Distribution

From Broadcast to Video-on-Demand, internet download, DVD and Mobile phone content, short film producers need to be able to negotiate the maze of license terms, fees and territories to maximise their film's career and its returns over a period of at least 5 years.

Throughout the world there are a number of short film distributors who specialise in this area and when a short film becomes successful at festivals your film will often come to their attention.

Although you could in principle distribute your short film yourself there are many legal technicalities to be aware of and many pitfalls, so sometimes it saves many headaches to hand this complicated area over to an expert so that you can concentrate on your festival strategy.

Often buyers will only deal with distributors as they generally buy packages of short films. They also understand that distributors will have the business knowledge to make sure all rights and clearances are obtained thereby saving the broadcaster a legal headache.

A distributor is a person or an organisation that will represent your film at festival markets and to buyers all around the world and will attempt to sell your film to TV, on-line, DVD, in-flight, mobile phone content buyers and any other buyer of short films.

Their job is to maximise sales for your film across all platforms whilst being aware of all legal contracts and clearances that are required to license your film. See Rights and Clearances page.

They will also deal with all terms of the contract i.e.:

• What territory
  
• How many screenings?
  
• Deliverables
  
• Exclusive/Non-exclusive license terms etc
  

You can negotiate with distributors on territories that you want them to represent your film in and hold back on territories according to your festival strategy, premieres required etc. Remember the Oscar rules on broadcast. If your film is having great success you may want to forego broadcast sales for at least a year while you build up your festival profile.

Distributors generally seek short films to add to their catalogues at film festivals/ film markets so if your film is selected into any key film festivals, particularly those with a market attached it is more than likely that a distributor will approach you regarding licensing your film for sales.

Key short film markets are usually attached to short film festivals including:

• Clermont-Ferrand, France
  
• Worldwide Short Film Festival, Toronto
  
• Palm Springs Short Film Festival
  
• Cinema Jove, Valencia, Spain
  
• Hamburg International Short Film Festival, Germany

Flickerfest represents a few hundred Australian short films in our catalogue that we sell both at home in Australia and internationally. Generally these are short films that have been selected into Flickerfest. It is rare that we will choose to license a film for distribution without selection into the festival; although we do have some films in our catalogue submitted to us for distribution, that have not been Festival selections. See The Festival Circuit page.

Short films that are most appropriate for broadcast distribution are generally under 15 minutes, have high production values, are comedies - romantic and otherwise - festival award winners or CGI animation.

Often if your film contains violence, course language, sexual scenes of graphic content it may be unsuitable for broadcast.

Films that are experimental or intense human dramas may have a highly successful festival life that may not necessarily translate to broader distribution sales.

You should make the film you want to make and not try to second-guess broadcaster interest. Short film sales are a bonus and it is highly unlikely that you will ever make a profit on short film sales. Some revenue return is nice and having your film get out there to the world is a great way of getting a profile as a filmmaker and developing an audience for your work.

Distribution Terms and Conditions
Most distributors will ask to license your film for a period of between 3-5 years, in all territories exclusively.

You will come across these key terms below when negotiating distribution deals.

Exclusive/Non-Exclusive Rights

• Exclusively- means you can't give the rights away to anyone else
• Non- Exclusively- You can share the licence rights for territories and platforms i.e. on-line or smaller cable TV broadcast, with buyers. However, distributors almost always sign exclusive contracts with filmmakers in order for them to effectively manage the commercial rights of the film for the term of the agreement.

Territories
Broadcasters and distributors from around the world operate in territories i.e.:

• Australia
  
• Europe
  
• Japan
  
• North America etc

Broadcasters purchase rights according to territories, while distributors will generally operate across all territories having established relationships with all buyers internationally.

Once you have formalised your deal with the distributor they will give you a written contract.

Distribution Contracts
The written contract should include:

1. Terms of agreement: The length of time the distributor will hold rights in your film.
2. Territory: This specifies the countries in which the distributor can exploit the film.
3. Term: This sets out the period of time the distributor will hold distribution rights in the film.
4. Rights granted: Generally the distributor will ask for all rights i.e. theatrical (cinema release not including festivals) and non- theatrical, which includes broadcast DVD, online, VOD etc. You can negotiate to hold back on certain rights i.e. Australian Free to air or Australian online if you have already signed agreements in this territory or if you are still seeking out festival opportunities. See The Festival Circuit page.
   
5. Warranties: The distributor will ask for a warranty that you have cleared all rights i.e. music, actors etc.; and that there is no infringement of copyright. See Rights and Clearances page.
   
6. Payment: The distributor will outline how royalties are to be shared between you as the producer and them as the distributor, from all gross receipts. This means all monies actually received by the distributor from the exploitation of the film before any deductions have been made. Generally sales are divided 40% to the distributor, 60% to the producer after costs incurred by the distributor have been deducted. Costs can include direct expenses i.e. DVD dubs, digital masters, freight charges etc. Direct costs should be outlined in the contract so that you are aware what are acceptable costs to be deducted prior to you receiving your royalties on sales.
   
7. Payment Schedule: The payment schedule is usually every 6 months where a full sales report is given to the producer outlining all royalties made after direct costs. The distributor should be under obligation to maintain accurate and true records of sales and expenditure and the producer should have the right to receive regular accounting statements of the film.
   

Short Film Buyers
Short film buyers can pay between AUS$50 per minute and up to AUS$350 per minute depending on exclusivity, non -exclusivity, territories purchased etc. In Australia the range is around $100 per minute whilst a top-end sale to a European broadcaster may net AUS$350 per minute.

In Australia the key short film buyers are SBS TV, ABC TV and the Movie EXTRA Channel.

Generally broadcasters license films for exclusive use in the Australian territory so if you sell a film to the ABC you cannot also sell it to SBS, as they are both free-to-air broadcasters and expect exclusivity.

Flickerfest has recently produced a short film show with Movie EXTRA called Flickerfest On EXTRA, which is 7 half hours of Australian short films with behind the scenes interviews with directors.

Subscription TV in Australia such as the Movie EXTRA Channel (part of The Movie Network Channel) does not generally ask for exclusive rights and is happy to share with free-to-air TV.

Internationally broadcasters generally prefer to deal with distributors and also approach films that they have seen at key A-list festivals. Most buyers of short films international are major European and north American cable stations who may buy 15- 20 Australian short films between them per year.

Other avenues for short film sales in Australia include Qantas In-flight, and occasionally DVD and VOD.

Flickerfest recently produced a compilation 'The Bold, The Brave and The Best, 30 years of Australian Animation' with Madman Entertainment. Short films on DVD are usually sold as part of a compilation as proceeds are greater and marketing more cost effective than with individual shorts.

Occasionally an individual short film such as Oscar Winner Adam Elliot's film 'Harvie Krumpet' will be released on DVD to great success and reap substantial returns. Obviously this is not only because the film is a great film, but also due to the major awards that the film has won and the publicity that surrounds it.

For the past two year Flickerfest has had a relationship with Real Networks for Video On Demand whereby a small upfront fee is paid for Australian short film to be viewed as content on their platform. Often an upfront fee is a far better way for filmmakers to recoup revenue rather than fee per download which returns very little to individual shorts.

Buyers content requirements change from season to season which is another good reason to have a distributor as they are regularly attending International markets and keeping up to date with the broadcaster trends.

Withholding Tax on Licensed Films
In order to avoid withholding tax of over 40% from outside Australia on International sales made you must be a registered company and be able to apply for a residency certificate from the ATO.

Sales to the USA require you to register for an UIN (Unique Identification Number) and fill out the W1/BEN form from the Inland Revenue in the USA to avoid additional taxation.

A distributor will be able to deal with these requirements.

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