Theatrical Distribution Deals

Theatrical Distribution Deals


The share of Box Office paid over to distributors varies between territories. The typical exhibitor's share in the US is 45 to 55% and in the Rest of the World 55 to 65%. The UK has some of the highest retentions by the exhibitor, averaging around 65 to 70%. The balance remitted to the distributor is termed the "Net Theatrical Rentals".

With regard to how much might actually flow back for the purposes of producers or financiers or agents below the distributor, there are three main types of theatrical distribution deal : 

i. "Costs off the Top Deal": the distributor recoups their prints and advertising (P & A) spend from the net theatrical rentals. From the balance, the distributor retains a distribution fee of up to 50% and from the remaining balance recoups any advance plus interest before paying the final balance into the pot; 

ii. "Net Deal": the distributor retains a distribution fee of up to 50% of the net theatrical rentals. From the balance, the distributor recoups P & A expenditure and any advances plus interest. The net receipts after these have been recouped are put into the pot; 

iii. "Gross Deal": the producer / financier / agent receives an agreed percentage from the net theatrical rentals before any P & A spend or advances have been recouped by the distributor. Out of the balance, the distributor retains their distribution fee and recoups P & A spend, advances and interest. After recoupment, any remaining receipts are paid into the pot. 

Of these three models, the net deal is the one most commonly used. Under any of these structures, however, and because of the high cost of P&A coupled with distributor fees and other costs, it is unusual for independent producers to receive any back-end profits from the theatrical release since the other parties further up the chain will still be unrecouped. The independent producers will have to look towards the other revenue streams to see if they can get some "profits" back from their project.

Video/DVD Distribution Deals 

Film distributors take an average of 75% of consumer spend from retail video/DVD activity compared to about 25 - 33% from rental activity (hence their keenness to get titles into the sell-through market as quickly as possible). There are various kinds of video/DVD distribution deal for the independent producer to be aware of 

Rental: 


* royalty deal: distributor pays royalty to producer / financier / agent of 35 - 45%.

* Off the Top deal: distributor takes fee of between 25 and 35%, deducts their costs (typically up to 25%) and remits the balance to the producer/financier/agent.


Retail: 


* royalty deal: distributor pays royalty to the producer

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