Guide to exporting DVD-Video titles

Many overseas companies will want to make their own localised DVDs as they will, in most instances, sell better. The level of creative control the rights owner wants should be stated from the outset, explains JIM BANTING.

Buyers or Sellers Market

n Retail concentration – it is important for any sellers of rights to understand the exploitation dynamics of a particular country. And the most important factor is retail concentration since it affects how revenue is generated theatrically and at retail for VHS and DVD titles.
The UK has the highest retail concentration for entertainment product of virtually any other country – the top 10 retailers on video and DVD account for around 70% of the market. There is a similar situation in theatrical distribution with many films struggling to get into major cinemas at all.

The buyers for these companies know their power and will restrict the access to salesmen – i.e. smaller companies get limited access.
Countries such as Germany have a very different retail mix with few big store groups. The best partners, therefore, are those that have a strong sales force on the road.

Mail order and non-retail markets – for foreign or niche product, alternative routes to the customer are key. Film clubs, mail order, off-the-page advertising, DVD hardware magazines and other routes can now make up a substantial proportion of revenue. It is important for any company selling rights to see whether their prospective partner uses these avenues effectively – many make a token effort with little real experience.

Online – the growth of online purchasing has been one of the most important shifts in the entertainment market in recent years. Most online vendors still prefer to do deals with the major companies and purchase product at typically lower prices that regular retailers.

Deal Structure

Advance vs Royalty – most rights-acquiring companies pay little or no advance for overseas product unless there is a package of rights (see below) or an exceptional property. It is always beneficial to try to get an advance, wherever possible, so that the acquiring company has a real financial incentive to get behind your product. Always try to get an escalating royalty as the margins once the distributors sells a certain number will improve tremendously.

Single vs Multi-product deals – selling individual properties, unless they have a proven track record or huge brand, is extremely difficult. The acquirer has more risk as they have one product only to sell and if this is unsuccessful, there is nothing to fall back on. If a company is able to put a basket of titles and rights together this will be more attractive and the chance of getting a good advance increases.

Multiple Rights deals – video and DVD sales potential is greatly enhanced by other exposure especially television but also book, magazine, game or music. If you are able to offer a package of rights which include these rights, the chances of getting a worthwhile deal again increases quickly.

Marketing Report – before any deal is struck, make sure the overseas company provides a full marketing plan. This will not only give you valuable insight into how they are going to sell your product but also their level of expectation. For example, the amount they plan to spend on marketing is a vital indicator as to whether they think the product will sell substantially or not.

The marketing report can also be compared with your accounting statements at a later date to see if they have done what they said they would do.

Accounting Statement – you should request getting a full accounting statement at a minimum of every 6 months and, preferably, once a quarter.

Creative Control

Foreign Language DVD – many overseas companies will want to make there own localised DVDs as they will, in most instances, sell better. The level of creative control the rights owner wants should be stated from the very outset. Build in creative milestones during the production of the DVD. It is possible for any company handling localisation to show all the DVD elements, either via email or on DVD-R.

The key creative stages are as follows – the video encode, the audio encode, menus, creation of added value such as docu, gallery, etc. and logos. It is possible to drop these elements onto one or more DVD-Rs and send them on for approval.

Foreign Language – most companies simply release the film or programme only on video but it can be helpful to have approval if anything else is included on the tape (such as trailers or other programming).

Packaging – having approval over packaging is an ideal with full creative consultation being a fall-back position.

General – the better the elements provided, generally the better the quality of localised elements and packaging. This relates to the source video and audio masters to images for packaging and menu creation.

Deliverables for DVD

General – Localisation for DVD is often expensive and time consuming. It is possible to dramatically reduce the time and cost of making foreign language DVD by following the steps listed below. The reason this is important is this: the lower the costs of localisation, the more cash is available for promotion and marketing and the quicker the product can get to the customer.

Video Masters – Make sure the masters have been fully checked by someone who knows they are going to be compressed for DVD. A full report should accompany the masters. Try to use digi-beta tapes where ever possible – the MPEG picture quality is usually better using this format.

If the video has been analogue or been on different tape formats during its life, it is usually worth cleaning up the picture before shipping a digi-beta tape. Any problems with the picture will be exaggerated by DVD.

Audio Masters – Mono or stereo tracks should be included on the digi-beta master but any other audio such as a commentary or 5.1 should be delivered on a DA88. Try to make sure that the DA88 is conformed to the master (with identical timecode).

Video Extras – Trailers, documentaries and animations, etc. should all be delivered on digi-beta tapes and full labelled.

Other Extras – The success of many DVDs often depends on the number and variety of the extras they contain. Galleries, interviews, behind-the-scenes footage, ads and information about the "making of" all help to enhance the sales potential. Try to deliver these in the best format possible -– as an example, if delivering images, make sure they are high resolution.

Menus – Images, drawings and photos should be provided to get the best menus. The alternative is to take screen grabs from the video master but the quality is never as good.

Subtitles – if a subtitle stream exists, it is worth sending a copy with the other assets. Often a full script can help clarify any language issues.

Certification and Copyright Issues

Copyright – A full list of copyright notices and instructions should be provided with the deliverables along with any restrictions on how to use images such as key talent. This can avoid problems down the line.

Certification – In many countries the local distributor will need to submit the video content for local certification and it will help this process to supply all necessary copyright owners details and dates of creation. As an example, all moving video including motion menus, trailers and documentaries need to be submitted to UK and German censorship bodies before the DVD can be released.

Rights Issues

Rights Ownership – It is vital to outline exactly what rights are owned and what rights are being sold. The biggest issue currently is online distribution – do the rights you are granting allow direct-to-consumer delivery. This has a number of implications, not least the fact that customers in other parts of the world (not the territory granted) might want to purchase online.

New Assets – When creating a DVD, a basket of new assets are created such as menus, encoded video and audio, packaging, etc. It is important to try to specify who actually owns these new assets and what happens to them once the deal has come to a close.

Localisation Costs

Budget – The first thing to understand is that localising progammes from, say, French is not a straight-forward process. It is expensive and takes time. Some rights-acquiring companies will look for part funding or a royalty break on localisation costs. If this is part of the deal, it is always worth agreeing on fixed numbers, so that if the cost of production runs higher than expected it doesn't affect when royalties or advances are paid.

Exposure in the Marketplace

Events – There are many events worldwide such as MIPTV, MIPCOM, MIPASIA, London Screenings and various other fairs which can provide a good platform for promoting your products and available rights. Having stands at these festivals and markets is often expensive but many of them cater specifically to companies that do not want to incur huge costs.

One alternative is to place advertisements in specialist magazines with the aim of getting people to contact you after the show.

Trade Magazines – All the major countries have specialist video, film and television magazines which contain invaluable information on who is buying rights and what is happening in the market. It is often possible to get hold of these publications through trade or government bodies which can give direct access to possible targets.

Local PR companies and agents – local PR companies can provide valuable press and publicity coverage which can help generate interest in a large package of rights or major brand. Also good agents can put together a short-list of contacts which can save a lot of time. It is worth noting that many agents fail to deliver what they promise and often have little access to the key decision-makers.

Alliance – It might also be worth exploring forming an alliance with several other companies wishing to sell rights. Together there might be a critical mass of product to interest major distributors. Alternatively, it would be possible to share the costs of an agent or a marketing campaign.

First Look Deal – This is a relationship which works well in the film business and allows for companies to have a first look at new product. This may be helpful to gauge early reaction to properties and help build a stronger relationship with a small number of overseas companies.

Genre Specialists – Companies looking to sell rights could well have success by looking for genre-specific companies. There are many video, DVD and TV specialists that need similar product and often have tailored marketing and sales routes in operation. In the UK, the key genres tend to be kids, special interest, television, sport, music, comedy, adult and film. And there are many players that just work in one or two of these areas.

Local Country Facts

Market Update – it is always worth trying to identify what is happening in the market before selling single products or a package of rights. Often one successful title or trend can dramatically increase the profile of certain genres and therefore drive up the price.

Retail Markets – It is also worth checking whether there have been major shifts in retail terms or conditions in the key markets as this might affect revenue generation.

Margins – In the UK, for example, a retail price of £15 for a video or DVD will generate an average sale to the distributor of around £8 (after tax and retail discounts). Terms are broadly similar in most European countries – Germany, Switzerland and Belgium have slightly higher retail prices and margin while Spain and Italy slightly less.

In Canada, the margins are usually lower, often reflecting trends from USA. The Korean market is extremely volatile and usually prices are very low. Piracy and low average incomes play a major part if entertainment markets.


Jim Banting was the New Media director for MGM and had responsibility for the launch of DVDs including classics such as Tomorrow Never Dies, Thelma & Louise and GoldenEye. He is now heading e-Digital, a new media production company specialising in DVD production.
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