BOF Chapter Review

Film is intellectual property, and thus is protected under \_____________ law.

copyright

What is required to license new films and library films?

An understanding of consumer tastes/behavior and precise timing in releasing/licensing a film in multiple media markets worldwide

How does the film business differ from otehr commercial enterprises?

It completely relies on creative artists for the product it sells.

What makes the film business different from other media businesses, such as music and publishing?

The complex nature of filmmaking that requires the melding of the efforts of various creative artists as ell as the large financial investment at stake in each individual film

The ability to \_______________ is essential to success in the film business.

manage creative talent

True or false: Film is one of the leading export industries in the United States.

True

How much revenue of the film business comes from foreign markets?

Roughly half

What are the three principal functional sectors of the film business?

Production, Distribution, and Exhibition

Describe the production sector of film.

The sector of film that involves the process of making a film.

Describe the distribution sector of film.

The sector of film that encompasses the licensing or sale of a completed film to media outlets, like theaters, TV broadcastors, and DVD/video retailers, and related marketing activities.

Describe the exhibition sector of film.

The sector of film that involves the delivery of a film to a consumer through various media outlets.

What are the names of the six major studios?

1. Warner Bros,
2. Universal Pictures,
3. Paramount Pictures,
4. Walt Disney Pictures,
5. 20th Century Fox Films, and
6. Sony Pictures

How does the exhibition sector of the industry differ from the production and distribution sectors?

The main companies involved in this sector are not solely focused on film, but rather multimedia contect which includes film

The studios effectively constitute an \____________ - a small group of competing companies which together dominate these sectors of the industry and create major barriers to entry for potential competitors.

oligopoly

The major six studios release about \____ films each year, generating approx \____% of the industry's revenue.

200, 90

The size and structure of the majors creates barriers to entry for new players, with the most significant being...

the large amount of capital eeded to compete in the marketplace

The major studios depend on many smaller support entities, creative talent and craftspeople to...

make a movie.

What is currently the system in which studios produce films?

Every film is produced on a *project basis* with the necessary talent and craft elements assembled as needed to complete the film.

Define the studio system.

Process of film production in which a studio would have talent under exclusive contract to create films

Studios and nonstudios alike are involved in the various sectors of filmmaking: the \___________, \____________, and \____________ of a film.

Production, Distribution, and Exhibition

How many people tend to work on a film?

Hundreds

Movie studios, which originated as companies that made only movies, are now ...

divisions of large parent companies

What has been the general trend over the last few decades regarding studios and their parent companies?

A merger of content providers and content distributors, with the largest media groups seeking to return to a robust version of vertical integration in owning all/many of the elements in the chain of production, distribution, and exhibition of a film.

What is an example of horizontal integration in the film industry?

The use of subsidiary companies, such as Buen Vista, Miramax, and Touchstone.

What differentiates film studios from their subsidiaries?

One was created to distribute a type of film product different than the other subsidiaries and aimed at a particular audience niche

Define subsidiary film company.

A film company created to distribute a type of film product different than the other subsidiaries and aimed at a particular audience niche

What is the advantage of horizontal integration in the film industry, such as the use of subsidiary film companies?

The opportunity to establish a "brand" identity for each of the distribution arms

The parent company owns the \_______________ company.

Production

The production company owns or hires the \________________ company.

Distribution

The distribution company reaches out to a(n) \________ company.

Exhibition

The production company is owned by the \_________ company.

Parent

The distribution company is owned or contracted by the \_____________ company.

Production

The exhibition company is owned or contracted by the \____________ company.

Distribution

What is the time range for the production process of a film?

Anywhere from a few weeks to over a year

What factors effect the length of production on a film?

The size of the film and complexity of the production

What is the average production cost of a studio film?

$75 million

Where are most films shot?

On location

What is the purpose of production facilities owned by studios? When are they used?

To mimic a locale and avoid traveling expenses

What is typical for a studio to do regarding their development, production, distribution, marketing, publicity, and business and legal-affairs functions?

Staff is hired full-time.

What is the typical overhead charge for studios?

15% of the budget for a film

What is the purpose of overhead charges studios use for their facilities?

It exists to help defray

What is the extent of union involvement in the film industry?

All-union

What is included in union minimum wage pay scales?

Minimum pay scale, conditions, pension, and health insurance

Where does the bulk of financing for a film come from?

The studio

What does the studio provide a production company for the production of a film?

A fee and profit interest in the film

There are a number of well-financed independent companies in the production sector that finance all, or a substantial portion of, the budget of a film, relying on a studio for a portion of the financing, if needed, and for distribution. In these situations, the production company is a \_________ with the studio on reoupment of production and profits.

full partner

Some production companies often employ \_____________ that keep their production costs lower than the studios, and much lower in the case of nonunion productions.

economies of scale

Other independent studios produce films totally outside the studio system, relying on \________________ from investors or through \____________________.

Private financing, distribution deals

Films produced by independent companies are generally low budget, usually under $\___ million and rarely receive theatrial distribution, at least in the United States.

5

Most films \____ money.

lose

If most movies lose money, why would an investor think to invest in one?

The love of the artform, notoriety, involvement in the film industry without being directly involved, learning to produce, critical attention, and possible financial rewards.

How are independent films typically financed?

Broadcast licensing agreements, grant funding, or other private sources

What is the typical price to produce a low-budget?

Nothing lower than $5 million

As the production sector, the \________ dominate film distribution.

studios

Why do studios dominate film distribution?

Their resources, experience, and expertise, and the number of new films they release into the market, which give them an enormous competitive advantage over smaller distributors, as well as their extensive studio libraries which allow them to control the major share of the secondary markets like syndicated TV

What advantages to studios gain from their extensive libraries?

They allow them to control the major share of the secondary markets, like syndicated TV

How do the parents of the studios enhance their competitive positions?

The ownership of some media outlets

With what do studios have the financial resources to support the release of new films?

Substantial advertising and marketing expenditures

What is the average cost of marketing a studio film?

$40 million

What marketing sector makes up most of the marketing budget?

TV marketing

The distribution sector encompasses a number of nonstudio companies that, like the studios, are engaged in both production and distribution. Such companies include..

Lionsgate, Weinstein Company, Summit Entertainment, and Curb Etertainment

The exhibiton of films takes place at a \_________ level, where viewers pay to see a movie.

retail

What are the various exhibition outlets as of today?

Movie theaters, pay-cable TV, free TV, DVD rentals/purchases, and Internet.

The theatrical segment of the exhibition sector is dominated by a handful of large movie theater chains. Five make up 52% of the industry's screens and approximately 80% of America's box office revenue.

Regal Entertainment Group, AMC Entertainment, National Amusements, Cinemark, and Cineplex.

The TV segment of the exhibition sector is, of course, dominated by the four networks and the major cable TV networks and systems. The most active companies in this sector include..

HBO, Showtime, Lifetime, Turner, Disney, and Court TV.

What is development?

The process of assembling the essential building blocks of a film, story idea, script, director, one or two main cast members, and a budget.

In 2007, how many films were theatrically releaseed?

603

What is the ratio for films that actually make it through the development process to the big screen?

1 out of every 10

The riskiest money in film is invested at the \___________ stage.

development

What are the steps involved in the development process?

1. Evaluating a script, idea, or literary property to determine whether it can be turned into a profitable film,
2. Creating a package by acquiring a script or having one written,
3. Attaching a director and talent, and
4. Creating a budget.

Ideas for films can come from anywhere, including:

news events, personal experiences, books, radio shows, history, short stories, plays, other films, video games, or original scripts.

What do theatrically released films generally have?

production and marketing budgets in the millions of dollars, and experienced and well-known actors and directors working on them.

A movie that is successful at the box office will generate more/less revenue in all forms of distribution than a movie without a theatrical release.

more

What kind of audience do DVD release films typically target?

niche

What was the perception of "made for" DVD films as a market?

Dumping grounds for poor-quality, low-budget films that couldn't make the grade for theatrical release.

What is the success rate for short films generally?

Not good

Where can short films be used besides in their own field?

The development process for feature-length films

What is the foreign market for shorts like compared to the United States?

Much better

How are short films distributed in foreign territories?

They're commonly shown in theaters, and regularly on broadcast and cable TV

What recent technological development has expanded the market for short films?

The internet

How is fundraising usually sought for documentaries?

Grants, cable or TV funding in licensing fees (from PBS, Showtime, A&E, WGBH, etc), and private sources

How have the major six studios and their independent arms responded to the financial successes in documentaries in recent years?

They've stepped up the acquisition and development of documentaries

What innovation has led to the changed perception and funding of made-for-TV and cable films?

Cable TV, specifically the pay networks

What is the typical cost of a made-for-TV movie?

$2-3 million

The premium pay systems, like HBO, will often spend substantial dollars on ...

producing films and aggressively marketing and promoting them.

Who drives the development process?

A producer or would-be producer

What triggers the development process?

The acquisition of property

Before making an investment in acquiring a property, a filmmaker or prodcer should be committed to \_____________, otherwise the investment will be wasted.

see the development process through to the end

Once satisfied that the project has potential, what must the producer then consider?

The legal, creative, and financial challenges posed by the project, and be certain they have the necessary passion for the project to see it through to the end, with the full understanding that most development projects never become films

True or false: Most development projects become films.

False

What is the general timeframe for the development of a film?

Several months to several years

Why do they call it 'development hell'?

The experience of a producer or director trying to get a studio to green-light a film, or to make the official financing agreement, is like living through a rollercoaster

It is the role of the \___________ to initiate and drive the development process, overseeing the entire life of the film, through production, to marketing and distribution.

producer

The studio needs to keep their "pipelines" filled with enough development projects to yield a steady flow of \___ or \___ films a year for distribution.

15, 20

Because the studio needs to keep a pipeline of development projects to produce films, they must be \__________ when it comes to production.

proactive

What is a "tent-pole" film?

a big-budget movie whose earnings are expected to compensate the studio for its less profitable movies

Development departments employ \____________ to evaluate scrpts that come in from writers, producers, directors, actors, and agents, summarizing the strong and weak points in their coverage of the script and indicating whether or not they think the project will make a good movie.

readers

Define coverage.

The assessment a reader of a script writes to highlight the script's strengths, weaknesses, and whether or not this script should be made into a film

Why do studios avoid looking at unsolicited scripts?

They could be at risk of a lawsuit and put their credibility at risk

The studios rely almost exclusively on scripts from established screenwriters represented by a \_______________ with whom the studio does business.

talent agent