Distribution companies and their importance

Distribution companies are companies that buy the copyrights of the movie from the producer in exchange for consideration and they sell it to the sub-distributors who then distribute it among the theatres.
Some of the best distribution companies include, Walt Disney, Warner Bros, Aditya Chopra etc.

Why are distribution companies important?

Movie distribution is of great importance to the Entertainment Industry. Movie distribution companies basically buy distribution rights for a film and help in getting it out for the audience. A Producer or a production company puts money to make a movie. Right from pre-production to production to post-production, everything is funded and supervised by the producer. Once a movie is made, you need to get it out for a theatrical release. Here is where the movie distribution company plays its role. They buy films from producers for a given amount and also put money for its promotions.

Distributors analyse whether a movie has enough potential to make profits. Once the rights are purchased they invest in exhibiting the movie. Finally, the box office profit is shared between the exhibitor, distributor and producer. These days, there are various OTT platforms that release movies online. Apart from that, the distributor might buy selected rights like Satellite rights, online rights, theatrical rights, Home DVD rights etc. They basically pay a lump sum amount to the producer and become partners for the profits earned. Sometimes, a low-budget film might have a gripping story. They have the potential to make good profits. Movie distribution companies weigh all the pros and cons before buying content rights.