In a distribution agreement, what is the distributor's obligation?

• A. To publish the finished film in public domain
• B. To fund marketing campaigns for a fixed percentage of profits
• C. To own all rights in perpetuity
• D. To purchase the finished film for a pre-agreed, fixed price upon delivery

Answer: (D)

In distribution deals, the distributor’s obligation centers on acquiring the rights to distribute the film, either by licensing or by outright purchase. A pre-agreed, fixed price paid upon delivery reflects a buy-out arrangement: the distributor agrees to pay a set amount and takes ownership of the distribution rights as soon as the finished film is delivered. This gives the producer clear, upfront compensation and gives the distributor certainty to exploit the film under the contract.

The other options don’t fit because publishing in the public domain isn’t something a distributor does—the film remains copyrighted unless a rights holder relinquishes it; marketing costs aren’t typically tied to a fixed percentage of profits and are structured in various ways, not as a guaranteed profit-based obligation; and owning all rights in perpetuity is uncommon—the usual setup is rights licensed for defined periods and territories, not perpetual ownership by the distributor.