Business

These are some of the key terms used on the business side of film and television. This is by no means an all-inclusive list so if there’s something missing you’re curious about, let us know and we’ll add it in.

Above the Line: Refers to the creative elements of a production such as the writer, producer, director and actors. Literally, these are the names that appeared above a bold line that divides standard production budget sheets. This term is used to describe money spent on things that don’t actually show up “on the screen.” For example, giving Tom Cruise $25 Million as opposed to $20 Million doesn’t make the movie look any better — though Tom is probably happier on set. See also Above the Line’s opposite, Below the Line.

Actual Break-Even: The point in time when a film’s revenues reach Net Profits based on a full Distribution Fee. Compare to definition of Cash Break-Even.

Adjusted Gross: Generally means gross box office receipts minus Off-the-Tops. However, many people use the term to refer to gross box office minus all distribution costs.

Advance: Advance payments for either (a) the license of film rights or (b) compensation for services rendered (talent, crew, craft service).

Backend: Profit participation or moneys received after a film is released. The backend is usually worked out during Pre-Production and is performance-based compensation vs. up front payment.

Below the Line: Refers to the technical elements of the production staff. Literally, these are the budget elements and people that appear below a bold line on a standard production budget form. Money spent “below the line” actually translates into things that show up “on screen.” See also Above the Line.

Box Office Gross: Gross receipts collected by movie theatres.

Cash Break-Even: The point in time when a film’s gross receipts reach net profits, but using a low distribution fee.

Completion Bond: A contractual commitment issued by a Completion Guarantor agreeing to either (a) complete and deliver a picture on time or (b) repay the bank if timely delivery is not achieved.

Completion Guarantor: A company issuing the Completion Bond.

Co-Production: A joint production of a film between two companies. For example, “Gladiator” was a co-production between Universal and Dreamworks.

Coverage: After a script sits on an executive’s desk for a few weeks, or gets toted around in the executive’s script bag, the coverage, drafted up by some lowly reader, comes back. The coverage usually talks about how the script is nothing more than a failed attempt at a tired genre, and falls short as a screenplay in nearly every important aspect. The executive’s assistant, at the request of his or her boss, will call up a form letter on the computer which conveys something to the effect that, “while I enjoyed reading [insert catchy title here], it is not the kind of project we are interested in pursuing at this time.”

Deal Memo: A term sheet or letter of intent, usually binding.

Deferment: A fixed payment to Talent that is payable out of Gross Receipts, usually after reaching Cash Break-Even.

Development: From the studios’ point of view, development is where a good script is made better and more production friendly (a.k.a cheaper).

Development Hell: From the writer’s point of view, this is when the producers rape their vision.

Director of Development: Studio or production company executive who is involved with reading scripts, coverage, giving notes, making writers and directors lists and meeting with agents. Shepherds ideas, books and scripts into better scripts ready for production. Often have suspicious daily schedules involving breakfast, lunch, and drinks meetings.

Distribution Fee: A retained share of profits by the Distributor, usually charged as a percentage of Gross Receipts. Oftentimes confusing as it can be refered to as a “fee.”

Distributor: The owner or licensee of film rights that then licenses them to third parties (exhibitors, studios, regions or countries)

Domestic Box Office: Total money spent on tickets by moviegoers in the United States and Canada.

Exhibitor: Owner of a movie theatre or theatre chain. Regal, AMC Entertainment and Cinemark are the three largest exhibitors in the U.S.

Fanboy Effect: Certain films have a very loyal following, usually due to their source material. These people will flock to the film as soon as it opens, either over the opening weekend or, more likely, opening night. This inflates these numbers, reducing both the Internal Multiplier and the overall Multiplier.

Film Rentals: The portion of Box Office Gross paid by Exhibitors to the Distributor.

First Dollar Gross: Percentage of all Adjusted Gross Receipts, although it is almost always offset against any up-front compensation paid.

First Look: Either a right of negotiation or an option to purchase film rights.

Greenlight: Used in Hollywood to describe when the studio commits to making a film. When a film gets the “Greenlight” from the studio brass, the production team sets a start date and the studio begins allocating resources (money) to kick off pre-production.

Gross Participant: Someone entitled to a share of the Adjusted Gross Receipts, either First Dollar Gross or after a pre-defined point, such as after Actual Break-Even.

Gross Receipts: All gross revenues from a film. Usually specified at a certain point in the chain.

Home Market: The Home Market refers to revenue derived from people viewing movies at home. It is broken down into three sections: rentals, sales and TV rights. Combined these bring in more than double the domestic box office and can turn a film that was a mid-level hit to a monster hit, or lift a film that struggled at the box office to one that shows a considerable profit. And to think, just a couple of decades ago studios were suing VCR manufacturers and Video Rental stores claiming they would kill the industry! Of course now DVD is king, representing more than 80% of rentals and nearly all of the sales.

“Hulk” Effect: Back in 2003 when Hulk came out, the studio bowed to incredible pressure from fans and released early footage of the special effects. The plan was to get the fans talking and build up the word-of-mouth. However, the special effects were in the early stages and were so bad that the buzz it generated killed any chance the film had. More recently the same happened to “Catwoman” with the early look at Halle Berry’s outfit. Just goes to show you, sometimes there is such thing as bad publicity.

Internal Multiplier: A film’s weekend box office divided by its Friday number. It’s basically a measure of the film’s word-of-mouth, with 3.0 being the best most films can get these day while 2.3 is generally the bottom rung. Certain films have an inherent advantage (like those aimed kids), while the Fanboy Effect can shrink the number as the hardcore fans flock to the movie on Friday.

International Box Office: Total box office from all nations outside United States and Canada.

Legs: Legs is a term used to refer to how long a film lasts in theaters.

Meaningful Consultation: Something actors request, usually meaning that if the studio, producer or director is going to change the script or hire an actor, the star must be notified and asked what they think.

Multiplier: A film’s total box office divided by its opening weekend box office. Another measure of the film’s word-of-mouth but with a much wider range of possibilities. Films with below 2.0 are not unheard of, while 6.0 or more are a possibility. Just as a side note, not too long ago films with a multiplier of 10 or more were quite common, but the economics have changed and a big opening weekend is too important to the studios and the home market shortens a film’s legs.

Negative Cost: Cost of producing a film, including Above-the-Line and Below-the-Line costs and certain other miscellaneous costs (Completion Bond Fee, Contigency Fees)

Negative Pick-Up: An agreement when a studio acquires rights to a film in return for a fixed payment due upon delivery. Oftentimes happens during/after a film is in production.

Net Profits: Gross Receipts minus all imaginable costs relating to a film (Distribution Fees, Participation, P&A, Overhead of studio)

Off-the-Tops: Specific deductions taken from Gross Receipts in calculating the Adjusted Gross (Collection, Taxes, Trade Dues, Currency Conversion).

Offer: To make a money offer to talent. In terms of casting, an offer can come after a reading, audition, and/or screen test - or the actor is so famous and desirable that they are “offer-only” and you don’t ask them to audition you just send them the script, the offer, and pray.

Optioning: A written agreement between a producer and a writer or owner of content. The writer/owner signs over all of the Rights to property for a specific period of time and price in hopes the producer can develop it.

Overhead: An arbitrary mark-up (such as 15%) that is added to either the Negative Cost or Distribution Expenses.

Participation: Payments to Talent based on a percentage or Gross Receipts or Net Profits from a film.

Pay-or-Play: A contractual provision providing that if Talent is not used in a film for any reason, they will be paid their full compensation (other than a Participation).

Pitch: A short speech given to Studio Executives and/or Production Companies in an attempt to promote or sell an idea for a movie or television show.

Press Junket: An event involving the media where members of the press go into rooms (mini-sets usually with a poster of the film in the background) and ask questions of the actors and director. Often held in a hotel. Generally organized by entertainment companies to help build awareness around a project that is being prepared for release to the public.

Prints and Advertising: Also known as P&A. Prints are the actual physical film that are shown in theaters and are quite expensive to make and distribute, costing about $2,000 per print. Each theater needs at least one print and possibly more depending on how many screens the film is playing on. The advertising part of the budget is the amount spent on just that, advertising. Most of the money is spent on TV, but radio, newspapers and magazines, the Internet and in theater advertising are also very important. The average film spends $34.4 million on P&A, while some films have spent more than $100 million.

Production Budget: The amount of money it cost make the movie including pre-production, film and post-production, but excluding distribution costs. The average cost of a wide release is about $65 million, with the most expensive films topping $200 million.

Release Print: A print of the film ready for distribution and screening.

Residuals: Payments owed to Talent and unions pursuant to the collective bargaining agreements entered into with the unions (DGA, WGA, SAG)

Scale: The Guilds dictate scale: the legal minimum union members can receive for working on a film. The WGA, DGA, and Screen Actors Guild all determine scale. As all of you actors out there know — this is Hollywood’s term for minimum wage and, the amount that most actors get paid on independent films to keep the budget low.

Screening: Usually a private showing of a completed film; sometimes before its theatrical release.

Screenplay: Also known as the script, it is the basic blueprint of a film. The screenplay includes descriptions of scenes, character action and of course dialogue.

Screens & Screen Count: The actual screen the movie is projected on. Most Theaters have multiple screens, with largest having two dozen screens or more. Screen Count is simply the number of screens a film is playing on, but this is rarely used domestically, but internationally it is used to measure how wide a release is.

Sequel Effect: Also known as “Sequelitis.” Think of this as a sub-species of the Fanboy Effect specific to sequels. Such films have a built in audience due to the original movie (as otherwise making the sequel is pointless).

Shooting Schedule: With the help of the director and producer, the first AD puts together the shooting schedule which contains the locations, times, equipment and personnel required for a day’s shoot. The schedule itself may be compiled for a single day but is usually planned ahead for a number of days if not for an entire week. In order for the AD to compile this schedule, he or she must have the shot list.

Studio: A controlled environment for the making of a film. The term is synonymous with the leading production companies of Hollywood’s “Golden Age” who owned their own studio facilities, as do a few today. Today, the term refers to one of the major film distributors or one their subsidiaries (Time Warner, NBC Universal, Disney, Fox, Sony, MGM, Paramount).

Technically Available: The talent is technically available to work (i.e. they are not booked on another project during the time requested) but the agent or agent’s assistant doesn’t want to tell you that they are free, either because they don’t like your project or because they are snooty or because the talent is negotiating another deal that hasn’t closed yet.

Theaters & Theater Count: A theater is any place a movie is showing from the smallest cinema on the art house circuit to the largest megaplex. A film’s Theater Count is simply the number of theaters a film is playing in at a given time. Domestically Theater Count is used to measure how wide a release is.

Theatrical Release: The date when a new film is scheduled to come out in theaters, usually preceded by a myriad of internet banners, TV commercials, billboards and hype and accompanied by the obligatory red carpet premiere, plenty of fan fair and paparazzi.

Trades: Variety and The Hollywood Reporter. Been around for years and still the best sources of information in the industry.

Treatment: Brief description of a film or television program.

Unavailable: When the talent is booked on another project during the time period requested, and therefore unavailable to work.

Worldwide Box Office: Domestic Box Office plus the International Box Office.