Film Distribution.

The film distributor is responsible for releasing a film for public viewing either theatrically or for home viewing (TV/DVD/download etc)
A distributor might do this by directly distributing the film to their own theatres or they can send it to sub-distributors. If the distributors is working with a theatrical exhibitor the distributor will write a contract to say how much the exhibitor will pay them from the gross ticket sales. After the distributor gets their shares in the gross ticket sales they transmit the remainder of the profit to the production company.

Vertical Integration Distribution:
The stages of production and distribution are done by the same company e.g. large Hollywood production companies can afford and have the resources to do this

Horizontal Distribution:
One company produces the film then has another distribute the film. This allows the companies to share the risk of failure and if the film is a failure then it is less of a loss for the companies. This is done by the distributor acquiring the legal rights to show the film from the producers. British productions use this method. Independent producers have to sell their films to different distributors in each territory.

Local distributors only work in their country and will share the profits made in that country with the film maker. There are 90+ territories worldwide.

How are films usually launched?
Scheduling - Often come out on a Friday as it is the end of the week so children and adults will have the time to visit the cinema.
Film Distribution Association - work out how and when the film should be launched Seasonality, light weekends and other releases are considered before they agree on a time for the film to be launched to ensure optimum success.

There is usually about 10 releases in a week.

Prints - (old way of distributing film)
Independent/ specialised films made about 10 prints or less of a film and toured it over 6 month period to all areas around the UK. Mainstream films had about 200+ prints made which would be simultaneously shown in all major UK cities. Transportation around the world was expensive and difficult. The prints had to be hired by the exhibitor, they were easily damaged and expensive to store as they had to kept at a certain temperature and condition.

The success or failure of a cinema release determines when and how the DVD/ TV releases will happen.

5 major distributors will account for 90% of box office.

Wide Release - used for US major distributors/ films need £2 million+ to make a wide release. This type of release requires heavy investment in prints and national advertising. The producers and distributors can recuperate their investment quicker. Also the revenues from the DVD sales can be gained faster from a quickly-executed theatrical release. The shorter the time period between the theatrical release and the DVD release, the greater the potential for DVD income.
Modified Wide Release - The film will open in a few major markets and expand week by week to build up awareness and allow positive word-of-mouth reputation to develop. This type of release would initially be supported spot advertising in a certain area e.g. one city. It may then move to national advertising once it expands to other markets.

Exclusive and Limited Runs - Exclusive and limited runs begin with engagements at a limited number of screens, traditionally in large urban areas e.g. Toronto. Based on favourable reviews and positive word-of-mouth depends on whether or not the film will move to additional theatres. This release is usually used for upscale "art-house" or foreign films and may be part of a platforming strategy where critical acclaim in an important market will assist in providing momentum for a wide release.

Territorial Saturation - Territorial saturation involves saturating a territory with bookings, heavy advertising and promotion before moving on to another territory. This method would be used for films tailored to specific markets. In Canada this would be seen with French-language films, which primarily would be well-received only in Quebec. It is also used by independent distributors for exploitation or family movies.

Universal Release - The film is released in several countries on the same day. For instance a major blockbuster is sometimes released in the USA and the UK on the same date.

Digital Distribution - quicker/cheaper/gets straight to the audience who want to see it. Independent productions use this method. The main attraction to this type of distribution is the way it can get directly to the audience with minimum business overheads involved which makes it cheaper for the consumer. It has been blamed for media stores having to close down. DSN (Digital Screen Network) sites supports new facilities in 211 screens across the country (out of 33,000). This is a small but important step of change towards full digital cinema.

49% of all DVD rentals are now generated online.

Only Showcase remains in American hands but all the other chains are deeply committed to distributing American films.

How film makes its money back:
Promotional screens -> Cinema -> Hospitality (planes/hotels) -> DVD rental -> Pay TV/VOD -> DVD retail -> Free TV -> Library

Digital distribution is changing this order because it allows it to go straight from cinema to DVD retail, Pay TV and download at the same time.
A film recuperates most of its budget through DVD sales. From 40% of DVD sales 75% is from Retail and 25% is from Rental. 28% is made from TV, 25% from Cinema profits and 7% from other sources.
The more times and places a film is exhibited the move money it generates. There are around 45 international areas in which the rights to exhibit films are regularly traded. 20 major international marketplaces: Sundance - Utah, Cannes - France, Toronto Festival - Canada

Sales agents for film rights tend to use the same set of generic internal percentage to make estimates as to how a film will sell internationally.
Europe - 39%
North America - 33%
Far East - 16%
Latin America - 4%
Other - 9%


A film exhibition sale is generally a 75-25 split between a vendor (cinema/retailer/TV channel) and a distributor - who deducts 35% commission and costs "off the top".

Royalty Model - Distributor pay the producer a 35% royalty of the profits made

"Off the top" Model - Distributor takes 35% commissions + 25% of costs.

Cinema hasn't been seriously affected by the recession. As people still want to see films and go out for the cinema experience. The high months are May, July, August and Jan/Feb

40% of independent British films never gross more than 100k at the box office as opening in over 100 screens significantly increases the cost.

DVD Sales
Audio-video specialists - 35%
Supermarkets - 23%
Generalists - 18%
Mail order - 15%
Wholesalers - 9%
Supermarkets have come to dominate DVD sales pushing the average retail price of DVD to £7.42.
Pay-per-View & VOD tend to be more profitable as the costs of sale are born by the TV platform.
Subscription & free TV fired-fee licensing deals depend on the performance history of the film.
Producer - 60%
Distributor - 40%

Recoupment is organised into a corridor and made from a central collection account.