Filmmakers plan, write, enter contests, crowd-fund, shoot proof of concepts, generate business plans, design decks and pitch, to make a movie to sell to the public. Often, the major decision-makers between filmmakers and audiences are the distributors. The major studios and streamers control film distribution, however, there are also many smaller distribution companies worldwide.
What Exactly Does A 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.
The goal? To MAXIMIZE REVENUE
This means that if a distributor likes your project, sees the audience, the parameters of genre and scope fit with their guidelines, and they feel they can market, it may be a fit for them.
Most often, this is something producers concern themselves with, but understanding who the players are with respect to distribution is great industry knowledge. Why? It will assist you by understanding who the players are; thinking as if you are in the shoes of the distributor, with a lens on marketability.
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? Right, so that’s 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 releases in movies are the only potential to hit the lottery – when a movie hits it big (Blair Witch) the upside is unlimited. While distributors can predict with relative accuracy how well a movie will do in theaters, there’s always the possibility that a breakout success can occur. With movies like Driving Miss Daisy, and My Big Fat Greek Wedding, the film just stayed and stayed in theaters, and the revenue kept growing. As the distribution patterns change, and there are fewer or no theaters in that equation, then there is no potential of that breakout.
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.
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.
Due to high production and marketing costs, distribution companies are under great pressure to make back their investment— as quickly as possible. The release of the new James Bond film has been delayed multiple times due to the pandemic. That’s extending the time for the film to recoup costs and generate profits, straining the distributors.
Watch The Exhibitors
After its initial purchase of AMC (which WAS the biggest US theater chain), Wanda retained an 80 percent stake in the theatre chain, then acquired rival chain Carmike Cinemas for $1.1 billion, and London-based Odeon and UCI Cinema groups for $1.2 billion, to create an 11,000 screen platform that ranks as the world’s largest. There are various other movie theater chains with thousands of screens and wondering what to do with them. It’s possible the chains may want to sell the screens or go bankrupt; or keep their screens but reconfigure them for varied and multiple uses, showing movies but also other entertainment such as concerts, e-sports and more.
Audiences Of The Future
Ultimately GenZ doesn’t care about theaters, and they are a crucial audience. About 33 percent of moviegoers in the United States and Canada last year were under the age of 24, according to the Motion Picture Association. Most young people will have gone a full year without visiting a cinema by the time vaccines are expected to be widely deployed “Yes, there is pent-up demand to see movies in a theater,” said veteran film exec and producer Peter Chernin, whose Hollywood career has spanned four decades. “But people change their habits.” After the 1918 pandemic came the roaring 20s and people went out all the time – that will happen – but theaters may only be a small part of that landscape. Audiences of the future may become accustomed to streaming releases, and not miss theaters.
In conclusion, film distribution is a key to understanding how a movie generates revenue. This is an exciting time of change in the industry. 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!