dvd makes ’em and breaks ’em

January 9, 2007 at 3:17 pm | Posted in Uncategorized | Leave a comment

The New Yorker: Big Pictures : David Denby:

But theatrical grosses actually account for less than twenty per cent of total movie revenues. Despite the to-do in the media every weekend over what’s No. 1 and what’s No. 2, and how the take for “Crushed Knees 3” compares with that for “Crushed Knees 2,” the theatres bring in much less money than other revenue streams—sales to television in all its forms (free, cable, pay-per-view) and rentals and sales of DVDs, which make up half of total movie revenues. Not that the theatres are financially unimportant: in general, the more noise made about a movie when it opens, the bigger the eventual return from the ancillary markets, which is one reason the studios still contend to be the weekend box-office champ. In crude terms, the theatres can be seen as a branding device and a stimulant to DVD sales.

This was a point Kevin Smith made in the recently released An Evening with Kevin Smith II: Evening Harder, that one of the reasons he doesn’t worry about the languid performance of his films at the box office is that they (1) rarely cost much (which, in other interviews and commentaries he credits almost exclusively to the efforts of his long-time producer Scott Mosier) and (2) they do really well on DVD. Even if he doesn’t make his budget back on box office, as with Jersey Girl, he does make it up on DVD sales.

In August, when Tom Cruise’s production deal with Paramount Pictures, Viacom’s film division, ended, Sumner Redstone, the chairman of Viacom, mentioned Cruise’s controversial public behavior, which, he said, hurt the box-office for Paramount’s summer release of the third “Mission: Impossible” movie. What Redstone didn’t say, as Edward Jay Epstein reported in the Financial Times, was that Cruise had a deal with Paramount which gave him an enormous share of the DVD revenue on the movie. “M:i:III” cost a hundred and fifty million dollars to make, and its worldwide theatrical gross was almost four hundred million. But Paramount realized that after the theatres took their cut, and the production, promotion, and overhead costs were deducted from what was left, it wasn’t going to make much money—maybe none—while Cruise would walk away with seventy million dollars.

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