This series demystifies the entire filmmaking process.

In our previous episode, we looked at marketing.

Today, we look at filmmaking's final stage.

These are the Stages of Filmmaking.

Distribution.

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Today, we're joined by entertainment lawyer Melissa Dagodag,

theatrical booker Susanne Jacobson,

and Alamo Draft House programmer Jake Isgar.

Let's begin.

Getting a film in front of an audience involves two stages.

Distribution.

And Exhibition.

A film distributor gets a film into different exhibition settings

whether it be a theater, TV, streaming service, or DVD.

An exhibitor, meanwhile, owns these platforms where the film can be shown.

As such, distribution does not just pertain to getting a movie into theaters.

It includes ancillary markets where a movie can make money for years

after the initial theatrical release.

Since the Paramount decision in 1948, studios could not own the means of

production, distribution, and exhibition.

For most studios, this meant selling off their theaters.

But that decision has recently expired

so some studios are once more getting involved in exhibition.

- We are back, baby.

- We are back. - We're back.

- For many films and filmmakers, landing a distributor is by no means a given.

They must navigate the challenging process of finding distribution.

Distribution begins with acquisition.

This is where a film ends up in a distributor's hands.

In other words, the distributor obtains the rights to a film from

its copyright holder, which is typically a producer or studio.

These deals outline what territories the distributor can operate in and for how long.

Without any distribution, it isn't possible to make

any of a film's budget back.

So it's a good idea to have distribution in mind early on.

As Susanne Jacobson notes...

- You really have to have a plan from the outset.

Just telling a story that you've always wanted to tell.

Yes, that's wonderful.

Does that mean that it needs to play in theaters, especially since the pandemic?

Probably not.

Because an empty theater is a sad place.

- A film can secure a distributor when it's still in development or pre-production.

This is referred to as pre-sale distribution, a guarantee from

a distributor that they will acquire a film upon completion.

This typically happens for movies

that have big stars or are sequels to big hits.

For more on pre-sales, check out our episode on development.

For big studios, distribution is typically done in-house.

Disney, for example, has the Walt Disney Studios Motion

Picture Distribution Company.

- If a studio makes a film, they're going to distribute it themselves, or

they already have a deal in place to co-distribute it with another studio,

another big production company.

- Indie studios, meanwhile, will have to shop their film around

to multiple different firms.

Independent filmmakers have a few different options to

try to get distribution.

Festivals, film markets, sales agents, and self-distribution.

Indie filmmakers will typically utilize a combination of these strategies.

Most distributors are only present at highly prestigious festivals,

such as the Big Five, Venice, Cannes, Berlin, Toronto, and Sundance.

There, buzzy films that get audience or critical attention will be

approached by distribution companies.

Film markets have the primary purpose of selling a film to distributors.

Sometimes, these markets occur within a larger festival,

such as Cannes Marché du Film.

But there are others that stand on their own, like the American

film market and Hot Dogs.

A film can be a good route if your film can't get into the highly

selective, prestigious festivals.

Many films bought at markets are not finished, often only

in the development stage.

Distribution reps at markets are called acquisition executives, and

getting their attention requires a strong, brief pitch

along with enticing materials like a trailer, scene, or collection of stills.

Often filmmakers at festivals and markets will be partnered with sales

agents who specialize in selling films to distribution companies.

They will usually represent films at markets and festivals as well as use

their own well-established connections.

Filmmakers who are not established typically have to wait until their

movie is finished to land a sales agent.

It is possible to reach out to potential distributors cold using

IMDb Pro, though few distributors accept unsolicited submissions.

Different distributors have different areas of expertise.

Some specialize in certain audiences or genres.

Therefore, it is a good idea to have a target audience in mind when

meeting with distribution companies.

If a filmmaker doesn't need a theatrical release for their movie and is

content with a straight-to-streaming release, they can target aggregators.

Aggregators are companies that will approach streamers on a film's behalf.

And they do not require distributors or sales agents.

They do, however, typically require either an upfront fee or a percentage of sales.

The final option is self-distribution.

With self-distribution, all avenues of exhibition are still open.

But they will be at the financial risk of the filmmaker.

A theatrical release is possible, for example, but it will cost a lot of money

since the filmmaker will have to cover ads, posters, certification, and more.

A filmmaker typically needs a sales agent to get a deal with a TV network.

These deals can result in a lot of profit but are typically lengthy.

Self-distribution also includes posting work onto platforms like

YouTube Movies or Vimeo On Demand.

These services allow filmmakers to sell their films directly

to consumers at little to no cost.

Once a method of distribution is procured, a filmmaker must then decide on licensing.

Nearly all independent distribution requires some form of licensing.

This is an agreement between the creator or rights owner of a film

and a distributor with set terms for compensation and duration.

To best navigate this process, using an entertainment lawyer is a good idea.

Melissa Dagodag explains a role.

- I handle production contracts for independent films, and I form the

business entity that usually owns the film and enters into all the

contracts on behalf of the filmmaker.

So that and registering trademarks, brand names are huge parts of what I do.

I also register copyrights once the film is in the can.

And for screenplays, of course, I also register the scripts with the copyright office.

And I work with a lot of creative people across the board.

- For major studios with their own in house distribution

licensing can be more straightforward

since the rights stay within the parent company.

However, distribution licensing can take many forms

for independent filmmakers and smaller production companies.

Before entering into any kind of distribution agreement the producers

of a film need to ensure that they have all of the clearing rights for the project.

Dagodag explains that process.

- What that work involves is reviewing the screenplay and reviewing the film to make

sure that there's nothing in it that could trigger a copyright infringement lawsuit.

So what could that be?

Strangely enough, I'll give you an example.

It could be like you have a building.

A lot of people don't realize that buildings like the Disney Concert Hall

can be subject to copyright protection.

Moreover, there's trademark issues that could trigger

infringement lawsuits as well.

And that could be like.

Oh, you have the brand name of a store appearing in the background, you know, and

that could be something where you have to get a license to have that name appearing.

So there's lots of intellectual property issues that need to be spotted.

- Clearing rights also means having a firm grasp on the chain of title for

all the IPs involved in your project.

- Chain of title is really the way that you prove that you own all the rights

that you're representing and warranting that you do own in and to the film.

So that comes down to contracts with all the talent, all the above-the-line, below

the line people in your film, making sure that those rights track completely

with the contracts that you have.

- If there are co producers or investors involved, the filmmaker will likely have

to clear their distribution plan with them before a licensing deal is signed.

There are two main types of distribution agreements, leasing and profit-sharing.

When a distributor enters a leasing agreement, they will pay a fixed

price for the rights to a film.

- A leasing agreement is for circumstances in which the distributor is distributing

the film, usually on a reduced fee basis.

And then the production company will pay for distribution expenses like

prints of the film and advertising.

And what's key in that type of distribution agreement is you

want to make sure that you limit what can be counted as expenses.

And if you don't limit that, there could be very little left for the filmmaker.

- Profit sharing agreements, meanwhile, are where a distributor gets a

percentage of profits accrued by a film.

This is typically anywhere between 10 to 50 percent.

And while it might take more money from the filmmaker, it may also

incentivize a distributor to maximize a film's distribution and profits.

- With the profit sharing contracts, you know, that's, that also is going

to be a percentage of something and it all matters how it's defined.

So it really doesn't matter what you call it.

Defined terms and contracts will be in capitalized letters.

And what always matters is what are the details of that definition?

Like what expenses does this person get to take out before they pay me?

And how do I limit those expenses?

So I get more money.

That's what's crucial.

- Licensing agreements may also differ based on the type of distribution being offered.

Primary rights refer to theatrical releases, whereas secondary

rights refer to everything else.

A licensing deal may give primary rights to a distributor, but not

secondary rights or vice versa.

Distributors typically want all of the rights

but sometimes it can be strategic to withhold certain distribution rights

so you can renegotiate down the line.

Distributors usually also want their license to be exclusive.

Meaning they will have the sole right to distribute a film in a specific

territory for a given period of time.

A distributor will pay more for this, but it may also limit your film's exposure.

Nonexclusive rights means multiple different distributors

can release in the same territory.

For example, a film may be licensed to multiple TV networks.

This kind of deal, however, can be trickier to negotiate.

A licensing agreement will also dictate a term length.

In other words, how long the distributor will have the rights to the film?

These terms are often lengthy, up to 15 years.

Before signing a licensing deal, it is important to do your own research.

Make sure the distributor is willing and able to market your film.

But at the same time, won't overspend and hurt the film's profit margins.

This means looking at a distributor's track record with prior films.

International distributors will try to get a film into markets around the world.

National distributors, meanwhile, will take the rights for a

film in their specific country.

Second-run licenses will then be negotiated to reach a global audience.

With the licensing deal complete, it's time to deliver your film to exhibitors.

An exhibitor needs the necessary data to show a film.

Typically, this comes in the form of a Digital Cinema Package, or DCP.

DCPs are high-resolution files that allow an exhibitor to show

a film at its highest quality.

They include audio, video, and metadata files that are tailored for exhibition.

These files are formatted in accordance with Society of Motion Picture

and Television Engineer standards

for consistent playback from theater to theater.

Usually, creating a DCP is outsourced to a company which specializes in the process.

If a movie is going to be shown on actual celluloid, its reels will need

to be hand-delivered to the exhibitors.

Exhibitors are the retail aspect of the film industry.

In other words, they handle showing a film to the public

and this can take many forms.

Jake Isgar explains.

- Exhibition can mean plenty of different things.

I mean, when you see, like, think of, like, those FBI labels in front

of, like, old VHS tapes about, like, a public exhibition is not

allowed unless you have that.

It could just be, you know, somebody getting a projector out

at a bar and putting on a movie.