Answer to : What is a Film Distribution Company?

Thanks for sending in your questions.. I will cover all of them, the first one is very basic as it is important, It was asked by Srikanth Dasari :

QUESTION :

What is a distribution company? I mean once the movie is
produced by the
producer, does he sell them to distribution companies,

And if so then to what price do these distribution
companies sell these
movies to the theatres. How is the cost determined?

Hope you will get back to me. Eagerly waiting for your
reply.

Thanks,
Srikanth Dasari

ANSWER :

A distribution company is a middleman between the theatre and producer/director/filmmamker. At least that is how it should be. Sometimes a distribution company has their own theatre and completley does not do business with an unknown producer/director. This is called a restraint of trade. As you may know, it was illegal in the 1950’s and completely weakened hollywood. Now it is not so and not so illegal anymore. A distribution company acts as a middleman between the theatre and the producer/director. You do not need a distribution company for your film and can choose to “self distribute” it to the theatre. This is all you need, a “theatre”. However, it is not so easy to distribute all over the world, so you most likely will have to use a distribution comany. Check out my post :

http://moviedistributionfacts.wordpress.com/2008/05/17/film-history-from-1890-present/

for more information.

What prices do the distributors sell to the theatres? it usually is 75% for the distributor and producer/director and 25% for the theatre. That my friend, also depends on the budget of a film, if it is a high concept 100 million dollar film or a $500 thousand to 5 million low budget or independent film.

Please reply with any other questions to Jonathan at nyctrader_07@yahoo.com. thanks.