What Should I Expect with a Film Distribution Contract?
Independent film producers face a number of potential options when it comes to negotiating a distribution contract that’s most suitable for their film. Whether distributing on cable television, inside theaters, or streaming. Through one of the many on-demand services available, distribution channels are abundant these days. Which means that there are more opportunities than ever before for independent filmmakers to enter into distribution deals. But when we’re asked, “What should I expect with a film distribution contract?” We can’t help but answer…It depends.
The terms, and exact details of your distribution contract are going to vary. Based on a variety of factors including the method of distribution. As well as the establishment of rights that will be granted among the distributors involved.
So, “What should I expect with a film distribution contract?” and more importantly, how can an independent film producer prepare so that they understand the key areas of importance within the contract?
It’s best for you to first learn about the different types of specific clauses and points of negotiation that may come up during the deal. So that you’re in the loop and understand the most vital aspects of the contract.
You’ll also want to know what areas are negotiable and those that are potentially non-negotiable. So that you can prepare to use your energy where it’s most suited to effectiveness in establishing a distribution agreement that works for your film.
Before You Negotiate
Before you begin negotiations for your film distribution contract it’s important for you to familiarize yourself with some important aspects of the film distribution deal negotiations process. While you should have a production attorney on your side every step of the way.
It’s also best for you to take on some of the learning ahead of time. So that you’ll understand the conversations that take place in the coming weeks leading up to the final signing of your distribution deal.
Consider the following important areas of consideration:
Due Diligence
Whether you have 1 distributor offer to pick up your film or you’ve got a list of distributors vying for the rights. Your job is to research each distributor so that you know whether they’ll be a suitable party to work with.
Evaluate distributors ahead of time so that you know their track record and can make an informed decision on who to work with in the end.
Split-Rights Deals
Distributors are never perfect. And no single distributor is effective in every market. Know the markets that the distributor specializes in and consider split-rights. So that you can establish agreements with distributors that have expertise in their area thus maximizing your return.
Bargaining Power
The more you learn and know, the more effective you will be in negotiating your distribution contract. Your bargaining power depends on your negotiation strength as it compares to the distributor you’re working with.
Know how to have the upper hand! You’ve got bargaining power whether it’s the fact that you have multiple distributors vying for your film. You have reputable actors involved. Or your film comes with some other perceived value, don’t let the distributor take away your power!
Granting Film Distribution Rights
The next thing you need to be aware of when it comes to entering a film distribution contract is how the different rights work for the deal. The rights that you grant to the distributor will impact various other areas of your contract.
It’s important for you to understand the rights that you are relinquishing as well as to recognize how your delineation of rights may impact other markets or mediums.
The following are some of the potential rights that might be addressed when you enter into a distribution agreement:
- Theatrical distribution rights – The right for your film to be shown in theaters to the general public. It also provides the theater the right to charge viewers an entry fee.
- Pay television distribution rights – Provides the distributor the right to show your film on cable television. That requires viewers to pay in order to watch the film.
- Free television distribution rights – Provides the filmmaker the right to show your film on “daytime” television. It may not be shown during the day. But the point is that it will be broadcast on television that does not require payment from viewers in exchange for access.
- Video on Demand distribution rights – Provides the distributor with the right to displace your film on television networks. Which allows the general public to view on their schedule. Rather than being broadcast at a set time.
- Subscription video on demand distribution rights – Provides the distributor the right to offer your film within a library. That requires a membership in order to view such as on Netflix or Amazon.
- Home video distribution rights – Provides the distributor the right to produce DVD or Blu-ray style video that can be rented or sold to consumers for playback at home.
Reserved Rights in a Film Distribution Contract
One of the key areas of consideration that we discuss with independent filmmakers when they ask, “What should I expect with a film distribution contract?” is the fact that they must understand how a reserved rights agreement works.
If you grant distribution rights which allow the distributor theatrical distribution rights, and you have reserved rights to home video distribution. This means that the distributor may show the film in theaters.
And that you may later choose a distributor to produce home video products such as DVDs or Blu-ray style products for sale. This is your right but the distributor might insist that you wait to release home video distribution for a period of time.
Such as 6 months to allow them ample time to adequately profit from the distribution in theaters. Know that you have the right to accept this deal, or to negotiate and modify the arrangement before you sign your distribution contract.
Negotiating Performance Requirements
Along with wondering, “What Should I expect with a film distribution contract?” Are you also considering what will happen if you choose a distributor that doesn’t hold up their end of the bargain and fulfill their duties to distribute your film?
You’ve got the right, during negotiations, to establish distributor performance – and you should!
Distributor Failures
Negotiating performance requirements that dictate your recourse should the distributor fail to adequately distribute your film is important. Consider setting specified sales levels that should be reached within specified periods of time as part of your film distribution contract.
This is one of your many rights as an independent film producer. Should the distributor fail to withhold their end of the bargain, you may terminate the contract and sell distribution rights to another party.
As long as you negotiate all of this ahead of time and work with your entertainment attorney to ensure that this clause for distributor performance is included in your film distribution contract.
The Takeaway
As you can see, when it comes to answering the common question, “What should I expect with a film distribution contract?” It’s very important for you to familiarize yourself with the various clauses and elements of the deal ahead of time.
So that you know where to focus your negotiations. As an independent film producer, you have rights, and the ball is in your court when it comes to establishing a distribution deal that works best for your film project – don’t let anyone take those rights away from you!
