Why is Film Distribution is Critically Important to The Business

Filmmakers plan, write, enter contests, crowdfund, shoot proof of concepts, generate business plans, create decks and pitch – for what? To make a movie that they hope will be distributed. Producing the movie incurs expense. Distribution is when that turns around, and the point is to make the movie available so that people can buy and watch it.

What Exactly Does a Film Distributor Do?

A distributor releases, licenses and positions a film in the marketplace, maximizing all of the possibilities to generate revenue by licensing:

  • all available and exploitable rights
  • in as many territories as possible,
  • for the longest amount of time.

If a film goes into a streaming platform, it may never be distributed into any other territory, or media. Increasingly with the streaming ecosystem, companies are producing and funding movies to live primarily and only within that site. It’s efficient, builds the amount of content (or library of content) in order to draw subscribers. New subscribers are important so that the website gets bigger, but retaining current subscribers is also key.

For Profits, Distribution is Everything

The Distribution process consists of making a movie available to the public, and the financial success of a film is how it is distributed and marketed. A movie that is never distributed will not recoup costs and a movie that is distributed poorly may not recoup costs or generate profits.

What’s Changing In Movie Distribution

Been to a movie theater lately? Many people who used to go aren’t going as much. There are the standouts like the recent Spiderman and Scream, but the change in the theater industry is a problem with respect to film distribution. The theatrical window has traditionally been the engine that drives all of the other movie distribution windows. Theatrical generates awareness and buzz that cascades over all other windows of distribution, consider omnipresent outdoor campaigns, and endless trailers for typical Summer blockbusters. A successful theatrical release can maximize revenue in the aftermarkets, and even a modest theatrical run generates awareness for a film that will increase overall revenues. Without theater releases, overall profits for a movie are diminished. Also, theater release in movies are the only potential to hit the lottery – when a movie hits it big the upside is unlimited.

Streaming Is Taking Over

Hollywood movie studios and the big movie theater chains have been fighting for years over “windows”: the amount of time between when a movie comes to theaters and when you can watch it at home. Most of the studios have been trying to shrink that window. They want you to be able to rent a big movie at home weeks, not months, after it debuts in theaters. Theaters, for obvious reasons, want to keep that gap as big as possible.

And since theaters represent a big chunk of the revenue a movie can generate, they’ve been able to more or less hold the line. However, technology has been pushing the architecture of distribution to shift. Consider your own preferences as a lens for the future – how do you want to consume movies? Are you excited to get back into theaters?

Technology Rules Film Distribution

As new technologies emerge in movie distribution, the sequence of release and availability must be adjusted. Historically, the sequence of the release windows (the media technology to view a film) has been based on the price of that window to the consumer, starting with the theatrical window, the most expensive to the consumer, and then moving sequentially to the windows that are less costly. Traditionally, each window has a period of exclusivity as against less expensive windows.  The theatrical window generates the most visibility for a film, and even if it is a “loss leader,” theatrical exhibition contributes to generating revenue in all of the other ways. Every time a new technology changes the distribution side of the movie business, like streaming right now, it forces a change in when movies are released to the public, and the spans of time between windows. In the near-term, that translates into online premieres of films, rather than theatrical premieres, or delayed releases. Both have the potential to reduce movie revenues.

Looking ahead, the distribution landscape will be different, but people will always want to see movies. So, there will always be a need for filmmakers, no matter where audiences are watching!

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