missouri65 – the situation here in San Francisco is that there are so many chains and theaters (and more being built as we speak) that everyone is desperate for films and the studios can do pretty much as they please. One chain used to have a monopoly on all Disney product so they were guaranteed a couple big moneymakers a year, but were also stuck with all the junk put out by Hollywood and Touchstone. The studios can not only tell you what to play, they can tell you how to play it. (# of shows per day, how long between shows, etc) Say for instance you want to premiere the big new Star Wars movie…you’d better be perpared for your neighbor over the hill George Lucas to come in and tell you you need an entirely new soundsystem; you’d better be ready with your checkbook, too.
As for what it costs a theater to show a movie; it’s not so much that the theater buys the print outright, as I previously stated, but that they lease the print and pay for any damage resulting in a replacement reel or print. (I’m at the management end of the food chain rather than distribution/booking so I’m not sure of the details.) The cost of this “rental” decreases as the film ages. In addition to this the theater agrees to give up a certain percentage of it’s box office take. This is also proportional to the shelf life of a film.
As far as why films are made that aren’t sure fire hits…for every supposed money-in-the-bank blockbuster like Last Action Hero or Hudson Hawk, there are a dozen “who knew?” flukes like Pulp Fiction, El Mariachi, or The Full Monty. The studios hope they’ll be the first with some new, cheap thing that will be the surprise hit of the year. Example: does this sound like a sure fire hit to you? Plot-rich, good-looking professional falls in love with spunky, uneducated prostitute. Lead actors - Has-been Richard Gere and little known independant film actress Julia Roberts. Not only did this film make more money than you would dream possible, it resurrected the career of one and made an overnight sensation of the other.