Will Rogers said, “Even if you're on the right track, you'll get run over if you just sit there.”
No film or television distribution company can afford to just keep putting one foot in front of the other and hope to survive this chaotic business. You need to move. Which direction to jump is another question.
It seems that most film distributors and sales agents are moving in one of four directions. Some that I know are moving ‘upstream’, that means that they are helping to finance films earlier than ever before. Some at the script stage. They are doing this to secure the long term distribution rights to films by producers that they know and trust. Also, many distributors were once (and still are) movie producers in their own right, and this is a comfortable path for their companies to take. By supplying production, or finishing funds for films, the distributor secures the distribution rights, gets executive producer credit and often back end participation (if any). It is a smart move if you can afford it, but it takes deep pockets to do this.
Another large group of distributors are moving ‘downstream’, that is, they are developing channels of distribution to sell films directly to the consumer, be it via Hulu, YouTube, etc. or their own internet portals. These film distributors see the benefit of bypassing the traditional markets to go directly to the end user. They still attend all the major film markets, mostly to acquire product and cement international relationships, but they are not there to necessarily sell films to the foreign buyers. Most of these distributors have deep catalogs in specific genres; perhaps horror, sci fi, Christian/family, classic movies/TV, or documentaries. The problem with the move ‘downstream’ is that revenues have not yet caught up with the costs. You need to have staying power to build a brand and hold out until the consumers finds your channel(s) and are willing to pay for the convenience.
The third way that I see distributors jumping is (in keeping with the stream theme) to the left or right bank of this business. On the left bank (Rive Gauche) is the vertical integration model. In this model the sales agent, turned full service distributor, acquires all rights to the films they sell, both foreign and domestic… or they simply buy some films outright. The distributor handles everything, including television, HBO/Showtime/Cinemax, RedBox, Amazon, Netflix, foreign sales at the markets, and even DVD. This is what I call soup to nuts distribution. All markets, all mediums, all world. In the vertical integration model the distributor also handles the theatrical release of the movie (if any). Many distributors have found the financial rewards of doing day and date releases for their films. It is a way to get better exposure for their movies to foreign buyers, and to potentially hit a home run in North America.
The fourth jump out of the typical sales channel is to the right (Rive Droite). In this move the foreign sales agent or distributor chooses to partner up with other compatible film and television distributors, sales agents, producers, or even their biggest customers, into something of a coalition. In some cases they simply merge. Many of these companies have downsized as much as they possibly can and some have even given up their fine offices in favor of working out of their homes. Gone are the big staff and acquisition team, in favor of a more streamlined operation. These companies have been living off of market fees and meager commissions (sometimes for years) but have now seen the wisdom of creating a partnership with other companies that provide a synergistic service to the industry. This is taking advantage of the power of long term relationships and segmenting the channels of distribution. We see this most often in the digital distribution space, where a US company will partner with a European company, or perhaps a Chinese company, to gain market access and create a supply chain that both companies need. There is often strength in numbers and no independent sales company can be all things to all people. But, by partnering up with companies of common interest, you can complete a loop that benefits the producers, the buyers and the consumers.
Will Rogers was right. You can’t just sit down on the tracks and wait for the money train to run you over. Every company in this industry has to be on the move. Some are moving upstream, some are moving downstream, some are jumping to the right and some are jumping to the left… and unfortunately, some will be road kill.
Which way are you moving?
No film or television distribution company can afford to just keep putting one foot in front of the other and hope to survive this chaotic business. You need to move. Which direction to jump is another question.
It seems that most film distributors and sales agents are moving in one of four directions. Some that I know are moving ‘upstream’, that means that they are helping to finance films earlier than ever before. Some at the script stage. They are doing this to secure the long term distribution rights to films by producers that they know and trust. Also, many distributors were once (and still are) movie producers in their own right, and this is a comfortable path for their companies to take. By supplying production, or finishing funds for films, the distributor secures the distribution rights, gets executive producer credit and often back end participation (if any). It is a smart move if you can afford it, but it takes deep pockets to do this.
Another large group of distributors are moving ‘downstream’, that is, they are developing channels of distribution to sell films directly to the consumer, be it via Hulu, YouTube, etc. or their own internet portals. These film distributors see the benefit of bypassing the traditional markets to go directly to the end user. They still attend all the major film markets, mostly to acquire product and cement international relationships, but they are not there to necessarily sell films to the foreign buyers. Most of these distributors have deep catalogs in specific genres; perhaps horror, sci fi, Christian/family, classic movies/TV, or documentaries. The problem with the move ‘downstream’ is that revenues have not yet caught up with the costs. You need to have staying power to build a brand and hold out until the consumers finds your channel(s) and are willing to pay for the convenience.
The third way that I see distributors jumping is (in keeping with the stream theme) to the left or right bank of this business. On the left bank (Rive Gauche) is the vertical integration model. In this model the sales agent, turned full service distributor, acquires all rights to the films they sell, both foreign and domestic… or they simply buy some films outright. The distributor handles everything, including television, HBO/Showtime/Cinemax, RedBox, Amazon, Netflix, foreign sales at the markets, and even DVD. This is what I call soup to nuts distribution. All markets, all mediums, all world. In the vertical integration model the distributor also handles the theatrical release of the movie (if any). Many distributors have found the financial rewards of doing day and date releases for their films. It is a way to get better exposure for their movies to foreign buyers, and to potentially hit a home run in North America.
The fourth jump out of the typical sales channel is to the right (Rive Droite). In this move the foreign sales agent or distributor chooses to partner up with other compatible film and television distributors, sales agents, producers, or even their biggest customers, into something of a coalition. In some cases they simply merge. Many of these companies have downsized as much as they possibly can and some have even given up their fine offices in favor of working out of their homes. Gone are the big staff and acquisition team, in favor of a more streamlined operation. These companies have been living off of market fees and meager commissions (sometimes for years) but have now seen the wisdom of creating a partnership with other companies that provide a synergistic service to the industry. This is taking advantage of the power of long term relationships and segmenting the channels of distribution. We see this most often in the digital distribution space, where a US company will partner with a European company, or perhaps a Chinese company, to gain market access and create a supply chain that both companies need. There is often strength in numbers and no independent sales company can be all things to all people. But, by partnering up with companies of common interest, you can complete a loop that benefits the producers, the buyers and the consumers.
Will Rogers was right. You can’t just sit down on the tracks and wait for the money train to run you over. Every company in this industry has to be on the move. Some are moving upstream, some are moving downstream, some are jumping to the right and some are jumping to the left… and unfortunately, some will be road kill.
Which way are you moving?
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