If you want to thrive in the independent film world, this is a term you need to become familiar with. It’s an agreement made between a distributor (usually foreign and specific to only one country) and the production company before the film is completed and often times even before production of a film has even commenced. This is a strategy that producers use to get their film financed. You may here that a producer financed a film via foreign presales alone. This means that a distributor pays for the distribution rights for their territory before they even see the finish product. In return, they will get to pay a significantly reduced cost for these rights as opposed to if they waited to buy the rights to the completed film in the open market. They are banking on the film doing well in the box office based on the script, director, producer and actors that are attached to the film in return for a discount. Some presale agreements involve the distributor and producer agreeing – prior to production – on a fixed amount to be paid upon delivery of the film. This is called an advance or a minimum guarantee. The ultimate objective for an independent film production company is to close enough foreign presale agreements in order to cover the negative cost of their film.
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