by Marty Shindler

"When will large-format effects budgets be more realistic?" asked the Executive Producer at one of Hollywood’s digital production facilities recently. "Time after time we put our best foot forward, crank up the creative juices and sharpen our pencils. But our bids are always considered way too high!"

I attempted to interrupt, but he wasn’t letting up.

"We want to help grow the industry, so we have purposely worked on a lower margin than normal. We’ve gotten ‘our share’ of work, but at these low rates we need even more jobs to make it worthwhile.

"And don’t give me the Economics 101 answer!" he bellowed, pushing his blood pressure up a notch or two. "I know what you are going to say, that when more theaters are built, more films will be needed and the increased box office will help drive up production budgets, which in turn will mean better and more realistic effects budgets. That will then generate more revenue which will prompt more theaters to be built, keeping the circle in continuous movement."

Of course, he was right, at least theoretically. But before I could interject, he continued.

"You are also going to tell me about the increased number of commercial LF theaters and say that when more ‘commercial’ or ‘mainstream’ films get produced in large format there will be more money to spend on effects. There has to be a way to get those bigger films produced sooner and speed up the process, but how?"

With that, he left to take a telephone call, so I had a chance to ready my response.

When he returned, I said, "Just as in your digital production company, there are two approaches to this problem."

He looked at me quizzically. "What do you mean?"

"In running your business you have a two-pronged approach to finances," I said. "First, you keep a lid on your spending. You watch wages, rent, and other overhead items, and you’re careful about making large capital investments." He nodded in agreement. "That’s exactly what the LF producer is doing when analyzing your bid and attempting to get the most for his production budget," I continued, as again he nodded in agreement.

"Second, you do all you can to maximize revenue. Managing the cost side only takes it so far. That’s why you’re always hustling more work. But I think large-format producers and distributors could do more to maximize their revenue and build their bottom lines. Maybe then they could allocate some of that ‘extra’ toward more production."

"What should they do?" he asked.

"Large-format distributors need to begin thinking outside the box. They all push for as many leases and playdates as possible and revenue in this area will grow as more theaters come on line. However, I don’t think they’re looking at other potentially lucrative revenue sources. When was the last time you saw any LF product at your local video store?" I asked.

"Not recently," he replied.

I continued, "Sure, the videos are available for sale at many of the theaters showing the films, but after a family of four has just paid to see the film, does Dad really want to shell out another 30 bucks to buy the tape? But if the film were available for rent or sale at their video store back home, they might just rent it a few months later. They might even buy it. After all, video is the single largest revenue source for most Hollywood studios. All LF distributors have video divisions, but they don’t seem to adequately exploit the market."

I was really rolling now. "And you know, I’ll bet there are other options that are virtually untouched. Airlines and cruise ships show films and syndicated TV programs all the time. Think of how appropriate many of the large-format films would be in-flight," I suggested. "Okay, they wouldn’t have the full impact of an 80-foot screen, but a long flight would be a perfect place for such good family entertainment. And you could add a tag line to spur the viewers to visit their local LF theater."

At that point he had to leave for another meeting, but the talk got me thinking.

Back at my office I called Arthur Stanisch, president and CEO of AirLandSea Entertainment, which specializes in non-theatrical marketing of films .

Art agreed that LF films had non-theatrical potential. "In fact," he said, "many feature film producers make the same mistake. They get the theatrical business, push for video and TV syndication, but they leave money on the table when it comes to my end of the business. With minimal effort, they could bring in another US$50,000 - $100,000 or more per film by having us sell their product.

"In addition to traditional presentation on airliners, technology is allowing for personal video programming at each seat, providing for increased selections and in several languages. The fit for large-format product is a natural," Art said.

Intrigued by this untapped market, I called Jeff Klein of Jaguar Distribution, another company specializing in this segment of the ancillary markets. "Documentaries and other short subjects do very well on many airlines," according to Jeff. "Certain subjects such as sports, extreme sports, travel and comedies are very popular. Some airlines, already sensing this, have established individual channels to group like kinds of product."

Century City-based Entertainment in Motion indicated that while feature films are the firm’s primary focus, they now have a person dedicated just to niche markets. Michael Covell stated that "this is definitely an interesting area. Today’s world airline and cruise ship markets are always looking to supplement their offerings."

I sat back to reflect on the day’s events. In addition to squeezing our nickels in production costs, think of how many more films we could make by expanding the revenue side of the equation.