Film Accounting Glossary
Distribution fee
What is a distribution fee?
A distribution fee is the percentage a distributor retains from gross receipts as its compensation before expenses and participations are calculated.
Fees vary widely by window and territory, and on studio pictures a notional fee is charged even for the studio's own distribution arm, which is one of the mechanics that makes net profits so difficult to reach. In any participation calculation, the fee comes off the top.
Example
On $80M of gross receipts a 25% distribution fee retains $20M before a single expense or participation is calculated. On a studio picture a notional fee is charged even for the studio's own distribution arm, which is one reason net profits are so hard to reach.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
The first deduction on any participation statement, set by the distribution agreement and varying by window and territory.
Common mistake
Modelling revenue without taking the fee off the top first. It is the first deduction on every statement, and on a studio picture it is charged even for in-house distribution.
Related questions
- How much is a film distribution fee?
- It varies by window and territory and is set by contract. Studio pictures also charge a notional fee for their own distribution arm.
- Is the distribution fee taken before or after expenses?
- Before. The fee comes off gross receipts first, then distribution expenses, then cost recovery, which is the order that makes net profits so hard to reach.