Today, there are more channels than ever for distributing your film. Since many distributors specialize in certain channels, you may want to consider dividing up the distribution among different distributors, as long as their territories don’t overlap if you have exclusive deals. In other cases, distributors will ask for all rights in all channels within a certain market, such as domestic (US and Canada), foreign (all countries outside of the U.S. and Canada, or certain countries or regions), or worldwide.
Thus, it can become very confusing to sort through who wants what channels in what territories, besides looking at the range of deals offered in terms of percentage split, types of deliverables required, such as DVDs and digital files, and the amount of money needed from you, if any, for P&A (promotion and advertising), or whether you will get any upfront money on signing the deal (which is generally no if you don’t have any recognizable names in your film).
One way to help sort through the varying offers is to create a matrix where you list the required and desired channels for each distributor, along with the territories required and desired. Your matrix might look something like this:
Across the top: All Channels, Theatrical, Home Video, DVD, and so on.
On the side: Worldwide, Domestic, All Foreign, Latin America, Eastern Europe, Asia, etc.
Then, in each box, list the name of the distributor who has expressed interest in that channel and territory, and note if the distributor requires (R) or desires (D) that channel and territory for the deal. You can also indicate of the distributor wants an exclusive (E) or non-exclusive (N).
As you get expressions of interest from different distributors, you can enter their name in the matrix. Also, review their track record and offers. As you do, you can rate the distributors to create a priority list (such as ranking them from #1 to #5, with the top rank being #1, or rating them from 1 to 10, where the higher the number, the more you like them). Use whichever system you prefer – a ranking or rating system. Then, put that number in the box for each distributor listed, along with whether this channel is required or desired and whether the distributor wants an exclusive or non-exclusive. The result should look something like this for one box: Distributor Smith. #1, R, E; Distributor Jones, #3, D, N.
In making these deals, you will commonly retain the direct sales rights, which means you can sell DVDs from your websites and at screenings, and often you may have the right to sell downloads and streams from your site, unless the distributor wants to restrict such sales. Ideally, it’s best to retain direct sales rights, because you will have a greater profit margin, a faster payment, and don’t have to split your income from these sales with a middleman; you only have to pay the manufacturing and fulfilment costs. Also, by retaining direct sales rights, you can sell other products if you have merchandise associated with your film, such as T-shirts, hats, posters, mugs, soundtrack albums, or a book based on your film. Plus you can sell related products from others that might appeal to your audience, such as books and DVDs, which you buy at wholesale and sell retail. But if you aren’t set up to handle sales and fulfillment yourself, it may not make sense to keep these rights if the distributor wants to do this and give you a share of the proceeds.
According to Peter Broderick, author of “The Twelve Principles of Hybrid Distribution,” in a recently published book: Independent’s Guide to Film Distribution, the major channels of domestic and international distribution can be listed as follows:
Domestic: Festivals, Theatrical, Semi-Theatrical and Nontheatrical, Cable VOD, SVOD, Television, Direct DVD, Retail DVD, Direct Digital, Retail Digital, Educational, and Home Video.
International: Festivals, Television, Direct DVD, Retail DVD, Direct Digital, and Retail Digital, and occasionally Theatrical and Educational Distribution.
Splitting up the rights among different distributors handling different markets can be complicated and time consuming when you get a number of offers to consider. But an advantage to splitting the rights is that you can get better distribution when different distributors are especially strong in a particular channel or channels, so you can have another distributor handle those channels where another distributor is weak. Then, too, as Broderick notes, this approach avoids cross-collateralization, whereby the expenses from one area of distribution are applied against revenues from other areas of distribution.
Also, in splitting up rights, decide if there are certain areas where you want to retain the distribution rights, because you feel you can successfully handle that type of distribution on your own, such as contacting the educational market or selling direct DVDs or digital copies from your own website or from a dedicated site for the film.
In assessing the distributors for different channels, find out which channels they handle well by asking about their track record. That can help you decide which distributor would be best in handling a certain channel. Also, as possible limit not only granting an exclusive, but the term of distribution and the level of performance expected, so you can assess how well the distributor is doing with your film during a certain time period (such as 6 months or a year). Then, if the distributor is doing well, great; you can mutually renew the agreement. If not, you are not stuck in an agreement, and you can either end the contract at the end of the term or for non-performance. These agreements can get complicated, so do have an attorney or someone familiar with distribution agreements review them and make suggestions about what to add or change, as necessary.
Finally, be careful that the rights you give to different distributors for different channels don’t conflict, but are complementary, and that the rights given to a distributor for different channels and territories don’t restrict you from making deals for other channels or territories. Ideally, make all the deals at the same time and try to keep them to the same term, so you can better keep track of when deals expire or are up for renewals.
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Gini Graham Scott, PhD, is the author of over 50 books with major publishers, including two on writing and publishing books: FIND PUBLISHERS AND AGENTS AND GET PUBLISHED and SELL YOUR BOOK, SCRIPT, OR COLUMN. She has written and produced over 50 short films, has written 15 scripts for features, and has one feature film she wrote and executive produced scheduled for release in February 2015. She also writes scripts for clients, is Creative Director for Publishers Agents & Films (www.publishersagentsandfilms.com), and has several book and film industry Meetup groups which have meetings to discuss members’ books and films and help them get published or produced.