A Brief Introduction About the Film Distribution Agreement
During the making of the film, there are many agreements that need to be signed by the producers, and one of them is a film distribution agreement. This is the agreement which is signed by distributors and producer of the film, and it involves marketing work done by the distributor. These agreements are unique because the product to be sold isn’t any physical property of the producer, but it is the right. A movie is a collection of producers’ rights that are sold/ licensed with the help of the distributors to earn money.
Who Takes the Film Distribution Agreement?
This agreement is taken by the producer of the film and TV shows who wants the distributors to spread awareness about the film. The distributors make money, and then they collect the audience for the film. The time period given to the distributor is decided by the producer, and the distributor should also be agreed with it. There aren’t any third parties involved in it, but media can play a major role in it, but its scope needs to be defined in the agreement to avoid any conflict later.
Purpose of the Film Distribution Agreement
The main purpose of the agreement is the guarantee to the producer that the distributor would assure royalties to the producer at certain time periods. In case the royalties fall short, then the distributor has to advance money in order to make advance just equal to the guarantee. Royalties are mostly paid by gross receipts of the distributor or net profits.
In the agreement, the gross or net payment should be clearly defined. Producers need to research the distribution deal, which can enhance their profits. Most of the time, there are gross deals signed by the producer and distributor. For TV and films, distribution fees range from 20% to 40%.
Contents of the Film Distribution Agreement
- The major contents of the distribution agreement are payment for the right and definition of the rights which are being granted to the distributor.
- The rights to be granted to the distributor are specified for license period and territory.
- Most of the time, the distributor asks for exclusive rights. The territory can be national and also global.
- The license period provided to the distributors can be one or two years long, and it can also be extended to fifteen years or longer.
- The content of the film distribution agreement should also have the scope defined for the media. The producer should have a rights’ reservation in the agreement.
This finalizes that all rights are not granted to the distributor only, but there are some which are reserved to the producer. The time of payment should be specified in the agreement. In some agreements, semi-annual payments are provided while some provide annual or quarterly payments.
[ Also Read: Film Contracts ]
How to Draft the Film Distribution Agreement?
You can easily take the help of a sample film distribution agreement available online to get an idea of this agreement. The major contents should be included in the agreement, and the rest of the things are secondary, which can be decided by both of the parties. It is quite important that one should look forward to taking legal help. The lawyer can help to draft the agreement with the acceptance of both parties.
Negotiation Strategy
The producers can always negotiate with the distributors about the project. You might have a dispute about payment but can be sorted easily if you will consider taking the help of the trusted filmmakers.
Benefits and Drawbacks of the Film Distribution Agreement
The producer has got the right to examine accounting correctness at the time of income. An audit can be conducted by the producer on the distributor’s records and books. The producer will provide publicity materials, technical materials, music sheets, and this is all mentioned in the agreement.
Delivery of omission insurance is also added in the contracts to protect the rights of producers. Without the consent of the producer, no alteration can be made in the motion pictures by the distributor, and there is a special clause about it in the agreement. If the distributor wants the right to do editing for censorship purposes, then it is also included in the agreement.
When the distributor doesn’t follow the obligation, then the producer has got the right to terminate this agreement, and that can be harmful to the distributor. The best advantage of the agreement is that these provide dispute resolution. When everything is written and signed legally, then no party can question anything of it later.
What Happens in a Case of Violation?
In case of violation, the victim party can go into the court. While forming the agreement, there are also some clauses that include the consequences of breaking the agreement(1). Preparing an agreement is an important task that should only be done with the help of an experienced person or a lawyer. Sometimes, the person who violates the law has to pay a large amount of money to get rid of the legal issues.
The producers who want their films to be a super hit definitely need help from the marketers who can advertise the project in the best manner. So, the need for a film distribution agreement template agreement is justified. You have known all about the drawbacks and benefits of the agreement, and this must have made you take the decision of going for a formal agreement in such projects. Lots of resources are required to make a movie, and those shouldn’t get wasted because of someone’s carelessness.