Cable Sankar



The business of Hollywood movies in the USA, Disney, Paramount



Though the right word is cinema (as in India), since we are used to it, let us use the word theater (as in USA). Theaters are also called exhibitors in the USA.

There is no area wide release like Chengelpet, Madurai etc or A, B or C centers in Hollywood. Wide release means really wide release. A movie, which is released in California, would be released at the same date and time in Minnesota and Mississippi. In the first week, a film would be released up to maximum 4000 locations (not screens).

To understand this, we need to first understand the theater system of USA. Before 1948, the film business mode was different in USA. Disney, Paramount and other giants would release their films in their own theaters (Yes, they owned hundreds of theaters). Production companies that owned about 17% of theaters were reaping 45% of movie collections then.

This vertical integration did not stop with theaters alone. Right from printing labs to the advertisement agency were owned by production houses. It also included hiring actors under contract and labeling them as Disney artist and Warner Brothers’ artist! This problem of monopoly was taken to courts back in the 1940s. The judgement was given against the production houses in the year of 1948, forcing them to sell off their theaters. Precisely at this time, Television started gaining popularity. Collection problem loomed, and continued until 1972, when Godfather arrived. In 1948, the annual collection stood at $ 4.6 Billion; whereas in 1970s (when the population has doubled) the collection was an appalling $ 1 Billion.

The above lawsuit has changed the way Americans produced the movies. Hence the studios had to sell their theaters, thereon, they had to approach theater owners to release their films. (Some studios have started their own corporations to ‘sell’ their theaters) Until this point, the studios were fixing the theater lease amount. For them, the new theater owners’ 35% tariff came as a jolt. Until 1948, the theaters were booked in two ways.

·         Block Booking
·         Blind Bidding

Block bidding entails blocking almost all the theaters before the release of the film (at times without even seeing it), not leaving theaters for other producers’ movies. Blind bidding is even before the movie is complete, creating hype about the film and booking theaters in advance.

These techniques became no longer viable after that historic trial. Production houses started to control their films. No good film meant no theater. So, story, screenplay, direction all the aspects were centralized like never before. Quantity of the films reduced and quality increased. Thus this lawsuit changed the whole legacy and outlook of Hollywood.

‘Second run’ theaters occupied America until early 1970s.  Porno movies had separate theaters for them. Apart from second run films, B rated movies were also released in these theaters. All these were wiped out with the advent of Video Cassette. This decade sees the resurgence of Second run theaters.

Above 90% of America’s theaters are complex theaters with more than one screen. Single screen theaters could be rarely spotted in the countryside. They too, would either been shut down, or would be leased to screen Tamil,Telugu or Malayalam films (2-3 shows) or screening world movies.

Except the above, all other screens are multiplex screens. Some multiplex would have a maximum of up to 30 screens (Megaplexes), Corporate companies are having their imprint here, sure. These are huge network organizations in present cinema market of USA. Wherever you go in USA, surely you would see theater complexes of companies like Regal, AMC, etc.

To explain further, these theater networks are called ‘Chains’. (Satyam, INOX, PVR, Adlabs, Cineplex are such chains in India)  A few companies join together and form Chains on their own, within themselves. Notable theater chains in USA are,

·         Regal Entertainment Group (United Artists, Edward theaters, Regal Cinemas)
·         AMC Entertainment (American Multi Cinema, Loews Cineplex, Sony, Plitt, RKO)
·         Cinemark USA
·         Carmike Cinemas
·         Redstone

20000 of USA’s 35000 screens are owned by the above five chains. Individuals and small organizations run rest of the screens. These chains enjoy 80% of income with 65% of the screen count.

As Canada’s source of entertainment is USA and 99% only Hollywood movies are screened there, all the scenario we have discussed here would be pertinent for there as well. In Canada, Cineplex controls a network of more than 1300 screens and enjoys the collection of 65% collection.

This massive network is controlled from a remote corner of USA. Without sweat and traveling to the corners of the continent, deals are struck for the entire United States. Simply, a distribution company could strike a deal for screening a film in a chain’s Pan-American theaters only by talking to that chain’s head office manager. But, practically, this is not possible. So, distribution companies have divided the whole of USA into territories, just like areas in Tamilnadu. Based on that company’s convenience, the number of territories differs. The territories are further divided into circuits.

After completing a film, the production house, for instance Disney, would choose a distribution company. (If the film is promising, the movie is only for own distribution companies. We have seen enough of those marketing tactics already). Now, the distribution company has to screen the film to the theater owners and buy theater rentals. Once the film is ready, Disney’s New York branch officer would contact the theater chains from his territory and arrange for screening. Just like preview in our part of the world. Now, theater manager would not attend this screening. Instead, there are dedicated people paid for this viewing task, called buyer, would be representing the respective area’s theater chain. Non-chain theaters, which could not afford a full time buyer, would engage them on contract basis.

Based on the buyer’s report (Fantastic, Rocking, Super, Dud, etc.) theater owners and managers take decisions on buying the film. These deals are again, person inclined and multiple deals prevail as well. In India too, big distributors would send their representatives or mediators for such activity. However, there is no salary. Only the commission of 1% from both the sides is paid. Some mediators let down the distributors who would not pay the commission properly, claiming a drab film is a great one.

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