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Distribution Economics: How Does Revenue Flow From Distributor to Producer?

In this seminar we discuss the realities of how independent film revenue flows from distributor to producer for both traditional and alternative distribution platforms.

This seminar is in audio format


DISTRIBUTION ECONOMICS - HOW DOES REVENUE FLOW FROM DISTRIBUTOR TO PRODUCER?

Traditional distribution is very expensive. Unfortunately, the producer is the last to get paid. Of course, one of the major benefits of self-distribution and direct-to-consumer sales is that the filmmaker gets paid right away. That's why I recommend a hybrid distribution approach where you split up your rights and mix traditional deals (long sales cycles) with self-distribution (short sales cycles) for maximum cash flow.

*The numbers presented here are ballpark figures intended to simply give you an idea of how it all breaks down. The figures, percentages, and assumed deal terms presented here are not carved in stone, but just examples provided for educational purposes. Actual figures and deal terms may differ substantially. The chart below shows a sample traditional distribution breakdown for a scenario where a distributor recoups P&A before taking their distribution fee. Alternatively, distributors may also take their distribution fee before they deduct their P&A recoupment (in which case their fee would be greatly increased since its based on a substantially larger number). Again, actual breakdown and figures will depend on the particulars of your deal terms.

THEATRICAL
10,000,000 revenue at theaters
- 10% tax off the top (exhibitor)
= 9,000,000
- theater take: 50%
= 4,500,000 to distributor
- distributor recoups minimum guarantee ($1 million) + P&A: $3,000,000
=500,000
- distributor's fee 25%: 125,000
$375,000 to Producer

DVD
1,000,000 in revenue
- 10% tax (retailer)
=900,000
- retailer pays 50% wholesale to distributor
= 450,000 to distributor
- distributor recoups minimum guarantee ($100,000) + marketing expenses ($100,000)
= $200,000
- distributor takes fee: 25%: $50,000
=$150,000 to Producer

VOD
$10,000 in revenue - VOD platforms
- platform takes cut: 40%
= $6,000
- aggregator takes 20% cut: $1200
$4800 to Producer



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Stacey Parks is the founder of FilmSpecific.com. She has over 16 years experience in independent film as a sales agent, producer, and consultant for independent filmmakers. Stacey is also the author of "The Insider's Guide to Independent Film Distribution" (2012 Focal Press), now in its second edition and considered to be an essential handbook for independent filmmakers seeking production and distribution insight for their films.