ASK & DISCUSS
INDEXIf I am self-distributing my feature, do I need to set up a distribution company, or can I sell through my production company?
7 years, 8 months ago - Elliott Maguire
Hi,
Just looking for some advice, I am going to be self-distributing my feature through VOD next year, and wondered if I was able to distribute through the production company, or if I have to set up a distribution company as well. Only asking as it seems a bit pointless setting up a distribution company only for it to receive sales money and transfer it over to the production company account, both owned by myself, but for all I know this is industry standard?
Any advice is much appreciated,
Elliott
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7 years, 8 months ago - Tim Berry
You could do it both from the same company but each film you make should have its own SPV anyway (a Special Purpose Vehicle), which is a subsidiary Ltd company which the production funds will go into.
Response from 7 years, 8 months ago - Tim Berry SHOW
7 years, 8 months ago - John Lubran
There's no definitive law as to how to do business other than those that pertain to limited companies and the simple keeping of accounts, all monies in and all monies out, sufficient to reveal any taxable profit, if any. It must be observed however that very few VOD projects other than those associated with very clever and we'll funded marketing actually make a profit, let alone any significan't cash flow at all. If on the other hand the project really does have proverbial legs on it then it ought to be a limited company for and within its own specific purpose anyway. In such a case the only real reason for setting up abother limited company to act as distributer is to protect the first company from any liabilities risked in diatribution; namely spending more money on distribution than is made doing it. But then the shenanigans associated with much of this business are not for the innocent.
Response from 7 years, 8 months ago - John Lubran SHOW
7 years, 8 months ago - Marlom Tander
How much money is involved? Every company has accounting overheads and if scale isn't there you are just creating expenses to no purpose.
SPV is useful when different groups of people have different interests (and audit rights) in the project/movie. So any serious film with people on points or profit share etc would be an SPV to make it easy to manage that side of things.
That said, if you do not run your biz via a Ltd Co then you are scary exposed and need professional advice. (The above assumes your main biz already a Ltd Co and should have multiple. If you don't even have one, you need one).
Response from 7 years, 8 months ago - Marlom Tander SHOW