Service Deals Become all the Rage in Park City

Only a couple of days ago, I had a long conversation with another producer about the effectiveness of theatrical distribution service deals, and if it all made sense. Ultimately, the cautious producer has the tough job of deciding for themselves whether their particular project and budget fits this model, and I am curious to learn more about which projects would benefit the most from this type of risky, yet empowering way of growing your film's amount of visibility in the new marketplace. Here is some of the article here, from the Hollywood Reporter:



PARK CITY -- A bidding war broke out at Sundance last weekend over the sci-fi entry "Splice," which stars Adrien Brody and Sarah Polley. But it wasn't the typical contest in which distributors vie to see who is willing to pay the most for rights to the hot movie of the moment.

Instead, the suitors were offering service deals, under which a movie's producers pay them an upfront fee and a percentage of boxoffice returns to get the film into theaters.

As a distribution strategy, the service deal was once considered a mark of shame, a last resort for films.

But as changes have swept the indie world, service deals have become an increasingly popular option, one way to ensure the prestige and visibility that only a theatrical release can provide. With so many specialty outfits having closed their doors, and other companies limiting offers to video rights, producers are more willing to share in the costs of releasing their pics.

Under the service model, producers pay distributors an upfront fee and a percentage of boxoffice -- in many cases, that also covers the distributor's outlays for marketing and distribution. The upside is that they retain rights and future profits on the movie; the downside is they take on much greater financial risk. And new variations on the model are cropping up all the time, sometimes with distribs buying only partial rights.

Read the full piece HERE.