I was all set this week to write about something positive and calm. The fact that my friends want to see I Am Legend in IMAX -- or else not at all -- made me contemplate how there's often theaters, show times, and audiences that we feel necessarily appropriate for the movie we're going to see (for example: "midnight movies" have their title for a reason).
Unfortunately, some news came on the wire Friday that caused me unease. I don't need to care about a chain of theaters out in the Midwest when I'm sitting in New York, but I do care. It's the main reason I wanted a column about the exhibition side of movies. I feel the need to direct attention to the sufferings of American cinemas, while at the same time celebrating the movie-going experience.
The story is that Marcus Theatres will not be showing Sweeney Todd: The Demon Barber of Fleet Street because the movie costs too much to book. What this means is that Paramount Pictures is asking for an unusually high percentage of the money made from ticket sales. Marcus thinks the percentage is too steep and is protesting by refusing to show the movie at any of its 49 cinemas. Now, part of me wants to celebrate the protest by Marcus, which is the seventh largest chain in the country. It seems like a great, gutsy move, similar to what theater owners have done in Italy and the UK in the past. But it is less a brave protest than it is simply an only choice for Marcus. The website for the Marcus Corporation, which owns the chain, features no press release promoting (or even acknowledging) the decision, though Marcus Theatres president Bruce Olsen did issue a statement related to the story:
"Unfortunately, as a result of the negotiations with Paramount reaching an impasse, Marcus Theatres will not be showing Sweeney Todd at any of its locations. This decision was reluctantly reached because the price requested by Paramount to show the film in Marcus Theatres was too expensive in the opinion of our film buyers. Our customers are our first priority. We must be able to control all of our costs so that we can continue to provide the best entertainment value for our guests. This commitment is the foundation of our business."
Certainly it could be argued that Marcus is not thinking of its customers when it fails to provide them with one of the big movies of the holiday season. If the first priority were really the customers, the chain would take a loss or at least a lack of profit on Sweeney Todd just to get its customers what they wanted, in this case a bloody, R-rated musical starring Johnny Depp.
But I don't want to focus on the faults or hypocrisy of Marcus, regardless of the fact that I'm not familiar with its cinemas or its usual business practices. The point is the chain has been around for more than 70 years -- so it must be doing something right -- and it has to do what it has to do in an industry that is constantly bullied by another.
Everyone hopefully knows that cinemas don't make their money from ticket sales and that this is why concession prices are so expensive. When a new movie is released, the studio/distributor negotiates a plan for how much of the box office it will receive from the theater. This amount, or percentage is always higher than what the theater will make off the movie. However, the percentage split evens out the longer a movie plays at the theater. So, a box office profit split could typically begin as 70/30 for the first two weeks of release and end up as 50/50 by the fourth week. Of course, since most movies make the bulk of their money in the first two weeks, that 50/50 divide is a lot less favorable to the cinemas than it seems.
The best explanation I've ever seen for the distributor-theatre profit plan is on the site How Stuff Works, which has a handy chart illustrating how theatres typically break even the first week, show a profit loss the second week, and only begin to see a tiny profit in the third week (also check out the break down on How Stuff Works express). But the site doesn't point out that Hollywood negotiates more ridiculous agreements for huge blockbusters. For example, when Star Wars Episode 1: The Phantom Menace came out, Fox received the highest percentage of box office gross ever known. There may have been similar deals made for other movies with huge demands.
It is easy for studios to bully theater owners to accept such a deal, because every cinema wants to show the first Star Wars movie in 16 years. Not only does it want to show high-demand movies because they're what customers want, but usually a theater chain will be able to strike more lucrative advertising and promotional profits that correspond with such movies. Ever notice that when a big movie comes out the Pepsi cups and popcorn bags are suddenly decorated with graphics relating to that big movie or to the marketing of another big movie? Also, in general, theater owners depend on those big movies to get more customers into its theater, who will buy concessions, which as I mentioned is where cinemas make their real money.
So, is Sweeney Todd really that high in demand that Paramount can attempt such a deal? Certainly the bullying has to be working with other theater chains, because Marcus is the only company we've heard about turning the studio down. Obviously Marcus doesn't think it's that big a deal to not show the movie, which stars one of the biggest movie stars of the day, but which doesn't quite have the same appeal as a family-friendly blockbuster like Pirates of the Caribbean (the third of which surely had another unfair percentage split).
And Paramount must not be too concerned with its movie being left out of 49 cinemas located throughout Wisconsin, Illinois, Minnesota, Ohio, North Dakota and Iowa. However, this isn't an indication that Paramount thinks its movie isn't highly anticipated. Yet at the same time, studios are often interested in distributing their movies to as many screens as possible, at least for show. Sweeney Todd will of course play at other cinemas in those six states and if the movie is really that good or in-demand, people might go the extra distance to see it. Or, they might just wait for video, which is probably fine with Paramount, which like most of the studios earns more of its money from DVD sales than box office receipts.
The worst-case scenario, though, is that customers will be annoyed with Marcus Theatres and no longer be as loyal to its cinemas. And Hollywood could be hurt, as well. Without easy access to Sweeney Todd, movie fans could be more willing to download the movie illegally, or buy a bootleg or otherwise participate in movie piracy. Plus, with DVD sales not what they used to be, Hollywood is eventually going to have to realize that the theater industry is their friend, not some weak underclassmen to which it can give figurative wedgies.
All I can say is that I hope some moviegoers out there feel that their local Marcus cinema is the necessarily appropriate place to see Sweeney Todd, and will therefore want to start a campaign against Paramount asking for the studio to back down its bullying and work out a better plan so the people can have what they want. A word of advice to potential protestors, though: don't threaten any executives by saying you'll cut them up with a shaving blade and bake them into pies, even if the idea seems relevant.
Update (01/11/08): Marcus Theatres is Finally Showing 'Sweeney Todd'