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Written by: Mark Kresser
Date: May 30, 2001

Can Big Movie box office revenue hold a candle to Hollywood blockbusters? The results may surprise you.

  

Category: Columns

The Large Format Film industry is generally considered to serve a niche market, producing films tailored to a specific audience. Sure, the cameras are larger, the screens are bigger and the images are crisper than those of the conventional 35mm industry. Sure, the theaters are located in 30 countries, and 120 million people a year see the films. But Hollywood has the Big Stars with Big Egos, the Big studios with Big producers, the Big budgets and the Big salaries.

Hollywood films gross tens of millions of dollars in one weekend, while an average Big Movie might gross tens of thousands that same weekend. In fact, in a typical Daily Variety Box Office Chart, only four to six of the 60 top-performing films are Big Movies. Take the weekend of May 4 - 6, 2001 for example . . . Hollywood blockbuster THE MUMMY RETURNS took the number one spot with more than $20 million in gross revenues, while the top Big Movies, MICHAEL JORDAN TO THE MAX and SHACKLETON'S ANTARCTIC ADVENTURE, grossed about $64,000 each and took the number 44 and 45 spots, respectively.

So, Big Movies clearly underperform Hollywood films, and are less attractive to audiences, right?

Not necessarily. First of all, 8 - 10% of the spots on the US Box Office Chart isn’t shabby for a format that comprises a far smaller percentage of all films released annually. Also, some Big Movie producers don’t report box office – for example DOLPHINS and JOURNEY INTO AMAZING CAVES would likely be on the chart, as well. More importantly, because Hollywood films play on so many more screens than Big Movies (thousands, versus dozens), it’s informative to compare not only total box office revenue, but films’ per-screen averages. It’s here the results might surprise you.

The 'CALENDAR' section of the LOS ANGELES TIMES called it "astounding" that MUMMY averaged more than $20,000 per screen ($20,035 in its first weekend, a milestone only two "wide-release" -- read: "Hollywood" -- films had ever reached before it). However, these numbers pale in comparison to top-performing Big Movie EVEREST, which made an astonishing $62,331 per screen in its second weekend. This is nearly three times as much as the biggest per-screen weekend average ever for a Hollywood release (LOST WORLD: JURASSIC PARK made $21,985 per screen in its opening weekend). And EVEREST made at least $20,000 per screen for the first 10 weekends it was released, while MUMMY dropped to $9,895 its second weekend.

Of course, EVEREST was the most successful Big Movie blockbuster ever (except for FANTASIA 2000, whose ticket price was greater due to its longer-than-average Big Movie length). What about other Big Movies?

Well, SHACKLETON'S ANTARCTIC ADVENTURE earned nearly $26,422 February 23-25, and $25,224 March 16-18. For the same weekends, the top wide-release Hollywood film on a per-screen basis made $4,789 (HANNIBAL) and $9,152 (ENEMY AT THE GATES). Even an older Big Movie like T-REX, BACK TO THE CRETACEOUS edged out HANNIBAL the weekend of February 23rd, taking in $4,826 per screen.

Of course, not all Big Movies have astronomical per screen averages. And in the end, the most important number is not per screen averages, but overall profit. Here Hollywood films clearly have an advantage: their market not only includes a potential two to four thousand screens at a time domestically, but a humongous "secondary" international market, and substantial ancillary revenue streams such as DVD and home video. Often times, a formulaic Hollywood film with mediocre performance at home may be much more appealing to audiences abroad. For example, STRIPTEASE may have been too risque, even by Hollywood standards, to achieve broad appeal domestically, earning only $32 million in gross revenue; however, the more sexually open international audience welcomed it, and it took in another $80 million abroad, for a total of $112 million. In the same vein, a non-descript action thriller like LICENSE TO KILL might make only $35 million in the U.S., but pull in another $122 million internationally, for a total of $157 million worldwide. These numbers don't count the aforementioned, potentially substantial ancillary revenue sources like DVDs and home video.

Big Movies face a very different scenario. The market for Big Movies is much smaller -- even successful Big Movies might only show on 30 or 40 screens domestically, and another 10 or 20 abroad. As the worldwide theater network is quite homogeneous from country to country, there is no international "second act". While some Big Movie DVDs and home videos have done surprisingly well, and the market is increasing in size of late, these sources cannot yet be considered significant revenue streams for an average Big Movie filmmaker. So an "average" Big Movie might make $15 or $20 million (e.g., approximately the revenues for GALAPAGOS and TITANICA, so far) in worldwide box office, and that's it.

From the cost side, a Hollywood film's budget, including marketing, can easily push $80 million, whereas an average Big Movie budget including marketing expenses is generally under $10 million. For example, the Big Movie DOLPHINS only cost $7 million to make, and made over $40 million in its first year of distribution. TO FLY’s budget in today’s dollars was no more than $5 million, but it has grossed nearly $170 million. Granted, it took 15 years for TO FLY, still playing every day at the Smithsonian in Washington DC, to hit the $100 million mark -- but with such a small investment, this kind of return would be worth the wait, right?

Maybe. There’s at least one more important factor to consider: even if many Big Movies’ revenues exceed their budgets by a far greater percentage than many Hollywood films, the manner in which profits have traditionally been allocated makes them far less attractive ventures for producers. This is true because of a basic difference in the formula of how revenues are shared between theaters and producers.

In Big Movies, approximately 80% of gross ticket revenue is kept by theaters, with only 20% going to the distributor and producer. For Hollywood films, the split is nearly reversed, with producers and distributors enjoying 50-80% of every ticket dollar, and only 20 - 50% left for the theater. This is justified by the fact that in Hollywood, studios generally orchestrate major national or international marketing campaigns for the movies they release, and provide the film prints free to theaters. In the Big Movie business, on the other hand, theaters must purchase the pricey prints (around $25,000 for a 2D print, and $50,000 for 3D), often up front, and handle most or all marketing for the film locally, out of their own budgets. Thus, theater operators feel entitled to a much greater share of profits.

So what’s the bottom line on Big Movies’ bottom line? For the moment, for most producers, Big Movies are still more about love than money. But overwhelming audience response to the good ones in the locations they do play bodes well for the future of this growing medium.

[Editor's Note: Year-by-year and week-by-week box office revenues are extremely difficult to come by on a worldwide level; thus, domestic figures are used in most cases.]

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