In light of the theoretical showdown between Universal Studios and the exhibition business and the many opinions thrown around, a simple guide to how the current exhibition/distribution relationship works, in the broadest terms, is called for.
Movie theaters are brick & mortar outlets for a small percentage of the content produced by major studios. Via their labels, the majors release around a hundred movies a year via theatrical. They produce thosuands of hours of television each year that are never intended for theatrical release.
Majors spend between $20 million and $60 million domestically to bring a new movie to market. A hundred times a year.
Movie theaters charge the same amount for every movie in each theater, regardless of the cost of production or marketing. Theaters pay distributors, on average, 50% - 55% of box-office gross. The exhibitor's cut of the gross represents about 60% of the revenue for a movie theater. So while we talk about expensive concession prices, exhibitors …
