributors have tended to release blockbuster films at the same time in many different countries—a practice known as a day-and-date release. The reasons have to do with concerns with piracy, along with the technological ability to promote a movie efficiently across the world at the same time.

RELEASE PATTERNS In addition to the release date, distribution executives must agree on the release pattern in which the movie will be released to theaters around the country. Three release patterns are common in the United States:

• A wide release, the most common pattern, typically involves opening a film in more than 2,000 theaters simultaneously. (At the higher end, wide releases are sometimes called saturation releases.) Putting a film in thousands of theaters beginning the same weekend is increasingly common as distributors hype potential blockbusters around the country (and the world) at the same time. In 2009, Disney's A Christmas Carol, Michael Jackson's This is Ity Couples' Retreat, and Saw VI all opened with far more than 3,000 engagements.

• A platform release involves the initial release of the movie in far fewer theaters in a relatively small number of areas. Executives are likely to choose this approach for films that they feel have potentially wide appeal, but that need time for media reviews and other discussions of the film to emerge and ignite interest among the target audience. They hope to increase the number of theaters as the movie's popularity builds and thus encourage the snowballing of attendance.

• Exclusive releases are not set up with the intention of “going wide.” These films go to only a handful of carefully selected theaters around the country. Films with this distribution pattern are typically specialty films, often foreign, that their distributors believe will do well with very specific audiences in particular places around the country.

Of course, the number of movie theaters available to show a film is also an important consideration in determining release dates and release patterns. Theater-chain executives have their own ideas about what pictures they want in what locations, and they negotiate with the distributors regarding what pictures they will take and for how long. By law, movie distributors are not allowed to force exhibitors to book blocks of their films—a practice known as block booking. Paramount, for example, is prohibited from telling the Regal theater chain that it can have a particular film only if it takes three other motion pictures. Over the decades, though, the major distributors and the major theater chains have developed ways to accommodate each other's needs.