The Financial Side of the Film Industry


April 26, 2013EntertainmentNo comments

Box office success is never guaranteed; it can be an elusive animal. The success of a film company is dependent upon a number of factors, but positive reviews and good cinema revenue from the first day is essential.

There are blockbusters that have continued to raise the bar in box office takings while the success of other films is dependent upon making the most of every revenue channel available. Those other channels include sales of the films for home entertainment and selling broadcasting rights to television companies.

A balancing act

The sale of films in video format, and subsequently DVD and Blu-ray disc is a slight balancing act. It cannot be done at the same time as the film is released in the cinema even though the cinema experience on the large screen generally beats home viewing. Box office revenue needs to be maximised yet the film must still be very popular at the time it is released for home entertainment on disc.

The financial side of the film industry
Television rights are similar. Satellite television sells monthly subscriptions on contract because of what it can offer, and the latest films come into that category. The balancing act continues with satellite companies needing to ensure the price paid in each case can be retrieved. It means the dedicated film channels need to attract subscribers and a proportion of the monthly subscription for a total package includes an element entirely for the film channels.

Satellite revenue streams

There is a new service that owners of screening rights have introduced which utilises the Internet. It allows the public to see the latest films, and a whole library of others, without taking on a long term monthly subscription through the facility. Now TV is a very good example. You can watch movies online at Now TV at any time. All it needs is a good broadband connection.

The service is available on more than one device at a time so there is tremendous flexibility that is not available through traditional television.

It increases the revenue that the owners can earn, but it also provides an excellent additional service for the benefit of the consumer. It is not motivated by offering a facility that might lead to more monthly subscribers to the television company itself, but that might be the natural progression from someone getting a taste of the quality available. There are some people for whom a monthly subscription service will always be preferable.

The Internet is a strong marketing tool and it has encouraged companies to present their full face to visitors to their websites. It means it is easy to gather information to help make a decision.  The range of films is an obvious starting point. The website also needs to explain what the procedure for signing up involves, including costs and payment. Secure payment gateways have led to an increase in ecommerce, so the initial concerns felt when the Internet first arrived have disappeared.

This is a unique service that utilises the latest advances of the Internet and technology. It is certainly worth examining more closely.