Sunday mornings may be a time of rest but for Paul Dergarabedian it’s a time to crunch numbers. As president of Exhibitor Relations Co., Inc, Dergarabedian provides the world with the box office receipts brought in by the year’s biggest films figures that have captured the attention of the general public and not just the studio executives who made the films to begin with. Exhibitor Relations, located in Encino, was founded in 1974, making it one of the longer-lived firms offering box office data. The company started as support for theater owners who didn’t have access to data and information about the entertainment industry. Dergarabedian joined in 1993 and worked for the former president, the late John Krier, an experience he said that gave him a unique perspective on how Hollywood works. “I learned from someone who had a lot of insight into the very beginnings of the movie business,” Dergarabedian said. The company’s newsletter has been a staple for more than 30 years and its “bread and butter” as Dergarabedian described it is the schedule of upcoming film release dates, provided in either a hard copy or in electronic format. The summer movie season encompasses just 18 weeks yet brings in 40 percent of the box office receipts for the studios. With DVDs and videos, cable and satellite television, online downloading, and video-on-demand, the public has more choice than ever on where and when to view entertainment. With all that competition, the studios and theaters need to differentiate more than ever the theater-going experience from the home-viewing experience, Dergarabedian said. Question: Why are people so fascinated with box office numbers? Answer: People have a vested interest in it. It’s like you own a stock and you are following that stock. People can in a way own a movie on the opening weekend and then watch what happens with those numbers on Sunday morning. A person can say to themselves that the $135 million that “Pirates of the Caribbean: Dead Man’s Chest” opened with, my $10 was part of that. People love movies. It’s a coming together of art and commerce. And I think in general we’re fascinated with big numbers. When a movie makes $100 million that’s something that everyone can get excited about. Look at the lottery. When do people line up (to buy tickets)? When the numbers get really big. Q: Was there a gradual shift from just the industry people being interested in the numbers to the general public? A: This company was started in 1974. At that time it was more of an insider thing to know what the box office was. It was not as prevalent in the mainstream press or media. I think once the film school generation started producing these massive hits, especially the summer blockbusters, that’s when I think every person became involved. When the (Steven) Spielbergs and (George) Lucases had people lining up at the movie theater like we had never seen before and as the era of the summer blockbuster was ushered in so was the intensity in the interest of the box office. Q: The 2006 summer movie season has ended. How did it compare with the summer of 2005 when Hollywood is generally considered to have done badly at the box office? A: The summer of 2005 was probably the worst time to be doing this job. Every week it was “Are we down again? Are we down again?” It was all about the negative. There was this shift toward this idea that maybe people didn’t want to go out to the movies anymore. That put a lot of fear into the industry, especially theater owners. I’m glad that’s over. The summer of 2006 is not going to be a record breaking summer by any means but it’s going to be solid. It’s a summer we could live with every year. This year has done a lot to shore up confidence again in the theatrical movie going experience. We’re up for the year 7 percent so far on revenues and up nearly 4 percent on attendance for the summer versus last year. Q: What are your thoughts on films being released to theaters and home entertainment at the same time? A: The collapsing window is the thing that puts extreme fear into the hearts of theater owners. John Fithian, the president of (the National Association of Theater Owners), said it’s like a death threat on our industry to have a collapsed video window. I agree. There’s this argument that the moviegoer wants the movie in the theater but they also want it out on DVD the same day. If the industry allows that they are cutting their own throat. No Academy Award is being given out to a movie that doesn’t play in the theater and there is a reason for that. They should first play in a theater. There’s a prestige factor that goes along with that. Q: Who creates the expectation of what a movie should make? Is it the studios, the financial analysts, the public? A: The studios are the last ones to come out and say this is going to be a blockbuster. In fact they don’t even do it. If you come out saying that you’d better be ready to back it up. Some movies have built-in expectations based on their budget. Automatically any film that costs close to $200 million is going to be put under major scrutiny and be expected to be a blockbuster. Certain stars automatically bring a higher expectation to a movie’s performance possibilities. If you have a Spielberg you automatically have a brand. It’s all about branding. Will Farrell is a brand. People know they are going to get a comedy, they know they will get something funny with him. Certain stars and directors have that kind of cache. Q: Studios don’t release how much movies cost to make so how do you know what the budget is? A: Budget figures are so hard to get accurate numbers on. Studios don’t necessarily want to release those. If you go through the trades or surf on the Internet usually you can find a number that’s fairly close to the actual budget of a film. But again it creates these built-in expectations. Something like “Little Miss Sunshine,” which has a very small budget, nobody is beating that movie up because anytime that movie is making money it’s seen as a great success. There are films that do well but are not profitable because they cost so much to make. That information allows the press and analysts, even when a film makes $100 million, to say it’s not really a hit because relative to its cost it’s not making a lot of money and could lose money. Q: How do studios come up with their release dates? A: What’s happening a lot now is where studios are planting a flag on a date and saying this is our date. Certain dates are coveted: the first weekend in May, Memorial Day, Fourth of July. Even the weekend before Memorial Day weekend, which is when the “Star Wars” movies have always cropped up. The “Lord of the Rings,” every year had the same basic release date three years in a row. When a studio finds a date that works they usually stick with it. It’s a strategic game; it’s like planning a battle. You have this product worth multi-millions of dollars. Everything can affect you on a release date, who your competition is to what world events are going on that you cannot control. Q: So in the end what do these numbers mean? A: These numbers quantify what’s going on. The direct reflection of the number of people who walked through the theater door is in those numbers. I would say 20 years ago if you said a movie did X amount of dollars on a weekend most people would look at you blank and not know how to put that in any context. Today people on the street know all about box office numbers, they know how much a film makes. The scary part for the creative side is that some people base a movie’s value on how much it made and not how good of a movie it is. Q: What’s your relationship with the studios? A: We are an information-based business. We rely very heavily on our friends in exhibition, distribution, but especially the studios who provide us with their numbers, their release dates and all that information on a daily basis year in and year out. We provide a service as well because our numbers go out and get quoted. Part of the marketing machine is getting out the numbers; the bragging rights of being number one are huge. You can build success on top of that. Q: Where does your business fit in with the whole scheme of the entertainment industry? A: In a way we are a liaison between the studios and the media and the press. We put all this information into one spot and provide it. Other people do it as well, we aren’t the only ones we’ve just been doing it a real long time. We have this place in the industry where it needs people to track and analyze what’s going on. There is such a huge appetite for this information and we’re here to put it in place, give it some perspective, compare and contrast the data with the past and figure out where we are going in terms of the industry in the future. Q: You’re stuck on a desert island with a solar powered portable DVD player and can have five DVDs. What are they? A: “Goodfellas.” Got to have Brian DePalma’s “Scarface.” “The Professional” with Jean Reno and Natalie Portman. That’s one of my favorites. And “The Godfather” Parts One and Two. Name: Paul Dergarabedian Title: President Born: 1961, Los Angeles Education: B.A. Radio, TV & Film Long Beach State University; M.A. Communications Management USC Annenberg School For Communications Career Turning Point: In 1993, leaving the architectural firm I worked for and joining Exhibitor Relations Co.. Most Admired Person: Frank Lloyd Wright Personal: Single, no children
