FilmBiz101: The Box Office Dollar

by Michael D. Sellers

So … how does a box office dollar get broken down?Well – there are different splits so there is no single formula. For example, when studios release blockbusters like Spiderman or Shrek, they negotiate a split that is very favorable to the distributor (the studio) in the first weeks, then swings to favor the exhibitor (theater chain or owner) later on. So with that disclaimer, here’s how it works for us indies…..For example…..$100,000 — Box Office Gross($50,000) — Exhibitor’s Share$50,000 — Distributor (Studio) Gross($12,500) — Distributor Share$37,500 — Producer’s Gross RevenueNow — in our situation it’s as simple as that. So when the film is released, if we do $10M Box Office Gross it means that $3,750,000 will be getting distributed to investors. So you can track this very easily and you don’t even have to wait for reports in the first weeks of the release.Now…..here’s the “but”…..if the release expands dramatically that means we have to finance the additional marketing “P and A” for the expanded release. So then the equation gets a bit more complicated. And as we get closer to that situation, I will be happy to explain in more detail how that works.But as for the basics — you have them above.

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~ by Michael Sellers on May 22, 2007.

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