The excerpt below is a snippet from the distribution chapter of Still Filmmaking, the Hard Way. It advocates for the need for independent filmmakers to change their way of thinking in regards to distribution, particularly the stigma associated with self-distribution and a widespread willingness to take bad distribution deals out of fear. Some of the more colorful language that I do not shy away from in my prose has been censored here as a consideration for the kind, and potentially more politically-correct, allies helping me spread the word of its release. You’ll just have to buy the book if you want to enjoy all of my more vehement adjectives.
Choosing Your Path
The chapter on distribution in my previous FtHW writing, mostly written in 2012-13, was titled “Distribution (Or the Pursuit of It).” I was unable to repurpose that little nugget of cynicism for this writing, as it thankfully is no longer applicable. Mr. Gorbachev has torn down the wall, and independent filmmakers no longer need the assistance of a distribution partner to bring a film to the masses. It has been democratized, to some extent at least, by the fact there are quite a few avenues currently available that a chimpanzee could manage commercially distributing content via.
Rarely in life do needs and wants overlap though, and media distribution certainly is no statistical outlier in this regard. There are not a lot of them, but there are absolutely potential distribution partners operating in the marketplace that can add significant value to the release and marketing of films that come out of the micro-budget space. So much of media distribution is facilitated by way of personal and business relationships that grease the wheels of money changing hands, between people whose entire job functions are built around having and exploiting those relationships, that an individual filmmaker has no hope of playing in the same sandbox.
The pitfalls in this step of the distribution process, making a decision between using the buddy system or going rogue, lie in the difficulty of determining whether your potential buddy can, or will, add sufficient value (or any whatsoever) to the project. There are a shit-ton of companies out there that claim to be content distributors and/or sales agents. Trying to find an all-encompassing list would be impossible, as new ones are born as others die nearly every day, but suffice it to say there are hundreds trolling the independent filmmaker waters at any given moment.
For the same reasons it is difficult to surmise an exact number that I would call credible, that I believe are capable and willing to add value commensurate with their cost, to the distribution process of an independent film created in the space this writing deals with. Spitballing a number, I might say the percentage falls in the ten to twenty range. That leaves, at best, an eight-in-ten ratio of shit to legitimacy.
“Shit,” as used in this context, is defined as a company that engages in one or more of the following business practices;
- Predominantly acquires and distributes films at no cash outlay to them, either in the form of a minimum guarantee/advance to the filmmaker or significant direct (not shared with other titles) marketing spends
- Is unwilling to cover any costs of delivery (quality control, marketing material creation, errors and omissions insurance) or, even more dastardly, charges the filmmaker for these at a profit
- Pursues before-approval expense caps in excess of the minimal costs of doing business at film markets and otherwise for the film, allowing for creative accounting to deem revenue for the film as recoupable expense for the distributor rather than profits to be shared by both parties across the agreed-upon revenue split
- Performs no physical “distributing” of the film beyond listing it on digital platforms that could either be reached by aggregator or self-placement
- ACTUALLY CHARGES FILMMAKERS A [expletive omitted] RETAINER FEE
At the risk of stating the obvious, the latter practice is particularly inflammatory for me. An October `18 email reply I wrote to Alex Nohe of Blood Sweat Honey, a notorious champion of this business model who incessantly sends out the same phishing email to filmmakers he finds by way of mining festival lineup announcements, sums it up quite nicely:
Alex,
As I’ve told you in the past (to carbon copies of this email) there is zero chance I will ever pay an upfront fee to a distributor/sales rep and, frankly, your business model of preying on inexperienced filmmakers who don’t know how wrong that is makes me nauseous. You can mark me down as a devout unsubscribe to these pitch emails
he independent filmmaker already shoulders an immense portion of the risk involved with monetizing a film when they produce one without distribution already in place. The idea that a distribution entity should not expect to shoulder a miniscule fraction of the overall risk in that joint endeavor, and have some expense outlay as well, is bad enough. The notion their participation should be subsidized by additional incurred risk for the filmmaker is downright asinine.
The only thing allowing for these companies to operate this way is the sheer volume of hopeful, but novice, filmmakers that believe there is no alternative to distribution beyond paying these [expletive omitted] leeches thousands of dollars for their perceived “connections” to buyers. If they had exclusive connections to premium buyers that sufficiently warranted filmmakers paying for access to them, there would be no need to charge the filmmaker in the first place – their superior proficiency with monetizing content would attract enough (there’s more movies made every second than audiences could ever consume blah blah blah, right?) quality, marketable films to generate revenues relegating a $5000 check from the filmmaker to start the process trivial. You’ve never heard any stories of A24, NEON and The Orchard asking filmmakers to front them operating capital.
Do not – I repeat DO NOT – support this [very colorful noun omitted] hatchery with your money. If you find your are unable to attract a distribution partner who does not require you pay them upfront and you are too lazy to do the work I will outline here to accomplish what I assure you are the same end results, but do have a burning desire to piss $5000 up a wall, email me @ filmmakingshit@nyehentertainment.com with your film’s link and distribution outreach to date and I’ll help you find an application of that money that’s actually constructive.
One moment, please, while I put my soapbox back in the closet.
Filmmaking is difficult, and monetizing the derivative of it is even more so. Not finding a willing distribution partner is not synonymous with having made a bad film. Having made a bad film is not synonymous with not finding a willing distribution partner. A film’s potential for monetization is not necessarily correlated with its quality, and quality is a subjective measure to begin with. That runaround summation is to say there are a profound number of unknown variables in the film distribution equation, and solving for all of them is unlikely regardless of who is on your team.
Not all distribution companies that exist outside the legitimate 10-20% operate as disingenuously as the gang on the receiving end of the above soapbox vitriol. There are a number of companies out hustling in the marketplace, doing all they can with the product they are able to wrangle, that simply do not have the resources, relationships, experience or luck necessary to be worth the minimum sensible compensation they would ask of a project to absorb it into their catalogue.
This is where the decision making component of the equation for the filmmaker comes in. Unless you premiere at one of the big boy festivals and generate a bidding war right then and there, dropping your need to read anything I write to near zero, your distribution options will likely not be presented to you in an orderly, expedient manner that allots you the luxury of side-by-side comparison. More often you must be able to look at an offer in a vacuum, deciding whether the deal points are at least in line with your minimum expectations and if the company is capable of adding the value that corresponds with those deal points. If you perceive either to be below par, you must have both the awareness and the cojones to walk away from it even when no other deal is on the table.
A BAD DISTRIBUTION DEAL IS WORSE THAN NO DISTRIBUTION DEAL.
Say that to yourself often. Sear it into your psyche, producer, as it is a crucial understanding.
Now that you’ve done that, you receive two distribution deals and are such a great [expletive omitted] producer after having read up to this point in this book that you know what their end outcomes will be:
Offer A
- Deal Points: seven-year term, 70/30 (filmmaker/company) revenue split, $35k expense cap ($25k of which is charged against the film), $4000 in delivery costs, no minimum guarantee.Results: Placement on every TVOD (transactional) digital platform, some smaller SVOD (subscription – no, not Netflix) platforms. Revenues of $15k in year one, $3750 in subsequent years for a total of $37,500 over the life of the deal.
Offer B
- Deal Points: seven-year term, 70/30 (filmmaker/company) revenue split, $0 expense cap, $1500 delivery costs, no minimum guarantee.Results: Placement on every TVOD digital platform. Revenues of $1k in year one, $100 in subsequent years for a total of $1600 over the life of the deal.
Make your choice, producer.
If that shiny-looking-from-afar $37,500 in total revenue from offer A lured you into its clutches, you still have much to learn. The total profit for that filmmaker is actually a $2750 loss. Offer B, with its lowly $1600 in total revenue, returns a whopping $100 in profit.
How in the hell does a sweaty, crinkled-up Ben Franklin end up in that lucky offer B filmmaker’s hands? Math, producer. The distributor’s bean counters are sure as hell versed in it, you had better brush up as well if you want to make good producing decisions in the content distribution sandbox.\
The terms are the same, the revenue splits are the same. The deal point that tips the scales so far out of the filmmaker’s favor is the expense cap, both in this case and often many others. These are defined as the expenses the company is permitted to incur while selling your film, before they are required to request approval from the filmmaker, and can (i.e. will) charge against the filmmaker’s side of the revenue split. The problem with this variable being such a crux in the profit equation is that it is very hard to contest. I’ve already done the work of explaining these, and life is short, so an excerpt from the first FtHW:
On the founded side, these are the expenses the distributor incurs while out selling your film to buyers – screeners, one sheets, posters, film market booths/rooms, travel attributed to your film’s sales, etc. The gray area here is that a distributor has a catalogue of films they are selling at any one time, so if your distributor takes their 12-film catalogue to a market and their room there costs $12k, it should incur a $1000 charge against your film’s sales, no? Well, what if the market is Berlin and it’s a known fact your film is not of interest to the buyers your distributor will be talking to, and the sales results for your film reflect that at the close of said market? Should your title be charged the same figure as those that were passionately pushed? Arguable either way really, and these accounting appropriations come up a lot in a distributor’s normal business practice.
The expense cap in offer A is $35k. Now, the company in question will assure you that this is only a cap and that they may not incur that number in actuality, but by the letter of the agreement they are permitted to do so without having to answer to you. There are undoubtedly some companies that genuinely work to minimize costs and do not make it common practice to charge films the maximum allowable amount, or near it, but if you’re banking on that being the case you are going to be let down more often than not.
This company operates in my glass-half-empty reality, assures the producer that the marketplace is a challenging one right now and insists that you have to spend money to make money! The distribution statement (yes, only one is sent in the life of the deal – they are very shitty at reporting) arrives and they have charged $25k in expenses against the film, after deducting their due 30% from the gross receipts. That 30% off the top comes out to $11,250, leaving $26,250 for the filmmaker side of the pie. This amount is now subject to their recoupable expenses, and 26,250 – 25,000 = 1250, so $1250 is the amount returned to the filmmaker. The filmmaker has already spent $4000 delivering the film, so they are still in the hole for $2750 and do not have a dime to send their investors.
The filmmaker that took offer B is going to hate writing an email to their investors letting them know they’ve only made a hundo in the seven years since the film was released, but she/he will be having a far better day than the filmmaker that took offer A and has to explain that not only is there no return on investment yet, but the cost of making that big fat zero was $2750.
Are these deal outcomes both shitty returns on investment? Probably, unless the negative cost of the film in question was $100. If so, you broke even and you’re a winner. Way to go. Next time make the film for fifty bucks so we can turn a profit, producer.
Are these completely unrealistic revenues and deal points for a micro-budget film in today’s marketplace? Revenues of course vary wildly but, particularly in the case of the deal points, I’m afraid they are not. Offer A is a deal in the wheelhouse of one I have seen a filmmaker accept recently, from a company you’ve likely heard the name of no less, and offer B is not unlike what a self-distribution arrangement could end up looking like.
The real-life filmmaker that took a similar deal to offer A (delivery costs were actually a little worse in his case) did so against my vehement ridicule of it because he just wanted to be able to say the film did have a distributor and not have to worry about sales efforts. While I might not agree with those being the primary goals of a filmmaker, it’s still a (relatively) free country and he is entitled to any priority set of his choosing regardless of whether the asshole producer at NYEH Entertainment agrees with them. Just like G.I. Joe, knowing what your goals of distribution are, and making the decision for your film that best services those goals, is half the battle.
The other half, thanks to advancements in technology that dictate how audiences find, purchase and consume content, is knowing that no potential distribution partner has you over a barrel. It is no longer possible to be left without a path to distribution. The tools are now available to everyone, and their cost is inconsequential. Taking control of your own revenue streams via self-distribution is a realistic option in the current and future content marketplaces. The stigma associated with doing so, that it’s some kind of failure as a filmmaker, must change. Yes, it is harder than ever to monetize content because of a range of factors, but if filmmakers collectively take the time and make the effort to understand the marketplace we can weed out the intermediaries that have been exploiting the artist since the dawn of art and commerce intersecting.
Still Filmmaking, the Hard Wayis a case study of three sub-$250k USD narrative features I have recently produced, and is a follow-up of sorts to a similar writing I published in 2013 – Filmmaking, the Hard Way – that scrutinized the producing process of my first feature (All God’s Creatures). I’ve worked in a producing and/or production management capacity on sixteen features and countless shorter-form projects over the last decade, during which time I’ve made quite a few mistakes. My goal with SFtHW was to pack as many of those mistakes into it as possible and share them with early-stage filmmakers who had yet to make them so they would never have to – or, at the very least, be able to better diagnose the mistake as they are making it.
I steer clear from calling it a how-to, given the random and unique problem set that every film project presents, but it is a gritty and exhaustive tour through every step of the soup to nuts process for each film. Special attention is paid to detail and transparency in the financing and distribution phases that traditionally are given a more opaque treatment in independent filmmaking writings like this, I feel. The book will be released on all the usual digital platform suspects – Kindle, iBooks, Nook, Kobo, many more – and in paperback on 7/1/20. More information can be found @ http://nyehentertainment.com/sfthw
Thanks for reading.
– Josh Folan