Copyright clearances in Film

Copyright defines the ownership of an intangible piece of intellectual property in the same way that the deeds to a house define the ownership rights to that tangible asset. It is intended to protect the creators or owners of the rights in some creative piece of work by establishing precisely what they may do with those rights and preventing anyone else from using them in that way without permission from the copyright holder. Although copyright is a global concept, it is interpreted differently in different jurisdictions around the world. Great care must be taken to protect the interests of the copyright holder in every country where their creative content is being used. MORE

Legal considerations in setting up and running a company

There are four principal legal forms that a film production or distribution company might take:

* sole trader: the simplest structure, but carrying unlimited liability for the owner

* partnership: relatively simple but inflexible. Financial affairs are confidential but limited to 20 partners and again carrying unlimited liability for the partners

* limited liability partnership: introduced in 2001, these provide limited personal liability for the partners but tax and operational issues are still being sorted out. Loss of confidentiality as accounts must be filed. Limited partners may not be involved in the management of the partnership

1. *limited liability company: see below MORE
   

Completion Guarantees

A completion guarantee is a legal undertaking by the guarantor to the film's financier(s) that the film will be completed and delivered to the specification agreed (ie. based on the agreed script, featuring the agreed principal cast, being of roughly the agreed length etc.) and by the date agreed in their contracts with the producer. MORE

Major Studios - How they Work and How to Work with Them

The main business of the seven major studios is distribution - not production. Essentially they only produce films to ensure that they have the right number of films to feed their distribution activities. Over many years, they have developed an expertise in production, but are not necessarily creative themselves. They understand the creative process and look to marry up their business sense with the creativity and passion of the filmmakers to deliver successful projects. In their long experience of production and distribution, they have encountered every conceivable problem and are able to bring this experience to the table when dealing with less experienced partners. MORE

Overview of International Film Markets and Theatrical Distribution

In 2002 there were 1.64 billion admissions to North American cinemas, an increase of 19% over the previous year, generating gross Box office receipts of $9.5 billion, approximately $3.5 billion of which went back to the major studios in film rentals. The total Box Office figure represents growth of almost 400% since 1978. The average number of times that each person in North America went to the cinema in 2002 was 5.7, double the frequency of attendance in the UK. 98% of this audience was for American films or co-productions, with the majors taking 95% market share (if their classics and specialist subsidiary labels are included; 73% excluding these quasi-independent labels). MORE

Exploring Alternative Financing Structures

Market conditions are generally very good for investing in the film industry and, despite a great deal of reluctance from the City to invest in British films, have been for many years. Global distributor revenues from film have risen by more than average stock market returns in the past ten years and have not experienced a single year of negative growth in that period. Indeed, this pattern of regular growth in distributor revenues can be charted back over thirty years and is reliably forecast to continue at a rate of almost 8% per annum to the end of 2005. Furthermore, the industry is regarded by Standard & Poor's as "generally recession-proof" because people tend to continue to spend on low-cost forms of entertainment, particularly films, whatever the state of the economy. MORE

Introduction to independent Film Financing

Financing independent films is becoming more difficult with banks becoming more cautious about to whom they will lend money, and international sales and television licences both being less lucrative sources for pre-sales than in the past. There is an increasing reliance on "soft" money from tax shelter funds and public subsidies. In these difficult market conditions, most independent producers are having to give away most of their potential upside from the success of their film simply to get the film financed in the first place. MORE

New Trends in Global Film FinancinG

(transcript from address to the International Chamber of Commerce at the Cannes Film Festival 2007)

With the demise of tax specific legislation Section 42 and 48 in the UK, the abolition of “sideways loss relief”, the restriction on EIS (Enterprise Investment Scheme) rules and the introduction of the new Tax Credit scheme the United Kingdom has been operating under a constant state of flux and regeneration over the past year. MORE

Revenue Flow and Making Money out of Film

Worldwide spend on filmed entertainment is around $65 billion a year, of which the distributors' share is about $35 billion. Total revenues are split almost equally between the Domestic (North American) market and the Rest of the World. The industry has doubled in size in the last 8 years - an annual growth rate of almost 10%. Few, if any, major businesses can boast such continued growth over this period. Video and DVD have contributed significantly to the growth levels. DVD has itself seen a tenfold rise in the last 3 years. MORE

The Role of Business Affairs

The two main tasks of business affairs executives are to negotiate the above the line deals for each film and ensure that the financing for the film is in place when it is required. In both of these areas, the business affairs executive has to be able to bring all of the pertinent facts together; keep an eye on the big picture of the movie as a whole; and juggle the various elements to ensure that they all stay together for however long it takes to complete the film. MORE

The Role of the Bank: Help or Hindrance to the Creative Process?

Banks fulfil a number of different roles within the film industry, ranging from simply offering basic banking services as receivers and payers of funds to advising clients on financial matters to taking an element of risk in supporting film projects (although the banks themselves will never invest in individual films). Very few producers enjoy the luxury of having enough money to make their film. They will, therefore, have to raise the finance from a variety of sources and may need a bank to help to bridge any gaps between the available finance and the cost of the film or, more frequently, cash flow expenditure on the basis of money promised to the film from other sources but not yet received. Relatively few banks fully understand the risks involved in the film industry which means that relatively few banks are involved in the industry. MORE

The Role of the UK Distributor

Momentum Pictures' turnover has grown to around ?30 million a year. Their strategy has shifted from buying more expensive films which offered a higher chance of being successful in the UK market, to having a broader acquisition strategy which might unearth some less likely successes. This includes becoming involved in films at the production (or even pre-production) stage, and investing in the production budget, to develop a strong relationship with the producer and director which will help them in creating their distribution strategy. MORE

The US Home Entertainment Market

The home entertainment sector is now one of the driving forces of the American film industry. The incredible growth in DVD sales and rentals over the past few years has increased revenues from this market to the extent that they now far exceed theatrical box office revenues for the studios. Consumer spending on home entertainment has grown from around $15 billion in 1996 to a projected $24.2 billion in 2003, and is expected to reach $28 billion in 2005. The growth of the sector has enabled the studios to generate ongoing revenues from their film libraries and gives extended life to the income flows from current titles. The market is predictably strong for the big box office hits but, in percentage terms, is more significant for smaller films which can generate more income from DVD rental and retail than they take theatrically. The rapid growth in DVD sales has also given greater exposure to art house and foreign language titles. MORE

Business Affairs Considerations in Film and Development

The underlying rights in the screenplay are the most important rights that the producer has at the beginning of the film making process. It is, therefore, most important that the producer has clear agreements in place with the holders of all the rights that constitute the underlying rights in the screenplay (including the screenplay itself and any source material) at the earliest possible opportunity - producers should ensure that all of these rights are fully tied down before they approach financiers for development financing.  MORE

Development and how to survive it

Writing a screenplay is an immensely difficult job.  It involves writing a narrative story as brilliantly and readably as any great novel although it is a piece of writing that will never be seen by its intended audience. Screenwriting includes creative, technical and craft skills and it is, unsurprisingly, extremely difficult to get right, which is where development comes in.  MORE