Film Distribution: Understanding the Rights and the Rules

By Scott Shaw

As a filmmaking who has created a large number of feature films and has written about the subject of filmmaking quite frequently, I am often either asked about film distribution or confronted with the fact that someone is illegally distributing one of my films via the internet. To the average film watching individual, they may never even question where, why, or how they are receiving the film they are watching. In fact, in many cases, they do not even care. But, to the filmmaker, this subject matters as illegal distribution truly robs the income of a film’s creator.

Again, as a filmmaker, having created a lot of films, I am also frequently contacting by people who want to distribute a film that I own the rights to. I appreciate those people who have the honor and the business prowess to realize that they must first legally obtain the rights to a film before they can sell it. Therefore, this piece is geared towards those individuals, as well, as they understand and appreciate that to legally distribute a film, without any worry of legal repercussions, they must obtain the assigned rights.

To begin, it must be stated, in this age of the internet, all rules have gone out the window. This was first illustrated by Napster in association with the music industry. But, Napster was a company with a name and a location. Though the owner did encounter legal objections to what he was doing, he was a person and there was a place. Thus, it all played out in front of a judge. In many cases, however, the person who grabs another person’s film to distribute is either a non-existence entity or a business located in some country where copyright laws are not enforced. Moreover, they are a person who does not care about the repercussions on the filmmaker. I would say, “This is wrong and a person should not behave in that manner,” but I am sure that statement would fall to deaf ears as a person who follows the path of illegal film distribution only cares about themselves and the money they are making.

This also is an important fact to keep in mind if you are one of those people who scours the internet to find a movie for free. The people who are offering those movies did not create that movie—they did not pay to have that film created, yet, they have stolen it from some source and are offering it to the world. Many sites claim they are free but they are never free. If they were not making money, they would not be in existence. Thus, that film thief is making money off of another person’s creation and another individual’s financial outlay. This, in and of itself, should make you think about where you get your movies. But again, I imagine, to the uncaring individual, all they care about is watching a film they want to watch. But, you should be more than that and think before you watch.

Okay, with all of the foreboding forewarnings out of the way, let’s get down to the business of film distribution…

A person comes up with an idea for a movie. They create the movie. Who owns the rights to that movie?

This question is both simple and complicated. For if a person comes up with a movie idea and then creates that movie with their own money, they own all the rights. But, if a person seeks money from an investor, depending on the contract, there can be more than one person who owns the rights to that film. This is why contracts are essentially important during the creation of any film as it defines whom owns what—whether this is by percentage or partial or whole ownership. I have seen many a filmmaker begin a film, run out of money from one investor, and then turn to another financier. From this, ownership becomes very convoluted if everyone involved was not present and in agreement every step of the way. This has caused many a completed movie to be lost from distribution as the legal implications of ownership are so convoluted.

Therefore, to a film’s creator, be very conscious of whom you bring into your production and be very precise of any contractual agreements you enter into as it can truly affect your ability to distribute your film.

This brings us to the subject of formal film distribution. You have created a film; how do you get it out the viewing audience? First of all, it is important to look at the times gone past.

There used to be only one way to get your film out to the viewing public and that was via a film distributor. What a filmmaker would do was to get a copy of their completed movie out to the various distributors and then make a deal with the distributor that offered them the most upfront money.

In no uncertain terms, film distributors have always been notorious creatures. In times gone past, they would at least pay you for your film upfront. From this, at least some of the financial outlay would be repaid. But, that would generally be it. Though you very possibly would have a contract promising you a percentage of the film’s sales, receiving a penny was virtually impossible. It fact, many times a distributor would give the filmmaker a, “Charge back,” claiming that the filmmaker owed them money for distributing their movie. As most filmmaker, (especially independent filmmakers), do not have the finances to employee savvy legal representation, the distributor would simply keep all the profits.

As first the video age and then the digital age came upon us, and everybody became a filmmaker, distributors ran away with this. As there was so many films being offered, they no longer had to pay the filmmaker anything upfront to represent a movie. I cannot tell you how many filmmakers (including myself) I know that have made a movie, witness it be released on VHS, DVD, and offered via established download and streaming services, and have never made a dime. Yes, they were promised money but they never saw anything. The distributor obviously kept all the money. For the most part, distributors are snakes. So, if you are a filmmaker and are lost in the dream of making millions from of your film, and you give it to a distributor, think again.

Today, there are so many services where you can distribute your own movie and get it out there without employing a formal distributor—for the indie filmmaker that is absolutely the best way to go if you hope to make any money from your movie. CreateSpace and Amazon Direct are currently two of the best options. You can monitor sales in real time and they pay you at the end of every month.

Now, to the modern distributors… I have encountered both the unscrupulous and the honorable distributor who have crossed my path. I have watched as some people have attempted to just take a movie that they liked as a teenager and believed it was out of print so they digitized it and released it. From this, they got sued big time.

It is essential to note that just because a movie does not have current distribution does not mean that the title is not owned by somebody. If it is owned by somebody, they own all the rights to that title. Maybe, they simply no longer want it to be in formal distribution. Maybe there are other factors attached. But, these are all factors that a distributor who just grabs an old VHS and runs it through their computer cannot know or understand. All I can say is don’t do it! I have witnessed more than a few people, even one very successful filmmaker/distributor, be driven to financial ruin by this practice.

If you do not formally own the rights, you have no right to release a film. Just because you like it or believe you want to get that film out to the public who has never seen it, or just because you believe you can make some money off of it, you
do not own the rights. Thus, you have no right to release it.

A side note here for the new breed of internet film reviewer who takes small or large amounts of footage from a film and then discusses it in an on-line presentation. Though some of your productions may be fun to watch, you
do not own any rights to that film or to that footage. Thus, it is illegal for you, under U.S. Copyright law, to use that footage in your review. If the owner of that footage chooses to do so, they can take legal action against you, and you will lose.

This brings us to the scrupulous distributor who has the same motivations for getting a film out to the public and actually contacts the filmmaker. I salute you. You are doing the right thing.

There are some filmmakers who do not have the technological or the business savvy to get their film out there. This, particularly, may be the case if they are from a previous generation and are not up on what is going on technologically. To those individuals, a distributor may be able to get their film out to the public.

To the honest distributor, they must be very careful in whom they approach to gain the release rights to a film, however. If a film is no longer in distribution, there is generally a reason for this. This is especially the case if a film was fairly successful, once upon a time. The thing is, if the rights were signed away to a production or a distribution company in the past, then the rights or ownership to that particular film have become convoluted. From a personal perspective, in years gone past, I have had people steal the masters for a couple of my films and sell the rights. They did this with no release from me but they did it anyway. Then, they disappeared with the money. Which caused me to have to take legal action. But, legal action is something nobody wants to do. It is expensive and it is time consuming. It is just not worth it. So, to the honest distributor, be sure you are contacting the person who actually owns the whole and complete rights to a film before you take on the distribution of that film because it could lead to legal consequences.

When it comes to money, it always gets complicated. Have you ever noticed that when you play the game Monopoly with some friends, the person who is the banker always wins? Why? Because they are cheating. They have access to the money, you do not. This is very much the case with distributors. To the honest ones, sure you may plan to pay out money to the person from whom you got the rights to a film. But, then comes your rent, your expenses, and the things you desire… Then what? You may plan to be honest but in most cases honesty and the film business do not go hand-in-hand. So, all I can say to everyone, on all sides of the distribution issues, is be careful as any deal you make will probably not turn out the way you hoped that deal would be actualized.

In closing, filmmaking should be solely about art. The fact is, it is not. Filmmaking, is based, (as is so often stated), in the, “Film Business.” Filmmaking is a business. From the low/no budget filmmaker to the ultra high-end production, people are in it to make money. And, for the artistic and the honest, they are commonly the ones who come out on the low end of the equation.

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No part of this can be used without the expressed written permission of Scott Shaw or his representative.