How distribution works

Here's the path a film usually takes to get to your local theater:

• Someone has an idea for a movie.
• They create an outline and use it to promote interest in the idea.
• A studio or independent investor decides to purchase rights to the film.
• People are brought together to make the film (screenwriter, producer, director, cast, crew).
• The film is completed and sent to the studio.
• The studio makes a licensing agreement with a distribution company.
• The distribution company determines how many copies (prints) of the film to make.
• The distribution company shows the movie (screening) to prospective buyers representing the theaters.
• The buyers negotiate with the distribution company on which movies they wish to lease and the terms of the lease agreement.
• The prints are sent to the theaters a few days before the opening day.
• The theater shows the movie for a specified number of weeks (engagement).
• You buy a ticket and watch the movie.
• At the end of the engagement, the theater sends the print back to the distribution company and makes payment on the lease agreement.

It has been said that making a movie is not nearly as difficult as getting it distributed. Because of the enormous amount of cost in money and time involved in distributing a movie, a distributor must feel confident that they can make a sufficient return on their investment. Having the backing of a major studio or a well known director or star can greatly improve the chances of securing a good distribution deal. Independent filmmakers often use film festivals as an opportunity to get the attention of distributors. Once a distributor is interested in a film, the two parties arrive at a distribution agreement based on one of two financial models:

• Leasing
• Profit sharing

When a distributor has leased a movie, they will try to determine the best strategy for opening the movie. Opening refers to the official debut of a movie. There are several factors to consider:

• Studio
• Target Audience
• Star power
• Buzz
• Season

While first run movies that have just been released are loss leaders, movies that have been out for a while can be profitable for the theaters that show them. Second run theaters often get very attractive leasing terms from the distributor. These theaters are facing increasing competition though, as first run theaters continue to show more movies past the traditional four to six week time frame.