Distribution

Distribution
A distributor can help market and generate sales for your film.

What is a Distributor?
In terms of shorts, a distributor is an individual or organisation who will represent your film at festivals and markets around the world and who will attempt to sell it to television (including terrestrial, cable and satellite), airlines and other companies that show short films. The major short film distributors in the UK are (in alphabetical order): Dazzle, Futureshorts, Network Ireland TV and Shorts International.

In terms of features, a distributor is generally an organisation who handles the theatrical release of a film in a particular country as well as the marketing and circulation of films for home viewing (DVD, Video-On-Demand, Download, Television etc). Often feature films have different distributors representing them in different territories and different distributors handling the home-viewing circulation. Independent film distribution in the UK is generally managed by indie distributors such as Metrodome, Optimum Releasing and Momentum.

Distributors will source new films to represent in their distribution catalogue at film festivals and markets around the world such as Cannes, Rotterdam, Berlinale, AFM and Sundance festivals (features) and Clermont-Ferrand, Tampere, Encounters and Toronto Worldwide Short Film Festival (shorts).

Although they may be interested in unsolicited submissions or work in progress, the majority of films that distributors acquire, are completed films sourced at film festivals and related markets. Having said that if your film hasn't been picked up on the festival circuit it is worth making contact with distribution companies and forwarding a DVD copy of your short film or emailing a link to your film online to see if they are interested and if so what they offer you in terms of a deal.

For a film to be distributable, you will need to make sure you have all the right assets in place.
As well as assets, distributors will require a clear paper chain - clear contracts and license deals so that they know that you are legally allowed to sell all the different elements of your film on to a third party.

Distribution Deals
It is up to you to negotiate the rights a distributor will acquire in your film i.e. you may want to hold back distribution rights in certain territories. If you conclude a deal it should be formalised in a written distribution agreement. Some clauses to look out for are:
Territory: this specifies the countries in which the film can be distributed by the distributor.
Term: this sets out the period of time the distributor will hold distribution rights in the film.
Rights granted: the agreement should distinguish between the media rights granted to the distributor (theatrical, video and DVD, television rights etc.) and those media rights which are reserved to the producer e.g. radio rights. You should determine whether the rights granted are exclusive or non-exclusive. If you agree to exclusive rights, it will stop you allowing others to show your film within the specified media/territory/term.
Producer's warranties and representations: the producer will be asked to provide assurances that there is no infringement of copyright.
Gross receipts: this means all monies actually received by the distributor from the exploitation of the film before any deductions have been made.
Net proceeds: this is the amount payable to the producer from the proceeds derived from the exploitation of the film after costs incurred by the distributor have been deducted. Costs can include distributor fees, commission and expenses.
Expense caps: there should be expense caps in order to prevent the distributor claiming unreasonable amounts, which would reduce the amount left for the producer to recoup.
Distributor's obligations: Distributors should use their best efforts to realise gross receipts from marketing and exploitation of the film.
Accounting: The distributor should be under obligations to maintain accurate and true records of sales and expenditure and the producer should have the right to receive regular accounting statements on the film.
Termination: You should pay special attention to the circumstances in which you can terminate the relationship with the distributor. If your distribution agreement is for a long period of time and a better deal comes along during that period, the wording of such a clause will often determine as to whether you can end the existing agreement.

One of the best ways to be clear on what is a good deal is to talk to other short filmmakers about their experiences. If you are still not sure, you can get advice from your regional screen agency.
The best policy is not to sign any agreement that you don't fully understand until you are clear about all of the terms. There are plenty of people who can offer advice to help you along the way towards the successful distribution of your short film.

Distributors generally offer a percentage royalties on any sales made, which should be net after any marketing, production and promotional costs the distributor incurs from the film's release. They almost always want exclusive rights to sell the film in the selected territories, so that they effectively manage the film's commercial life within that territory. One film may have several distributors, specific to each territory, so that a local marketing campaign and versioning is ensured. The deal also could include an advance fee on any sales the distributor makes, which is then recouped later on future sales.

Sales Agents
More rarely, both short and feature films can benefit from the skills of a Sales Agent, who works on selling a smaller range of films on behalf of the film's rights holder / producer. Agents are responsible for setting up the deals, but do not necessarily deal with all the contracts paperwork, taking a percentage fee from any sales that arise from their work. They tend to take slightly lower fees than distributors as they do not have such large overheads and provide no guarantees of sales. However you may need to pay them a retainer until they achieve a sale. They can also be responsible for setting up deals with film distributors per territory. Talent Agents can also act as Sales Agents.
In the case of short films, sales agents often do the same role as distributors.

Sales & Income
It is very rare to make a profit on selling a short film. It is not a good idea to overspend on budget with the hope that you will get it back afterwards from selling the film. You probably won't. Short film distributors tend to sell films in packages to make their profit margins sustainable, with a slant on high production values, romance /comedy / drama genres and avoidance of overly ‘adult' themes. However, if you are interested in getting your short on TV across the world, on seatback airplane TVs, and on iTunes, distributors have the right contacts and will do the heavy, complicated paperwork it takes to achieve this.
TV license fees tend to pay per minute, ranging from 50EURO to 250EURO per minute. Clearly, this means longer films make more money, but most broadcasters will not license a film that is over 15 minutes long. More active buyers will attend film festivals in order to source new films for their channel, so it is possible, if bureaucratic, to sell shorts directly to TV channels.

Withholding Tax on Licensed Films
It is worth noting that countries outside of the UK, including the EU member states and the USA, can legally withhold up to 40% of the due license fee as withholding tax, until you are able to provide the Licensee with a Certificate of Residency from your local tax office, where your company is registered. If you do not have a registered company, you will not be able to avoid the tax. The certificate changes annually and is needed in order to prove that your main business takes place in the UK, not from an overseas office. If you have a distributor, they will be able to deal with this for you, as they will have submitted annual Certificates of Residency to each international Licensee / Broadcaster.
In the USA you will also need to register for an UIN (Unique Identification Number) and fill out the W1/BEN form from the Inland Revenue in the USA to avoid additional taxation.