Important Terms to Understand in a Film Distribution Agreement

If you’re a filmmaker, film is more than simply a way to express yourself; it’s your bread and butter. Once the film is produced, you need to go through a new set of obstacles to get the finished product in front of the general public. 

Commercial films are generally distributed by one, if not multiple, distributors. In certain respects, film distributors act as representatives for the producers. They are necessary for the film’s marketing, which will finally lead to its economic success. As a result, filmmakers must approach a film distribution arrangement with caution.

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In this post, we look at some of the main phrases that are included within a film distribution agreement to help you get this portion of the process right.

1. Split Rights Deal

In exchange for distribution, you sell the rights to your film to a distributor or distribution firm in a split rights arrangement. The ultimate goal for a filmmaker is to get their film in front of as many people as possible, yet some may require assistance to do it. With a split rights arrangement, you’ll need a distributor that can bring your film in front of a large audience that you couldn’t reach on your own.

2. Modification Rights

A lot of films have explicit scenes, are too long, or are spoken in a different language. Because of this, some audience members may not be able to watch it in its entirety without a few modifications. 

A distribution agreement may provide the distributor with the right to make changes to the film before its release, including the addition of subtitles or removal of sensitive scenes. They can also change the aspect ratio to accommodate specific screens.

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3. Payment for Third-Party Rights

Producers may also be held liable for the payment of third-party rights for licenses utilized in their films. This is commonly for music, B-roll footage, and other similar elements in the film. When the rights for these materials lie with other parties, producers should guarantee that their income is sufficient to meet the third-party licensing cost. 

Alternatively, producers may arrange an assumption agreement with the distributor, in which the distributor assumes responsibility for paying such third parties for the rights licensed by them in relation to the film.

4. Terms and Issues of Non-Performance

Producers should negotiate a performance-based early termination provision. This is because the length of a distribution agreement can be as long as 20 years, but as time passes, the film’s saleability and audience interest decrease. As a result, producers are faced with a problem when a distributor fails to effectively advertise or distribute a picture, resulting in much less commercial success than expected.

The Wrap

Films are considered to be a powerful art form and a convenient source of entertainment. Millions of people around the world enjoy the viewing pleasure that different films can give, regardless of their genre. However, not many people realize that a lot of work goes into a certain film before it finds its way to the silver screen. All in all, the distributor is responsible for putting the film out there before an audience. They market the film and ensure that it becomes a commercial success.

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