How to Buy Distribution Rights for Animated Films

Acquiring animated film distribution rights is a complex process that entails a combination of tasks that will require various skills. In fact, navigating the process of actually learning how to buy distribution rights for animated films will require research, communication and possibly even some negotiation skills.

Before you begin the process of reaching out to copyright owners and securing animated film distribution rights, you might want to make sure you’ve got a plan in place.

Understanding Distribution Rights

One of the challenges in purchasing distribution rights for an animated film is likely to come up in the very beginning of the process. And it has to do with basic knowledge of literary property rights and distribution agreements.

An animated film represents an asset and is technically intellectual property. The creators of animated films, including those who write the script. And those who create the characters and other elements of the film.

They are protected so that their works cannot be infringed upon or otherwise used (or distributed for use) without their permission.

Granting a License

In order to distribute an animated film, the original animated film rights holder must grant permission to the individual or company that wishes to distribute the product. 

This is called granting a license and it transfers the rights to someone else for the purpose of commercial exploitation.

Animation Studios

Animated films are often created by animation studios. Which may hold the copyright to an animated film.

As well as individual patents to methods of animation that are used in the creation of certain animated works.

However, many studios choose to build separate business entities. For the purpose of each feature film they produce. 

Limited Liability Corporation

Say you’re interested in learning how to buy distribution rights for animated films. Ones that were created by a major studio, such as Pixar.

Under a limited liability corporation (LLC) that was produced specifically for the purpose of separating the motion picture business from the studio itself.

You’re probably going to need to do a little bit more research into who the original intellectual property rights holders are before you move forward. 

Ownership

The rights holder for an animated film in this situation could be an individual, a company (such as an LLC formed specifically for the film), a production company, or several production companies.

It is actually very common for animated films that are produced in the United States to be owned by an LLC. Which is established at the very beginning of the film’s production, when the ideas are initiated.

This creates a basis for a clean chain of titles which will be tracked throughout the production until distribution of the animated film.

Types of Animated Film Distribution 

If you’re interested in distributing an animated film, you’re going to have to familiarize yourself with the type of distribution rights that are available and decide what’s most suitable for your needs.

Animated films are often distributed in a theater. But in the event that ancillary rights to distribution are granted? The film could be found on digital VOD, DVD, Blu-ray, cable or on network television. 

Before you negotiate distribution rights, you’re going to need to know what rights are most important to you. This means you need to have a plan as to how & where you will distribute the animation.

What Rights to Purchase

Figuring out how to buy distribution rights to animated films is going to require your understanding of what rights you are actually purchasing.

There are many different types of film distribution agreements. Which grant the right to perform various actions with the animated content acting as a license. 

Distribution deals typically fall under one of two very common scenarios in which rights are granted in exchange, usually, for money.

These deals include the minimum guarantee and the straight distribution deal.

Minimum Guarantee

Under the Minimum Guarantee for distribution rights an advance is made by the licensee to the licensor. In exchange for the exploitation of specific distribution rights for a defined territory.

Such as a specific country or potentially worldwide. Anytime there are multiple distributors for an animated film.

A minimum guarantee is likely to be the chosen means of distribution. And installments are paid out along a timeline of specific moments of project completion or .

Straight Distribution Deal

With the Straight Distribution Deal an agreement is made between the licensor. In exchange for distribution rights. But there is no payment or advance of payment made upfront.

In this type of distribution deal, every dollar generated by the licensee that is relative to the distribution of the exploitation of distribution rights is split between the two parties.

As agreed upon as long as the film has reached a break even point and investors have been paid off.  

Contracts Involved in Establishing Distribution Rights

Depending on the agreement that you come up to with the original intellectual property rights holder for the animated film you wish to distribute.

There are going to be several different contracts involved in this process. If you’re considering worldwide or international distribution several agreements and contracts will be required as part of your chain of title. 

Distribution Agreements

The distribution agreements are going to make up a major element of your chain of title. Each agreement that is entered, each right that is granted, every licensor and licensee must be accounted for.

The animated film producer, the animation studio, the animators and several others will be involved in the transition of rights throughout the process. From the original acquisition of a script through the final distribution of the animation.

Chain of Title

Contracts in your chain of title should also include the sales agreement. Which grants distribution rights to the sales agent on behalf of the producer that is involved and the creation of the animated film.

Since animated films are frequently distributed internationally, you’re likely to have a domestic and an international sales agent. In which case you’ll have distribution agreements between these individuals too.

This means you should have contracts, signed, between these parties and they should be included in your chain of title.

Revenue Considerations

The final stage in learning how to buy distribution rights for animated films is all about revenue. If there are royalties involved in the distribution agreements that were made?

Then these revenues will need to be accounted for and managed. Revenue, including royalties, is paid out generally to all of those who were involved in financing the animated film prior to any profit being accounted for. 

A large consideration, and much of the negotiation surrounding the purchase of distribution rights to animated films is based on the profit sharing.

Or revenue share that is established between the parties. It’s very important that you work closely with legal counsel to ensure “fair” negotiations. And that you understand what you’re getting into.

Legal Counsel

In fact, legal counsel is recommended for a variety of reasons. Especially when it comes to learning how to buy distribution rights for animated films.

You need to make sure that you’ve acquired the appropriate intellectual property licenses for the type of distribution you’re attempting.

It’s equally important to maintain details pertinent to profit sharing, advance payments, royalties, ancillary rights and future rights assignments during the course of negotiations.

Because this is such a complex process, we recommend you work with a professional that understands the process.

Get in Touch

If you or someone you know is interested in producing an animated film? Give Beverly Boy Productions a call at 888-462-7808 to learn about the ways we can assist you!