PAE » Topics » International Markets

This excerpt taken from the PAE 20-F filed Feb 28, 2005.

International Markets


Outside North America, Europe is the dominant market for independent films followed by the Asia/Pacific region and Latin America.  The international market is structured similarly to the North American model.  The studios and their subsidiaries acquire distribution rights across multiple territories and media where they distribute either directly or through controlled or affiliated companies.  Most territories also support a variety of successful independent distributors and broadcasters who may acquire some or all of a film's distribution rights for their home territory and sometime others.  As in North America, license fees are a matter of negotiation between the distributor and the producer, with a somewhat greater emphasis placed on the cost of the film, its cast and the then current economic conditions in the distributor's territory.  In addition, since a U.S. theatrical marketing campaign usually creates worldwide awareness for a motion picture, another significant pricing factor is whether or not a film is guaranteed a U.S. theatrical release.




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Independent production companies typically access the international market in one of two ways.  Some independent production companies, usually those who can bring a steady supply of new films to the market each year, maintain their own international sales and marketing operations.  These proprietary sales and marketing divisions tend to afford those independent production companies a greater degree of control over the licensing of their films and the collection of license fees and profits.  They also provide the production company with an opportunity to make lucrative "output" deals in one or more territories, whether over a term of years or a specified number of films.


Other companies engage third party sales agents on a commission basis to represent an individual film.  These sales agents (based primarily in London and Los Angeles) usually have ongoing relationships with international distributors and normally represent projects from a number of producers at any given time.  On occasion, some sales agents will provide a bankable guarantee or letter of credit in favor of the producer secured by the international distribution rights to the film, at a substantial discount to their anticipated value.


Territorial sales of independent films are studied and widely reported in the industry trade papers at least twice each year, at the American Film Market ("AFM") and Cannes film markets.  Consequently, international license fees are reasonably predictable based upon a given project's budget, stars, director, likely U.S. distribution arrangements and the reputation and relationships of the film's producers.  


This excerpt taken from the PAE 6-K filed Jan 19, 2005.

International Markets


Outside North America, Europe is the dominant market for independent films followed by the Asia/Pacific region and Latin America.  The international market is structured similarly to the North American model.  The studios and their subsidiaries acquire distribution rights across multiple territories and media where they distribute either directly or through controlled or affiliated companies.  Most territories also support a variety of successful independent distributors and broadcasters who may acquire some or all of a film’s distribution rights for their home territory and sometime others.  As in North America, license fees are a matter of negotiation between the distributor and the producer, with a somewhat greater emphasis placed on the cost of the film, its cast and the then current economic conditions in the distributor’s territory.  In addition, since a U.S. theatrical marketing campaign usually creates worldwide awareness for a motion picture, another significant pricing factor is whether or not a film is guaranteed a U.S. theatrical release.




6






Independent production companies typically access the international market in one of two ways.  Most engage third party sales agents on a commission basis to represent an individual film.  These sales agents (based primarily in London and Los Angeles) usually have ongoing relationships with international distributors and normally represent projects from a number of producers at any given time.  On occasion, some sales agents will provide a bankable guarantee or letter of credit in favor of the producer secured by the international distribution rights to the film, at a substantial discount to their anticipated value.


A smaller group of independent production companies, usually those who can bring a steady supply of new films to the market each year, maintain their own international sales and marketing operations.  These proprietary sales and marketing divisions tend to afford those independent production companies a greater degree of control over the licensing of their films and the collection of license fees and profits.  They also provide the production company with an opportunity to make lucrative “output” deals in one or more territories, whether over a term of years or a specified number of films.


Territorial sales of independent films are studied and widely reported in the industry trade papers at least twice each year, at the American Film Market (“AFM”) and Cannes film markets.  Consequently, international license fees are reasonably predictable based upon a given project’s budget, stars, director, likely U.S. distribution arrangements and the reputation and relationships of the film’s producers.  


EXCERPTS ON THIS PAGE:

20-F
Feb 28, 2005
6-K
Jan 19, 2005
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