by Larry Richman
October 4, 2006 1:48 PM

Mark Cuban and Todd Wagner's company is 2929 Entertainment. Under that umbrella they own HDNet Films (which produces them), Magnolia Pictures (which distributes them), Landmark Theaters (which exhibits them), and HDNet Cable (which shows them on TV). So if no 3rd party distributor makes money, no 3rd party theater owners, no cable TV outlet, this begs the question...what do distributors, theater owners, and TV outlets actually earn from films?

I'm not as aware of how profits are distributed outside the US. I have a mountain of articles on this, but here is an excerpt:

"The movie theater pays an average of about 55% of its ticket sales to the movie studio, as film rental fees. The actual percentage starts with a number higher than that, and decreases as the duration of a film's showing continues, as an incentive to theaters to keep movies in the theater longer. However, today's barrage of highly marketed movies ensures that most movies are shown in first-run theaters for less than 8 weeks. There are a few movies every year that defy this rule, often limited-release movies that start in only a few theaters and actually grow their theater count through good word-of-mouth and reviews. According to a 2000 study by ABN AMRO, about 26% of Hollywood movie studios' worldwide income came from box office ticket sales; 46% came from VHS and DVD sales to consumers; and 28% came from television (broadcast, cable, and pay-per-view)."

There are exceptions, of course, but this is in line with what I've generally heard, that 45% of ticket sales are retained by the theaters. The cost of most film advertising is borne by the distributors, although the theaters (usually large chains) do spend a bit, especially for print ads.

It used to be the case that studios also owned theaters, but not any more (except for Cuban). Almost all theaters in the US are owned by large companies which are not connected to any film producers or distributors.

I should also point out that the figures in the last line above have changed somewhat. The majority of profits that the producers and distributors make from films now comes from television rights.