Once a film is completely edited, a filmmaker has a choice between attempting to distribute the film on his or her own or signing a contract with one or more distributors who will tackle the marketing of the movie. Either way, eventually the movie will make it into the hands of film exhibitors, or the retail branch of film production. This branch is usually associated with public screenings of the film at places like movie theaters where customers come and pay for the experience of viewing the film. In order for a film to make it to the public exhibition phase, legal matters between distributors and the exhibitors must be settled.
CONTRACTS BETWEEN DISTRIBUTORS AND EXHIBITORS
Whether a producer is distributing a film on their own or a distributor is working on behalf of a filmmaker, contracts between the distributor and exhibitor should lay out a clear framework for the film’s profits and the extent of the exhibitor’s rights to the film. Well-known distributors have an advantage in the negotiation process, while independent ones may struggle to find leverage in the exhibition agreement.
The agreement lays out, among other things, the license fee that the distributor (or the producer if self-distributed) will receive per week that the movie is shown in the exhibitor’s venue. This fee is usually some percentage of the profit that the exhibitor made after deducting the expenses of running the venue. This may include some room for renegotiation as the movie is shown, depending on the success and profits gleaned from its exhibition.
The agreement also defines the circumstances under which the exhibitor is allowed to screen the movie. This might include the location of the theaters in question, the number of seats in each theater, and the amount of time that the movie can be shown before the contract should be renegotiated. The distributor should ensure that the exhibitor cannot subcontract other exhibitors to show the movie and make a profit because the distributor should try to maintain control over the film to the greatest extent possible. Consequences and actions in the event of a failure to show the movie or a breach of contract should also be addressed in the agreement.
PUBLIC PERFORMANCE RIGHTS
Public Performance Rights (PPR) are the legal rights of the film producer or film distributor to show the movie publicly. These rights can be leased to exhibitioners or assigned to particular groups or individuals through Public Performance Licenses. Any time a film is being shown to a public audience, even if it is purchased on a DVD or streaming service, those showing the film must have a license to do so. Renting a movie only gives the customer the right to view the material in a private setting. There is a limited exception to this rule when the film is being used for educational purposes or “face-to-face teaching” at a non-profit educational institution. For more information or to discuss your film project, call Pinnacle Law Firm today at 818-707-5236 or contact us online.