Twenty-First Century Fox 2014 Annual Report Download - page 20

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worldwide, excluding a number of international territories with respect to television rights. Among its fiscal 2015
releases, TCFF currently expects to distribute three New Regency films.
The Company has an arrangement with DreamWorks Animation SKG, Inc. (“DWA”) to distribute new
release animated motion pictures produced by DWA, as well as certain other library motion pictures and
programming controlled by DWA, domestically and internationally in all media including theatrical, all home media
formats and certain forms of television. Among TCFF’s fiscal 2015 releases, TCFF currently expects to distribute
three DWA films.
Motion picture companies, such as TCFF, typically seek to generate revenues from various distribution
channels. TCFF derives its worldwide revenues from motion pictures and other program distribution primarily from
four basic sources (set forth in general chronology of exploitation): (i) distribution of motion pictures for theatrical
exhibition in the United States and Canada and markets outside of the United States and Canada (“international”
markets); (ii) distribution of motion pictures and other programming in various home media formats, including
digital distribution; (iii) distribution of motion pictures and other programming for exhibition on premium pay and
subscription video-on-demand (“SVOD”); and (iv) distribution of motion pictures and other programming for
exhibition on free television networks, other broadcast program services, independent television stations and basic
cable programming services, including certain services which are affiliates of the Company. The Company does not
always have rights in all media of exhibition to all motion pictures that it releases, and does not necessarily
distribute a given motion picture in all of the foregoing media in all markets. The Company believes that the pre-
release marketing of a feature film is an integral part of its motion picture distribution strategy and generally begins
marketing efforts three to six months in advance of a film’s release date in any given territory. The Company
markets and distributes its films worldwide principally through its own distribution and marketing companies.
Through Twentieth Century Fox Home Entertainment LLC and TCFF, the Company distributes motion
pictures and other programming produced by units of TCFF, its affiliates and other producers in the United States,
Canada and international markets in all home media formats, including the sale and rental of DVDs and Blu-rays. In
fiscal 2014, the domestic home entertainment division released or re-released approximately 1,249 produced and
acquired titles, including 19 new TCFF film releases, approximately 867 catalog titles and approximately 363
television and non-theatrical titles. In international markets, the Company distributed, produced and acquired titles
both directly and through foreign distribution channels, with approximately 1,004 releases in fiscal 2014, including
approximately 20 new TCFF film releases, approximately 723 catalog titles and approximately 261 television and
non-theatrical releases. The Company enters into domestic and international license arrangements with third parties
for distribution by electronic sell-through (“EST”), video-on-demand (“VOD”) and/or pay-per-view (“PPV”).
Distribution on an EST basis enables consumers to acquire the right to retain programs on a permanent basis. The
EST, VOD and PPV arrangements generally provide for license fees based on a percentage of the licensee’s gross
receipts received from consumers and in some cases a guaranteed minimum fee per consumer transaction. In
addition, these arrangements generally provide for a minimum number of scheduled PPV exhibitions per program
and for continuous VOD availability of each program to consumers during a fixed period. In fiscal 2014, the
Company continued its arrangement to distribute new release animated motion pictures produced by DWA as well
as certain other catalog motion pictures and programming controlled by DWA. In fiscal 2014, the Company
continued its worldwide home video distribution arrangement with Metro-Goldwyn-Mayer (“MGM”), releasing
approximately 520 MGM home entertainment theatrical, catalog and television programs domestically and 558
internationally. The Company also continued its domestic home video distribution arrangements with Lions Gate
Films Inc. (“Lions Gate”) (U.S. only) and Anchor Bay Entertainment, LLC (“Anchor Bay”) (U.S. and Canada),
releasing approximately 1,536 Lions Gate home entertainment theatrical, catalog and television programs and
approximately 696 Anchor Bay home entertainment theatrical, catalog and television programs. During fiscal 2014,
the domestic home entertainment division released 441 Blu-ray titles, including 19 new TCFF film releases, 350
catalog titles and 72 television and non-theatrical releases. In international markets, the Company released 326 Blu-
ray titles, including 20 new TCFF film releases and 306 catalog titles. The Company also distributed 181 Blu-ray
titles from MGM domestically and 127 titles internationally, 313 Blu-ray titles from Lions Gate domestically, and
169 Blu-ray titles from Anchor Bay domestically.
Units of TCFF license motion pictures and other programming in the United States and international markets
to various third party and certain affiliated subscription pay television and SVOD services as well as to free
television networks and basic cable programming services for distribution by means of various media, which may