What is film distribution?

Distribution is the dynamic, competitive business of launching and sustaining films. Like other entertainment sectors, the film business is product-driven: the films themselves are the main reasons why cinema tickets are purchased. But how do people get to know about the range of titles on release, and come to feel they want to see a particular new film? It is the distributors’ task to connect films with the public, drawing the widest possible audience to each one and realising the full potential of the filmmakers’ work.

It is well nigh impossible to entice people to a film in which they have no interest. Every new title has its own release plan, which the distributor develops in consultation with the producers and/or parent studio. A saturation release will be prepared for films with mass potential; a more select release for those appealing to narrower groups.

The release cycle

Usually, feature films open first theatrically (in cinemas). A theatrical launch is the most effective way to create demand to see a new film, and the cinema is also the arena where many filmmakers aspire to have their work showcased, as it looks and sounds its best.

After the big screen run, films are released on DVD/video, then on various forms of pay television and finally, two or three years after opening in cinemas, on free-to-air television where they may be screened repeatedly. The availability of films via official websites is also being developed, as an additional window of consumer choice. The profile built up on a film’s theatrical launch endures and reaps dividends throughout its release cycle, influencing the audiences and commercial value it subsequently commands.

The global filmed entertainment business has annual revenues of approximately $65 billion, with compound annual growth of around 6% forecast to 2007. The UK, where cinema box-office takings exceed $1.4bn, is the no.1 cinema territory in Europe and no.3 in the world after the US/Canada and Japan.

Like most countries, the UK has a number of major distributors (affiliated to the Hollywood studios) and independent (unaffiliated) distributors who tend to handle films made outside the studios or niche titles. Any distributor, whatever its ownership, may compete to pick up a film with available rights.

Film distribution is a team effort

Distributors collaborate on their release plans with:

filmmakers and producers, who may have nurtured their projects for several years through the development and production stages.

exhibitors (cinema operators), who present the finished films on screen to the audience

a host of external suppliers such as publicists, designers and advertising agencies

Distributors must present and ‘sell’ the films they are launching to:

the media
marketing partners
exhibitors
the public

Release slates

UK distributors acquire their slates from various sources:

A flow of new product from a parent studio
A studio or production company with whom the distributor has negotiated an output deal
A third-party sales agent, acting on behalf of a producer
A single title acquired at any stage before, during or after a film is made

The distribution contract

Distributors sign an agreement with the producer, sales agent or studio, specifying the rights they hold in respect of each title – to release it in UK cinemas; to promote it in all media; possibly to make a local edit, for example to secure a particular classification – together with the date the license expires and how the income from the release will be accounted for. As films are creative works, or intellectual rather than tangible property, their copyright is owned by the people or organisations that produced or financed them. Distributors act under license on their behalf.

A distributor’s opinion as to a film’s playability may – and ideally should – be sought before it is approved for production. In some cases, a distributor becomes a partner in a project, contributing upfront to its development/production costs and later launching it in the market place.

Each distributor may release any number of films, in some cases 25 or more, every year. In a typical week, seven or eight new films open in UK cinemas.

When considering acquiring a new film, distributors will look for something fresh or outstanding, a special element or potential marketing angle which in due course could help to draw a significant audience.

To secure distribution rights for certain films, the distributor may need to pay an advance/minimum guarantee against future earnings to the producer or sales agent. The advance commitment is for the distribution license rights plus the costs of film prints and advertising (P&A).

The earlier a distributor is involved, the better

It is useful and desirable for producers to have a distribution deal in place before shooting starts. Sometimes this can be viable on the basis of a hot script and anticipated cast. In practice, producers may seek finance from multiple sources, including pre-sales to various territories through a specialist sales agent; banks; private investors; beneficial tax schemes

including sale & leaseback; and public subsidies. In the UK, most of the latter are co-ordinated by the UK Film Council, the strategic agency for film.

For the full picture on the UK Film Council, and its support for the film industry, visit www.ukfilmcouncil.org.uk

There are no fixed formulae covering film financing or advances. Each case is affected by variables such as the film property itself, the script, cast and market conditions. Generally, the larger the production budget, the more likely the film is to have a distributor attached before all its financing is confirmed.

Distributors prepare reports for the producers or rights owners, covering marketing plans, expenditure evaluation, and forecast and actual revenues. These are submitted at least quarterly in the first year after theatrical launch and usually twice yearly after that.

Importantly, as well as the theatrical window, the rights acquired by distributors usually include DVD/video and often the right to license the film to UK television companies. Most theatrical distributors do not physically handle distribution in other media – home entertainment, sales to broadcasters, tie-in merchandising – but most have sister companies or business partners that do so.

The UK has a booming home entertainment market. High street retailers sell 200 million videos a year, mostly DVDs, whose sales have grown spectacularly in this decade. The British Video Association reports that the market is worth £2.9 billion – more than triple the value of cinema ticket sales. DVD has rapidly become a ‘cash cow’, adding substantially to the income that can be expected from a film release. For the latest video news, visit www.bva.org.uk

Positioning a film

The most important decisions a distributor makes are when and how to release a new film, in order to optimise its chances. With around 400 product launches (new releases) annually, the theatrical market place moves fast and is intensely competitive.

Through a combination of market knowledge, experience and judgement, distributors gauge the audience for each film. Relying solely on conventional wisdom is never an option – each release must be carefully planned. Understanding who the target audience for a film is (age, sex, lifestyle, media consumption) naturally informs the decisions on how and where that film is promoted.

Identifying the cinema audience

The audience can of course vary considerably film by film, from families to adults to teenage males or females. The most frequent cinemagoers are aged 15-24 – teenagers, students and young adults. More than half of 15-24 year-olds visit the cinema at least once a month – it’s 5 the favourite out-of-home leisure activity for young people – but overall, just a quarter of the UK population (58.7m people) goes that often.

The cinema audience is broadening slightly as the population ages. The average number of visits per person is three a year, up from barely one a year in the mid-1980s. Yet this remains a lower frequency than in other countries such as Ireland, Australia, the US and Canada, and the industry is working together to promote cinema visits.

UK cinemagoers tend to be upmarket, especially for ‘art house’ fare, and regular Internet users.Cinema is a unique shared experience, with an average of three people per party (source: CAVIAR).

It is important never to lose sight of a film’s core target market, but the distributor’s challenge is always to attract as wide a demographic spread as possible – to help the film ‘cross over’ or ‘break out’. The greater its box-office takings, the more likely a film is to be attracting infrequent cinemagoers and repeat visits.

Although much information about a new production can be gleaned from reading the script or discussing it with the filmmakers, every film is a one-off and release plans can sometimes be confirmed only when the finished product is available to view.

Assessing the distribution risks

Like any enterprise, distribution companies aim to recoup their costs and turn a profit at the end of the year. But launching a film is expensive and risky – audiences have many other leisure options. Most titles do not make money from their theatrical release alone. Margins can be extremely tight and profitability for distributors usually depends on the overall success of a small number of titles.

Although the thrills and/or laughs a film delivers are not directly related to its production budget, today’s event movies, often containing large numbers of special effects shots, can cost $150–200m to produce. At least $75m more is typically spent on marketing a big release around the world, so the stakes are higher than ever.

Audience tastes are notoriously unpredictable. Nobody can be absolutely certain what makes a hit, or when and where it might happen, as cinemagoers discover particular films they like or dislike when they open. Existing preferences may not count for much in practice. Just because one romantic comedy or star-led action adventure has played successfully does not guarantee that the next such release will do so: it depends on the individual film and market conditions.

Market research in the form of pre-release test screenings is sometimes conducted to explore audience reactions or to evaluate alternative marketing campaigns, if needed. These screenings, after which the viewers complete questionnaires, may help the distributor to be more confident of the core audience or box-office prospects – fundamental considerations for every release. In the US, research screenings are held for most productions.

Satisfying anticipated demand

As well as the marketing costs, distributors pay for the duplication of prints and trailers, which takes place in high-tech laboratories. One 35mm celluloid print of a two-hour feature can cost approximately £1,000, so the physical print cost alone of a film’s launch is substantial.

Different films are naturally handled in different ways. For example:

A saturation release at cinemas everywhere may open simultaneously on say 800–1,100 screens UK-wide, playing at two or more screens per multiplex. This helps to accommodate the mass audiences eager to see the film early. Occasionally, a new release is platformed in one location before rolling out UK-wide.

A specialised release of a foreign language film or revived classic may comprise ten prints or fewer. Initially, the film may be booked into selected ‘art house’ screens in London – about 26% of all UK cinema visits are made in the London region – and some university towns, before hopefully touring more widely over the weeks to follow. A majority of the films released in the UK every year go out on less than 200 prints.

The UK has approximately 675 cinemas with 3,300 screens. Across all films, distributors supply about 10,000 new prints every month.

D-Cinema

The expansion of digital cinema in the UK in 2005-06 and beyond will give rise to new releasing and programming opportunities for film distributors and cinema operators respectively. Films can be distributed on specially encoded disks, which are likely to be significantly less expensive to duplicate than celluloid prints. Future developments could see films delivered to cinemas by satellite or cable. Whatever the medium of delivery, however, the underlying principles of film distribution and marketing remain intact.

The competitive environment

Distributors carefully weigh up the most appropriate release date and strategy. Considerations may include:

Competition: Which films are other distributors likely to release at the same time and during the following weeks – especially those targeted at a similar audience? Is there space in the market for something different – some ‘counter-programming’? Are the most appropriate screens for this film available?

Is it an event film, a prospective blockbuster, for a mass audience or a specialised film for a more discrete sector?

Is it a film for a holiday period? If so, which? Note that school holiday dates may vary between the UK’s nations and regions. What kinds of films have been released successfully at any given period in the past?

Is it a film with hopes for award nominations? Often Academy Award® or Orange British Academy (BAFTA) Film Award contenders are released in the UK between January–March, the year’s congested awards season.

For the latest BAFTA news, visit www.bafta.org

Is there any star power among the cast? Is the film made by a ‘name’ director or producer?

Are any cast members available for (international) publicity or to attend a premiere?

What were the lead star’s last couple of films and how were they received commercially and/or critically?

Will the film lead the reviews of that week’s new releases?

If it is a sequel or franchise entry, what elements distinguish it or add contemporary value over and above its predecessor(s)?

Is there already any buzz about the film, due to its stars or makers, any book it is based on, or perhaps any controversial content?

Has the film already opened in the US or elsewhere? Substantial success in the US, reported via websites and other media, can contribute to positive word of mouth in the UK (although this can work both ways, as a disappointing US performance may adversely affect the way a film is perceived here).

What certificate does or will the film have? The certificate awarded by the British Board of Film Classification (BBFC) is important as it may affect the potential audience. Distributors submit a print of each film to the BBFC for classification as soon as possible after delivery, paying a fee according to the film’s length. Consumer advice about the content is regularly included in a panel on the film’s advertising.

For UK classification guidelines and consumer advice on current releases, visit www.bbfc.co.uk

Marketing strategies

On many titles, the marketing effort kicks off long before production is completed. Teaser material may be circulated online and in print to spark an audience’s interest and create a talking point many months prior to launch date. At the earliest opportunity, the distributor holds a private screening of the finished film and confirms how it will be positioned.

The marketing aim is to build visibility and awareness, convincing the audience that this is a must see film, with desire peaking as it opens. The advertising and publicity campaign will reach the target audience as efficiently and frequently as practicable. A combination of word of mouth and further promotion will give the film ‘legs’ during its theatrical run, which can last any number of weeks but nowadays rarely exceeds two months.

Budgeting the release

A film’s marketability (ways to promote it to audiences) and playability (how it actually performs in the market place) are not necessarily the same thing. Do the story, characters and situation grip the audience? Does the film ‘deliver’ and justify a theatrical release? It’s a function of the market that the more a film is intended for an audience beyond the core of 15–24 year-olds or family groups – perhaps an older, more discerning segment, who do not typically frequent cinemas as much – the more outstanding it has to be to sustain a theatrical life.

The distributor decides how much to spend on each release, based on a professional evaluation of its potential. Importantly, the investment and projected return is reassessed subject to performance as the release is sustained week by week. Expenditure per title in the UK can vary from a few tens of thousands of pounds up to £4m–5m.

Within the total P&A budget, individual elements are allocated a proportion. For example: designing/printing posters; duplicating/delivering film prints and trailers; advertising by region/medium; press materials; a premiere/themed party and other preview screenings; accommodation/hospitality for any visiting talent. In co-ordinating all these elements, often for several different releases at a time, distributors exercise formidable project management skills.

The cost of advertising on UK television, which may run into many hundreds of thousands of pounds or more for a package of spots in all regions, is prohibitive for most films, given their potential returns. Campaigns usually stretch across a range of media, as distributors aim to get their message to as much of the target audience as possible, as many times and in as many places as possible.

Blockbusters with top stars need heavy marketing spends to back up their wide releases. With high advertising costs and the market place so congested, marketing decisions become crucial. Whereas even inspired marketing cannot save a film for which the public has no appetite, a fine film can get lost in the mêlée unless it’s promoted distinctly.

Tracking and refining

The optimum form of publicity is word of mouth – when a film becomes a favourable talking point among the core audience, spreading via personal recommendation to other groups. Research companies may track levels of awareness as a film’s release date approaches. With a month to go there may be low awareness: each campaign is effectively a new product launch, often running in the media for just a few intense weeks.

Usually on Tuesdays, distributors hold marketing team meetings, reflecting on each film they have in current release and progressing plans for the next few titles. Some aspects of marketing, such as a major promotional partnership, may need a year’s lead-time; others, such as running extra advertising to capitalise on good reviews or awards nominations/wins, can be turned around at very short notice.

Distributors are competing for a significant share of voice not only against other distributors but also other leisure activities, all trying to entice the same audience.

Marketing techniques

As with any product or service, film distributors must have detailed knowledge of the market place and how to reach the consumers. Distributors’ campaigns are generally highly effective, as most cinemagoers know in advance which film they want to see before setting off for the cinema. When constructing a campaign, a wide range of media and promotional options is considered.

Poster

The main image conveying the appeal of the film – its stars, theme/genre and often a tagline to whet audiences’ appetites. The more striking and imaginative the design, the better. Film posters may be created at the US studio and adapted for use around the world, or they can sometimes be devised locally from scratch, depending on what materials are available to the distributor and how the film is best presented to local audiences. A poster is produced for every release, in quad format (the traditional UK size of 30” x 40”, landscape orientation) or one-sheet format (the US equivalent with similar dimensions, portrait orientation). Elements of the cinema poster are usually reproduced in due course on the film’s video cover.

Trailers

Probably the single most cost-effective marketing tool, playing to a captive audience of active cinemagoers. Full trailers, screened shortly before a film opens, may be preceded by early teasers (60–90 seconds). Exhibitors, who programme their own screens, ensure that all trailers are appropriate to the feature film before which they are played. Distributors fund the duplication, and sometimes the production, of trailers; a wide release will often have well over 1,500 copies circulated to cinemas. Sometimes trailers for new cinema releases are added to the front of suitably targeted videos.

As well as having trailers played on screens, distributors often provide display materials for cinema foyer spaces too, such as cardboard standees, banners, window clings and mini-posters.

Online

An essential communications channel for the film industry, the Internet plays a key role in shaping many cinemagoers’ perceptions of new releases. Even before a movie goes into production, distributors may release snippets of information, seeding interest among fans. Further news and on-set images can be offered, aiming gradually to accelerate the drip feed of buzz and hype. Most films have an official website, with trailers and production information, while the online community swaps opinions in chat rooms on a galaxy of other sites. Reviews and feedback can be shared instantly and constantly around the world, perhaps before the film has opened locally.

Internet usage continues to grow among the UK population, with at least 60% of adults now accessing the web. Of those online, a quarter are connected via broadband (fast access), but this penetration rate is rising rapidly too.

In the UK, increasing quantities of tickets are pre-sold via exhibitor websites. Special offers or up-to-the-minute information can be emailed to databases of cinemagoers wishing to receive them, while other new media options, such as texting to target sectors at suitable times, are also used where appropriate.

Media advertising

Television is traditionally the most effective visual means of reaching a mass audience, but it’s very expensive. Depending on the film, distributors often buy radio spots (especially, perhaps, during the summer months when TV viewing declines) and display-advertisements reproducing the film’s poster artwork in newspapers, film/lifestyle magazines, outdoor poster sites and bus panels. Less conventional media such as beer mats or T-shirts for nightclub staff may also be considered where appropriate.

FDA member distributors invest approximately £150m in media advertising every year to launch and sustain their releases. Television and outdoor typically account for 70% of the expenditure. Entertainment sector companies as a whole spend more than half a billion pounds on advertising each year.

Publicity

Editorial coverage of a film can be highly persuasive as the public often accepts news stories and features more readily than advertising. A distributor’s publicity team, frequently supported by specialist agencies, devises ‘hooks’ for articles and competitions. They arrange press and broadcast interviews with available members of the film’s cast and sometimes chaperone artists visiting the UK for junkets or premieres. In today’s multi-channel digital media environment, a host of outlets can be available for entertainment news stories and features.

Publicists compile press kits for journalists, containing cast and crew lists, biographies, notable facts about the production and a synopsis. Images from the film are disseminated for publicity purposes normally via online pressrooms with password access. Screenings for national newspaper critics are normally held a few days before the film opens to the public; those for writers with longer lead-times come further in advance. Three times a year, four-day events called Cinema Days are held for regional journalists, with preview screenings and press conferences. Although positive reviews are no guarantee of commercial success, critics’ plaudits can be very important and are often extracted for use in advertising.

Find full details of FDA Cinema Days at www.cinemadays.com

As with any product development, the film production process is conducted confidentially behind studio doors or on guarded locations. Film sets are normally strictly closed to the public. But distributors may have valuable opportunities to visit the set, especially of UK-based productions, along with key journalists, exhibitors or marketing partners.

Promotions

Depending on the film’s theme and target market, the distributor will endeavour to arrange third-party promotions. Such tie-ins generate displays for the film in retail stores, in restaurants or on packs – places where conventional advertising cannot reach – and allow customers to interact with the film characters, perhaps by collecting premium items or entering a competition. Importantly, too, tie-in advertising by a promotional partner, or a company whose brand has product placement in the film, can add substantial weight to the distributor’s own campaign.

Merchandising

Many releases, particularly family films, also have merchandising programmes, co-ordinated by an external agency or the film studio in-house. Related merchandise may include any item from calendars to clothing, mousemats to ringtones, screensavers to action figures. Manufacturers may be licensed to use approved logo devices, images or character likenesses on specific products, normally in exchange for an advance and subsequent royalty payments. Films regularly have tie-in soundtracks, books and games, which can generate significant revenues for publishers in their own right.

Premieres

Perceived as glamorous and exclusive, but painstaking and expensive to organise! Distributors organise premieres as an official launch for a film, reflecting its ‘event’ stature and providing a platform for photo opportunities and interviews. Star-studded premieres and the after-show parties are regularly covered by magazines and news programmes, and sometimes by international, not just UK, media. Normally premieres are staged in London’s Leicester Square, but sometimes elsewhere, such as in a town where the film was shot. Occasionally, a gala premiere in aid of a charity will raise a handsome six-figure sum via ticket and souvenir brochure sales.

Preview screenings

A useful marketing tool for building up pre-release word of mouth among audience sectors the distributor wants to persuade to see the film. As with any product sampling, distributors arrange previews carefully, perhaps offering tickets to readers of a particular publication, or listeners of a radio programme, which matches the film’s core audience. Sometimes a film is previewed to the public a few days before the official release date: this is a way to satisfy demand to see it as soon as possible and to bolster the early takings.

Festivals

These annual events, each with their own personality, often have two functions:

a market, where distributors seeking to acquire product may meet with sellers (agents, producers, studios);

a competition, where new titles may be screened to juries of filmmakers and awarded prizes. Such accolades flashed on a film’s poster add stature (but might characterise it narrowly as ‘arty’).

Distributors sometimes choose to launch films, mostly independently made works of a certain quality, at a suitable international festival, where critics and insiders may discover them and go on to champion them. The eyes of the film world and the media are focused on the leading festivals, which can serve as high-profile platforms for premieres, press junkets, early reviews and global coverage. Trade papers publish daily editions for industry members and journalists – sometimes several thousand professionals from around the world attend.

There are dozens of busy regional and local festivals all over the world, but the main entries in the diaries of international film buyers and sellers are presently: Sundance, Utah; Berlin; Cannes; Venice; Toronto; the American Film Market, Santa Monica; and the Mercato International Film e Documentario (MIFED), Milan.

The UK’s two principal festivals – Edinburgh in August; London a couple of months later – are aimed mainly at public audiences. They showcase the best of new cinema from Britain and around the world, but do not have markets attached.

Facilitating the study of film in schools

Distributors support Film Education, a registered charity that encourages the study of film and media within the UK National Curriculum. Distributors commission Film Education to create study guides, DVD- or CD-ROMs, wall-charts or websites, themed to a new release (except those with 18 certificates), and to supply them to its database of teachers. Film Education also promotes schools’ use of local cinemas by organising preview screenings for school parties, special events such as the annual National Schools Film Week, and teacher training seminars.

Discover more about Film Education’s current services for UK schools and colleges at www.filmeducation.org

The power of the cinema

Occasionally, a film becomes a ubiquitous event, saturating the media as well as appearing in advertising, partner campaigns, store windows and other channels. It can become an international news item, a popular cultural phenomenon, in its own right. Audiences around the world will take a new set of characters to their hearts, often within a very short period of time, indicating how powerful a medium the cinema can be. Indeed, people who saw a film once in a cinema say 25 years ago probably remember it today.

Licensing films to exhibitors

As with any retailers, cinema operators must be persuaded to ‘stock the product’. Distributors –key clients of exhibitors – screen their forthcoming titles for cinema bookers, discuss release dates and advertising plans, and make campaign presentations to cinema managers.

For every film, the distributor’s sales department negotiates a strictly confidential license agreement bilaterally with each exhibitor interested in playing the film. Under English law, the maximum booking period for a new release is two weeks, after which the distributor and exhibitor may decide that the film will continue to play if it is drawing a significant audience.

Print delivery

Distributors arrange for a print to be despatched to all cinemas playing the film a few days before release date. As films are ‘locked’ (finished) ever closer to their release dates, so the time available for print duplication and transportation gets ever more squeezed.

On arrival at the cinema, the cans containing the 35mm reels comprising each print are unsealed, and the reels are physically joined together and loaded on to the projector. Digital prints, supplied on disks, are usually stored on a hard drive in the projection room. All prints, whatever their format, are kept highly secure throughout the film’s run.

Opening weekend

A film can only be launched once – no second chances! – and its first weekend in cinemas is crucial to its further progress.

The distributor’s promotional effort builds up to the opening weekend, which normally draws by far the largest audience of any weekend in the cinema run. It’s not unusual for a film to generate more than 30% of its entire box-office takings during the first three days of release.

Distributors’ business plans, which include estimates of revenues week by week, usually assume that both the receipts and the number of screens a film plays will decline – often rapidly – as other new titles are launched. But such plans are necessarily flexible: better-than-expected box-office returns may lead to a quick investment in some extra prints or advertising.

Although films normally open in UK cinemas on Fridays, distributors sometimes preview a release or open it earlier than Friday. An impressive ‘opening frame’, with a gross running into several million pounds, can become a news story in its own right. Distributors will flash ‘UK’s No.1 hit’ on the second week advertising, or they may add ‘No.1 smash in the US’ as a selling point to capitalise on a top opening in America.

Typically, almost two-thirds of cinema visits take place over the weekend (Friday–Sunday), with the other four weekdays accounting for 8–10% each. Monday is normally the least busy day.

New releases in UK cinemas may face competition from the weather, as well as other films. Unseasonably high temperatures, for example, which entice people outdoors, can affect any title’s commercial destiny from day to day.

Box-office returns

As we have noted, every film is an individual work that remains the intellectual property of those who created it. Accordingly, the film print or disk is rented to, or hired under license by, the exhibitor, rather than being sold outright, as with most manufactured goods. Exhibitors complete a weekly return for each title, indicating to its distributor how many tickets were sold (whether pre-booked or on the day) and at what price. Cinema ticket prices are always set by the individual exhibitor.

Money taken at the box-office – the gross receipts – is often reported in the press. But the sums that distributors earn are substantially less than these figures. Revenue from ticket sales is generally shared between the distributor and exhibitor, after the exhibitor’s costs of operating the screen are recovered. The percentage each party takes may vary week by

week and film by film. Generally, UK distributors collect 30–40% of the gross.

So, if a film grosses £10m in cinemas, its distributor could eventually receive around £3.5m, allowing for the deduction of VAT, which exhibitors must pay for each ticket sold. This net share is traditionally known as the distributor’s ‘rentals’.

Distributors do not participate in the revenue from drinks, confectionery or popcorn sold in cinema foyers and bars, or in any proceeds from screen advertising.

Out of the net share, the distributor usually recoups any minimum guarantee plus the P&A costs incurred in releasing the film. Any outstanding balance is shared with the producers according to a pre-agreed formula, as set out in the distribution contract. Alternatively, the distributor may simply retain a distribution fee, with all net proceeds being paid to the producer.

Flexible, bilateral discussions

In practice, there are many different ways for such agreements to be struck, film by film. As this is an unpredictable, product-driven business, each distributor’s earnings and market share fluctuate month by month and year by year, reflecting the success or otherwise of individual titles.

On Monday mornings, after the weekend box-office takings are compiled, the distributor’s sales team discusses with each exhibitor the holding over of any current release for a further week from Friday (four days later). These negotiations – a vital fixture in the working week – take into account the new openers and any previews planned for the coming weekend, all of which are competing for the available screens.

Courtesy of Nielsen EDI, you can keep track of the top films at the UK box-office every week on this website and elsewhere.

Accessible cinema

UK distributors take advantage of digital technology to make their films increasingly accessible to cinemagoers with sensory impairments. Over the last year, well over 100 films a year have been released with subtitles and audio description, and most weeks, several new titles are available to the growing number of cinemas equipped to present them.

For current information about accessible film releases and screenings UK-wide, visit www.yourlocalcinema.com, a website supported by FDA and other bodies.

The wider picture

The UK is a substantial hub in a global market for film production and consumption. But films that play well in one country will not necessarily do well in all countries, and may need to be positioned and marketed quite differently. It is possible for one distributor to succeed with a film that loses money for another distributor in another country. Distributors’ expert knowledge of local tastes, cultural sensitivities and market conditions guides a film through its release around the world.

Most films nowadays secure their production financing from more than one source, and even the US studios sometimes share the costs of a big production, or split the distribution rights between the US/Canada (domestic) and the rest of the world (international). Some films are sold piecemeal, territory by territory; others have the same company overseeing their release worldwide. For local distributors, dubbing or subtitling may be an extra cost.

Evolving release patterns

Traditionally, many films opened in the US first, then rolled out gradually in other countries. Today, in an effort to combat the pernicious problem of global piracy and to capitalise on global publicity, the gap between the US and international releases is shrinking. More and more films open practically ‘day and date’ (simultaneously) across the world, and with master prints arriving in each country ever closer to launch date, such releases represent huge logistical exercises for the distributors involved.

The entertainment/leisure industry’s single greatest concern is counterfeiting. Films are most vulnerable to theft during the early or pre-release stages of their existence. Pirated film copies feed serious, organised crime, cheat consumers of the full viewing experience, and may cost jobs and diminish future investment. As DVD usage and downloading speeds both continue to accelerate, so the threat from piracy via these digital techniques grows too. Discover more at the dedicated websites, www.piracyisacrime.com, www.fact-uk.org.uk and www.aacp.org.uk

Blockbuster status applies to the minority of films that gross more than $100m in the US market, although today’s biggest openers can pass that figure in their first week. Furthermore, popular films often earn more internationally than domestically, and this trend is expected to continue as many European, Asian and African markets continue to develop.

Cinema release boosts subsequent business prospects

Although most films do not recover their production and launch costs from their theatrical release alone, cinema revenues constitute a minority of the total a film can earn.

With a title’s profile and theatrical stature established, there is potentially substantial additional income to be derived from the subsequent license periods (DVD, pay-per-view, video on demand, TV sales). Audiences worldwide have an insatiable desire for quality filmed entertainment. Cinemagoing has been positively affected by new media formats coming on stream, notwithstanding the haemorrhage from piracy. Symbiotically, the greater a film’s theatrical success, the larger its video shipments in due course. Some titles, especially in the action/adventure or horror genres, may perform better relatively on DVD than in cinemas.

Non-theatrical film presentations in aeroplanes, coaches, ships, hotels or other leisure outlets must also be licensed. In the UK, Filmbank Distributors Ltd. offers licenses for screening films in selected venues outside the cinema or home on behalf of many theatrical distributors. Visit www.filmbank.co.uk

Most films that succeed theatrically go on to do well throughout their release cycle – the audiences are complementary. The performance of British films here in their local market can have a significant influence on the attention they receive, and their commercial performance, overseas.

Summary of the distribution cycle

Connecting every film with its audience immerses distributors in a great deal of activity before and during a cinema release. For any given title, some of the phases listed below may overlap or be combined.

Producer/studio acquires rights to film a story or treatment

Screenplay is developed

Production finance and cast and crew are confirmed

Principal photography takes place, in studios and/or on agreed locations,

followed by some months of post-production, editing and scoring

Master print of finished film is delivered to local distributor

Distributor determines release strategy and release date

Distributor presents the film to exhibitors and negotiates

bilateral agreements to have the film shown in cinemas

Distributor’s marketing campaign creates a ‘want to see’ buzz

among the target audience and launches the film

Prints are delivered to cinemas a few days before opening

Film’s run extends any number of weeks subject to demand,

which may be augmented by additional marketing activity

After its final playdate, the film print is returned or transported securely to another cinema. Ultimately, most prints are destroyed under supervised conditions, with a small number retained in archives, and the distributor’s rights in respect of the theatrical release expire.

Working in film distribution

The distribution sector is small, especially considering the scale, profile and impact of its output. Only about 300 people work for UK distribution companies – less than 1% of the UK film sector’s total workforce – although employees in advertising, PR and design agencies also collaborate on the planning and execution of film campaigns.

A film distributor’s managing director normally oversees a small staff working in three expert departments:

Marketing & publicity

Sales

Administration & finance

In some ways, these departments may undertake activities similar to their counterparts in any organisation in any industry. But for film distributors, the products they handle are among the most thrillingly creative, emotionally charged, technologically advanced and hotly anticipated anywhere!

Ends
Courtesy: Film Distributors' Association of the UK