The distribution business
An overview of how films are distributed and release windows
Welcome back!
Last time we talked about the production process (read here if you have just joined). Today I’m going to cover the film distribution process.
Firstly, let’s cover some basics:
Film distribution is the process by which a film is made available to it’s audience. This includes many channels, such as cinemas, streamers (Netflix, Amazon Prime, MUBI), paid and free tv, etc.
Distribution is done by a Distributor. This can be a studio distributing the films it has made (eg Wicked has been produced and distributed by Universal Pictures), or it can be a distributor buying the rights to a film produced by someone else and then distributing it on their behalf (eg. The Substance is produced by Working Title Films, but distributed by MUBI).
The core function of a distribution business is to market and sell the film to a wide audience, and maximise the returns generated across the lifecycle of the film. This means selling the film across multiple channels and regions.
Distribution is essential to the commercial success of a film. Without it, even the best films might not reach their audience or make any money for their creators.
The Distribution Process
The distribution process has many elements to it, but it can be aggregated into three key phases:
Acquisition of the Distribution Rights
Distributors will negotiate with the film’s producers to get the rights to release the film in specific channels or regions. Some distributors have international coverage (Universal, Disney, Paramount) and in one deal can take on the global distribution rights for the film across all channels. Other distributors are smaller and channel-specific, so producers need to make deals with multiple distributors in multiple regions to ensure that their film gets broad coverage.
For independent films, there are 2 main acquisition methods: 1) Pre-Sales, when a film is bought before it’s even made, based on the script / trailer / vision / team, or 2) Post-Production Acquisition, when a film is bought once it’s made, usually when presented at film festivals.
Release Strategy & Management
Once the film distribution rights have been acquired, the distributor needs to come up with a strategy that determines where, how and when the film will be released (see Release Windows below for more details on this).
When creating a strategy, they review the release schedule for other distributors to ensure that there isn’t a clash with another similar film, they analyse the target audience in depth, determine which channels the film is best suited for, and what release windows the film will follow, so they can maximise the revenues generated by the film across each channel.
Once a strategy has been put in place, deals are made with the corresponding channels to show the film. This means negotiating with cinemas how long the film will be shown and in how many screens, negotiating with streaming services and tv channels the license fee and release dates, and sending everyone the right digital files (with dubbing or subtitles if necessary).
Marketing
Once a clear release strategy has been put in place, the distributor’s sole role is to market the film as best as possible to ensure that it’s intended audience watches it. Depending on the release channels, different marketing budgets and techniques are put in place across the lifecycle of the film.
In practice, this means: creating trailers, designing adverts for the London tube, organising premieres and press tours, putting the lead actors on talk shows, creating viral challenges on social media, creating partnerships with other brands (eg Minions and Chiquita bananas), and more.
Release Windows
Historically, film distribution had a standard business model that it relied on to maximise the revenues generated by each film: release windows.
Release windows refers to the standardised schedule by which a new film is released across the different channels available.
The image below shows the traditional release windows (not to be confused with what happens today, which I will cover further down).
Theatrical Window
Traditionally, a film was initially released in the cinema. The film would stay in cinemas over a period of time (approximately 90 days).
This was one of the major drivers of revenue for the film, and most of the marketing budget (~50% of the production budget of the film) would be allocated to exciting viewers to go to the cinema.
Exhibitors (cinema companies) would take a 50% cut of the revenues generated in cinemas through ticket sales.
Home Entertainment Window
Following the 90 days theatrical release, the film would be made available for viewers at home either on physical format (DVDs, Blu-Rays) or digital format (films you can permanently buy or rent on Google Play, Amazon, Apple).
These would be released in two formats: rental and purchase. In many cases, the “buying” option was released earlier than the “rental” option, since distributors could charge a premium to viewers who missed the film in the cinema.
The distributors would take ~70% of the total retail price of the rental or purchase.
Streaming Platform Window
Following 6-9 months of the film’s initial theatrical release, it would be released on streaming platforms like Netflix and Amazon Prime.
These films would be added into their content libraries which viewers would have access to as part of their subscriptions.
The films are licensed out to the streamers in two ways: 1) one-time license fee for a set period of time, or 2) revenue-sharing agreement.
If a film was produced and/or distributed by a studio that also owns a streaming platform (Disney+, Apple TV, Netflix, etc), then the film would be included on the platform without a license agreement, since the film would drive new subscriptions and retention for their platforms.
Pay Television Window
Approximately 1 year after the film was released in cinemas, the film would be released on Pay TV channels such as Sky.
The films are licensed to Pay TV mostly on a one-time license fee model.
Free-TV Window
Finally, 2-3 years after the film’s initial cinema release, the film would be available on free TV channels such as BBC.
Similarly to pay-tv, the films are licensed on a one-time license fee model.
However, things don’t look so simple anymore. The streamers have completely disrupted this business model over the past decade. What used to be a pretty standard and linear process, is now increasingly convoluted. Many films do still go through this traditional release schedule, but many top grossing films and top companies are breaking away from this model.
Some of the big changes include:
Theatrical windows have shortened significantly, especially for films created by streamers.
Many films are released in cinemas and on streaming platforms on the same day.
Some films are released exclusively on a streaming platforms, bypassing theatrical release altogether.
This has driven the industry to re-think its business model and economics, causing many distribution companies to shut down or be acquired.
However, it has also allowed new distribution companies to emerge that leverage the changes to their advantage. Direct-to-consumer models such as MUBI, or hybrid-distributors (limited niche theatrical release followed by quick streaming deals) such as A24 and Neon are models that have emerged because of the release windows model being disrupted.
As tech continues to evolve (particularly AI), film distribution is very likely to undergo a shift in business model once again.
What I’m Watching
Joy (2024) | Available on Netflix now
Based on the real-life story of the Nobel-prize winning scientists who pioneered IVF technology and created the first IVF baby.
Written by Jack Thorne (The Swimmers) and Rachel Mason, directed by Ben Taylor (Sex Education).
Bread and Roses (2023) | Available on Apple TV+ now
Produced by Malala Yousafzai and Jennifer Lawrence.
Documentary that follows 3 women’s protests against the Taliban in Afghanistan after their return to power.
No Other Land (2024) | In select cinemas until the 28th November only
Documentary by Palestinian filmmaker Basel Adra and Israeli journalist Yuval Abraham that follows the destruction of Basel’s town in the West Bank.
Note: all dates above are specifically for the UK only.
Thank you for reading! 1
See you next time,
Anna
Sources: mostly from conversations with people in the industry, my own knowledge after some years in the industry… and ChatGPT.