Home Marketing and Distribution Legals and Recoupment Negotiating A Distribution Deal

Negotiating A Distribution Deal

Page 2 of 3 Term There is no typical term length, so negotiate something reasonable – perhaps between five to 10 years, depending on the project, its prospects and the distributor involved. A shorter term (one or two years) may be best if you want to test the distributor and have the freedom to go elsewhere quite quickly if you’re not satisfied. On the other hand, you may want a longer term (but never in perpetuity) if the distributor is well-established, reputable, and willing to pay more money for the additional time. Whatever the term length, the distributor will probably want it to begin as soon as the contract is signed.  Instead, specify that the term does not begin until you, the filmmaker, have received payment of the advance (if any) in full.  This way, if the distributor fails to pay the advance, he won’t have the benefit of the licensed rights.  Otherwise, the distributor would be entitled to retain the rights and you would have to sue him, for money damages only. Territory The contract should state the territory (the country or region) where the distributor has the right to exploit the film.  Typically, territories are divided into two broad categories:  domestic (which may mean English Canada only, Canada only, or Canada and the United States), and foreign or international (usually covering the rest of the world). You can ask for a list of territories before signing the contract or ask for it to be included as part of the contract. Pricing is highly variable. It will depend on such things as the project, the rights being acquired, the term, the territory, and, of course, the bargaining power of the parties concerned. Some deals specify minimum fees for a territory, meaning that if the distributor wants to sell for a lower price, he must first obtain the filmmaker’s consent. One last point: Until technology is able to restrict access to audiences within a particular territory, you may need to restrict Internet exploitation of your films, except for promotional purposes. Language The contract should also include language restrictions to ensure the distributor is exploiting only the specified language in the specified territory.  For example, you may want to grant different language rights to different distributors in the same territory. If so, you need to prevent any one distributor from exploiting a dubbed or subtitled film (or DVD) in more than one language in that territory. Or, you may want to grant different distributors the right to exploit material in the same language, but in different territories.  Here you need to prevent one distributor from going beyond his contracted territory in that language. Expenses It is impossible for filmmakers to monitor the expenses incurred by distributors. The contract should therefore include a floor (the minimum) and ceiling or cap (the maximum), and it should also clearly specify the expenses on which the money is to be spent. The floor ensures that the distributor commits to spend a minimum amount on advertising the film – for example, by creating a poster, trailer and other promotional materials. The cap limits the amount of expense money the distributor is allowed to recoup from revenues before paying you your share. The cap may be expressed in a dollar amount or as a percentage (for example, of gross receipts). The floor and cap for any project will vary with the project and the kinds of expenses it has.  For marketing expenses, for example, a distributor may recoup between $2,000 and $10,000 per market, with an overall cap of $20,000. Continued... << Previous Page - Next Page >>

 

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