Updated: Nov 24, 2019
Filmmakers (and really all digital video creatives these days) need to get a good, solid understanding of how film, television and now digital media and content creation distribution actually works.
Successful filmmakers – and by that I mean filmmakers who successfully recoup their budget and repay investors, are the ones who develop a distribution strategy before they embark on the filmmaking process, and sometimes before they even write the script. These are also the ones who will build on a single success. This is important, I’ll touch on it later so don’t forget it.
I have been working with every kind of filmmaker you can think of, doing any number of differing types of product. Everything from feature films and television series, to Indy films, documentaries, television commercials and even music videos.
Through working and indeed networking with these fine people, I began to meet sales agents and distributors. First one was at an wrap party in 1997 where I met a very successful agent from Alliance Atlantis.
Through our casual discussions that night, I was able to learn a lot about how they work and who was who in the buying and distribution world. Shortly thereafter, I was introduced to others from Warner Brothers, VIACOM and even Disney at a wrap party after working on a Disney film shooting in Vancouver.
This began my foray into film distribution as friends who of course, had films wanted me to “work the deals” for them. Which I did. Ultimately however, as there was a real need for people doing what I was doing and a demand from the industry for quality submissions and not the “crap” they had to sift through to find the diamonds. I soon opened VineHill Entertainment and began to do that professionally. The money was good and the hours were sane! Well, when compared to 3 or 4 week shooting schedules getting about 4 hours of sleep a day can run you down, let me tell you.
I soon developed a reputation with the distributors for presenting very good quality products, thus eliminating a lot of "weeding" time on their sides.
Back in 2011, nearly 30% of the features or feature documentaries screened found a distribution deal following their festival screening. Although I am not privvy to the fine details of their specific deals, I do have a pretty good idea how things are shaping up in a very competitive marketplace, then and now.
And though I am not a lawyer, I certainly have the knowledge to know exactly how distribution deals are supposed to be structured and what exactly is in a clients best interests when it comes to their works for sale or option. This is why I have compiled a list here for you now about my 10 essential points filmmakers need to be aware of:
1. Forget the mythical and covetted global deal. Split rights is really where the deals are at.
Gone are the days when a major distributor would swoop down on your movie post Sundance, Toronto or Cannes and offer you a universal all-media buyout.
Sure there are exceptions like Fox Searchlight’s acquiring Another Earth at Sundance in 2011, but it would be a pretty foolish person to make a film on the hope that a global deal will happen. Sadly, I have met some who did and let me tell you, you won’t want to party with those broken people… like ever!
Commonplace are what is referred to as split rights deals. This is where distributors cherry pick territories and then decide which national rights they want. It could be they are interested only in TV, or DVD for example, leaving the other pieces of the distribution window to the producer to try to max out money-wise.
Cheap plug here, but this is where I excel and it’s what I do!
2. Trying to get your film into cinemas will cost you a fortune.
Just this week I was speaking with a well known Director who specializes in Documentaries who told me the story of how he had to jump through so many hoops just to be considered for an Academy Award. On his latest film it was easily going to cost another $35,000.00.
Booking ad space in newspapers and magazines and now the internet has become very competitive and costly. Now, don’t forget to add to that the cost of good PR person(s) and social media assets the cost of a theatrical release starts to look like the budget of a small nation.
Remember that the exhibitor (theater owner) takes a fair whack, and yes the distribution company (even with me negotiating for you) will also certainly take 30% off the top as it is pretty much accepted standard practice, and the amount left in the pot from all those cinema admissions starts to shrivel. From the ‘profit’, the distributor then deducts the costs associated with the release. It’s a wonderful process and NOT what you expected right?
Distributors aren’t in business to make a loss, so they will commonly write in a cross-collateralization clause, basically meaning that they can offset what they deem theatrical losses against profits from other windows or channels.
Why do a theatrical release for your film? The biggest asset is that a theatrical release guarantees critical notices in all the major newspapers in the country it has been released in. This brings the film to the general public’s attention, and creates an increase in “perceived value” for the film when it is available in other monetized formats, such as DVD or online streaming through major portals like YouTube, Amazon, or Netflix.
3. Service deals can work
In a service deal, the filmmaker hires a specialist who takes over the distribution process for a fee. Preview screenings are set up for cinema booking agents and then specialists are booked. Advertising and publicity campaigns are designed and launched, and the money is returned to the filmmaker less the money spent.
Service deals can offer a greater amount of flexibility and control to the filmmaker.
Essentially, the distributor is working for you. Generally, the more engaged and involved the filmmaker is in the campaign, the greater the rewards.
Remember that regardless of the film distribution deal you do, you will need to provide film Distribution Deliverable Essentials.
4. The Bigger the deal the less control you have
Get used to the idea, because its the truth and you can’t change it.
If fortune just so happens to place your darling, cute, sweetheart film into the arms of a big distribution company you will have to learn quickly how to dance to their tune.
Now, right off the top I’m gonna tell you, if you don’t like how they are playing, you can pretty much forget about your voice, and very likely you will be totally ignored while the big boys decide how to best maximize the return on their investments. And if they don’t get it right by your books, and screw it all up, you can pretty much kiss your movie goodbye.
Fact is, they can re-cut, re-do the artwork, and basically do whatever they want without consulting you. Make sure your contract is very clear on what the approval process is for key marketing decisions. Don’t get hung up on personal ego issues either. Swim with it or drown.
Then cash the check and move on.
5. Cap Film Distribution Expenses
This one is a biggie so listen up! The truth is ANY marketing campaign is expensive. So, If your deal calls for a split of profits after expenses, make very sure you have capped the expenses, ahead of time or any profit will simply melt away.
6. The Check is in the Mail
The money from your film can take an infuriatingly long time to arrive. For your much-lauded theatrical release, don’t forget that the distributor themselves has to wait to get the money from the exhibitor (theatre owner) as well. From DVD sales the wait can be even longer. Delays of 12 and even 15 months are not uncommon and should be understood upfront. This is because retailers often place a holdback on cash owing to account for unsold items.
For digital sales to the likes of Amazon and Netflix – remember that reporting to filmmakers is virtually non-existent. Once you have piqued their interest to the point that they want your baby, it would be prudent to expect nothing more than the initial license fee they offer you and even that often can be very small. London filmmaker Chris Jones was initially offered a mere $75.00 for each of his first 2 award winning features.
7. Beware the middleman
Now I shouldn’t mention this as technically I and the company I work for are the Middlemen, still I feel it only fair and every bit as important to point out that certain middlemen exist to represent slates of films by newcomers on the premise that they have an excellent filtering process through which they cherry pick the best of the new, raw, undiscovered talent to prospective distributors.
This becomes much more formal in the digital world. These middlemen, or aggregators, perform two functions. They prep your film for digital distribution, encoding it into a wide variety of CODECs for everything from Playstation to mobile phones to web viewing. Then they do the actual selling to large platforms like iTunes and Netflix.
They charge additional fees for this, and the filmmaker can end up with a fraction of the total revenue once the platform and the aggregator have taken their whack.
As the large platforms only deal with a very small number of companies like VineHill, you are pretty much stuck going through one. So please watch out for this: some aggregators and platforms try to get exclusive contracts. Signing anything BUT a non-exclusive contract would be, in my opinion, not the best option. But sometimes when the deal calls for it, it can be.
VineHill however does it a little differently, we always have. We negotiate FOR the content creator, NOT the best interests of the buyers. They know through our reputation we won’t represent garbage by some first time film maker who delivers crap. We represent works that are filling specific needs they have as entertainment distributors. Fill the need, gain immeasurable value and therefore some clout at the bargaining table.
Also, be wary of aggregators who do not have direct links with distributors – but rather submit to another larger aggregator meaning another layer of fees.
As for fees, some charge upfront, some take chunks off the back end, big chunks. We have found a little of column A and a little of column B work best for all concerned in our experience. Depending on what it is needing distribution, up front fees can be as little as $1,500.00 or as much as $9,800.00 with varying percentages (if any) on the back end.
8. Nothing can be guaranteed
All relationships in life grow and develop (or disintegrate). A wise filmmaker will often sign a distribution deal in which the filmmaker can leave the distributor if a certain minimal revenue stream has not been reached.
We almost always negotiate for this for our clients as standard procedure. It is also common to draft into your distribution agreement a void clause should your film not be released within a certain time frame. This is also important on the production side as many deals won’t see anyone paid until the film releases to theaters, airs on television or streams live online.
A final note on this as nothing can ever be guaranteed, neither can your film or digital product sale, option or lease. I can think of 10 to 20 films right now over the years that we have worked with that in all honesty never got picked up or went anywhere.
Great films too. Some even with what I call, “the golden package” consisting of a fantastic cast, great acting, excellent cinematography, good special effects and a great story well written and executed throughout.
Why? Who is to say… The fact is there can be any one of a thousand reasons and they may or may not have anything to do with you, your film, or even the moon landing.
Clearances can kill a film as fast as no marketing budget or even a Director with a bad attitude. In fact more factors having nothing to do with a film on it’s own merits and is often times is the culprit.
The best you can do as a creator is just go with the flow, don’t get dejected and keep on, keeping on learning all the way.
9. R.O.I. and all that
One thing that must always be in your mind as a content creator is that all films, television series, documentaries, MOW’s, hell even a podcast have a revenue potential.
The trick is to understand what the revenue potential for your film or product really is, and then make your product for less than the amount you expect to earn. Get good at this, and potential investors will start to trust your acumen and start investing in your next project without so much as an ask.
10. Network like mad
As covered in my social media post it’s so very important to be out there and in touch with the pulse of the industry and to represent yourself and your film or product in the best possible light at all times.
It’s a relatively small industry, and it’s very much a people industry. The more you network with fellow filmmakers, the more you will learn about the industry and the good as well as the bad.
Stay frosty and if I may mention the biggest piece of advice I can offer which was first told to me by my film school mentor Louie Lawless in 1996, “Remember everyone’s NAME. If you can do that, the rest is gravy!”
Until next time…
Christopher John Taylor - VineHill Entertainment