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FILM DISTRIBUTION: TIME TO MAKE MONEY


Money Recovery Flow

Means

Estimated Recovery

Theatrical Release in Indian Territories

40%

Overseas Right

25%

Satellite Rights and Terrestrial TV

25%

Home Video (DVD/Blu-ray)

10%

Music including Online Download

10%

Cable, DTH, VOD, SVOD, Internet, IPTV, Broadband, Pay Per View, Mobile, Others

15%

Others Sources as Gaming, Merchandising, Product Placement etc.

05%

Estimated Total

130%

Sale Shows - Bazaar Shows

As soon as the film is completed all important distributors are invited for a formal screening. The screening also includes middle man and mediators who break the deal with the distributors. The group after watching the film fix the prize for the movie. Then with the producers various kind of deals can be worked depending upon the comfort level of both the parties.

Three Major Distribution Mode


Outright Mode
Out right mode is one of the best deals for a film producer. In this deal, the distributor buys the total distribution of the film. After the deal the film belongs to the buyer i.e. distributor. Then it becomes the responsibility of the distributor to do the promotion of the film. The distributor takes care of booking the theatres, print and publicity. Here the producer is always the winner. However if the film clicks then the distributor can mint money. If it does not click then distributer is in trouble. Big budget films with established production house does distribution in this mode. Established Producers sell their film even before its completion in advance.


Minimum Guarantee (MG) Mode
The producer is being paid an initial sum as Minimum Guarantee after negotiation. Producer tries for maximum and distributor tries for Minimum amount. If the film collects more than paid MG then distributer have to share the profit with Producer as per agreed percentage share. If Collection is less than MG paid to producer then loss will be bear by Distributer only. In this mode Producer has nothing to do with loss but with the profit although Producer always get undervalued price as MG. Most of the film with good enough budget and known cast/crew does business in this method.


Commission Mode
Distributor pays only agreed amount as security money to the producer but producer has to return it in case if the money collected is less than the security amount along with the commission on total collected money. So basically in this mode of distribution Producer do not get any money as a film price but gets share from the collected money. Generally distributer charge 10-15% as commission from collected amount. This is very faulty mode of distribution because of ambiguity of accounts but most of the time, movies with new star cast or big banner's small budget films or new banner's film with mid budget are traded through this method. In the case of loss generally 5% commission is given by Producer along with advanced paid (If any) to him.


Terms and Conditions

Producer: By preselling the producer can recover almost one third of the film from the distributors even before starting his film. In case the movie makes it big then further deal is being worked out and the profit gets divided between the producer and distributor depending upon the deal and the profits which the film makes.

Distributor: The distributors pay an MG to the producers and book their territories. They also spend on print and publicity on which they take fixed commission. In case of an overflow, the profits are divided between them and the producer. The big producers distributes their own films here the risk is very high but so are the profits.

Exhibitor: Earlier the system was that the exhibitors used to get paid by the distributors for running the film in the theatre as rental fees. But now it's different as the revenue is shared between the theatre owner and the distributor.


Sharing Ratio between Theatre Owner and Distributor

The general is that during the first week of the release the revenue is equally divided between the producer and the exhibitor. Then from there in the second week the producer gets 40%, in third week it's 30% and if the manages to get into fourth week, he gets 25%

Distributor Share is generally calculated as below:

Type

Week 1

Week 2

Week 3

Thereafter

Multiplex

50%

42%

37%

30%

Single Screens

70-90%

70-90%

70-90%

70-90%

Box Office Terminology

Cost of Film = Budget + Promotion & Advertisement

Non-Theatrical Revenues = Satellite Rights + Music Rights + Overseas subsidy etc.

Footfalls = Number of tickets Sold

Gross Collections = Money collected from ticket sales

Net Collections = Gross Collections - Entertainment Tax


Film Distribution Circuits (Area)

Indian Film Industry is majorly distributed in 14 circuits and each have its distributors to represent them:- Mumbai, Delhi/UP, East Punjab, CI (Central India), CP Berar (Central Provinces), Rajasthan, Bihar, West Bengal, Nizam, Mysore, Tamil Nadu, Assam, Orissa and Kerala.