Distribution 101: How To Evaluate If a Distributor is Right For You
11 steps to make sure you are working with the right partner for your film’s success.
In the coming issue of Filmmaker Magazine, Scott Macaulay and I profile four new innovative distributors who are bending the mold of traditional distribution. I’ll be posting comparative summaries of the companies in the coming week culminating in our next webinar featuring the leaders of those companies. Which you can register for here:
📅 Wednesday, June 25 | 11am PT / 2pm ET
👉 Register to attend.
Its free for all!
Distribution 101: How To Evaluate If a Distributor is Right For You
While there are some amazing success stories of filmmakers who completely embrace direct to consumer strategies for their films (see our recent 1946 case study here), I’ve always felt that for the majority of filmmakers a hybrid approach where you split the rights among various distribution entities (while often retaining and exploiting some of those rights to distribute directly usually makes the most sense). This gave birth to the term hybrid distribution which I coined in Think Outside the Box Office - but currently giving way to “indepenendent distribution” which would embrace all forms direct and hybrid.
Last - occasionally there will be an all rights deal that makes sense for films such as with the four companies we are profiling next week (and others emerging now as well).
Here's how I recommend filmmakers evaluate potential partners, whether you're signing an all-rights deal or licensing select rights to different companies.
Vision Fit
Does their distribution plan (or importantly what they require as part of the deal) align with your goals—whether that’s career-building, reaching a specific audience, creating social change, or achieving financial return?
If relevant, do they understand the cultural, political, or social urgency of your film?
Are their marketing and release plans exciting? Do they make sense for your vision and your audience?
If they do not have a vision - even for split rights distributors such as digital distributors or educational distributors - that should be a concern.
Creative Collaboration
Will they work with you as much as you want to be involved, or are they fine if you have to move on to other projects?
I always say, why should your “child” (your film) go to a boarding school where you have no connection? You should have a partnership with a distributor that allows you to be involved in the process.
The above is mainly a concern for all rights distributors but pertains to split rights situations as well.
Staffing and Capacity
Who is your main point of contact? Do you feel comfortable with them and their approach?
How big is their staff, and how many films do they release annually/monthly? Do they have the capacity to give your film the attention it deserves?
If they hire outside vendors, like publicists, can you speak to them directly and evaluate if they’re a good fit for your project?
Reputation
Ask to talk to past clients. (But usually better to connect with filmmakers directly - look at their roster and reach out.)
Talk to at least two filmmakers whose films the distributor has worked with recently, and ideally, some filmmakers who have been with the distributor for 5-7 years. What’s their experience like, long-term?
Did the distributor show up with passion and persistence for their films? Are their accountings on time and accurate? Do they pay what is owed?
Revenue Deal Terms
Are there any advances or minimum guarantees (MGs)?
What does the "waterfall" look like?
How are net proceeds defined? See #6 Expenses.
When are expenses deducted?
What percentage of gross or net do they take?
Do they take a distribution fee off the top or is it a split with you after expenses?
Is there a gross corridor? (where filmmakers get a percentage of the gross before expenses). Normally for all rights deals.
Run your numbers: ask for low, medium, and high projections, and then adjust the low number for worst-case scenarios. (Generally projections are unreliable - I often take the low number and cut it in half.)
Expenses
Do they only deduct third-party expenses?
What’s their P&A (prints and advertising) commitment? Are they efficient with their spending? Will they invest in marketing?
Are any expenses capped or require approval before an increase?
For digital distributors - what are they taking off the top as an encoding fee? This will vary widely.
Rights
What rights do they want to take, and do they have the infrastructure to release those rights?
Will they let you carve out rights they either don’t engage, or rights that you would prefer to handle yourself or with another company? (Note this is less likely to happen with all rights deals with a significant MG and/or P&A commitment).
Do they sub-license rights to others, and if so, how does that affect you?
Same questions for territory
Territory
What is the territory? The US (and its “territories”) or North America or World Wide or the world excluding NA, etc. (Of course there are now universe deals and/or deals that include Mars - can you carve out Saturn?)
If world wide - how do they distribute to the rest of the world? Some foreign sales companies and distributors are trying for that global deal but what happens if that doesn’t happen?
Will they carve out territories they don’t sell to or that you have prior deals with?
Or can you get territories back after a certain period of time?
Term and Exit Plan
How long is the term of the deal? Many digital distributors still ask for up to 25 years, which can be too long for most films. A term of 5-7 years (or even 3 if you can get it) is much more reasonable. Again, large MGs and/or significant P&A commitments will tend to lead to longer agreements. But I’ve also seen companies not offering MGs or P&A and still requesting 15-25 years which does not make sense.
Make sure there’s an out clause in the contract in case things don’t go as planned. What happens if they don’t meet agreed-upon milestones (e.g., sales or release dates)?
Make sure you have a breach clause if they miss an accounting or payment (or max 2 accountings). If the latter happens you should get out as soon as possible.
Guarantees
Does the deal guarantee a theatrical release or digital release by a certain date? If theatrical, how many cities, and which ones?
What marketing commitments are guaranteed, and how much will they spend?
Marketing Vision and Abilities
Does the distributor have innovative ideas for marketing your film? Can they access niche or underground audiences that you may not be able to reach on your own?
Do they have experience with political or difficult content, if relevant to your film?
The Bottom Line
Whether they have the opportunity for an all rights deal or are creating a split rights/hybrid scenario all filmmakers must be critical in their evaluation of potential distributors. At the end of the day, you want a partner who will support your vision, communicate clearly, and follow through on their commitments. Distribution should never be an afterthought, and with the right partner(s), it can be the most exciting part of your filmmaking journey.
Don’t forget to sign up for the New Distributors Webinar happening next Wednesday on the 25th of June.
Until next time,
Jon.