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I work in film – what sort of distribution agreement do I need?

Published 01.11.08 at 09:30

Usually, the owner of copyright in the film (the production company/financier) will enter into one or several distribution agreements to circulate the film to the widest audience. The important clauses to consider when negotiating the agreement, relate to:

The Film Owner's and Distributor's Rights

  • the rights clause: the agreement sets out what copyrights are licensed or assigned and across what media
  • territory: the agreement defines which territory, e.g., Europe, US, Asia, the rights covers
  • media: defines the types of media over which rights are granted; for example, cinema, terrestrial TV, satellite TV, video, CD-Rom
  • licence or assignment?: a licence is the most common, however, in some territories only an assignee can bring an action for copyright infringement (note, in the UK an exclusive licensee can also sue for copyright infringement)
  • right to terminate: the film's copyright owner should retain this right to terminate before the expiry of the licence in case the distributor goes into liquidation
  • notification clause: the owner should include the right to be notified by the distributor should any infringement of the film's copyright arise
  • distributor's rights: the agreement should reserve rights for the distributor, including; (i) the right to edit or cut the film, so as to comply with local laws (e.g, decency) advertising requirements (ii) the right to make copies (should format changes be necessary) (iii) sub-licence rights?: the distributor may wish to sub-licence distribution rights to different distributors and broadcasters

Payment and Accounts

The distributor will receive (gross) income from the distribution/sale of the film. All income received is paid to the film's owner less the distributor's commission, any advance and expenses. The agreement deals with the:

  • distributor's commission
  • distributor's expenses: these must be clearly defined and include reasonable costs for editing the film to comply with the law, advertising, insurance, etc
  • distributor's advance: often the distributor pays a pre-sale advance to the film's owner, which it has the right to recoup
  • terms of payment, when payment is received by the owner, and how payment is received
  • accounts; including which account, the right to inspect accounts, right to a shortfall, if there is a discrepancy between the accounts and amount of money received from the distributor.

Distributor's Obligations

These are to ensure the distributor does all it can to promote the film, including

  • advertising the film
  • film clearance with all appropriate laws and regulations
  • staggering the release of the film across different media
  • regulating and monitoring sub-licences and infringement
  • achieving a level of performance and selling films at agreed on price in territories

Other Clauses

  • warranties and indemnities from the film producer that it owns or has licensed the copyright used in the film and will compensate the distributor if there is an infringement.

Content supplied by Daniel McClean. Photo credit: Kamshots 

 

Please note that this article discusses the legal position in the UK at the time of publication. It provides general information only but is not to be regarded as legal advice. You must take advice from a specialist lawyer in relation to your specific circumstances. Further, you should seek additional legal advice when dealing with parties based in other parts of the world or works originating from other parts of the world as the legal position may vary.

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