SECRETS OF STUDIO DISTRIBUTION with DAN FELLMAN

Welcome to the Movie Business Podcast, picking up where Movie Business book left off. I'm Jason Squire, hosting a wide range of industry talent and executives to answer fundamental questions about the business today. Here we go. Stip your distribution is our topic today with Dan Feldman, chairman and CEO of Feldman Consulting Beverly Hills. After serving as president of Warner Bros. Domestic Distribution, responsible for releasing franchises including Harry Potter, The Matrix, The Dark Knight, The Hobbit, and more. He began his career at Paramount, then Lowe's theaters, then founded American Theatre Management. Dan has served as chairman of Motion Picture Pioneers, president of Variety Children's Charity, board member of Will Rogers Foundation, and was elected to the Board of Governors of the Motion Picture Academy. Welcome, Dan. Nice to be here, Jason. Well, I'm glad you could join us on the Movie Business Podcast. Let's start by asking, what are the secrets of studio distribution? Jason, I hate to tell you about their Arnold secrets. It's just a lot of hard work, experience, relationship with filmmakers, talent, studio executives, and exhibitors, and most importantly, time on the job. Learning the competitive landscape is a very important component of the job. So there are a series of players that you interact with as distribution head. There are the decision-makers who move the project forward, no doubt you're involved in green light because you're responsible for the grosses that come from American theaters. The marketing executives, and you used to say the talent, and through experience have a wide range of relationships because it is a relationship business, isn't it? Absolutely. You're 100% correct. And so, is there an example that comes to mind of any issues with exhibitors that come to mind? Jason, running a major film studio, it's really not an issue of having problems with theater owners. Theater owners have always felt were partners of ours, but no theater owner could exist without the product from a major company, especially like Warner. So it just was important to keep those relationships current and in good standing. And I felt that partnership was important to me, and the relationships that I've developed over the years have been very important to the success of my career. Now, what you're describing is a lot of intangible. Sure, there are things that you need to learn, and there are systems in place. But you're also describing relationships, and that's kind of intangible, to be in touch with all your exhibitor clients, if you will, and travel around and go to conventions and meet them and make sure that the relationships stay strong. Well, that's true, but over the years, consolidation has taken place, and so there aren't as many of those independent exhibitors as they were when I started my career. Back in the early days, when I first started in Paramount, we had 32 offices across the country. Of course, I moved to Warner years later, and today Warner has two offices in North America. So, technology and consolidation in the theatre isn't something responsible for that. So maintaining relationships, of course, are important. But the number of exhibitors in the marketplace have dwindled due to consolidation. Well, let's go further down into the process itself. You're involved, essentially, in the movies that are going to come out. The movies that have come out recently. And then, the movies that are in the pipeline. So what's the process? There is an imagined sort of green light process, where management into studio finally goes ahead with an approved screenplay, cast, and talent, and then we get to the distribution calendar. But before getting to the calendar, you were involved with green lighting. Is that correct? That's right. We had a green light committee at Warner, which I was a part of. You know, the production department had the red light, and head of production and their executives would go over every week projects that each one of those executives would submit. They'd all read each other's projects. Head of production would red light those projects that he felt should not go forward, but those that he did feel needed to be reviewed by a green light committee were presented to us. We would read scripts, we would look at budgets, and we would make projections on box office on total revenue, and then decide to go forward or pass on a project. Well, I want to ask about projections, but before we do, I wanted to ask about the distribution schedule, because this comes in a bit of a chess game, knowing your competitors, knowing what the calendar looks for, how do you choose a given weekend for a given project? Well, that's a good question, and you know, as I said, it takes a lot of experience to actually put a release schedule together. My days at Warner, we were distributing towards the end over 20 movies a year. So, approximately every other weekend, you know, you were opening up a movie. So you really need to look at the marketplace and look at the sea, who has animation, where the tent poles are, where the wrong comms are, where the horror movies are. And try to find a spot that works for you. And sometimes you find them at opening a little window in the marketplace, where it might normally not be the right place to release a family found that kids are still in school. There's not a holiday weekend, but it might be a really interesting weekend to look at, because parents would come to me and say, "Damn, there's nothing for me to take my kids and see." And, you know, it could be like sometime in early February or late January or even parts of March when they were in those school holidays. That might be the perfect time to set a family movie when there was less competition in the marketplace. That does make sense. Now, let's assume that the project is out and you have the first weekend. What happens if the grosses are better and expected or worse than expected? Well, you know, if they're better than expected, that's the good news. You develop a chase campaign and you keep pushing it and one is saying as many theaters as possible. When you have a number of releases like Warner would have, you might have a movie opening the following week, but certainly a movie that did not compete at this animation. You might have a horror movie, you might have a tent pole movie or something of that nature. So you'd be fighting for theaters, fighting for shelf space really what it is. Keep your project on screen as long as you possibly can. In today's market, it's a little bit different. There's just not as many pictures out there. And so it's a little easier to stay on screen than it was years ago. And what if it opens worse than expected? Oh my goodness. Well, that does happen occasionally, unfortunately. But then again, you know, you try to push the marketplace and see how long you can keep it on screen. You're going to lose some screens and some will just continue to play. Just depends on how crowded the marketplace is. Does that involve phone calls and cajoling and reasoning with circuit owners and others who are big players in exhibition? Sure it does. And sometimes you might have to split a show. You just might have to take one matinee and one evening or you might have to take two evening shows and no matinee depending upon how strong the product is and how long you want to keep it in the marketplace. The avid moviegoer sometimes checks the actual show times. And why is my movie pushed to 11 o'clock at night and I wanted to see it at nine o'clock at night. And this is the answer to that, isn't it? Yeah, unfortunately, if the film's not doing business, the exhibitor really doesn't have a lot of options except to move it around to a place that will at least satisfy the distributor by giving him a show and unfortunately, the patron who was looking for an earlier show is not going to get his wishes. And how do you track grosses? Money starts coming into theaters, not to distributors yet. When do you guys get paid? Well, as a company, every theater owner in the country reports his grosses to at night and so that report comes in during the evening by the hour so you can read how your project is doing. And then in the morning, all those grosses are available to everybody in the industry from the distribution side that has subscribed to that service. And from that report, every major company puts together a box office report, not only with their own products, but with everybody's product. So management can see as well as filmmakers that you're involved, can see how they're doing in the marketplace. Well, that's a very congenial way of sharing grosses that you know that the competitor knows exactly what your projects are doing. That sounds really healthy. Well, it is tough. And it's very important. Let me turn to your management style. Well, I've always tried to surround myself with the smartest, most confident people possible. I guess I'd like to create what I call a workplace family. I've always had an open door policy. I like to share ideas with people that work for me and I want people to enjoy their jobs. That's just been my style along the way. And there's something else that we should also mention before we move on. And that is the internal computerized system that Warner's and every studio has in order to track product from years gone by so that they can analyze a project that's being presented before it's green lit as to grosses of, say, the major talent involved in their prior movies. Yeah, I mean, you can pick any particular week and open it up. Go back and hit three and see how it's performed. You can see what all the competitive films were weekend, and you can just keep going back year after year. And you can look at holidays and how they will affect the box office, not only in terms of numbers, but how it responds to families as well as general audience. What lessons have you learned as you look back? Well, you know, what I really learned over the years, it just takes time. It takes hard work and performance to earn the respect of senior management and your colleagues. Along the way you find those who are a bit too aggressive and I used to say slow down, don't get caught speeding. You also have to learn how to adjust the changes. When I started at Warner, Christmas of 1978, we had the first Superman movie, a Dick Donner directed, a wonderful movie, but we can we open, I think was December 22, something close to that. It was the biggest three day opening in the history of Warner Bros. And it was also the widest release in the history of Warner Bros. It was an exciting weekend for the company. The growth for those three days was $7.5 million. The number of theaters we opened as I said was the widest release of all time. 108 theaters, cut to the last Harry Potter, opened on a midnight, we had a midnight show, the night before it opened, so it's like a Thursday night. And we grossed $42 million on that one show and opened up in about 4,000 locations. So the business has changed dramatically from the number of offices, the number of screens to the enormity of the box office. And unfortunately, because of the pandemic, the box office has suffered dramatically. And the industry continues to be as uncertain as it's been for decades. That is true. You know, in 2019, the domestic box office was about $12 billion a year. And then 20 when COVID came, dropped a 2 billion and 21 it went back to 4, 22, 7 and a half, 23, 9, and last year finished at 8.7. Hopefully this year, which is off to a little bit better start, but it's still running 42 percent behind what it was for like a four year average before the pandemic. So there's a lot of catching up to do. Those are really helpful figures. Now, what advice do you have for anyone interested in working in distribution? Well, it's a very difficult time to seek a career in the actual distribution. The future of cinema, as we know, is that a crossroad? I believe it will adjust and remain an integral part of the motion picture business. But, you know, with a small footprint, you know, specialty films that have been produced for select audiences, quickly moving to streamers, which leaves exhibitors to rely on superhero movies, ten pole films to fill their seats. And that's a real problem. They need more product. There's too many screens, too many seats. The windows are shorter. There's been a lot of competition with streamers. There's no meaningful adjustment or film rentals from the studio. So that's caused the real problem in the exhibition community. I think at this time, I would not advise anybody who's interested in the film business to focus on a career at the moment in the actual distribution. I think it's going to need it some more time for adjustment before that returns, and I hope it does. I do too. Very good. You've actually answered the final question, which is about your prognosis for the business. Anything you would like to add? I would say this, over time, the theater business has been resilient. You know, they've overcome radio, they've overcome television, they've overcome cable, they've overcome DVDs, and VHSs, and you name it. And so I'm hoping for the best. You know, I just love watching movies on the big screen. And I hope it will remain that way for years to come. Very good. Well, that's a great way to conclude our time together. Thank you so much for being our guest on the movie business podcast, Dan Filman. Thank you so much. Thank you, Jason. I'll take care. Appreciate it. [MUSIC]