TO UNDERSTAND THE WAYS OF FILM DISTRIBUTION

Year 12

Film distribution

In a service deal, the filmmaker fronts the bill for prints and advertising costs and hires a company to provide distribution services, from promoting the film to collecting revenues from exhibitors.

The filmmaker is in effect renting the distribution system for theatrical releases, but pays less for the distribution fee (around 10%-25% of gross, rather than the classic 35% of gross).

The producer is risking his or her own money, but retains control over the film and continues to have final say in the promotion and costs.

Examples of films that have done this are: Fahrenheit 9/11, Monster, and My Big Fat Greek Wedding.

The latter, a $5 million, ethnic comedy with no big-name stars, grossed over $241 million at the U.S. box office.

The advertising budget was around $1million and the distributors, IFC Films, were paid a flat fee of $300,000.

Digital film

Today, most films are edited and mastered on digital equipment; a few, such as George Lucas's latest Star Wars episodes, are even shot using high-definition digital cameras, rather than being photographed on film.

Yet across the world, the standard format for presentation remains 35mm celluloid, which delivers superb quality to audiences.

Now the cinema industry stands on the threshold of a great, rolling transition from celluloid to digital, which is expected to gather momentum over the decade ahead. In time, digital technologies are likely to exert as profound an impact on the cinema sector as on the broadcast and other media sectors.

Digital or D-cinema has already been piloted in the UK for ten years. Disney/Pixar's Toy Story was supplied and presented digitally at London's Odeon, Leicester Square, in 1995.

Only a handful of cinemas have had digital projectors whilst further quality advances were achieved. Now, with D-cinema giving state-of-the-art clarity on screen, audiences may be unaware that they are watching a digital, as opposed to a film, presentation.

The general aim is to ensure that digital content can be distributed and played anywhere in the world - as is the case, of course, with a 35mm print.

The new technologies and components should be based on open, as well as compatible, standards that foster competition among equipment and service providers.

The hardware should be capable of easy upgrades as further advances occur.

Film distributors - the companies that release movies and market them to the public - will benefit if there are substantial reductions in the costs of duplicating film prints and transporting them to cinemas.

The UK is one of the most expensive markets in the world in which to release a film.

Approximatly £125m is spent on prints, duplicated in high-tech laboratories. A digitally produced or converted film could be delivered quickly and reliably via disc (a much smaller, cheaper physical medium than a 35mm print), fibre optic cable or satellite - triggering a huge systems change for the whole industry.

Cinemas that book and receive a digital copy would store it on a computer/server in the projection box, which would serve it to a particular digital projector for each screening.

Importantly, distributors should be able to encode and encrypt their digital files, to ensure that each film is as secure as possible and that access to them throughout the theatrical lifecycle is controlled and traceable.

In the digital era, new asset management models will emerge but for the foreseeable future, piracy is expected to continue as a key business issue, undermining the industry's further development.

In due course, it may be possible for distributors to deliver newly cut digital trailers to cinemas at very short notice, capitalising on topical developments such as awards nominations or wins, favourable reviews and box-office success, much as other forms of film advertising already do.

Given lower print/shipping costs, distributors may be able to consider increasing the number of (digital) copies or increasing their advertising investment to promote the film. If they take this risk, it may in turn help to draw a larger audience to 'specialised' films which tend inevitably to have smaller releases than commercial blockbusters. Of course, simply making more copies of a film does not automatically lead to more tickets being sold.

Ultimately, audiences will decide what content they want to pay to view, and accordingly what gets shown, in cinemas; technology itself does not drive admissions. Whatever happens from now on, potentially very exciting changes are coming. The future isn't what it used to be.

Internet

The internet is transforming the way that audiences discover and engage with films. There are new opportunities for distributors to utilise online tools and services to engage with and build audiences for a film, particularly over a longer lead time than is normally the case for distribution.

Consultation with the distribution sector has shown that securing substantial cinema bookings, particularly for smaller specialised films, can be challenging. By accruing more data on the prospective audience for a film (eg location/nearest cinema, email address, media habits etc) a distributor may be better equipped to secure more bookings for a film in appropriate cinemas.

Furthermore, this data can feed into the wider release plan for the film across other platforms such as DVD and online distribution, helping to ensure that the film reaches its widest possible audience. The internet is a highly efficient environment in which to gather such prospective audience data, particularly if the audience development activity can be carried out a long time in advance of the release date.

Opening a film theatrically is an expensive business, with films often losing money at the box office. The theatrical release is seen as an essential part of the distribution strategy because it generates awareness for a film, which hopefully translates into DVD sales further down the road.

Deals vary, but in a "standard distribution deal" once theatre-owners have taken their slice, say, 50% of box office gross, the distributor has taken his fee, typically 35% of gross, and the distributor has recouped the cost of prints and advertising (P&A), the filmmaker can easily be in debt. It can take some time for ancillary revenues, in particular, from the big revenue-maker DVD sales, to get the filmmaker into the black.

Broderick says that some filmmakers are responding to this situation by getting more proactive in their distribution strategy. Rather than aim for a conventional distribution deal whatever the terms, producers are focussing on distribution strategies that maximise their opportunities to earn revenue from their film - and that usually means hanging on to as many rights as possible, and getting into a position where they can negotiate from a more favourable position.

Internet distribution and marketing New technology continues to offer unprecedented distribution opportunities. Much-improved DVD projection, giant plasma screens, and surround-sound home entertainment systems are allowing filmmakers to bring the cinematic experience into other public and private places. You don't need a cinema to show your film to a crowd. You just need a large, quiet space, with protection from the elements, and an electricity supply.

Blair Witch may have been a one-off, but filmmakers are using the internet both as an effective grass roots marketing tool and for making direct distribution a possibility. Robert Greenwald's (Outfoxed, Uncovered) latest project, Walmart: The High Cost of Low Price, which I wrote about last week and which is moving into gear this week, is a high profile example of how documentary filmmakers are tooling up online. Greenwald's film is premiering at thousands of community screenings and house parties, all screened off DVD. The expectation is that he will capitalise on DVD sales of the film as word-of-mouth spreads among his core audience and people buy the film as gifts for friends or for educational uses.

Like theatrical releases, house parties are about creating word-of-mouth, and filmmakers don't expect to make a killing at the "box office".

Greenwald, for example, is just charging for the price of the DVD that will be used to project the film (organisers of screenings can charge as little or as much as they like).

"The first priority is establishing awareness and hoping that that will result in good things subsequently," says Broderick.

DVD

With bulk printing of DVDs (including postage and packaging) now costing less than a pound, the filmmaker who has retained rights to their film can benefit from a nice mark-up per unit sale. There are a few technical issues to bear in mind, like what region to print the DVDs in (Broderick suggests a universal region 0) and whether you should go NTSC or PAL, but these are not insurmountable.

"You don't have to sell a lot of DVDs to break even on lower budget movies. If filmmakers can figure out a way to sell ten or fifteen thousand DVDs over time, over the world, that can be enough to get them into the black. Once they've got those names and email addresses they can take that to other projects," says Broderick.

DVDs wont be around for ever. Digital downloads are becoming more common. Broderick points out that the first nine minutes of the feature film Serenity went online for free for a limited period. The film was full-screen and played within a minute of clicking the play button. "It's the best quality streamed video I've seen," he says.

Broderick sees some films even being cast on mobile media, like the video iPod in the "not-too-distant-future." It's difficult to envisage people watching films on their tiny handheld screens, but Broderick is adamant: "People are saying it's just television. They're so wrong. This is just the beginning..."

Film downloads

40% of the UK population (19 million people) are weekly Internet users. Of these, approximately 4.5million people download music and 3% download film presently.

Intentions to download film by those already downloading music is high; 22% intend to download film in the next year, which would double the number of people downloading film currently.

This is unsurprising, as one-third of these people are already downloading trailers, but not yet entire films.

Music and film down loaders are likely to be 15-35 years (more men than women).

Task-Discuss what are the advantages or disadvantages of film downloads?

After discussions two weeks ago!Most films downloaded are only available after their cinema release, so the greatest danger is of damaging the DVD rental and purchase sectors. But there is still a risk that pirated films, available on the Internet and downloaded even before their UK cinema release, may deter cinema visits.

Select a that has not recently been released research the director, the film distributor, how it was distributed and how successful it was.