What is a distribution deal in film?

Production/Finance/Distribution Agreement: In a production/finance/distribution agreement, commonly referred to as a “PFD agreement,” a distribution company (e.g., a studio or VOD company) hires a production company to produce a film, and the distribution company agrees to directly finance production of, and to …

What percentage does a film distributor take?

Different Types of Distribution Profit-sharing, the distributor gets a percentage of the profits made from the film. This percentage is usually between 10-50\%. (Never go for the 50/50 split. You won’t make any money.)

What is a distribution fee in film?

A distribution company makes most of its money by charging a fee to distribute your film. This fee is paid out of the gross revenue from the film before any deductions or revenue split. If your film earns $500,000 in revenue, and the distribution fee is 30\%, the distributor would receive $150,000 first.

How does a distributor earn profit?

In order to earn the margin, distributors and retailers have to make costs, for example for shipping, storage, financing and of course selling the goods. They also have their overhead, leaving only part of the margin as their profit.

Do you pay for a distribution deal?

Music distribution companies charge you for their services. They may offer to provide a certain level of service — such as getting X number of albums in Y number of stores — and may offer you access to a particular record store.

Are distribution deals good?

Why M&D Deals Are Good for Record Labels For record labels, M&D deals make sense because they can have their records pressed without incurring any upfront expenses. This translates to less disruption to the cash flow of the company, which can be significant for independent and small labels on tight budgets.

How do independent filmmakers get distributors?

Independent filmmakers often use film festivals as an opportunity to get the attention of distributors. Once a distributor is interested in a film, the two parties arrive at a distribution agreement based on one of two financial models: In the leasing model, the distributor agrees to pay a fixed amount for the rights to distribute the film.

How to get a good distribution deal for your film?

Having the backing of a major studio or a well known director or star can greatly improve the chances of securing a good distribution deal. Independent filmmakers often use film festivals as an opportunity to get the attention of distributors.

Why do movie studios have their own distribution companies?

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.

What are typical distribution fees for movies?

Standard (or full) distribution fees vary by market and range from 15\% to 50\%. PRODUCTION (STUDIO) OVERHEAD – A flat charge, around 15\%, on the production cost of a film. Production overhead is included when calculating participant break-evens.