• Tweet
• Email
• SumoMe

• Tweet
• Email

MOVIE BASICS (Scroll down for TV BASICS)

The world of movie grosses can seem as arcane and jargon-filled as microbiology–that is, until you know the territory.  Once you do, all the numbers tell stories that can rival the films themselves in drama,  shattering or creating careers, upending studios, and directly affect the kind of movies that you get to see.  Here are some terms that will help you better understand the strange world behind the screen:

Weekend Predictions: a forecast of the opening weekend numbers, using ShowbuzzDaily’s proprietary model to analyze a number of variables.  A “weekend” estimate is always a three-day Friday-Sunday period.  If a film opens on a Wednesday, only the Friday-Sunday portion is forecast. For four-day Friday-Monday weekends, again only the Friday-Sunday portion is forecast. The purpose of this is to allow better comparisons among weekends and films.

Studio Projections: as the phrase suggests, the studios themselves issue these on Sundays for release to the press.  They use the actual grosses for Friday and Saturday and add an estimate for Sunday performance to provide an early look at the weekend. Although in theory the Sunday estimate is supposed to be based on the past history of that weekend, genre, etc, it isn’t unusual for studios to round up (to put it nicely) their estimated Sunday performances within reason for various PR purposes:  to boost their films in the rankings, reach a higher round number, or to outgross a comparable film from the past (such as another film featuring the same star or an earlier entry in the same franchise).

Actuals: the studios release their actual figures for Friday-Sunday grosses on the following Monday. This is where any Sunday “rounding up” often disappears.

Weekend Declines: typically, a film’s weekend grosses decline each week that the film is in release (an exception being where the studio is using a “platform” release strategy, gradually adding theaters in succeeding weeks).  A typical decline is 45-50%. A decline less than 30% is very good, and a decline greater than 60% is usually a sign of real trouble.  However, “normal declines” sometimes vary with genre:  horror, science fiction and sequels are among those that tend to have steeper falls. So, for example, a 55% decline for a horror film could be quite acceptable.  Also, films that appeal to older audiences tend to decline more slowly than those aiming at a teen audience, as older fans are less likely to run to theaters on opening weekend–although films that are intended for even younger audiences often have slower declines, as families with children tend to catch up with films that have good word of mouth.

Front Loading: the other side of the weekend decline is the fact that increasingly, the bulk of a film’s box office is front loaded into the first few weeks of its run. This is partly a function of the number of theaters (and multiplex screens within a single theater) that are now capable of playing a major film in its first weekend.  For a typical hit film, about one-third of total gross comes in the first weekend, about 60% comes in the first ten days (through the second weekend), and the film is 85% done after the first four weekends. About four in ten films are pulled from substantially all their theaters before week eight, and only half are still playing in week ten (usually with weekend numbers that are a small fraction of their original weekend gross).

Weekend Multiple: the 3-day weekend gross divided by the Friday gross is known as the “weekend multiple”. A typical weekend multiple is 2.8.  (On Saturday morning just multiply the Friday number by 2.8 and you will be very close to the weekend number.)  However, as with weekend declines, certain genres tend to have higher or lower multiples: science fiction or horror films, where fans rush to see a film on opening day, might be as low as 2.4, while family films can be as high as 4.0 (because families with kids are likely to wait for a more traditional Saturday or Sunday outing).

Total Gross Multiple: the final gross in theaters at the end of a film’s run divided by the first three-day weekend forms the “total gross multiple”. Most films have a total gross multiple of around 2.9 or 3.0, while the entire run of a true bomb can sometimes be as low as double its first weekend’s gross (theaters are typically obligated to play a film–hit or miss– for 2 weeks before they can pull it entirely, although a multiplex can downgrade a flop to a much smaller auditorium more quickly than that).  A real hit can have a total gross multiple of 3.5 or even 4 (as those films play longer and have lower than normal week-to-week declines).

Distribution Windows:  films live on for months and years in various forms of distribution, each one providing additional revenue to its studio.  On ShowbuzzDaily, we plan to bring you information on the complete lifespan (sometimes called the “long tail”) of movie revenues.  With the advent of digital streaming and the ramping up of VOD, the so-called successive “windows” of distribution are somewhat in flux, but for now, these are the windows through which a typical studio movie travels.  All exist both domestically and internationally, although not necessarily at the same time in every territory.

• THEATRICAL EXHIBITION is the traditional way films enter the marketplace–with an average price of about $8 per ticket (not to mention increases for extras like 3D and Imax), the revenues from theaters provide the foundation for a film’s ultimate income.  The studios split the ticket sales with theater owners (theaters keep 100% of their concession stand revenue), and the amounts received by the studio, usually 55% of the total in the US, are called “Rentals”.  Films typically play exclusively in theaters for about 12 weeks before becoming available on any other platform, although studios are currently campaigning to reduce that to 8-10 weeks, to the alarm of theater owners.

• VOD/HOMEVIDEO SALE is the next stop, and most films are released in both media simultaneously, where they remain exclusively for about 4 weeks. Homevideo sale, in particular, is a high-income platform for studios (the wholesale price of a DVD can be $15 or more, and blu-rays are even higher), but sale numbers have been declining over the past few years.

• HOMEVIDEO RENTAL, dominated by Netflix and Redbox, is a far less lucrative platform, and permitted only after the bulk of sales are typically made in the initial 4 weeks of release.  The studios also often limit these companies to versions of films that don’t include the extras contained in the for-sale discs.

• PAY-CABLE licenses kick in next, usually 6 months or so after a film becomes available on homevideo.  Each major studio has an “output” deals with one of HBO, Showtime, Starz or Epix, which means that virtually all their films are guaranteed to run on that network, for a fee usually calculated as a percentage of the theatrical rentals earned by the film–capped to avoid overwhelming payments for blockbusters like Avatar.  These networks usually have the films (still available on homevideo/VOD) for about 12-18 months.

• BASIC CABLE licenses follow pay-cable, and are dissimilar in that they’re usually negotiated for an individual film or a small group of films, rather than a studio’s entire yearly output.  Like pay-cable, these networks base their deals on a percentage of the film’s theatrical earnings.  A basic cable license typically extends for several years, and may be shared among several networks.  (Note:  broadcast networks are largely out of the business of showing films, and syndication on local stations is also relatively rare.)  Films that still have value after an initial basic cable window (think Pretty Women) will go on being licensed and relicensed until, as the saying goes, “the sprockets wear out.”

TV BASICS

Demography.  Understanding the audience is critical ini the world of TV.  Where do they live?  How do they get their television in to their home?  Which parts of the audience are growing or not?  The following posts answer these questions and more:

• Factoids from Nielsen’s “Universe Estimates”
• The Skinny on the Nation’s TV Markets
• Time Zones & Their Impact on Ratings and Programming

Nielsen Ratings.  Television ratings, collected by the Nielsen company, are the lifeblood of the industry.  The ratings are the “currency” that drives the business between broadcaster and advertiser.  Remember, a TV network’s customers are the advertisers and agencies and not the audience.  The “product” they sell is the time and attention of viewers, as represented by the numbers in the ratings.  Many audience analysis terms get thrown around liberally, sometimes incorrectly.  The following definitions are for some of the most often mentioned bits of jargon.

• Rating.  The proportion of a demographic group (most often Adults 18-49 years old) watching a particular show.  Say there are 100 people between the ages of 18 and 49.  If 10 are viewing Seinfeld,the Adult 18-49 rating is a 10.0 (10 out of 100 – or 10.0%).  By convention, the percentage sign is dropped and the number is expressed to tenths of a rating point.  In contrast, cable ratings are taken out to hundreths of a rating point.  The way network ratings are shrinking, they should be, too.
• Share.  The proportion of people watching TV who are viewing a particular show.  Assume 40 Adults 18-49 are watching television when Seinfeld is on.  The Adult 18-49 share would be 25 (10 out of 40 – or 25%).  By convention, shares are expressed as whole numbers.
• TV Usage (HUT & PUT).  The proportion of people watching television at a particular time.  In the example above, the PUT (Persons Using Television) is 40.0 (40 out of 100 – or 40.0%).  Like ratings, PUTs (or HUTs – Homes Using Television) are expressed in tenths of a point.  PUTs tend to rise and fall in very predictable patterns that have remained constant for decades: they peak around 9:30 pm and approach zero around 4:00 am each day, they are significantly higher Sunday-Thursday versus Friday-Saturday, they rise rapidly as viewers age, they are generally higher for women than men, and seasonally they peak in January and bottom out in July.
• Demo.  A particular audience that a network targets and that an advertiser wants to buy.  The most common sales demographic is Adults 18-49, although some advertisers want to reach Adults 25-54, Adults 18-34, Men 18-34 and Women 18-49, to name a few.  In addition to gender and age, ratings are available by race, income, education, urban/suburban/rural, region, and time zone.  Household income is probably the most important additional variable, which is released several days after the telecast in a report called National Audience Demographics (NAD).  When someone speaks about a program’s “NADs” they are usually referring to the rating with Adults 18-49 in Homes with income over $100,000 – and not referring to something more graphic.

• Fast Nationals.  The first look at the national ratings from the night before, released around 11 am ET seven days a week, 365 days a year. The ratings come from the National PeopleMeter sample of over 25,000 people in over 10,000 homes nationwide.  The fast nationals are time period ratings, measuring what viewers watched on each network affiliate during primetime.  They are fairly accurate as long as a network did not carry a program live to all time zones and as long as there weren’t any significant local pre-emptions.
• Official Nationals.  Precise program ratings, usually released around 4 pm ET the next business day.  These ratings measure program viewing, whether it was in the scheduled time period or not.  For example, if the ABC station in Detroit carried the ESPN Monday Night Football game in primetime locally and delayed Dancing with the Stars to 2 am, the fast nationals for ABC primetime would be inflated because of the very high NFL viewing in Detroit.  The official nationals would replace that viewing with the 2 am telecast in the Detroit area in the official national Dancing program rating.

• “Overnight” / Metered Markets.  These ratings are available very early in the morning, seven days a week, at around 8 am ET. Currently, 56 of the largest television markets have local ratings service.  (The other 154 smaller markets still rely on the archaic “diary” methodology during the “sweeps” months of November, February, May and July to get local ratings.  Yes, there is a July sweep or “book”, but very few pay attention to it.)  Most of the 56 metered markets measure only household viewing (instead of PeopleMeters, they use Audimeters, which only measure to what channel the TV or DVR is tuned), but the metered-market overnights provide an early look at ratings data for those who can’t wait until 11 am for the fast nationals.  The Overnight ratings are also a helpful tool to see in what markets or regions a show is doing especially well or poorly.
• Average Audience.  Program ratings are almost always Average Audience figures, the rating or absolute number of viewers watching in an average minute of the show.
• Total Audience.  Occasionally, a network will look at the Total Audience of a show, the number of viewers who watched at least part of a telecast (usually defined as watching at least six minutes of the program).  If a program is viewed by 10 million viewers 2+, maybe 20-25 million viewers 2+ are in the Total Audience, depending on how long the show was, because the audience is constantly changing and turning over as people come in and out of a program.  The Total Audience number is perfectly suited for publicity and marketing departments because it yields the biggest number.  Also, note that the demo of choice for TA is Viewers 2+ — suddenly older viewers count for something because the goal is to tout a large number.
• Cumulative Audience (“Cume”).  Similar to TA, a “cume” looks at the total audience across a series of telecasts or even across an entire network schedule.  Another term for this is “reach”, the marketing concept to measure how many people an advertising schedule reaches over the course of a month or a quarter, for example.
• Coverage.  An indication of how many people are able to see a program or a cable network.  Most broadcast network program have a coverage level of 99 or 100, meaning the program airs in every local market.  If five markets totaling 8% of the country refused to carry a controversial program, the coverage would be 92.  If the same markets simply aired the show in a different time period, the coverage would be 100 but the Live Coverage would be 92.  Widely distributed cable networks have a coverage around 90, while HBO’s coverage is about 25-30.  Coverage Ratings are also available (looking only at homes which can receive a certain network), but they are not reported very often.
• Data Stream.  Before the DVR (broadcasters would call them the good old days), the audience watched shows when they were scheduled, and they watched (or at least were exposed to) the commercials that paid for the programs.  VCRs were used to watch rented movies and never accounted for more than a trivial amount of recording and playback of TV shows.  But the DVR (in 43% of homes as of 2011 and rising) has completely changed viewing behavior and measurement. Now the national ratings have various “streams” of data, offering different types of ratings for the new DVR world.  A rating used to be a rating, but now there is an entire menu of ratings to select from. Following are the most common rating types.
• Live+Same Day Rating.  The most common data type is Live+Same Day (LS), which measures live viewing of a program as it is telecast or playback of a DVR recording on the same day it was telecast.  Fast national data is Live+Same Day ratings information, for example.
• Live Rating.  Live ratings, not surprisingly, exclude any DVR playback and are significantly lower than LS ratings.
• Live+7 Day Rating.  Live+7 Day (L7) ratings, usually available about ten days after broadcast, measures live viewing plus any DVR playback within a week of recording.  L7 ratings are generally the highest data type and are the favorite of publicity departments but are almost completely ignored by advertising agencies who rely on the…
• C3 Rating.  And finally there is the C3 rating, a Commercial rating for live viewing and DVR playback within three days of recording.  Instead of looking at the average rating across an entire program, a commercial rating looks at the minute in which a specific program aired.  So if a viewer watches The Office two days after broadcast but skips through all the commercials, that viewer will not show up in the C3 rating.  Believe it or not though, there is a substantial minority of DVR viewers who do not skip commercials and are credited to the C3 rating.  Why is it three days of recorded viewing?  Like everything else in business, it was the result of often bitter negotiations between advertisers (who only wanted to pay for Live ratings) and networks (who wanted to get paid for up to seven days of recorded viewing).  Unless you work at an advertising agency or network advertising sales department though, you won’t see C3 ratings very often.  But they are the numbers that drive billions of dollars in business.
• Ratings Comparisons.  Finally, how does one judge whether a rating is good or bad?  The easiest and most common method is to compare a program’s rating to other shows in the time period.  What is the program’s ranking with Adults 18-49?  How does it do with smaller groups such as Women 18-34 versus the other shows?  Next, how does the program compare to its lead-in?  How does the show compare to the “time period”, that is the programs it replaced last year or last month?  Finally, how does the program’s performance compare to its own performance in other time periods?  With so many comparison points, the answer might be ambiguous at times.  Sometimes a show is clearly a hit or a flop, but most shows land somewhere in the middle, and all manner of ratings arguments can be formulated to support or attack a show’s performance.