Financial Model

Our goal is to produce the most engaging release for our audiences within the best setting possible for each Oscar© nominated film, cost-effectively: We want audiences to be amazed by your film as much as we are, and we want to be sure that you make money while doing so.

CREATING THE ONS RELEASE

Since the ONS come as fifteen different and unconnected short films, they must be programmed into three different theatrical presentations – one for the live action nominees, one for the animated short nominees and a final one (or two, depending on length) for the documentary short films.

For each theatrical presentation, our team creates an integrated programming plan, an intro & outro, title cards for each film, interstitials, music, subtitles and any other elements needed.

For the animation portion of the release, in which the animated films usually take up less than the necessary 75-85 minutes of runtime, our team selects additional “Highly Commended” films that are felt to be of high enough quality and audience enjoyment to strongly support the release.

To keep the costs low, we keep the work of design, interstitial creation and any filming needed in-house or with trusted contractors who are familiar with the release as much as possible.

We get the finished feature-length anthologies into theaters across the US and Canada on a shorter timeline than other theatrical distributors ever believed possible. From the time that we know which films will be in the theatrical release until the time they’re actually in movie theaters is no more than two weeks!

PRODUCTION OF THE ONS RELEASE

In September and October, three months before the shortlisters are announced by the Academy, our production team starts work on the poster, graphics, music and interstitials for the coming year’s release.

Once the shortlisters are announced in late November/early December, we get in touch with each shortlisted film to pre-position as many of them as possible at the post-production house in New York City where the final release will be produced once the nominations are announced.

Getting contracts signed for the release is critical at this stage, as the final master can’t leave post-production without all contracts in place. Any contracts not signed at this point may cause a film to be dropped from the release.

DISTRIBUTION OF THE ONS RELEASE

Theatrical

We start planning our US and Canadian release plan months in advance.

“Coming Soon” trailers go into theaters in the US at Christmas, and theater bookings are often well-underway by then.

The theatrical run then lasts until a few weeks after the actual Oscar© Ceremony.

Primary interest outside the US/Canada is for the Live Action & Animated portions of the release. We work closely with theaters, in-country theatrical distributors and film festivals in countries around the world, including the UK, Netherlands, Belgium, France, Germany, Italy, Australia, Mexico, Chile and South Africa, as well as individual or festival screenings in many other countries.

Digital

We have worked closely with movie theaters who screen the films to create a window for online commercial exploitation at the very tail-end of the theatrical run. But in return, we have promised to ensure the films are not available in other media (digital, TV, etc) from the time of nomination until the week before the Oscar© ceremony.

On the Tuesday before the Oscar© Telecast we release the digital compilation of the ONS across VOD and EST sales platforms. The release is carried as a pay-per-view/VOD asset by all major cable and satellite carriers in the US and some in Europe. It is also carried for sale in online stores such as iTunes, Amazon, Google, Verizon, Vimeo and others.

FINANCIAL RETURN

Theatrical audiences love the Oscar© Nominated Shorts.

Live Action & Animated releases have been in theaters since 2006 and have grown to more than 600 theaters in the US & Canada. The Documentary release began in 2011 and has grown to about 190 theaters in the US & Canada.

The Total Box Office for 2018 for all three programs was $3.5 million. Box Office ticket sales related to the Documentary Shorts continue to grow, rising to $0.5m in 2018.

What do theaters pay?

• In aggregate, theaters keep approximately 65% of box office receipts (approximately 35% of box office to Shorts International).
• Some smaller screenings for universities, community centres, etc are licensed at a flat fee.

How do we maximize the nominated filmmakers’ financial returns?

• We don’t use a “fee first” traditional distribution approach:
  • In this model, the distributor takes the first 30-35% of all receipts then recoups expenses. The remainder is split among filmmakers.
  • In this model there is less risk to the distributor and much more risk to the filmmaker.
• We do use the “costs off the top” model:
  • In this model, we recoup expenses first (no distribution fee before recouping expenses). Filmmaker’s “fees” are guaranteed up-front and recouped as expenses.
  • 50/50 split between distributor/filmmakers on remainder. This provides an incentive for us to keep expenses as low as possible.
  • The last 2 years have seen record returns to filmmakers for all categories – Each of the last three years have seen $0.3m+ in total returned to filmmakers across all nomination categories.

When do theaters pay and when do you get paid?

• Most payments from theaters are received by late Summer/early Autumn, from which we recoup expenses.
• We then report the theatrical portion of the release in the end of year statements following the release.
• Digital sales report more quickly and begin being reported in the mid-year statements, two to three months following the release.

Who verifies the theatrical film statements?

• We receive independent verification of your theatrical film statements.
• Since the 2015 release, PwC has audited our statement process and controls to ensure we have appropriate internal procedures for accurate reporting of that year’s ONS Theatrical Release.
• For the 2017 release onwards, PwC audit the accuracy of the transactional data used to calculate the net theatrical earnings for each release.
• These reports are available upon request to all nominated filmmakers for the release containing their film.
• In addition, Grant Thornton (the accountancy firm) conducts our annual statutory financial audit.