Revenue Sharing Model
After a film’s release, box office income is split between the distributor (representing the studio) and the exhibitor (theater owner). The exhibitor split is the portion retained by the theater.
Exhibitor Split: Common Arrangements
- Front-Loaded — Higher percentage to the distributor in opening weeks, then gradually increasing to the exhibitor.
- Flat Percentage — Same split throughout the run.
Factors Influencing the Split
- Film’s perceived marketability.
- Length of theatrical window.
- Negotiating leverage of the theater chain.
Exhibitor Split: Example
A blockbuster may start with a 90/10 split favoring the studio, shifting toward a 50/50 split after several weeks.
Exhibitor Split: Significance
The exhibitor split determines the profitability of theatrical operations and can influence how long a theater keeps a film on its schedule.