Theatrical distribution

If a distributor is working with a theatrical exhibitor, the distributor secures a written contract stipulating the amount of the gross ticket sales the exhibitor will be allowed to retain (usually a percentage of the gross). The distributor collects the amount due, audits the exhibitor's ticket sales as necessary to ensure the gross reported by the exhibitor is accurate, secures the distributor's share of these proceeds, surrenders the exhibitor's portion to it, and transmits the remainder to the production company (or to any other [intermediary], such as a film release agent).

The distributor must also ensure that enough film prints are struck to service all contracted exhibitors on the contract-based opening day, ensure their physical delivery to the theater by the opening day, monitor exhibitors to make sure the film is in fact shown in the particular theatre with the minimum number of seats and show times, and ensure the prints' return to the distributor's office or other storage resource also on the contract-based return date. In practical terms, this includes the physical production of release prints and their shipping around the world (a process that is being replaced by digital distribution in most developed markets) as well as the creation of posters, newspaper and magazine advertisements, television commercials, trailers, and other types of ads.

The distributor is also responsible for ensuring a full line of advertising material is available for each film which it believes will help the exhibitor attract the largest possible audience, create such advertising if it is not provided by the production company, and arrange for the physical delivery of the advertising items selected by the exhibitor at intervals prior to the opening day. Film distributors spend between $3.5 billion and $4.0 billion a year in the United States alone on direct buys of advertising such as TV commercials, billboards, online banner ads, radio commercials and the like.^[1] That distributor-spending figure doesn't include additional costs for publicity, film trailers and promotions, which aren't classified as advertising but also market films to audiences.

Distributors typically enter into one of the two types of film booking contracts. The most common is the aggregate deal where total box office revenue that a given film generates is split by a pre-determined mutually-agreed percentage between distributor and movie theater. The other method is the sliding scale deal, where the percentage of box office revenue taken by theaters declines each week of a given film's run.^[2] The sliding scale actually has two pieces that starts with a minimum amount of money that theater is to keep—often called "the house nut"—after which the sliding scale kicks in for revenue generated above the house nut. However, this sliding scale method is falling out of use. Whatever the method, box office revenue is usually shared roughly 50/50 between film distributors and theaters.

International distribution

If the distributor is handling an imported or foreign film, it may also be responsible for securing dubbing or subtitling for the film, and securing censorship or other legal or organizational "approval" for the exhibition of the film in the country/territory in which it does business, prior to approaching the exhibitors for booking. Depending on which studio that is distributing the film, the studio will either have offices around the world, by themselves or partnered with another studio, to distribute films in other countries. If a studio decides to partner with a native distributor, upon release both names will appear. The foreign distributor may license the film for a certain amount of time, but the studio will retain the copyright of the film.^[3] When a film is produced and distributed by an independent production company and independent distributor (meaning outside the studios), generally an international sales agent handles the licensing of international rights to the film. The international sales agent will find a local distributor in each individual international territory and license the exclusive rights to the film for a certain amount of time but in the same case as the studios described above, the production company will retain the copyright of the film. This means that this distributor in a certain territory has the exclusive right to exploit the film in various media (theatrical, TV, home entertainment, etc.) for a certain amount of time.

Non-theatrical distribution

This term, used mainly in the British film industry, describes the distribution of feature films for screening to a gathered audience, but not in theatres at which individual tickets are sold to members of the public. The defining distinctions between a theatrical and a non-theatrical screening are that the latter has to be to a closed audience in some way, e.g. pupils of a school, members of a social club or passengers on an airline, and that there can be no individual admission charge. Most non-theatrical screening contracts also specify that the screening must not be advertised, except within the group that is eligible to attend (e.g. in a membership organisation's newsletter or an in-flight magazine).

Non-theatrical distribution includes the airlines and film societies. Non-theatrical distribution is generally handled by companies that specialize in this market, of which Motion Picture Licensing Company (MPLC) and Film bank media are the two largest:

Motion Picture Licensing Company Film bank media

Representing the major Hollywood studios and independent producers. Home video media is sold with a licence that permits viewing in the home only. Until these technologies were widespread, most non-theatrical screenings were on 16 mm film prints supplied by the distributor. Today, the most common business model is for a distributor to sell the exhibitor a licence that permits the legal projection of a copy of the film, which the exhibitor buys separately on a home video format. These licences can either be for individual, one-off screenings, or cover an unlimited number of screenings of titles represented by that distributor for a specified time period. The latter are often purchased by pubs and students' unions, to enable them to show occasional feature films on a TV in their bars.

Home video distribution

Some distributors only handle home video distribution or some sub-set of home video distribution such as DVD or Blu-ray distribution. The remaining home video rights may be licensed by the producer to other distributors or the distributor may sub-license them to other distributors.

If a distributor is going to distribute a movie on a physical format such as DVD, they must arrange for the creation of the artwork for the case and the face of the DVD and arrange with a DVD replicator to create a glass master to press quantities of the DVD.

Some movie producers use a process called "DVD-on-demand." In DVD-on-demand, a company will burn a DVD-R (a process called "duplication") when a copy of the DVD is ordered, and then ship it to the customer.

A distributor may also maintain contact with wholesalers who sell and ship DVDs to retail outlets as well as online stores, and arrange for them to carry the DVD. The distributor may also place ads in magazines and online and send copies of the DVD to reviewers.