Basics of Film Distribution Agreement
There are various agreements that are used in filmmaking including film director agreements, Co-Production Agreements, Actor services Agreements, Distribution Agreements, etc. Film Distribution Agreements are basically entered between a producer company and the distributor who acts as an agent of the producer. The distributor plays the most important role in the marketing of the film which eventually decides the level of success of such film.
The distribution agreement entered between the producer and the distributor defines the territorial limit in which the film is planned to be released. Also, the distributor who is appointed may further distribute the same to the sub-distributors, acting as a link between the producer and the sub-distributor.
Types of Film Distribution Agreements:
There are various types of film distribution agreements that can be entered into as per the requirements of the filmmaker including:
- Pre-sale Distribution Agreement:
A pre-ale distribution agreement is basically a pre-financing agreement that is entered before the completion of the film. Under such an agreement, the distributor agrees to purchase the film for the purpose of distribution once it is completed in exchange for cash.
- Film markets and trade shows:
In order to seek a film distribution deal, the producer can showcase the film through various film markets which are organized during the film festival week.
- Negative Pick up deals:
A negative pick-up distribution agreement is entered where the distributors agree to pay for the film only when the final negatives are delivered and a fixed price is set for the film by the distribution company.
Key terms covered under the Film Distribution Agreement:
Various factors such as the star cast involved, competition level, etc play an important role while entering the distribution agreement. But, there are certain key points that shall be considered while negotiating the film distribution agreement:
- Imposing restriction on reserved rights:
Under this clause, if the producer wants to reserve certain rights for himself, the distributor may require certain rights to be exercised after the expiry of the certain time period. This provides security to the distributors in respect of the target audience, revenue, and competition.
- Form of consideration given to Producers:
The distributor may pay the consideration to the producer in the form of an advance, royalty, a share of revenues, etc. The different modes of release involve different forms in which the consideration is paid by the distributor to the producer for the right to distribute the film for example a share in revenue is paid for the theatrical release of the film.
- Appointment of Sub-Distributors:
The distributor may appoint his sub-distributors further for the distribution of the film. This directly impacts the share of the producers as the profit gets divided among the three parties i.e. the sub-distributors, distributors, and producer. Hence, the producer shall try to avoid the engagement of the distributor and shall directly negotiate with the sub-distributors.
- Appointment of Multi-distributors:
Before deciding the distribution strategy of the film, one of the most important decisions to be taken involves whether multiple distributors shall be appointed for the film distribution depending upon the territorial limit and marketing of the film.
- Rights of the distributors:
The distribution agreement shall clearly state the rights of the distributors including the right to make modifications to the film before its release. Such modifications may include editing the content or duration of the film etc.
- Tenure of the distribution:
The distribution agreement so entered shall state the tenure for which such agreement is entered. Provided that such tenure may range from five years to twenty years.
- Termination of Agreement:
The distribution agreement entered between the producer and the distributor shall contain the appropriate termination clause as if in any circumstances the distributor fails to market or distribute the film, the producers can terminate such agreement and make a time-bound corrective decision.
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