There are two primary ways to raise financing for the production of a feature film outside of the US studio system: one is international co-production and the second is the pre-sale. A pre-sale is the sale of a film to a distributor in a particular territory before the project is made. This sale is normally effected on the basis of the creative assets attached to the package. such as actors or director, but rarely the writer.
A UK distributor might assess the package and its elements and decide it has sufficient sales potential to warrant a pre-buy for the territory. The rationale behind this being that if the elements are suitably attractive to the buyer, the distributor has the commercial advantage of securing a potential hot property well before it comes to market in a completed form, where they would have to compete with other distributors and often pay a higher price. The practice is fraught with difficulties, however. and for every successful pre-buy that goes on to take the box office by storm, or at least make it's advance back, there are significantly more examples of pictures that seemed like a sure thing but barely trouble the local multiplex and go on to eke a return on DVD or late night television. As an independent distributor, you can only make decisions like this on rare occasions and expect to still be in business at the end of the day.
Yet there are still enough success stories that support an ongoing pre-sales market.
One example of such a success was the acquisition by Steve Ayres (a UK industry pioneer who pretty much invented the video retail market as we know it) of then huge video publisher VCI of the UK rights to a property based on a little known short story by Stephen King and directed by the then equally little known Frank Darabont. The film was, of course, The Shawshank Redemption. Ayres still vividly remembers the circumstances behind this particular pre-buy. 'I pre bought the film for VCI in a joint deal with Rank Films. I had a copy of the script and was sitting on some steps outside MIFED reading it. Couldn't put it down. and was late for two meetings. Still made lunch on time though! The script read like a novel and, at the time, as the cast meant little it was the story that sold it. Fantastic.
"Shawshank was a slow starter with. as I recall. very limited theatrical returns." continues Ayres. 'A stint in rental and then into retail. In the history of the business this must be the biggest word of mouth hit ever. Even my kids. all these years later, boast about it. What I learned from this is that. however long we have been in the business, we really don't know that much. Nobody saw this one coming.
As for the passion project area of this film market activity, when a distributor undertakes to track and buy a film they instinctively have a commercial feel for. there remains today the opportunity to make an impact. Laurence Gornall. Marketing Director of The Works UK Distribution who himself spent a full two years tracking and negotiating on the epic Mongol puts it down more succinctly to 'simply a case of good timing.' A case of good liming which led to a modest theatrical hit becoming a significant DVD and VOD success upon its UK release last year.
Nowadays. distributors tend to exercise more caution. Well. fair enough. there is a lot less money around for a start and so many of the 'good homes’ have been felled during this world-wide period of cash crunch. Pre-sale is still a potentially viable way of financing product, but it's a lot less bankable.