1. WHAT IS FILM
DISTRIBUTION
?

2. DEFINITION:
The distribution of a film (or movie) is the process through
which a movie is made available to watch for an audience
by a film distributor.
This task may be accomplished in a variety of ways; for
example, with a theatrical release, a home entertainment
release (in which the movie is made available on DVDVideo or Blu-ray Disc) or a television program for
broadcast syndication and may include digital distribution.

3. STEP-BY-STEP:
Here's the path a film usually takes to get to your local theatre:
1) Someone has an idea for a movie.
2) They then create an outline and use it to promote interest in the idea.
3) Then a studio or independent investor decides to purchase rights to
the film.
4) People then are brought together to make the film (screenwriter,
producer, director, cast, crew).
5) Then the film is completed and sent to the studio.
6) The studio makes a licensing agreement with a distribution company.
7) Then the distribution company determines how many copies (prints) of
the film to make.
8) The distribution company shows the movie (screening) to prospective
buyers representing the theatres
9) The buyers negotiate with the distribution company on which movies
they wish to lease and the terms of the lease agreement.
10) The prints are sent to the theatres a few days before the opening
day.
11) The theatre shows the movie for a specified number of weeks
(engagement).
12) You buy a ticket and watch the movie.
13) At the end of the engagement, the theatre sends the print back to the
distribution company and makes payment on the lease agreement.
Some of these steps may be combined and,
particularly in the case of small independent
films, additional steps may be necessary. As
you can see, there is a lot that goes on before
a movie is ever shown to a paying audience!

4. Once a distributor is interested in a film, the two parties arrive at a
distribution agreement based on one of two financial models:
●
●
Leasing: In the leasing model, the distributor agrees to pay a fixed amount
for the rights to distribute the film.
Profit sharing: If the distributor and the studio have a profit-sharing
relationship, on the other hand, the distributor gets a percentage (typically
anywhere from 10 to 50 percent) of the net profits made from the movie.
When a distributor has leased a movie, they will try to determine the best
strategy for opening the movie. Opening refers to the official début of a
movie. There are several factors to consider:
●
Studio
●
Target Audience
●
Star power
●
Buzz
●
Season

5. MAJOR FILM
DISTRIBUTION:
Most of the major studios have their own distribution companies. For
example, Disney owns Buena Vista, a major distributor. The obvious
advantages of this are that it is very simple to set up a distribution
deal and the parent company doesn't have to share the profits with
another company.
The big problem is when an expensive movie is a flop -- there's no
one else to share the costs. That's the main reason several studios
have partnered on major movies in recent years. For example, "Star
Wars: Episode One" was produced entirely by Lucasfilm but
distributed by Fox.
Then the next big step occurs once the distribution company has
rights to the film. Most distributors not only provide the movie to
theatres, but obtain ancillary rights to distribute the movie on VHS,
DVD, cable and network TV. Other rights can include soundtrack
CDs, posters, games, toys and other merchandising.

6. The Need for Concessions
There are two ways for a theatre to lease a movie:
●
●
Bidding: Bidding requires that the theater agree to pay a fixed amount for
the right to show the movie. For example, a theater might bid $100,000 for a
four-week engagement of a new movie. During that time, it could make
$125,000 for a profit of $25,000. Or it might take in only $75,000, which
means the theater has a loss of $25,000. Few distribution companies use
bidding.
Percentage: Most agreements are for a percentage of the box office (ticket
sales).

7. In this sort of deal, the distributor and the theatre agree to several terms:
●
●
The theatre negotiates the amount of the house allowance, or nut, with the
distributor. This is a set figure to cover basic expenses each week.
The percentage split for the net box office is set. This is the amount of box office
left after the deduction of the house allowance.
●
The percentage split for the gross box office is set.
●
The length of engagement is set (typically four weeks).
●
The distributor will get the vast majority of the money made by the movie. The
agreement gives the distributor the agreed-upon percentage of the net box office
or gross box office.
At the end of the negotiated engagement, the theatre pays the distributor its share
of the box office earnings and returns the print. If a movie is very popular and can
continue to draw a steady crowd, the theatre may renegotiate to extend the lease
agreement. Any time you see the phrase "Held over," you know that the theatre
has extended the movie lease.
While first run movies that have just been released are loss leaders, movies that
have been out for a while can be profitable for the theatres that show them.
Second run theatres often get very attractive leasing terms from the distributor.
These theatres are facing increasing competition though, as first run theatres
continue to show more movies past the traditional four to six week time frame.