What is Film Distribution?

Its is the job of the distributor to identify and deliver the largest possible audience for every film.

A film distributor brings a film to the cinema by:

identifying its audience

considering why they'd go and see it

estimating the revenue potential across all the formats of its release

persuading exhibitors (cinema operators) to play the film

developing plans and partnerships to build awareness of and interest in the film

aiming to convert as much interest as possible into cinema visit

A distributor acquires a film they will release from one of these sources:

• a third-party sales agent, acting on behalf of a producer
• a continuous flow of new content from a parent studio
• a studio or production company with whom the distributor has negotiated an output deal covering a slate of titles
• a single title acquired at any stage before, during or after production

Larger studios may often only work with the major producers who will provide all the resources needed and if they are happy with the final film they will distribute it.  However sometimes especially with smaller films sales agents may try and sell distributors there films at all stages of film production. This includes the concept, draft script, filming/post production, or final/ non-final films. This will often coincide with large film festivals. 

When looking for a new film distributors will often look for distinguishing features which will allow them to sell it easily to the audience. This may include outstanding or original features with a new angle or "hook"which could make it easier to market. Distributors also recognise the important of local product as they can see that a British film will appeal to a British audience and a film set in America will appeal to citizens in America.

Distributors will consider the target audience and then possibly secondary target audiences. He will then look at whether or not the characters or stories will appeal to the target audience. This will help him decide whether or not the films is worth the costs of marketing and theatrical release. 

Even before a film starts to be produced a distributor's opinion on marketability should be asked. 

The larger the production budget of a film the more likely it is to have a distributor sign up before all of it's financing is confirmed. Producers tend to seek financing from a variety of sources including :

pre-sales to distributors in various territories via a specialist sales agent

bank loans (subject to prevailing economic conditions)

institutional investors

private individuals

beneficial tax schemes

public subsidies (the available National Lottery funding for film is awarded by the British Film Institute – see www.bfi.org.uk)

Often a distributor becomes a partner in the project by contributing funding for production and development and then bringing the film to market. the distributor may also pay an advance/minimum guarantee against future earnings to the producer or sales agent. The distributor prepares reports for the producer or rights owner, displaying marketing spend and forecast and actual theatrical revenue. 

Film festivals have many functions including:

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 can add prestige but may also pigeon-hole it as 'arty';

a high-profile platform where films can be showcased prior to release.

Distributors sometimes choose to launch their film at a suitable international festival, where some critics and insiders may discover them and go on and champion them in reviews and columns. People all around the world will be watching these festivals which may encourage them to go and see the film.

Distributors sign a formal contract with the producer, sales agent or studio, specifying the rights they hold in respect of the title. These normally include the right to release it in UK cinemas and promote it in all media before and during its release.

Distributors normally seek to acquire all available rights in their particular territory, spreading the risk and opportunity across multiple platforms. So importantly, in addition to the theatrical window, the contract usually includes the further right to license the film for home/mobile entertainment and to UK broadcasters.

A distributor might only be aware of a title (possibly a 'working' title), have read the script, be aware of the confirmed (or potential) cast, and met the director/producers to understand their vision. They would know if the director is a seasoned film-maker or a first-timer, and if the story is original or adapted from a popular book or a TV series.

Either way, a distribution plan needs to be prepared.
The distributor will develop this in consultation with the producers and/or studio as appropriate.

The digital transformation

For many years, films were released in cinemas on 35mm celluloid prints – which whirred through projectors on reels. Today's industry standard is digital with no celluloid involved.

For a digital release, specially encoded media files containing the film are delivered to cinemas either on a hard drive or via a satellite link. These are called DCPs (Digital Cinema Prints). The DCP is ingested into a powerful server at the cinema and played out through a state-of-the-art digital projector.

Once the DCP is received at the cinema, the projectionist normally needs to ask the film's distributor for a Key Delivery Message (KDM), a security key encryption system. This will generally be formatted to reflect the agreement affecting that film, i.e. the screen/s it may play on, what time of day it may play (particularly important for preview screenings), and within which dates.

Digital images appear on screen in pristine quality and do not deteriorate over time – there is no wear and tear or scratches, as was inevitable with 35mm projection machinery. Digital remastering, though time-consuming and costly, enables classic films to return to the big screen looking as good as new.

Digital equipment enables cinemas to redefine themselves as modern entertainment centres, able to present sports, operas, live concerts, shows and other events to local communities. This means films must be scheduled in smarter, more flexible ways to reach their maximum potential audience

Digital projectors may be adapted easily to show content in 3D. 3D can enhance some films dramatically with a spectacular, laser-sharp viewing experience, and more and more films – live-action and animation – are released in 3D as well as 2D. As 3D films can command a ticket price premium, there is a potential for enhanced box-office returns. In 2012, 3D accounted for 18% of the total UK box-office.

Digital prints are significantly less expensive to duplicate than the old 35mm copies, and the hard drives can be reused. So wider releases, and the logistics of hard drives moving from cinema to cinema, become easier to manage.

The most important strategic decisions a distributor makes are when and how to release a film in order to optimise its chances. Through a combination of market knowledge, commercial experience, statistical research and professional judgement, distributors gauge the audience for each film.

Who is the film for? Who can be convinced to buy a cinema ticket to see it and why should they do so? Can the film be positioned within a popular, recognisable genre? What sort of audiences have similar films attracted recently? When were they released? How strong is the cast?

When distributors have estimated what a film may earn, they prepare a budget to release it. As with every business plan, the goal is to recoup the costs and turn a profit. But launching films is expensive and risky – audiences have so many other choices – and in reality, most films do not make a profit from their theatrical runs alone (see Acquisitions).

The job of a distributor is to create visibility and to raise enough awareness and interest in a film to persuade potential audiences to buy tickets to go and see it at the nearest cinema at the earliest opportunity, eschewing all other entertainment options at the time. Ideally marketing needs to lead a horse to water and also persuade it to drink!

The marketing plan – produced to complement the overall distribution plan – is designed to navigate a route to market that allows interest to peak as the film opens in cinemas. This will take into account the competitive environment, to ensure that the opportunities to raise interest and awareness are not lost under the weight of other films or entertainment on release.

Marketing is done in a series of ways, these include:

• Film artwork
• Trailers
• Digital marketing 
• By releasing cast and  crew lists, and facts about the film etc.
• By winning awards
• By attending film festivals
• Having premiers
• Licensing and merchandise
• Third-party and brand promotions
• Media Promotions
• Exhibitor promotions
• Preview screenings
• Educational resources
• Media and Advertising
• Research and tracking

A key consideration in any distribution plan is where the film should play.Which sorts of cinemas and screens are most appropriate? Given the intended audience, how can the theatrical release achieve its greatest impact? How many screens and prints are likely to be sustainable?

Every theatrical release is effectively a joint-venture: the distributor supplies the film, the exhibitors provide the screens, and the arrangements are reviewed week by week. Like all retailers, cinema operators must be persuaded to 'stock the product'. Distributors screen their forthcoming titles for cinema bookers, and discuss release dates and marketing campaigns.

Films should possibly avoid being released around the times of key other events such as the Olympics. This had an impact on both The Woman in Black and the Avengers because in 2012 there was both the Olympics and The Euros which impacted on cinema participation. 25% of all cinema release happens in London so companies should focus their advertising and marketing around that area.

The distributor's sales and marketing strategies go hand in glove, with the film's target audience kept front of mind. For each release, the sales team negotiates a 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, by mutual agreement, the film may continue to play for a week at a time if it is drawing a significant audience.

The distributor's marketing effort builds up to the opening weekend, which normally draws by far the largest audience of any weekend in the theatrical run. It's quite common for a film to generate 30% or more of its entire box-office during the first three days of release. Although films conventionally start in UK cinemas on Fridays, distributors quite often open on other days or run previews the weekend before.

Distribution plans usually assume that the revenues and number of screens on which a film plays will decline, often rapidly, as competing titles are launched in successive weeks. But such plans are necessarily flexible: better than expected grosses may lead to a quick investment in some extra advertising and the film may be scheduled into more screens than on its opening weekend. A highly impressive opening frame can become a news story in its own right.

Box-office takings – i.e. the gross receipts including VAT – are often reported in the press. But the sums that distributors actually earn are substantially less than these figures. Revenue from ticket sales is normallyshared between the distributor and exhibitor. The percentage each party takes varies film by film and week by week. Generally, UK distributors receive 25–40% of the gross. So, if a film grosses £5m in cinemas, its distributor may eventually collect around £1.5m, allowing for the deduction of VAT which exhibitors must pay for each ticket sold. This net share was traditionally known as the distributor's 'rentals'.

Distributors' businesses depend on the income they receive from licensing content. Distributors do not participate in exhibitors' revenues from advance booking fees or the drinks, confectionery and popcorn sold in cinema bars and foyers, or in any proceeds from screen advertising.