Week 8: Industry and Genre

What is the distribution system and the Distributors?

  • the business of selling the film to various media
  • typically rare to have sole financing

Studio Distribution & Financing

Distributor Strategies

Filmmaker Strategies

Independent Distribution

🚩 The copyright ownership and distribution contract

  • rights to use the film goes to the copyright holder
  • film producers can contractually license or rent the film to a distributor for a specific length of time
  • producer can release all control of the film by shifting copyright to the distribution forever OR
  • license a specific right (eg. domestic, foreign, home video DVDs, streaming, television) to the distributor for a specific length of time.
  • Distributor collects rental monies and splits the producer's share.

🚩 The distributor is an intermediary: buys films from filmmakers and re-sells them to consumers at a higher price

  • film distributors are involved in making artistic decisions about the product, changing the name for marketing or obtaining pre-manufacturing financing
  • motion picture distributors have tremendous power (especially in independent film)
  • Distributors have the ability to influence script changes, casting decisions, final edits, marketing strategies and financing the film
  • all these 'rights' are written in the distribution agreement

🗳 U.S. Box Office is the backbone in the chain of revenues for a film

  • driven by the domestic theatrical release, increases values
  • some products skip domestic markets and are shipped straight to home video or foreign markets.

Major studios have their own distribution divisions The Functions:

  • send out promotional and advertising materials
  • arrange screenings of films
  • release their own films and acquire other films
  • make deals with domestic and foreign distributors
  • natural clout and power

Studios have offices in Foreign markets

  • studio will partner with a local distributor and release with both names
  • studio retains the copyright and licenses to foreign distributors for a specific length of time

Studio has a lower chance of achieving a high net profit as compared to independent films

  • more films to cross-collateralize by offsetting the losses of one film with the profit of another
  • more unreasonable costs to float

😃 Advantages of Studios include:

  1. ability to mass circulate films and its materials
  2. several channels of publicity and advertising
  3. sufficient clout to place producers, actors and directors on early-morning and late-night national interview television shows
    • able to inundate these shows with ads

Studios have been able to monopolize the chain movie theatres

  • some moved to theatre ownership
  • exhibitors often bow to studio pressure due to its ability to perform well
  • when independent films gain critical acclaim, they move up the distribution depth.

Distributor does not equal to Exhibitor!!

🚩 Studios tried to emulate the success of independent films with lower-budgeted films

  • acquired independent companies
  • merged into specialty divisions within the studios
  • meanwhile new independent companies continue to appear

🚩 Too many films on the market that are low-quality

  • not all films released by the studios were successful and there are too many bad independent films
  • 3000 film entries into film festivals
    562 films released by independent film companies compared to the 61 released by major studios

Independent distributors multitask by performing more roles than just distributing

  • they participate in creative decisions and contribute to the firm's financial resources, and they are usually handled by one person rather than a department

Independent companies release and distribute independent films

  • make and distribute OR pick up finished films to distribute OR deal with a smaller distributor for specialized marketing
  • highly capitalized and successful companies ebb and flow

Distribution landscape is always changing

  • companies are acquired and dissolved
  • certain successes of films can move the company to the forefront of distributions
  • new companies emerge

Important to know the history and personnel of the company to do business

  • dealmakers who are more interested in selling the company for a profit or being distributors who love film
  • always do research for choosing distributors

🏠 Domestic territory of distribution comprises U.S. and sometimes Canada

  • distributors often consider both to be North American package.
  • there may be output deals with Canada.
  • applies to both theatrical distribution and all other media (DVD, Cable, the Internet)

🌐 Domestic distributors can distribute into foreign waters

  • pick up worldwide rights and sell off the other territories to sub-distributors
  • often includes all English-speaking territories

🌍 Foreign specialized distributors deal with networks of subdistributors all around the world

  • distributor is granted rights to the film for foreign markets
  • also known as a foreign sales agent

💻 Internet rights and Video on Demand rights need to be settled with distributors and copyright ownership on these platform can be held by producers to license to others

  • most of the time, theatrical release then VOD/internet is more successful
  • check with distributors and do not enter internet contracts without a distributor

🏛 Entertainment attorney is needed to negotiate film contracts with distributers and to protect producer's rights

  • Distribution deals in film are different from other areas of the entertainment industry
  • fees are usually 35% under

🎊 Distributors pick up films at film festivals and pay upfront, depending on how higher return expected and how much they want the film

  • do not assume knowledge about another film's agreement and promise the same deal to your distributor

💰 Print and Ad money are usually taken on by the distribution

  • print = reels of film stock shipped to theatres to be displayed
  • conversion of film to digital is usually done by studios

Independent films typically have a platform release: open initially in a few regional or limited local theatres

Who Greenlights a Project?

👤

  • studio executives
  • stars
  • producers
  • TV: producer/writer/director
  • Directors (film, usually not TV. and if the director is formidable)
  • talent agencies/agents/executives
    • ability to package a deal based on who they represent (put a group of people to package a deal)

it's always about money. The ability to make money and who has box office draw, who plays well in merchandising opportunity, bring in audiences in a variety of ways

Public Financing and Private Financing

  • Private = corporate, studio financing,
  • pre-sales (secure commitments before production) & distribution (capital advance from distirbution companies that covers production to post-production costs),
  • private equity and hedge funds (provide funds in exchange for profit from box office revenue)
  • Public = government and media institutions money
  • National film funds (lotteries for co-productions, singapore film commission, tax contributions go towards country budget allocation)
  • Tax breaks & incentives (Various)
    • investor, labour, and production credits (submit receipts to rebate)

Release Dates

  • Considerations for release dates: maximizing the release times (holidays, thanksgiving, christmas)
  • competition from other films being released (release before or after your rival films)
  • counter-programming opportunity against an opposing genre. (balancing the genre trends etc.)
  • box office performance is important to studios
  • target audience (ratings/film classifications)

What role does film play in a studio's films?

  • tentpole release (most popular films that bring in all the money)
  • awards vehicle
  • both
  • Wide Release for Tentpole films
    • in a wide release: box office revenue for the first few weekends is important
  • wide = large number of theatres
  • Boxofficemojo website
  • Limited Release for smaller films that are a challenge to market
    • niche topic, unknown topics
  • garners box office revenue overtime, gradually open up in more theatres
  • open in a festival and get attention and awards (builds on word of mouth)
  • initial releases in NY & LA (eligibility for Oscars)