How the Box Office Dollar is split?

Landon D. Parks · January 23, 2008

Ok, here is a question for you guys that I have been wondering for a while now. I know it probably varies by film, but in general, what is the average box office dollar split? I know that the first 2 weeks, it's usually a 95/5 Split with Distributer & Exhibitor. I also know about the House Allowance (or nut), but this is where my real question comes in. I read somewhere that a house allowance can be as much as $4,500 - $8,000 per week, per screen. I'm guessing that from the Box Office gross for that theater, they deduct that allowance from the total gross and THEN split the 95/5? If this was the case, and then film only made $4,600 that week at that theater ($3800 Opening Weekend and $200 per day x 4 days) that would mean that there would only be $100 left over that week to split 95/5... How would a distributer make ANY money at all this senario? UNLESS the box office gross's you find at place like boxofficemojo and IMDB are AFTER this allowance is taken out.

Another term I have heard is something called a "Floor" which I'm kind of in the dark about. From what I'm guessing, it is a floor set by the distributer BEFORE the exhibitor can take out there Allowance or Gross?

From what reading I have done here recently I now have more questions about this area than I did before (I though I knew how it all worked.. guess I was wrong)

If anyone here has some knowledge in this area who can answer my somewhat stupid question

I would really appreciate it. I have tried looking around on the net, but there is very little subjects about this area (I guess because Theatrical distributer is such a closely held market by only a few companies?)

Thanks!

Landon D. Parks · January 23, 2008

PS) I have just read an online artical that states that a Distributer only gets a little more than 1/2 of the total box office gross. If this is true, how does the 95/5 split come in? Is the house allowance fee that large that is take an additional 45% of the gross?

John Brawley · January 23, 2008

PS) I have just read an online artical that states that a Distributer only gets a little more than 1/2 of the total box office gross. If this is true, how does the 95/5 split come in? Is the house allowance fee that large that is take an additional 45% of the gross?

Hi Landon.

I don't know where you got your 95/5 figure from. It normally starts at *something* like 50/50 and then changes each week as the film goes through the release cycle. It depends on what the distributors and exhibitors negotiate, and the territory. It's film specific. A hot film will carry more weight and they often tie it to number of sessions, trailers and all sorts of other peripheral bargaining issues. Sometimes if a big film tanks they re-negotiate the rate that's already been agreed to by the second week.

In Australia, nobody ever starts at 50% for example. It's always less (in favour of the exhibitor)

jb

Landon D. Parks · January 23, 2008

If theaters are making 50% of a films profit, why are they always complaining they only make money on concessions?

"How It works" Artical on Film Distribution says that normally, the split for the first two weeks is 95/5, week 3 is 90/10 and week 4 is 85/15. It also says the theater charges a house allowance, usually as much as $4,500 per theater per week. They also say (as I have heard elsewhere as well) that theaters only make money on concession's, and that the movie itself is considered a "loss leader" to draw people to the Theater to buy there concession's. I saw a quote online as well from a theater owner who stated

"I'm pretty much in the candy business instead of the Film business". I also read elsewhere that most studios put a "floor" on a film which means the distributer must make a set amount of gross %, usually 70% for the first two weeks.

Yet I also read on two other sites that they average split is 45/50 (Exhibitor/Studio). Does anyone really have a firm answer to this? As I said, im sure it varies with different films, but there should not be THAT big of a difference (95/5 to 45/50 is a major difference).

Edited January 23, 2008 by Landon D. Parks

John Brawley · January 23, 2008

If theaters are making 50% of a films profit, why are they always complaining they only make money on concessions?

"How It works" Artical on Film Distribution says that normally, the split for the first two weeks is 95/5, week 3 is 90/10 and week 4 is 85/15. It also says the theater charges a house allowance, usually as much as $4,500 per theater per week.

I think you're confusing different distribution models. I think the older style of bidding for the rights to a film with higher agreed percentages doesn't really exist anymore. Individual cinemas would gamble on how much they could take with a film and would compete with others for the exclusivity of the rights to a film. It tends to be more like a profit share now, with the actual percentage negotiated. There are also very few truly independent cinemas anymore.

jb

Brad Grimmett · January 23, 2008

Yet I also read on two other sites that they average split is 45/50 (Exhibitor/Studio).

Where does the other 5% go?

Landon D. Parks · January 23, 2008

Sorry brad, I meant to say "45/55" not 45/50"... Give me a little break, it was 4am :huh:

Anyway, So then this higher split to the distributer does not really exist anymore than? It know closer to a 50/50 split of the total box office gross?

That would probably explain why so many theaters can afford to build 25 screen multi-plex Cinema's and have 10 story glass atrium's... I had just always heard that theaters only made there money on concessions, hence the need for such high price's.

John Brawley · January 23, 2008

That would probably explain why so many theaters can afford to build 25 screen multi-plex Cinema's and have 10 story glass atrium's... I had just always heard that theaters only made there money on concessions, hence the need for such high price's.

Well it doesn't matter what the split is if people don't actually GO to the cinema. If 5 people show up for a film then they're going to loose money. They make more money on the concessions PER CUSTOMER than they generally do from the ticket price of which they get at best, 50%.

The reason they are building 25 screens is because they want to have a diversity of product and the number of films being released every year keeps increasing. It's hard to schedule all those films into a year to actually get them any screen time. You'll notice it's 25 SMALL cinemas, or maybe they'll have a couple of larger cinemas, but usually they only hold 100-200 instead of 600-800 like they used to.

It's all from memory, but i think Hollywood alone cranks out 400-500 films a year for mainstream release, compared with closer to 100 in the 90's. And then there's the rest of the world. ;-)

jb

Landon D. Parks · January 25, 2008

I finally broke down and just called my local Kerasotes Theater and asked to speak the General Manager. He more than happily told me what the average gross split is, at least at there theater. He told me that depending on the Movie, Generally the Split is from 90/10 to 85/15 the first week, 85/15 to 80/20 the Second and so on. HOWEVER, he also said that they deduct a house allowance out of that gross (I took it by this; he meant they deduct the allowance from the total gross then split the remaining? I didn't clarify).

He also told me that the Studio's set what's called a Floor, which is generally 80-70% the first week, 70-60% the second, and so on. He told me that this floor is taken out by the studio even before the house allowance is taken out of the gross.

So from what I got, The studio is going to get at least 70-80% of the gross opening weekend, even more if the film makes more money (up to there 90% share) after house allowance is deducted.

Just thought I would share the results with you. I don't know if this is standard in all countries, but apparently in America it is still the way things are done (at least by Kerasotes, a major chain theater).