Production Financing Distribution Agreement

New media (such as the Internet, mobile devices and over-the-top (OTT), cable and satellite generate considerable revenue. Due to the increasing spread of smartphone subscriptions, the availability of broadband connectivity and the ramp-up of 4G connectivity in key development markets, the VOD market is the fastest growing range in the world. As a result, the market for low-budget films (with a budget of $10 million or less) is relatively healthy, as they can potentially be recovered for digital distribution with advance financing. Independent filmmakers in the U.S. can find ways to collaborate or co-produce with foreign production companies (outside the U.S. and Canada). These co-productions are financed free of charge or at a very low price by the American production company to produce a film, project or television program. Most of the time, the foreign company makes this cash, goods and/or services available in exchange for the co-ownership of the project and obtains in return exclusive rights to distribute the film in its respective territories and can also obtain a proportionate share of the film`s net profit worldwide. The advent of digital distribution has created a more congested marketplace.

There are many more opportunities today than ever before. But the outlets are all different. This makes independent cinema much more complex than ever for filmmakers. It makes the process of finding out how to finance and publish films more difficult to obtain than before. Clearly, the producer prefers to negotiate a maximum advance, since the money can be used to finance the production of the film, repay production credits, reimburse investors, pay deferred fees to talent (such as director and performer) and pay a seller`s expenses and expenses. The foreign presale is a license to distribute the film in certain foreign areas or media (outside the United States and Canada) before the film is finished. Foreign pre-sale is an important source of revenue for independent films and can be the main source of guarantees for production credits. Although the details may be very different, the term negative pickup means that a movie studio or hobby pays the cost of the film to be ready, to the point that a final negative is ready for use. Typically, the filmmaker sells the film to a studio for reimbursement of production costs and a form of participation in the profits of the film`s potential proceeds. For example, if a filmmaker had a budget of $1 million for a film project, he would “sell” the film by promising to deliver a finished film roughly the same as the one described in the script, in exchange for a $1 million payment. Once the negative is delivered, the film studio would have a duty to complete the prints for the film, pay for its marketing and distribution and, if it exists, to share with the filmmaker gains on the agreed-upon percentage basis.

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