BEHINDWOODS COLUMN

A Hollywood distributor’s work is divided in to two major portions - Production & Distribution.

In this tie-up, distributors would buy a film rights in two ways.

* Presales – Making the agreement when the film is still in production. If possible and needed, financing also would be done for the film, just like our producers do for big stars’ films in India.

* Filmsales – Striking the deal after the completion of the film shooting.

Rarely, the distribution houses would buy the complete rights of a movie from the small production houses, if the film is very good. An example is Paranormal Activity. This movie cost the director-producer Oren Beli a mere $ 15000. When Spielberg happened to see this film, he tried to purchase it for his Dreamworks, which was then with Paramount. Finally Beli sold the movie to Dreamworks (and thus to Paramount as well) for $ 500,000.

Paranormal Activity grossed US $ 141,000,000 in first month in theatrical release alone. This trade is pure gamble. Beli, when sold, must have sold the complete rights. For him, the comparison of $ 500,000 Vs 15,000 could have been attractive. $ 500,000 is peanuts for Paramount. Also, the movie was enjoying massive campaigning in Facebook. Calculatively playing the cards yielded this jackpot.

If the distribution company has not bought the complete rights of a film, the only choice is to release on percentage basis. It takes a percentage (10-30%) of the theater collections and gives the balance to the producers.

For this income of 10-30% the distribution house bears all the expenses like posters, advertisement, trailer and merchandise etc.  Also, when a film is sold to overseas, expenses like subtitle, dubbing, publicity, legal expenses, spend for screening in film festivals – all are borne by the distribution house. Producer’s task is complete when the film production is over. Rest all is the responsibility of the distributor.

Presale or Film sale, the agreement is made in one of the following methods:

Profit split deal:
Producer and distributor share the profit, after the distribution expenses.

Net deal:
When the production and distribution companies belong to the same group, net deal is followed. In the total income, the distribution company would deduct a certain percentage as service charge. It would reduce the distribution expenses from the rest of the money and the remaining money would be handed over to the producer.

Gross deal:
If the film is promising, has big stars, or if it is a film for which the distribution company has financed, Gross deals are made.

All rights deal:
Hollywood distributors release a movie in any media, save the newspaper. To that extent, they have screened the movie in any other medium in which audio and video are enabled. All rights deal means exactly the same. When theatrical rights are purchased, along with that, buying other wired and wireless rights included telecast rights. This follows the telecast of the film across multiple mediums individually or combined with other companies. Through this, they would earn a great amount of money that even if the theatrical release has not been profitable, these telecasts would compensate and earn profits.

Back end deal:

This is the deal of giving away the wired and wireless telecast rights alone to a third party and getting the commission from them. The non-theater market like this is called Ancillary market.

Apart from the above, there are lot of methods for distribution and screening. 70/30, 90/10, First dollar gross deal, 50/50 first dollar gross split, Modified gross deal, Sliding scale, 50/50 net deal, Net deal, Comparing deal. The list is endless. To explain them all, a dedicated book would be required.

The ancillary distribution companies of the Big 6 are not only marketing their own films. They would review other countries’ films and decide whether to buy them or not. Perhaps if a Hollywood film is not running as expected in the US, these companies would look in to the possibilities to make it successful in other countries. Many films, which have bombed in US have thus become successful in foreign countries. These companies identify their targets through film festivals and screener DVDs.

Fine. The distribution company has decided to buy or its mother company has produced a film. Theater booking and other activities are the least of the work to be done.  First of all, above acting, above production, above direction there is a foremost thing to be done. Marketing!

[…to be continued