White paper on creativity - ebla center

Chapter 7The importance of distributionBeing able to count on an effectivedistribution company is definitely acritical factor of success for a film.Distribution is a real bottleneck in thesector, since the principal distributorscontrol large market shares in terms ofthe number of films distributed, boxoffice receipts and cinema admissions.Moreover, in recent years, the numberof film distribution companiesoperating on the market has steadilydwindled, which has furtherconcentrated power in the hands of afew companies. Consequently, not allfilms produced reach the cinemas,while those released in a few peripheralcinemas, or in the low season and witha limited investment in the number ofprints are destined from the outset toobtain very modest results. Thus for afilm to succeed, it is very important tobe strongly backed by a distributor interms of promotional investments,number of prints, and effectivemarketing and communicationsmethods.As far as number of prints released isconcerned, recent studies suggest thatthe market is increasingly fast movingand very quickly “burns up” films,which thus have a drastically reducedtime to establish themselves. If weconsider the performance of the Top150 films in 2007 (the data refers tofigures published by the review BoxOffice for the period 1 January-22October 2007), on average, on the firstday of release a film brought in 6.36%of the total proceeds, on the openingweekend it reached 35.61% and in thefirst week over 50% of the total.Another interesting figure is that theTop 10 films were distributed in 684cinemas, a very high number certainlyaffecting the speed with which thefilms were consumed.Unfortunately, it is very difficult to findfigures on investments made bydistribution companies to promotefilms. Therefore we will use as a proxyfor their marketing commitment thenumber of prints of the film distributedat the opening weekend. An analysis ofthese figures reveals that the openingweekend is of key strategic importancefor a film at the box office. Filmswhich make it into the Top 20 in thefirst weekend of release also tend to bein the Top 20 for the whole season. In2000-2005 this did not happen in only13% of cases, which confirms thewidely held opinion that the filmindustry is a sector characterised bylogic of “all at once or nothing”, thusmaking the box office on the openingweekend a key indicator in assessingthe overall performance of a film. Thelife-cycle of a film is characterised by agradual decrease in admissions fromthe first week on. After peaking at theopening weekend, demand graduallytends to dwindle.The promotional investments andcommunications techniques adopted bydistributors to launch films is thus veryimportant. A distributor’s strength isnot only measured in terms ofinvestments in numbers of prints, butalso the capacity to establish profitablepartnerships with cinemas, by goingbeyond the traditional concept ofrelations basically based on bargainingwhich is not very productive in thelong term. In other words, the successof a film seems to be stronglyWHITE PAPER ON CREATIVITY 174