OCTOBER 19TH, 2016
BUYERS VS. DISTRIBUTORS:
What's the difference? Let's clear this up.
The distinction between Buyers and Distributors is one of my biggest pet peeves, although the answer is really simple. I keep reading pieces online where the writer is obviously knowledgeable about film distribution in general, but clearly doesn’t know the difference between a buyer and a distributor. On discussing companies like HBO, Netflix, Roadside Attractions or Gravitas, writers end up confusing the two terms and talking themselves into a corner, leaving the reader in the dark, yet again.
My goal here is to clear up these terms within the industry so we can have concise conversations that actually make sense. I help filmmakers understand distribution and strategize their film's release, but to be honest, this conversation is more for people working in distribution than for filmmakers. For filmmakers reading this post, in Part Two I'll explain why this distinction matters to you, and how you can use it to be more powerful in your contract negotiations with distributors and buyers alike.
One of the reasons these terms aren't frequently defined is that the ramifications of the answer in today’s distribution landscape is complex. This is because companies are adopting innovative methods to showcase their films as they learn that they can, and as they are pushed to by consumer demand. Companies today are crossing the line between distributor and buyer more and more frequently.
But we've gotten ahead of ourselves. What's the difference between a buyer and a distributor? Here it is: Buyers offer their products directly to the consumer. Distributors sublicense their products to other companies (who are, in many cases, buyers). Simple, right? HBO and Netflix executives who show up at a festival or market searching for films to place onto their services are buyers. They will offer the films they license directly to their consumers. Gravitas and Roadside Attractions, on the other hand, are distributors; they will sub-license the rights of the films they license to other companies. Even when Roadside Attractions handles a theatrical release, they are licensing the film to the theater, which is where the consumer finds it. So the theater chain is the Buyer, Roadside is the Distributor.
As simple as this seems, it does get confusing in today’s marketplace, for many reasons. Companies who have been solely buyers in the past, like Netflix and Amazon, are now producing their own content. So when they are looking to acquire a completed film, they are acting as a buyer, but when they are producing their own products and looking at how to maximize their sales in the marketplace, they are morphing into distributors.
There are other ways the lines are blurred.For example, HBO is offering its shows on Amazon Prime. Who is the buyer and who is the distributor? Not so easy to answer in this case, because the original buyer (or producer, for many of their programs), HBO, is acting as a distributor in that they are licensing their programs to another company, Amazon, who will offer the shows directly to the consumer. However, because HBO always keeps their label on every program, they do not become “Amazon” programs. Instead, HBO maintains its brand throughout the transaction, basically using Amazon as another HBO platform. In this way HBO is still the company offering the films directly to the consumer.
When I was working for Gaiam, I was acquiring films for two branches: One was an OTT subscription platform (GaiamTV, now Gaia) where we were looking for SVOD rights to the films we wanted to acquire. The other was a distribution company, selling a massive quantity of film product (some produced by Gaiam, some acquired) to other companies. For this branch we wanted to license all rights to the films we were acquiring, if we could. I was acting as a buyer for GaiamTV, while acting as distributor for the Gaiam. I could watch a film and want to buy it, distribute it, or both.
Now that Netflix, Amazon and Hulu are producing their own programs, they are coming from a different angle than when they were just buyers. Now they are making products that they own outright, just like the studios, which means they have all rights to these branded programs and are entirely responsible for any money earned on them, forever. Premiering on their own platforms is a must, increasing new subscriptions and keeping old subscribers happy. But it wouldn’t make sense to keep them on their platforms only, for the entire life of the film; they’d be giving up huge income from other available outlets. So Netflix, Hulu and Amazon, (aka. the new studios) have become distributors as well.
Stay tuned for Part Two: Why does the distinction between Buyer and Distributor matter?
Do you like this conversation? Join me and my colleague Jilann Spitzmiller for a huge day packed with the latest on distribution at our upcoming Film Distribution Workshop on October 29th. Sign up now! http://bit.ly/film-distribution
SEPTEMBER 15th, 2016
ABC's Of Distribution Contracts
(written for a Stage32 live Webinar)
If you're curious about how to read, understand and negotiate film distribution contracts, please join my webinar today on Stage32. We will be talking about deal points, going over definitions of terms, and taking a look at what can and should be negotiated in every contract, and what should be left alone.
There's a fine line between fighting for the best possible deal you can get, and pushing a distributor too far. I've seen it happen, there are deal breakers for each party, and it's important to know what they are and how to navigate around them to get what you want without losing the deal.
As filmmakers, if you are clear about your own priorities and intentions for your film's distribution, and you understand the language of the contract, it will be simple for you to negotiate with strength and clarity. My experience in distribution has shown me that when a filmmaker arrives at the table with that strength and clarity of vision, the distributor will do everything they can to work with them, sometimes even giving a bit more in places where they might not usually give.
This is because a distributor knows that if the filmmaker has a clear plan, they also have the motivation to make the sale, and an understanding of their audience that will benefit all levels of that film's distribution. This holds real value in the marketplace today, and distributors respect that.
film distribution strategy.