Pre-sales are an essential part of feature film financing. In simple terms, pre-sales refer to the process of selling the distribution rights of a film before it is completed. Pre-sales can provide significant upfront financing for the production and can be a crucial source of funding for independent filmmakers. In this blog, we will explore the role of pre-sales in feature film financing and discuss the advantages and disadvantages of this approach.
How Pre-Sales Work in Film Financing
Pre-sales involve selling the distribution rights of a film to distributors or broadcasters before it is completed. These distribution rights can include theatrical release, television broadcast, streaming, and DVD/Blu-ray distribution. In exchange for these rights, distributors or broadcasters will pay a pre-agreed amount of money to the filmmaker.
The amount paid for the distribution rights is usually based on the perceived commercial value of the film. Distributors or broadcasters will consider factors such as the film’s genre, cast, director, and script when making their offer. The amount paid can vary significantly, with some films receiving significant pre-sales deals, while others may receive little or none.
Advantages of Pre-Sales in Film Financing
- Upfront Financing: Pre-sales can provide significant upfront financing for the production, which can be crucial for independent filmmakers who do not have access to other sources of funding.
- Reduced Financial Risk: Pre-sales can help reduce the financial risk for filmmakers by providing some certainty about the film’s revenue potential before it is completed.
- Distribution and Marketing Support: By securing pre-sales deals, filmmakers can also gain distribution and marketing support from distributors or broadcasters.
Disadvantages of Pre-Sales in Film Financing
- Uncertainty of Revenue: Pre-sales revenue is based on the perceived commercial value of the film, which can be difficult to predict accurately. If the film does not perform as expected, the revenue generated from pre-sales may not be sufficient to cover the production costs.
- Limited Creative Control: Pre-sales agreements may include specific requirements for the film’s content, cast, or production, limiting the filmmaker’s creative control.
- Limited Access: Pre-sales agreements are typically only available to established filmmakers with a proven track record, making it difficult for first-time filmmakers to secure this type of financing.
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Conclusion
Pre-sales are an important source of financing for feature film productions. They provide upfront financing and can help reduce the financial risk for filmmakers. However, pre-sales also come with some disadvantages, including uncertainty of revenue and limited creative control. It’s important for filmmakers to weigh the advantages and disadvantages of pre-sales carefully and consider other financing options to ensure the success of their film project. Pre-sales can be a valuable tool in a filmmaker’s financing strategy, but they should not be relied upon solely to finance the entire production.