Understand Rights Splitting

The film-making industry has seen a major shift in how rights are being sold. In the past, a distribution deal meant selling all of your rights. Now the trend is shifting towards splitting rights between a number of specialized distribution partners. Both approaches have advantages and disadvantages.

Selling all the rights to one distributor, such as Sony Picture Classics, Focus Features, Fox Searchlight and Lionsgate (which are the independent arms of major studios) guarantees a lump sum up front because they can afford higher payouts.

On the flip side, such a deal cuts off all other revenue channels. So if the lump sum is not large enough to pay investors, the movie will be left in the red without having any opportunities to make up for it.

It is therefore recommended that you negotiate rights for yourself, such as self-distribution of the DVD through your website, as well as broadcast and foreign rights. Although this is standard industry practice, some distributors will resist it. In this case it is best to reassess your position and what is in your best interest. Remember that any rights that you keep can be sold to other distributors for additional revenue.

Sales agencies may offer you a deal for no advance. These are not distributors and cannot really offer you a distribution deal. Instead, they will take the rights to your film and use their expertise to sell them to individual distributors. For such deals, you should examine the agency and the types of films it sells carefully. If you decide to follow through, try to retain local distribution rights as you probably will not require the agency’s expertise for contacting domestic companies.