The colossal Indian Film Industry is seeing a constant increase in its massive turnover each year. This is because diverse visions are being captured on reels that find their way to the viewers in the relevant market, fostered by competition. The different marketing strategies adopted by associations of producers, distributors or exhibitors between themselves or among different levels can be termed to be forming cartels and hence per se anti-competitive. Film production constitutes the most important part of film industry. Movie production includes the creation of story, narrative, dialogue, etc., music recording, movie shooting, laboratory processing and post-production activities such as cutting, dubbing, re-recording, mixing, final printing, censoring and distribution of prints. Under the current financing strategies followed in the industry, producers usually account for about 25% of the cost of making a film, and the balance of 75% is met by advance payments from distributors and funding from private financiers. A notable feature of film production is that the producer retains the maximum cost of production of a film before/at the time of the release of the film by selling distribution rights to distributors (usually distributors pay up to 40% of the amount negotiated while the film is under production and the remainder at the time of the release of the film). [1]

Once a film has been made, it will go through different stages, such as the pre – production, the production process, the post-production stage and the distribution process. At the distribution point, which is the main concern here, producers sell the “theatrical rights” of their films to all Indian distributors or third parties for the promotion and distribution of films to the public. .[2] The person who does the distribution is called the distributor. The film distributor is accountable for the commercialization of the film. The distributor may set a film’s release date and the process by which a film is to be shown or made available for viewing; for example, either theatrically or for home streaming directly to the public (DVD, video-on-demand, download, TV programs via television syndication, etc.).  A distributor can do so directly if the distributor owns theaters or distribution networks, or through theatrical exhibitors and other sub-distributors, a distributor can do so directly. A limited distributor can either deal with certain items, such as DVDs or Blue rays, or may operate in a given country or market. A limited distributor can either deal with certain items, such as DVDs or Blue rays, or may operate in a given country or market.[3] The Production Houses gives its film for various reasons rather than licensing it to the third parties. Some of the reasons are: – First, it will permit the studios to maintain control over their film libraries, rather than risk losing control, particularly in the easily pirated digital format. Second, distribution costs will be relatively low (other than advertising, which the studios already know how to do); it will not require an extensive staff of employees, such as is required to service theatrical or video distribution.[4]

However, there are so many issues being faced by the production houses like Film & Broadcasting Solutions and distributors while transacting between them. Sometimes, Distribution rights are exploited. When the agreements for distribution rights are signed and contracted for, issues relating to the collection of total revenue and the extent of distributor’s rights often come into picture. Sometimes, distributors are not given their due share in the profits and sometimes distributors stay the release of the project causing damage to the production-houses. Moreover, Distributors were being marginalized as many producers are releasing films directly. Besides, the producers are directly dealing with major Multiplex companies for distribution deals. Thus the key change that took place in cinema was that the production units became corporate companies, multiple production units are venturing into the field of film distribution.  It will therefore increase the popular share of interest among them and the perceptible amalgamation of production and distribution undertakings.[5]

The industry consists of individuals involved in the distribution of prints and films. Executors, producers and distributors can make a film financially profitable only after they have worked with each other. The ‘exclusivity clause’ in the distribution contracts plays a key role in determining film rights in the commercial market. Issues relating to professional marketing, distribution of materials, holding of exhibitions or celebrations are common in relation to distribution rights.[6]  In the recent judgment of Moserbaer India Ltd. v. Movie Land[7], the court discussed the significance of possession of copyright with distributors in cinematograph films. It observed that, “In order to avoid long delays and maintain the flow of revenue through a project’s profit in market, arbitration provides a great opportunity to settle the dispute as soon and as amicably as possible. Arbitration assists the Indian filmmaker in protecting their rights in distribution processes and protects them from incurring major losses in the valuable market if the project loses its audience.”

With the venturing of the film producers into distribution as well and the advent of the multiplexes, the single-screen movie hall owners and small distributors are losing out. Their concerns have led to forming anti-competitive agreements among themselves in order to avert the businesses of the multiplexes. Further, the question of abuse of dominant position in the film industry has extended to the Competition Commission’s doorsteps a number of times.[8]

In the case of FICCI-Multiplex Association of India Vs United Producers/Distributors[9], the FMAI filed a case before the Competition Commission of India against UPDF & Others, in which FMAI claimed that UPDF demanded an absurdly flat rate sharing ratio of 50 per cent for all weeks and all types of films. It was also alleged that there was an anti-competitive agreement between producers / distributors, including those who are not members of UPDF. The Competition Commission established the allegation and, in the case, imposed a penalty of one lakh on each of the opposite parties.

Moreover, the Internet platform has destroyed the marketing strategy of the elite production and distribution units.  A significant number of people have access to the Internet and are searching for online content that is inexpensive and conveniently available from the comfort of their home. Online platforms and the OTT platforms have become on demand today as they deliver quality content with a cheaper price tag. With just a click, the latest movies and music can be downloaded easily over the internet. Although the internet has broadened the media audience but also disrupted the market, the contrary elite producers and distributors do not generate sufficient revenue from their work, and this is becoming a matter of concern to them, as the internet has reduced the cost of distribution to a large extent, and digital films can be moved from one country to another for a meager amount.[10]

Conclusion:-

Distribution and commissioning are the bedrocks of the film industry without which, no matter how big stars the film casts, a film can’t succeed. Distribution is marketing to produce heavy profits and to recover the money that was invested when making it. However, in the contemporary age, the concept of earning revenue through distribution channels is quite changing as on-demand online platforms are gnawing away the cost of distribution. People bend towards the online platform because with just one button, it gives fast and comfortable access. Though these platforms are good for the independent and marginal filmmakers as they hardly get the elite distributor or distribution channels but to the contrary it is a pain for the channels of distribution. In fact, Corporatization is the latest trend in the movie industry that affects the distribution sector as well. Hence, the existing laws need to be amended so as to include OTT Platforms in the regulating list.  Besides this, the Competition laws had to be given full effect and the Competition Commission of India’s jurisdiction has to acknowledged.

The industry consists of individuals involved in the distribution of prints and films. Executors, producers and distributors can make a film financially profitable only after they have worked with each other. The ‘exclusivity clause’ in the distribution contracts plays a key role in determining film rights in the commercial market. Issues relating to professional marketing, distribution of materials, holding of exhibitions or celebrations are common in relation to distribution rights.