More bad news about VPFs…or is it?

I ran into an exhibitor friend at the Toronto Film Festival (who shall remain nameless) and he went off about how unhappy he was about having signed a VPF deal in order to convert his theaters to Hollywood’s version of digital projection equipment. We talked about all the various implications of the deal, which I’ve outlined in a previous post. But he brought up another angle that I hadn’t realized before.

In order to be eligible for a VPF deal, an exhibitor has to guarantee a certain number of “turns” per screen per year. A “turn” is when you dump the film you are playing and bring in a new one, which then requires the distributor of that new film to pay a VPF fee. The more “turns” the more your equipment has been subsidized.

What does this mean in more practical terms? It means that theaters are incentivized not to holdover films for very long. This is potentially the death knell for the types of films that require word-of-mouth to build into a hit. Now, we all know that the old fashioned word-of-mouth film has been on life support for a while now. A film like “Hoop Dreams,” which required 6 solid months of business before it started to take off could never happen today. But now will we be seeing films that could have played 5 or 6 weeks reduced to 1 or 2 in order to support the number of “turns” required by the VPF deals?

But here’s a potential upside to this. Theaters that don’t sign VPF deals will be that much more attractive to distributors who want longer runs for their films. Recent films like “To Rome With Love” and “The Best Exotic Marigold Hotel” are examples of films that would never have made as much money as they did if they had been relegated to two week runs. In fact, many of the theaters on the Emerging Network have picked up such films after they were unceremoniously dumped by the major chains, and ended up having many weeks of successful box office in second run.

So, yet again, the system had perverted itself in ways that both exhibitor and distributors are just beginning to understand.

4 thoughts on “More bad news about VPFs…or is it?”

  1. Ira…The VPF is one slippery goose.
    Where o where is there solid info that gets down on the subject? Enough in print on
    DCI, digi screens, “2000” for the fee, etc.etc.
    Paramount apparently cut a deal in the beginning??? But what is the real or going “deal” today for the Indie Flickers???

  2. Part of the issue is that VPF deals include a confidentiality clause, and the deals are wildly different from exhibitor to exhibitor.

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