There are no bigger advocates for independent producers than motion picture distributors. The largest distributors are the studio distributors commonly referred to as “the Majors”. The more of a working understanding of how a studio distributor works and how that relates to them that the producers have, the more likely it is that they will form more mutually beneficial relationships with the majors.

Studio Distributors or The MajorsThe studio distributors (Majors) are: 20th Century Fox, NBC Universal, The Walt Disney Company, Paramount Pictures, Sony, Warner Brothers, and Lionsgate. The Majors make billions of dollars each year and compete with each other in all markets and in media across the globe.

Each is a self-contained entity capable of both producing and distributing motion pictures. They are defined as “a global distribution entity with in-house production that includes owning its own sound-stages and back lots.”

Studios are distribution-focused for three reasons:

  1. It yields higher profits per picture when compared to production.
  2. It means the studio can handle more movies.
  3. It connects them directly to the marketplace, increasing stability and predictability to their business model.

As a result of this focus, all the studios have reduced the amount of pictures per year that they will produce in-house. They instead rely on independent producers to deliver movies to them for distribution. In meetings, studios are excellent negotiators and are well prepared to enter into relationships with producers.

Producers must likewise be well prepared when entering into a negotiation with a studio. They should know what they want out of the negotiation, and have in writing the deal points they want written in language that is approved by their attorney. Generally, however, producers are not prepared and leave the negotiation without the power they should have, and usually with a different understanding of their relationship than will later reveal itself in the resulting agreement document.

Studios are notoriously creative in their accounting efforts as if pertains to calculating profits. Producers and their teams of counsel should be cautious as it pertains to licensing agreements as these are typically negotiated to the benefit of the studio. As a rule, producers should be well versed in how money flows at a studio and how his percentage is calculated within that flow.

While each studio is unique in structure, they do tend to have three different operational areas in common. The first is the executive arena, comprised of the ultimate studio chiefs who make decisions on the largest scale, in areas like studio direction and assets, media alliances, global market positioning, etc., and only deal with the largest independent producers.

The second is the distribution arena where the focus is on acquiring pictures from independent producers. This area is home to the global distribution executives and where the sales organizations for the theatrical and home entertainment divisions reside. Most producers forge their relationships with the members of the distribution arena.

Finally there is the production arena made up of the organizations that manage the development of new projects, handle the production of the in-house pictures, and participates in production of independent films funded wholly or in-part by the studio. Each operational area will typically have a president although some studios have multiple presidents in each arena.

Studio relationships with producers usually revolve around three types of deals: in-house studio production, negative pickup (where the studio agrees to pay a sum for certain rights upon delivery of the final product), and distribution-only. There are crucial deal points to each of these relationships. They are:

  • Creative Control
  • Film Negative and Copyright Ownership
  • The specifics of the theatrical distribution commitment (number of screens and marketing minimums, principally)
  • The distribution fees, studio charges and overhead, studio participation, and for in-house producer relationships, the producer’s profit participation
  • The profit participation definition (a meticulous document that determines if a producer will receive anything), and the license or assignment of the film’s distribution rights between the producer and the distributor.