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Film distribution

Film distribution, also called film exhibition or film distribution and exhibition, is the process of making a film available for viewing to an audience. This is normally the task of a professional film distributor, who would determine the marketing and release strategy for the film, the media by which a film is to be exhibited or made available for viewing and other matters. The film may be exhibited directly to the public either through a movie theater, physical media (DVD, Blu-ray), digital download/transactional video on demand (VOD) (sale or rental), subscription VOD (e.g. Amazon Prime Video, Apple TV+, Disney+, Netflix) or television programs through broadcast syndication. For commercial projects, film distribution is usually accompanied by film promotion.

Initially, all mass-marketed feature films were made to be shown in movie theaters. The identity of the first theater designed specifically for cinema is a matter of debate; candidates include Tally's Electric Theatre, established 1902 in Los Angeles, and Pittsburgh's Nickelodeon, established 1905. Thousands of such theaters were built or converted from existing facilities within a few years. In the United States, these theaters came to be known as nickelodeons, because admission typically cost a nickel (five cents).

Distributors license films to theaters granting the right to show the film for a theatrical rental rental fee. The movie theater pays an average of about 50-55% of its ticket sales to the movie studio, as film rental fees. The actual percentage starts with a number higher than that and decreases as the duration of a film's showing continues, as an incentive to theaters to keep movies in the theater longer. However, today's barrage of highly marketed movies ensures that most movies are shown in first-run theaters for less than 8 weeks. There are a few movies every year that defy this rule, often limited-release movies that start in only a few theaters and actually grow their theater count through good word-of-mouth and reviews.[citation needed] According to a 2000 study by ABN AMRO, about 26% of Hollywood movie studios' worldwide income came from box office ticket sales; 46% came from VHS and DVD sales to consumers; and 28% came from television (broadcast, cable, and pay-per-view).

Typically, one film is the feature presentation (or feature film). Before the 1970s, there were "double features"; typically, a high-quality "A picture" rented by an independent theater for a lump sum, and a lower-quality "B picture" rented for a percentage of the gross receipts. Today, the bulk of the material shown before the feature film consists of previews for upcoming movies (also known as trailers) and paid advertisements.

The development of television has allowed films to be broadcast to larger audiences, usually after the film is no longer being shown in theaters. [citation needed] In 1971 U-Matic became the first magnetic format in which movies could be enjoyed in institutions outside the theatre. Later that year, the first videocassettes of movies became available to consumers to watch in their own homes. Recording technology has since enabled consumers to rent or buy copies of films on home media such as VHS, DVD or Blu-ray. Older formats include Betamax, LaserDisc, Video CD, and other video disc formats. Internet downloads are also revenue sources for film production companies.

Prior to the decline of the Motion Picture Patents Company (Edison Trust) in 1915, there were two main forms of film distribution: states rights and roadshow.

Under the states rights system, films were sold on a local, territorial basis. The local salesperson would then play the film as often as they desired in an attempt to make as much profit as possible. Film copyright holders would sell rights of a movie directly to the theater or franchise salesperson, typically on a foot-by-foot basis for 10 cents a foot. Absent major studios or national theater franchises, this system was generally the best way to ensure national release of a film, particularly for shorter films. However, in terms of profitability, the states rights system was not the most effective way to screen feature-length films since the film's producers only made money on the initial sale of each film copy.

This method also made it possible to screen films of various genre which may be illegal in one state but legal in another.

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