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Business, Entrepreneurship

How to Make Money as a Filmmaker When You’re Stuck at Home

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December 29, 2020

- Business, Entrepreneurship

The pandemic has decimated some industries, with the film industry in particular feeling the economic effects.

Movie theaters have been boarded up, and about 70% of those are forecasted to close permanently or declare bankruptcy by spring 2021. These closures make it especially hard for filmmakers to maintain their income stream and find ways to pursue their passion.


So it’s lucky that the industry is made up of creative minds, as the “new normal” has definitely put new demands on the way content is consumed. As Blumhouse Productions CEO Jason Blum and legendary filmmaker Werner Herzog discussed in a recent podcast, the future of filmmaking may rely heavily on online streaming.

While there’s no way to know how the industry will fare post-pandemic, there are things you can consider to help you make some money doing what you love at home:

 
Explore new genres

Quarantine left filmmakers without their crews and sets, but they remain undeterred when it comes to producing films. In fact, a number of music videos and films were shot while the cast and crew were quarantined in their own homes, and have been released recently.



This unique arrangement has even inspired some directors to explore new themes like self-isolation and deeper introspection.

This is the perfect time for you to be experimenting and discovering new genres and filmmaking styles, as all the rules of filmmaking have just been wiped out. And don’t be limited by the physical space you’re in, because the internet allows you to move beyond the walls of your house.

Remember that you can always communicate online with other filmmakers and actors, and you can collaborate with them on how and what to shoot on their own for your next film.

Become a consultant

Other filmmakers are always in need of expert advice and looking for consultants.

Additionally, there are businesses and individuals who can benefit from the ancillary, or secondary skills you have picked up as a filmmaker. This might be anything from video production to marketing, to branding, website building, photography, or other useful skills.

Being a consultant opens you up to a wide array of options as it can cover areas both directly related to film and other topics.

And with your skills honed by years of experience and relatively little startup costs, you can easily start a consulting business. This is a lucrative path to consider in the industry, especially now that there may be several challenges posed to film production—and being the owner of your own small business gives you unlimited earning potential.

However, this also means that you’re solely responsible for making your consultancy business succeed. Like any other business, you’ll have to choose a unique name, entity type, file the necessary paperwork, and register it with your state.

Use your established network to market your business and help you land clients.

Become a niche storyteller

Figures show that about a third of all internet activity is spent watching videos, which isn’t surprising given the volume of videos published on a daily basis.

An army of vloggers, influencers, and producers have hopped onto the video bandwagon. It’s especially appealing because promoting products or partnering with brands to create video content could make you anywhere between $30,000 to $100,000 per year.

However, the market can get extremely saturated pretty quickly. This is why narrowing down your content so that you reach a smaller, albeit dedicated and passionate, niche audience is so important.

You’ll find that you can go without a sizable, noncommittal viewership when you have a small group of highly-engaged audience members interested in seeing the highly specialized content you create as a niche storyteller. 

Once you’ve built a solid group of what’s called ‘true fans’, and have a good relationship with this audience, they’ll be self-motivated to support your content due to the affinity they have with your brand of storytelling.

Being stuck at home shouldn’t stop you from doing what you love. There are still a number of ways you can earn from and improve your skills at the same time.

Something you can always use from home and is often free is to utilize the great number of educational resources online for filmmakers.

This is a collaborative article by writer Harry Minton.

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Business, Filmmaking, Fundraising

4 Facts You Need to Know about Profits for Your 1st Feature Film

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June 23, 2018

- Business, Filmmaking, Fundraising

Money matters can be quite complicated…
…and I aim to sort them out in a comprehensible manner to help you get ready to launch a bigger project (such as your first feature film).  

Just like with securing film distribution, I’d never handled any of these matters prior to producing my first feature film. The university of life taught me how this stuff works – plus some input from mentors.

I must mention that while I have learned a lot from my experiences thus far, there are many things in regard to investing that I do not understand and have not encountered.

This is only a basic breakdown of how your film’s profits will break up if seeking some investment or when sharing profits with your team.

It’s important to understand what people expect, what they are talking about, and what your obligations are once you’ve made promises of giving any amount of ‘profit’ or ‘ownership’ of your film to anyone, and what you’ve really promised to share with them.

Since there are a handful of terms in this article that not everyone may be familiar with, I’m going to define a few things before we get started.

Super-exciting definitions you can (but shouldn’t) skip
‘Points’. This is the common term for profit participation percentage points.

Profit participation (how much of the profit a particular person or party receives when the film makes money) can only be out of 100 percentage points, which is where the shorthand ‘points’ comes from.

Gross profits. Gross profits, according to Investopedia, is “the profit a [film] makes after deducting the costs associated with making and selling [it].

Gross profit will appear on a company’s income statement, and can be calculated with this formula:

Gross profit = Revenue – Cost of Goods Sold

This is a generic business definition of gross profits, commonly referred to simply as ‘gross’.

Within the film industry, gross is commonly understood to include all costs of producing a feature film, including prep, production, and post, but not usually including other expenses such as marketing, also known as print and advertising (‘P&A’), production company overhead, miscellaneous company expenses, or other costs not directly attributable to the production of the film.


I know. This stuff is boring, but it’s important, so keep reading!

Net profits. Commonly referred to as ‘net’, Investopedia defines this as, “Net income (NI) is a company’s total earnings (or profit); net income is calculated by taking revenues and subtracting the costs of doing business such as depreciation, interest, taxes and other expenses…”

An important element to note is the part of the definition that says, “…and other expenses… “

Oh… What could that mean? The truth is, ‘other expenses’ can be anything a company decides is part of their operating expenses of one sort or another. This is something you have to watch out for when dealing with people.

You need to make sure the definition of net profits is clear.

Generally, the definitions of gross and net profits can change depending on with whom you make deals. Whatever the case, it’s important that everyone is totally clear on their expectations and define things clearly.

Fixed and contingent compensation. “Fixed compensation is the upfront money that is paid [to cast or crew] when the film goes into production, regardless of what happens to the movie in the distribution phase. The contingent compensation is the percentage of a pool called the ‘producer’s adjusted gross.’ Today, virtually all films produced include some form of contingent compensation.”
(by producer Kathryn Arnold on HG.org)

When it comes to your first feature film, you will, in all likelihood, use a lot of contingent compensation, since you don’t have much (if any) up-front payment you can provide.

These terms are relevant because any ‘points’ you give to key cast and crew for their help are a form of contingent compensation. While there are ways to use this method of compensation in a professional manner as well as ways to do this in a manipulative manner, there is nothing inherently wrong with contingent compensation.

Tricky terms. Sometimes, there will be some tricky terms out there that look like something they are not.

This is where having good mentors or a good entertainment attorney can really come in handy. For example, ‘adjusted gross proceeds’, or ‘modified gross proceeds’ are other ways to basically say net profits, in my opinion.

My knowledge and understanding of accounting/economic terms and concepts are limited and imperfect, so I recommend you do some research on your own to learn more. If you want to look at some more definitions, I found this interesting sheet of info.

Ownership versus profit participation
Big difference!

While I am not a lawyer, I know that there’s a difference between signing an agreement that says you are giving someone ‘5% of the film’ or ‘5% ownership of the film’, and an agreement that says you are giving someone ‘5% of the film’s net profits’ for their help, and then defining net profits.

Always be careful what you sign.

I almost made this mistake, since I didn’t make that distinction.

The difference is this: owning your film is owning the intellectual property (the script, the ideas, the creative input) and rights of the physical images, voice recordings, and images of the actors.  Basically, everything that makes up what the film actually is.

If you give someone some of the film’s profits, all you owe them is a certain amount of money based on what the film makes.


What you want to do with their money to spite them is another issue entirely. You still have all the rights to the film and they don’t get any say in what you do with it.

I almost signed away some of my film’s actual ownership to some people who worked on my film. Oops. Don’t be like me – pay attention and make a distinction between these two things.

Structuring your project – who gets what
So, let’s say you’ve found a partner with whom to make your film. You’ve also found someone who is going to contribute a bit of funding to your film, in addition to whatever you and your partner contribute.

This is a sample scenario for someone making their first film. You couldn’t find someone willing to give you a ton of cash, but between yours and theirs, it’s enough to get something off the ground.

Before you get to that point, you’re going to have to decide how you’d like to allocate the net profits of your film – the ‘points’. Having a plan will allow you to negotiate with people properly when it comes to their contingent compensation.

You’ll know where you intend to allocate things, how much you’ll have if you offer someone ‘x’ amount, what number of points you want to reserve for yourself and investors, and how much you can realistically give away.


Above, I’ve included a sample breakdown of your film’s points. Assuming a lot of people involved in your film are working for very little up-front cash, it is common to offer them a reasonable amount of points in exchange for their work.

What ‘reasonable’ means will vary and be based upon that person’s apparent worth given their skill and how valuable their time is. Okay, from the top-down, let’s break these numbers down.

The executive producer (EP). The big cheese. Whatever the case, they are offering something so valuable to your production (whether money or resources) that they earn this title along with a substantial chunk of your points.

The amount they receive will be entirely between you and them, but based on my limited experience, it seems likely for this number to be anywhere between 20-50% and depends greatly on how much they are contributing compared to you.

You and your producing partner. This is, of course, assuming that you do have a partner. In a prior article, I suggested that you should find someone with whom to co-produce your first film and how to find a great partner.

If you don’t, this is easy. Give yourself as many points as you realistically can, while treating your cast, crew, and backers fairly. If you do have a partner, on the other hand…

You and your partner are going to have to have a candid and transparent discussion about who will be doing what, how much work each person will be doing, and what they are bringing to the table. Basically, you have to come to what you feel will be a fair arrangement for both of you.

Whatever you decide, make sure you are satisfied with the agreement. If you feel troubled about what you’ve agreed to, bring it up. The last thing you need is to be harboring any feelings of bitterness or resentment toward your partner several months into making the film.

For my first feature film, my partner and I decided on even responsibilities and an equal split.

From left to right: Michael Alvarez (one of our actors), Joseph Mbah, and Nick LaRovere

The stars of the show. For my first feature film, we offered those that were committing a significant amount of the time to the film, the lead actors, a few points. We based the amounts on what we gave others for the same level of commitment. I believe this is only fair, especially if your actors are working for no upfront cash payment.

Your crew, your team. Like your lead actors, the crew that is dedicated to seeing your film through is deserving of at least a reasonable offer of points for their assistance.

If the crew is being paid normal rates, then you probably don’t have to be concerned about offering points. However, on your first feature, chances are you will not be able to offer full rates for anyone.

Composer, Writer, and more. There may be others that are willing to assist you with your first feature that are seeking experience and are therefore willing to work for points alone. It is up to you and that person to negotiate a number of points that seems appropriate for the level of work they are contributing.

An example of points structure: The EP contributes $5,000. You and your partner contribute $2,500 each.

Perhaps your EP gets 25 points, and you and your partner get 12.5 each. However, you realize that since you and your partner not only helped fund the film, but also will spend countless hours prepping, shooting, and in post, you increase your allotments to 20 each. The remaining 35 points are split up to everyone else as you choose.

Hold some back. I recommend not giving away all your points up-front. You may encounter a situation where it’d be helpful to offer points to someone.

This might be in exchange for an otherwise un-securable location, expensive equipment lent to you, or any other unforeseen assistance that may need a bit of grease on the wheels to get things moving.

What money goes to who, and when?
Great question. This will depend on what kind of deals you have arranged with all participants in your film, especially the distributor and financier(s).

There are, in reality, many different types of deals and each will have its own peculiarities. Who receives what payments, and when, will vary, as all these sorts of things can be written into a contract. However, for the most part, it will probably go something like this. In terms of priority…


You may be wondering why the distributor gets first priority in this scenario. Didn’t the outside investor take on the most risk by investing in someone’s film (that isn’t their own like it is yours)?

Most likely. However, from what I’ve learned, it is quite normal for a distributor to require they recoup any marketing or direct costs of distributing the film before any funds are disbursed to other parties.

Here’s where your profits go when there’s a typical distribution deal:


What is the distributor recouping?


In reality, the definitions of ‘marketing and sales costs’, or ‘costs of distribution’ can mean almost anything at all. This is an unfortunate problem with this distribution process.

Your best bet, in my current view, is to get an honest distributor. Unfortunately, you don’t control that, but you can do your best to work with someone who seems to work honestly if you get multiple distribution offers.

Marketing caps. Since a distributor will be pushing your film, they will incur expenses, perhaps every year, as long as they have the contract. So, they may include a marketing cap which encompasses all expenses, such as traveling to Cannes Film Festival, the American Film Market (AFM), and other popular sales locations.

It’s important that there is a marketing cap in your distribution deal. Otherwise, if the distributor gets ‘marketing and sales costs’ taken off the top of the profits before anyone else gets anything, they have no limit or accountability as to how much they spend in that category.

An arrangement without artificial limitations may lend itself to some creative accounting. What is ‘priority’ or ‘first-money return’ of investment? This concept simply means that your EP wants to get their investor paid back to them first before anyone else (aside from the distributor) gets anything. Since ordinarily, they are the primary 3rd party risk-taker on a film, this seems like a fair arrangement.

The EP should be reimbursed monetarily for his or her initial investment before anyone else is paid since they have nothing but a monetary stake in the project – unlike you.

When do you get paid anything? Well, unless you arranged something different with everyone else that received points, after the distributor has recouped their marketing costs (reached their cap) and after the investor has been paid back their initial investment, the percentages of net profits will be split evenly and without priority to all parties.

Reporting what the film makes. In your deal with a distributor, you should be promised by them that they will report what the film is pulling in, at least every year (for a limited time) if not every 6 months.

After that, if it isn’t already in your contract, it’s a good idea to share those reports with your EP (at the least) for the sake of transparency and good business, as well as any other major points-holders.

If those holding few points on your film trust you, chances are they won’t mind not having those numbers shared with them, as long as they are getting checks in the mail.

Otherwise, you should let them know that the film simply isn’t making money (which is an unfortunate possibility) so they don’t have any unrealistic expectations.

Movie profits in a nutshell
1. Definitions:

‘Points’. A common term for profit participation percentage points.

Gross profits. The money the film makes, aside from the costs of making it and getting it to a distributor.

Net profits. The money the film makes after marketing and sales costs of the distributor are subtracted.

Fixed and contingent compensation. Fixed is the up-front cash you pay people. Contingent is money they are promised on the back-end, including points.

2. Ownership versus profit. Remember that these two things are not the same. Ownership implies having rights to the film itself in some way. Profit is just money.

3. Structuring your project. Have an understanding of where all your points are going, who is contributing what, and divvy the points out carefully.

4. What money goes to who and when. Every deal structure will be different, but remember that the money being made on the film most likely won’t be for you, at least not at first. Make sure you handle the funds appropriately and pay the right people.

5. Additional resources: A wonderful, but more complicated breakdown of where the money goes in a film deal: read the breakdown HERE.

More definitions, including many terms I don’t understand, HERE.

So, feel ready to make a feature film yet? No? That’s understandable.

You may never feel ‘ready’.

Keep that in mind, keep learning, and working hard… Good luck!
1
Business, Filmmaking

Film Distribution: 5 Things You Need to Find a Great Deal

By on

June 16, 2018

- Business, Filmmaking

When I made my first movie, I was clueless about film distribution.

I wondered how we would figure it out. How does film distribution work? What is a film distributor, exactly? Does anyone have these answers? No one I spoke to seemed to know or were willing to share.

As I learned, sometimes you just have to figure things out yourself.

What I learned when securing film distribution for my first movie was that when it comes down to it, securing your first distribution deal consists of the following:

1. Make your film the best it can be.


2. Contact as many distributors as you can.

I’ll get into more detail, but that’s the essence of it.


If you want to get film distribution, you have to grind and email a ton of people, then wait. That may not be what you want to hear, but for you first-time feature filmmakers out there, trust me when I say that one way or another, there is a path forward.

A caveat: you should be considering distribution as you pick a script or concept to write and produce. Even if you are  set on a particular idea, you should have a plan on how you will approach the second half of your film’s life – distribution.

Let’s get to it!

What is a distributor?

What the heck is a distributor, really? What’s a sales agent? A producer rep? An aggregator? (Ugh, too many titles…)


There are a lot of terms flying around out there. It’s hard to know, really, what someone’s definition of a particular title might be. Your best bet is this: ask anyone who inquires about your film whether they sell directly to different territories, handle all rights, and market your film, or handle a specific right or territory. Understand what kind of deals they typically make and what services they provide.


This subject can be quite complicated, but if you understand the kind of deals the person/distribution company you are speaking to usually makes, and what services they provide, you will be in good shape.


I recommend that when you seek film distribution, you look for a distributor who will make the following deal with you:


To license all rights to your film, including VOD, TV, theatrical, DVD, and any other medium, in every territory in the world (including US and all international territories), have all rights to market and sell your film in any medium through the whole world, for a limited period of time (say, 3-5 years), after which the rights revert back to you, and their services end.


You will only have to deal with one company that will market and sell your film in all aspects. Only one middle-man will be taking a slice of the pie. And they don’t keep your film forever, only a limited period of time.


Let’s move on to an obvious, but important point.

Make the best film possible

This pretty much goes without saying. Of course, as a filmmaker, you want your film to be as good as you can possibly make it! This is the goal. Keep in mind though that ‘perfect is the enemy of good’. At some point, you have wrap up your film and push it out into the world. 

Why is it important to understand that you need to wrap up your movie and not try to make it perfect?

It’s better to have an asset (your movie) in hand that you can sell than something that is incomplete. An incomplete movie is not a complete product that you can sell and will not do you any good. I’ll take this even further and say that it is better to have produced a competent but otherwise unremarkable film than to have a dream of a perfect movie that will never exist.

Your first attempt won’t necessarily be great, and that’s okay. You will improve.

You can take your mistakes as lessons learned and make a better movie next time.


Okay, so you’ve made the best film you could make, given your skill, talent, and resources available. Congratulations. This is a great achievement, and you pride yourself on pushing through and finishing.


Most people never get to this step.


Here’s the reason why it is important that you make the best film you can:

More distributors will offer you film distribution deals–and more lucrative deals–the better your film is. There’s no guarantee a film distributor will take on your movie and market it. It is going to depend on what the market (buyers) are looking for, what’s more or less popular, and what distributors are looking for based on those variables.


However, the better your film, the more likely someone will be willing to pick it up, and the better deal they may be willing to give you.

Okay, now I’ll actually share the steps you need to take to secure film distribution for your movie. (Finally, right? Sheesh.)

Step 1 – prep your project

The key to getting film distributors interested in your project is proper preparation. You want to make your project as attractive as possible so that you hook them with your first email.


Make an explosive trailer. Your trailer is your film’s calling card. It’s all they will see and it will create the first, and possibly the only impression of the quality and content of your film.


Your trailer should hook the viewer right away – in the first few seconds, if possible. If you have any special effects, visual effects, stunts, intense drama, or exciting moments, include those in the trailer.


“But I don’t want to spoil the movie!”


Trust me, I understand. I dislike a trailer that gives away too much as much as the next guy.

However, It’s okay to ‘spoil’ your movie in this trailer. This trailer isn’t intended for a regular audience. This trailer is intended for the film distributor. When it comes to marketing and selling your film to ordinary audiences, your distributor will most likely cut a new trailer for your film, since they know what the target audience is looking for.


That said, craft your trailer understanding that the distributors are your audience, for now. You should cram your trailer full of interesting and high production-value material. This will indicate the quality of your film as well as tell the distributor that there’s enough interesting content to make a great trailer.


(Of course, you should try to make your trailer as objectively ‘good’ as possible. Don’t try so hard to shove everything interesting into it that it makes your trailer cringe-worthy.)


Here’s why it’s important for film distributors to see that you have enough material to make a ‘hooky’ trailer: Independent feature films live or die by their trailers and cover art – especially indie films with no name talent involved. 

If someone is browsing online or at a store looking for a movie, they are going to be pulled in by an eye-catching poster or an exciting trailer.

They aren’t looking at it because Brad Pitt’s face is on the cover of your movie, or because the name ‘Ridley Scott’ is at the top of the DVD art in bold lettering. Indie films don’t have that advantage.

Step 2 – contacting distributors

Okay, you’ve got your trailer ready. You or your editor did a cut, reworked it, got feedback from filmmakers, reworked it again, then got feedback from ordinary people and adjusted the movie a final time. (Read here to find out more on how to get great feedback for your feature film.)

Great. Chances are you’ve got something that’s ready to share.

Warning: be sure your film is ready since you only get one shot at a first impression with a film distributor! Like I mentioned before though, you eventually have to pull the trigger and push the film out to the world.

Where to find film distributors. You need to do online research to find these companies. A few good places to find these companies include IMDb Pro, websites in a cursory Google search, and (believe it or not) Wikipedia. Wikipedia has a list of film distributors. Not all of them will be in existence any longer, but it’s up to you to scour that list and try to find current companies.


Don’t be a pest. The world of distributors is a small one (or so I’ve been told). Whether or not this is true, it does make sense. Regardless, this is a good rule of thumb as a professional. Don’t go assume word won’t get around if you are a pain.

Be professional, courteous, and reasonable at all times. Be reasonable in your follow-up with people by waiting a week or two to follow-up. Don’t send a long email. Keep your follow-up simple and straightforward. Don’t be a pest, but don’t be a pushover.


Who to contact – don’t spam people. Be mindful of who you are contacting. Do a bit of research before you send your trailer off to a distribution company. Take a look at their website. Have they distributed anything like your film or its genre in the past? Do they only handle documentaries, but you have a horror film?

In that case, it’s best to not contact that company. Don’t add to their already overflowing inbox. If you think they might be interested, since your film is sort of on the edge of what they might handle, go ahead and send it to them.

If you go to a film distributor’s website and their website is ‘laughingheartsllc.com’, it’s covered in pink and rainbows, and the last 50 films they distributed have titles such as “Romance in Paradise”, don’t send them your over-the-top, underground, experimental, slice-of-life slasher film “Bloody Murder Syndrome”.

Just… don’t.

But let’s say at ‘laughingheartsllc.com’ they have 1 slasher horror film in their catalogue. That’s weird, right? Yep. But maybe they’ve only distributed 1 horror film, and are trying to branch out into the genre. If they have a record of distributing your kind of movie, then contact them.

Keep your emails simple! Don’t go crazy and send a 5-paragraph essay in the body of your email to a film distributor. Put yourself in their shoes. They probably go through a lot of submissions, right? All those small tasks–a couple of minutes here and there–add up. Make your email short, sweet, and to the point. If the distributor can quickly and easily understand your email, your chances are better that they will respond compared to another over-eager first-time filmmaker who sent a novella-length email.

I’ll show you what my first emails to film distributors looked like:

“We recently finished post on our feature, ‘Genesis: Fall of the Crime Empire’.”

Obviously. Why else would we be contacting them? This is unnecessary information.


“We are seeking a distributor interested in taking on our film. Synopsis: To an undercover detective and his partner, events seem like typical gangland power struggle, but a feared criminal puppeteer seeks an alien powerful artifact, which according to legend, can grant god-like powers.”


A synopsis could be helpful, but hopefully, your trailer will tell them everything they need to know.

“Cast/Crew: (may be viewed at) http://www.imdb.com/title“


Unless you have name cast, do they really care? Probably not. If you do have some known person in your film, it might be better to say so earlier in your email, such as ‘our film, “Superstar Thrill Ride”, with a cameo from Brad Pitt, is available for worldwide distribution’.

“Festivals/Awards: This film has not been submitted to any festivals.”


I’m guessing someone recommended I add this to my email to indicate we hadn’t shared our movie anywhere yet. However, if the distributor is interested, they will ask you these sort of questions later.


Oh yeah, and I totally forgot to add a link to the trailer. Oops.

This is the film distributor thinking…

“Is there a link to the trailer? Is this all there is? Eh.” *DELETE*

I improved after the first couple of emails.


Here’s what I included in my subsequent emails:


Subject: Possible Acquisition – “Genesis” Feature Film


To Whom it May Concern:

We are looking for a distributor interested in acquiring our film “Genesis: Fall of the Crime Empire” for distribution.

The trailer is in the link below. Thank you for your time.


‘Link’


If the distributor watches your trailer and is interested in your film, they will follow up and ask for a screener. You must have this ready before someone asks for it. Don’t keep the distributor waiting.


What’s a screener? A screener is a complete and ready-to-view cut of your film. Usually a screener is uploaded to a service like Vimeo for distributors to easily view. You should definitely make the screener private and password-protected, but do not forget to include the password clearly in your email with the screener link.

Step 3 – sealing the deal

So, you’ve got this far. You did the legwork, and you got an offer or two, or maybe even more (you lucky devil, you) from film distributors who are interested in your film.


That’s wonderful. Now you have to understand their offer. Does it match up with your goals? Be realistic, but don’t be too eager or necessarily take the first offer you get. Get insight from mentors, if you have any who’ve been through this before. If you don’t have a mentor and haven’t reached this step yet, go and find one!


Getting a distribution deal is a Catch 22, because a film distributor can change their mind at any time and withdraw the offer if the winds change. So don’t rush, but don’t take too long to decide. Usually, a distributor will put a time-limit on their offer to encourage you to take their deal and save time in negotiation.


The content of distribution deals is a bit complicated, so for the purposes of this article, I’ll assume you have an understanding of net and gross profits, profit ‘points’ ownership models, and other similar things. If you don’t you can read all about how film profits work in an article I wrote.


A film distribution deal boils down to this:


Who gets what? After the distributor takes their cut, what percentage of the pie is left for you, your investors (whether that’s you or someone else), your key cast and crew, and anyone else who owns a slice of the film?


The smaller slice the distributor takes, the more you get. These percentages can range from 15-20% (going to the distributor) for a great deal but are often higher.


How long will they have your film? From what I’ve read, heard, and experienced, a length of 3 years
or so is a pretty normal length of time for a distributor to have rights to sell your film, with the right to request an extension.


In the event your film does quite well, you may want to try something different with it in the future. In the event you feel your distributor hasn’t done great with the film, but you think it could sell better, after the period is up, you can take your film to a new distributor or try to sell it yourself.


Arguing for a lower cut for the distributor. I understand you may want to negotiate with the distributor to get a better deal. You have to balance that against (unfortunately) the potential of pushing them away. However, if you think the deal doesn’t fit your (realistic) goals, don’t be afraid to turn deals down.

Either way, assuming you can get them to lower their cut, you have to balance this against whether the distributor will compensate for their lower cut by spending less marketing dollars and time on your film, or increasing the flat amount of money they take off the top.


Wait, what money off the top? Yes, many film distributors will skim a certain dollar amount off the top of what the film makes. As part of the deal, they may have a ‘marketing cap’ of say, $10,000 (for example). Anything the film makes goes to the distributor until they hit that cap.

The cap’s purpose is to compensate them for the money and time they spent marketing your film up-front, including travel and other items. Once they meet that dollar amount, the money splits according to the percentages of the deal. For example, 25% to the distributor, and 75% to the filmmaker.

Be aware that if the marketing cap is higher than the amount of money the film is likely to make, and that is the deal the film distributor is offering you, you are essentially signing the film away to them. Your film will get marketed and sold but you won’t make any money back.

There’s more involved in a film distribution deal, but this is a good baseline.

Get a second opinion. As indie filmmakers, we can’t always afford to speak with an attorney. However, you should feel free to at least contact one or two and ask how much it’d cost to just get their opinion on the deal. A film & entertainment law attorney will have experience with distribution deals and will know what’s normal.


That said, if you can’t afford an attorney, it’s okay. This is where a good mentor comes in. If you know someone who has experience in this arena, you can show them the potential deal and get their opinion on it.

Step 4 – delivering the film

Okay. You’ve signed the dotted line and are ready to get your film out to the world!

The distributor is going to ask you to provide a long laundry list of items so that they can properly sell your film. Some of this is technical stuff, such as exports of the film, the audio, and things of that nature. Some of it is legal, such as contracts, releases, and other paperwork.

Together, the items the distributor requires from you in order to start selling your film are called deliverables, and they are very important.

Here are some of the major things your distributor will ask for from you:

Chain of title. This is just like real estate or a vehicle – a paper trail proving that you are the rightful owner of something. Your film’s chain of title will prove that you have all the rights, permissions, and licenses to legally license your film to the distributor, who can then legally go out there and sell it to people. It will contain documents such as:

Releases. Crew, cast, and location releases, music license documents, certificate of authorship or licensing for the screenplay and any material it’s based on, ownership documents for the film itself, such as partnership agreements from producers, and anything else proving you have total rights to do what you want with the film.


This chain of title protects you, the film distributor, and anyone else involved in selling the film. In the event someone claims you used their performance or creative contribution without permission, you will have their contract to show that you do have permission. 


A high-quality HD or 4k (if you have it) export of the film. The distributor will provide technical specifications as to what they want. They will send your film off to a lab which will analyze the film for issues that will need fixing in order to optimize it for different platforms and regions. You will most likely have to make some adjustments and provide a new export, after the lab provides their report.

Music and effects track (M&E track). The ‘M&E’ track, as it’s referred to, is an audio track that contains all synced, non-dialogue sound and music from your film. Scrapes, scuffles, bangs, whistles, explosions, and your epic soundtrack… everything except your characters’ dialogue, grunts, yells, and so on. The purpose of this track is to make it possible for various sellers to have your film dubbed if they want. They can simply put in the dubbed dialogue, yells, screams, and cries over your music and effects track.


Creating an M&E track can be tough if you had a low audio budget. A lot of your normal sounds will overlap with dialogue in your boom recording. Once you take out your boom audio, you lose the dialogue but also lose everything else. This is one purpose of Foley. If you can’t afford Foley, you may have to do some yourself, inserting at least major sounds in the scene, so that the lab will accept your M&E track. Pre-built foley and sound effects packs are great for this.


Music cue sheet. This sheet will contain a list of titles and timecodes for all music, including original score, that play in your film. It lists who made the music, who holds the arrangement, recording, and performance rights for the music, the title of each song, how much of each song is in the film, and where it plays.


Dialogue list. This is a word-for-word, verbatim transcript of what is said in your film. The dialogue list makes it easier for domestic and international sellers to have your film’s dialogue translated, dubbed or subtitled. There are companies out there that provide transcription services for this purpose, and it can cost anywhere from $300-500. For my first feature film, my partner and I opted to do this time-consuming task ourselves and save some money.


DVD extras. If you have any bloopers, cast and crew interviews, behind the scenes, or any other extras,
your distributor will ask for these as well.


This isn’t a comprehensive or perfect list, but these are the major items you should expect to provide to your distributor.

Step 5 – I have to pay for what, now?

You thought you were done? Ha!

Unfortunately, you are not. You are going to have to pay for a couple of things, unless your distributor works out a deal where they pay. I did not get this kind of deal for my first feature, but it is possible.

Errors and Omissions insurance. Remember the chain of title? Well, like chain of title, errors and ommissions insurance (commonly known as E&O) protects you, the film distributor, and others from liability in the event you missed some vital permission or failed to request rights to something, and someone decides to pursue your film legally (sue you/your company). Any distributor is going to require that your E&O insurance cover the duration of your film distribution deal. 

E&O insurance will likely cost you something in the range of $2,000-$3,000. This will vary based on your film and the insurance provider.

Lab costs. The lab that examines your film doesn’t do it for free. I believe our lab fees cost us in the range of $500 or so, but this likely varies from lab-to-lab.

Distribution – the final frontier!

If this is your first film and you’ve never had a film distributed, this might feel like a tough nut to crack. I felt that way. When I pursued distribution for the first time, the process seemed like a great mystery.

Securing traditional film distribution for your film is doable. There are no guarantees, but you should always give it your best shot.

Remember:

1. Make your film the best it can be. The better your film, the more (and better) offers you will receive.

2. Make an explosive trailer. Remember that your audience at this stage is the distributor, and edit accordingly.

3. Contact distributors. Research to find relevant companies. Reach out to them, but keep it professional, short, and include a link to your trailer. Have a screener ready to send for when they request one.

4. Seal the deal. Understand the substance of the offer from the distributor. Get advice. Don’t feel obligated to take the first offer, but be realistic and don’t leave them hanging.

5. Prep and provide deliverables. The sooner you get everything to your distributor, the better. If you didn’t plan for those extras expenses (E&O and lab fees, etc.), start saving now.

6. Wait patiently for release. Make sure to abide by the distributor’s rules as to what you can share and publicize, and what you can’t. You don’t want your movie floating around the web before it gets released. It can take months before you film is released.

7. Don’t be too upset when you find torrents of your film online. Yes, it will happen. Yes, it’s illegal and immoral for someone to steal your hard work. Day 1, there were Korean rips of our film online. That said, it’s an unfortunate reality of the film business. Don’t tear your hair out over things you can’t control.

Getting your first feature film distributed and out to the world is a big step. It’s a lot of work, but it’s quite exciting.

I wish you the best of luck with your pursuit of film distribution.

If there are any questions I can answer for you, please feel free to reach out and I’ll be happy to help.

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Business, Entrepreneurship, Filmmaking

How to Pick a Film Producing (or Business) Partner

By on

May 26, 2018

- Business, Entrepreneurship, Filmmaking

How did I pick my producing partner for my first feature film?

Good question. I kind of figured it out as I went, to be honest. I’d never made a feature film before, or truly partnered in such a big way with someone. It was new territory.

You might wonder, ‘why do I even need a partner for my first feature?’ The answer is that you don’t really need one, of course. However, I’d strongly recommend it. It is great to have someone to back you up financially, help with the burden of work, and offset your weaknesses with their strengths. I may cover that topic in another article.

When I was considering making my first feature film, there were many unknowns. Despite that, I knew there was one box I absolutely had to check. I definitely wanted a partner to work with, and…

My partner had to have the same values as I did.

That point is what I will mostly cover in this write-up, but first, I’ll explain how I found my producing partner, Joe, and had a sense he might be a good guy to work with on my first feature film.

Joe, myself, and several of the cast and crew on one of the first days of shooting our first feature film.

Work with and evaluate him/her prior to partnering

In the summer of 2015, I met my friend and producing partner Joe for the first time. I had seen him on social media but only saw him as a competitor, honestly. Of course, my thoughts on collaboration before 2015 weren’t very positive. I saw other filmmakers not as potential partners, but as competition, and that’s a topic worthy of discussion in its own right.

In 2015, Joe and I worked together on a feature film being shot in Arizona. I was working as the assistant director and he was the camera operator.

That shoot gave us four solid weeks,12-16 hours a day, to get to know each other. It gave us the opportunity to (at least subconsciously) find the answer to several important questions.

Joe running camera on the set of “Krampus: The Reckoning”, where we first worked together.


These considerations are key to knowing whether someone will make a great partner:

– What is he/she like under duress, when tired, unhappy, and when facing challenges?

– Will they bend, or break?

– Will they rise to the occasion and be a problem solver or a problem causer?

– Will they complain, or do what needs to be done?

– Do they follow through and complete tasks?

– Are they reliable and hardworking?

– If there are communication issues, will they make the effort to work through issues with you, or allow your relationship to fall apart?

– Will they be honest and transparent, especially when it comes to monetary and budget issues?

– Will they stick to their word and adhere to your original agreement, even if it inconveniences them?

I could go on, of course, since there are a million qualities that make someone desirable to work with. Many of these questions will vary based on what you like in a business partner.

One of the main things I was able to determine by working with Joe was whether we got along. Did we enjoy working together enough to tolerate spending the next year or more shooting, editing, tweaking, selling, and delivering this film? After all, that means many, many hours spent working together closely. It means months of decision-making, collaboration, and compromises.

As the saying goes, ‘a business partnership is a lot like marriage’. If you can only stand the person for a few hours a day, that’s a good sign it’s not going to work.

Sure, there are awful people you won’t like working with, but sometimes it’s as simple as a personality conflict. It’s good to work with someone who compliments your weaknesses, but if you can’t find common ground in anything, you may have a hard time reaching consensus on important issues.

Ensure your potential partner has similar principles

It’s incredibly important that a potential business partner shares your values and principles. It’s okay to disagree on some things, of course. But you should agree on the most important issues of morality and behavior that often arise in business dealings.

The bottom line is that if you know what your potential partner’s convictions are, you will be able to better predict their behavior. Will they treat you well, give you the benefit of the doubt, and act in good faith? Or, will they slide on their commitments and twist the meaning of promises when it favors them?

I’m not saying that even a good person and ideal business partner can’t or won’t ever make bad choices. They might fail badly, make a poor judgment call, or act selfishly. We all do, from time-to-time.

I’m also not saying that partnerships based outside these guidelines can’t work, or can’t be pleasant. I’m certain they can. After all, as long as things generally go well, and nothing goes really upside-down, you’ll be fine. However, you run a much greater risk of serious issues if something goes wrong or strays from the original plan. The greater the adversity you face, the more your differences and conflicts will be evident.

Joe and I working on one of the major action sequences in our first feature film.


But life (and people) are full of surprises, and you should always plan for the worst while hoping for the best.

What are some values to look for? Here’s a few things you might consider:

– Commitment to fulfilling promises and obligations

– Operating with honesty and transparency

– Ability to be humble

– Willingness to be open and consider other ideas

When it comes down to it, if you know that your partner will strive to do what is right and honest for both of you, things are likely to shake out okay, even if everything goes to hell in a handbasket. That’s a person worth investing time in, a person you can count on, a person worth partnering with, and a person you can make a film with (and have a good time doing so).

A word on helping maintain a good partnership

Finding the right person to partner with is great. It makes things safer and more enjoyable. It lays a wonderful foundation for a partnership. However, there are a few things that I would suggest doing to lay things out straight and maintain a good relationship with your fellow producer.

Create a contract or agreement. This often-spoken bit of advice is a good one. The painful truth about contracts is that at an indie level, with shoestring budgets and little money all around, the reality is that no one can really afford to enforce their contract by suing the other party. That’s why finding someone who you know will treat you right is so important. But once that is done, it’s just as important to lay out the details between the two of you.

Why? Because when you don’t have to worry about dishonesty, what’s left is forgetfulness and miscommunication. Good people can forget what they promised. They can also have misunderstandings as to intent. Even a very simple agreement between the two of you will act as a reference throughout your project.

You can always go back to it one of you forgets – ‘ah, that’s what we agreed on. It’s been 6 months, so I forgot about that bit.’ If you lay things out clearly, you can refer to it to clarify what the original plan was. Check out a book I recommended here called “Clearance and Copyright”. This is a great start to learning about contracts.

Establish clear goals. This is something you can actually lay out in your contract, but it’s a good idea to set out goals, regardless. If one of you has wildly different expectations as to what will be done with the film, or what the end-result of distribution will be, it could become a conflict down the road. It’s best to clear those things up at the beginning.

It can also help stave away disappointment if you set realistic goals. For example, I produced my first feature film with my friend Joe. Because we knew that our desired end-goal was to have a completed feature film and to get a distribution deal, we weren’t devastated when the film’s distribution didn’t garner it much money (and certainly none that came back to us).

We had anticipated that might happen. We were a little unhappy at first that it didn’t do better (but we got over it).

Communicate constantly and openly. This is very important. Just like any other relationship, effective communication will make everything go smoother. In particular, you should make sure to say the things that need to be said but are uncomfortable. You can approach it softly, with tact, but if there’s a serious issue (either with the direction of the film or your partnership) you should address it. Don’t allow it to fester.

Do what you say you’ll do. The bottom line… if your producing partner can’t trust that you will do what you say you’ll do, the relationship will fall apart. Trust is paramount. However, I don’t just mean sticking to your word. The other important thing is that you do your absolute best to never drop the ball. If you have a particular task to take care of, your partner is trusting that you will take care of it.

If you are having trouble or think you won’t be able to get something done, make sure to communicate that to your partner. If you drop the ball (especially if you don’t tell them what’s going on) they may have to look over their shoulder and wonder… ‘is he/she going to actually handle that?’

Identify roles and responsibilities clearly. If you do so, you will be able to easily tell if someone has dropped the ball. This creates accountability. In addition, when you and your producing partner understand who is meant to do what, there is a lower chance of stepping on one another’s’ toes.

There are many things you can do to maintain a good working relationship, so these are only a few.

Here’s how you pick a producing partner

1. Work with and evaluate him/her prior to partnering. Remember, a business partnership is a lot like marriage.

2. Ensure your potential partner has similar principles. When it comes down to it, if you know that your partner will strive to do what is right and honest for both of you, things are likely to shake out okay. Try openly discussing this point with them.

3. Life (and people) are full of surprises. Therefore, you should always plan for the worst, while hoping for the best.


After you’ve found your awesome teammate…

1. Create a contract or agreement.

2. Establish clear goals.

3. Communicate constantly and openly.

4. Do what you say you’ll do.

5. Identify clear roles and responsibilities.

It isn’t easy to find good people to work with, so keep your eyes peeled. If you want to make a movie, I wish you the best of luck. You never know if you can unless you try.

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