After the Distribution Deal
Congratulations! You got distribution for your film. Now what? What can you expect to happen?
So many filmmakers think that once they get a distribution deal for their movie, all their hard work is over. Unfortunately, that is just not the case. Realistically, expect to continue your marketing efforts because although any distributor will create a marketing campaign of its own for your film, no one can market your film as well as you can. And distributors have more than just your film to contend with in their catalogs, so anything extra you can do to help drive sales will ultimately help your own bottom line.
And remember, the squeaky wheel gets the oil. Feel free to call or email your distributor with any suggestions you have for creative marketing ideas or promotions. Also, don’t be afraid to ask for your producer’s report or accounting statement whenever it’s due. Take an active interest in the success of your film, and it will be successful.
If the distributor needs more artwork or slides from you or a clean master, go and get it done right away. The longer you take to turn in all your deliverables, the longer your film will sit there without getting any sales push. Work with your distributor as if you are partners, and pay attention to even the smallest of details so that your film gets the chance in the marketplace that it deserves.
WHEN WILL I GET PAID? DISTRIBUTION CASH FLOW
Another aspect of distribution deals that you want to be clear on is how distribution cash flow works. Some filmmakers assume that the moment their distribution deal closes, a check will come in the mail. Not the case at all. And the worst thing you can do is depend on your film’s sales revenue for paying the rent or time-sensitive bills, for example, because it can take awhile before money starts actually hitting your account.
Another important reason for understanding distribution cash flow is so you can give realistic time lines to your investors indicating when they will start seeing repayment of their investment. The fact that repaying them is going to take awhile is okay, but you need to be up front with people so they know what they’re in for BEFORE they invest in your film.
Also, it helps you to know when money is going to start rolling in so you can start planning for your next project.
As a general guideline, the following sections describe what you can expect in terms of distribution cash flow.
All-Rights Deal
If you are lucky enough to get an all-rights deal from one of the mini-majors, then your nice, big advance (you hope) will probably be processed within 30 days after signature of the hard-copy agreements, verified Quality Control (QC) report of your master, and all the delivery items on their list. I have seen it take three to four months or more to get signed hard copies of contracts in place after making a deal, so plan on three to six months after agreeing to the deal before you see your first check. Usually, the first check will be for a percentage of the total advance amount, with the balance remaining paid out over installments.
Traditional DVD Deal
With a traditional DVD deal, the norm for cash flow is 50 percent of the agreed-upon advance on signature of contracts, and the remaining 50 percent payment on full delivery of all materials and verified QC of your master. Sometimes, DVD companies will want to pay you the second 50 percent payment several months later, say on the release date of the film. I recommend negotiating against this option; otherwise, you’ll be stuck waiting for six months to a year to see your second payment.
Also, with a traditional DVD deal, you will receive royalty payments. I recommend negotiating for quarterly statements and payments so that you recoup your money more quickly. Otherwise, DVD companies may try to negotiate your getting yearly or twice yearly accounting.
Traditional Broadcast Deal
With a broadcast deal, typically you will get paid 50 percent upon signature of contracts and verified QC of master, and the other 50 percent on the first date of airing. The catch here is that often the air date will be for six to eight months henceforth, meaning you won’t see that second payment for quite some time. You can try to negotiate that the air date be moved up or that you get paid 100 percent upon signature of contracts and QC, but it is unlikely the broadcaster will agree to that.
One other issue to be aware of with broadcasters in particular is that it takes a LONG time to get hard copies of contracts generated. Count on between two and three months, maybe even more. So plan on waiting this amount of time before receiving your first payment from them.
Foreign Distribution Deals
With foreign distribution deals, the cash flow situation can be surprisingly promising if you are selling to reputable DVD companies and broadcasters. I know that’s a big IF in the foreign marketplace, but you can usually use your common sense to discern which distribution companies are reputable and which are not.
For example, most foreign DVD companies will offer you 50 percent payment upon signature of contracts, and YOU get to draft the contracts (using the standard AFMA/IFTA template). That means you don’t have to wait for anyone else’s business affairs department to generate contracts; rather, you have control over how quickly contracts get drafted, signed, and sent over to the buyer for countersignature.
I have also seen many foreign distributors offer 100 percent payment up front. Then you know they’re serious buyers! The key is to negotiate as much as you can up front obviously, and if you get only 50 percent up front (which is great), negotiate for the second 50 percent payment upon delivery of materials and verified QC of your master.
A lot of foreign buyers will try to spread out payments over four equal installments, but do not fall for this plan. It might sound tempting as you get swept up in the excitement of having a distributor interested in your film, but trust me, I’ve had nothing but bad experiences with foreign buyers and payment plans.
Also, remember that with foreign distribution, you won’t be counting on royalty payments, so you should try to negotiate as much up front as possible.
One last point to keep in mind is that tracking down or staying on top of foreign distributors is not as easy as it is with ones in your own country, so when a payment goes missing, there’s not much you can do as recourse. Also, your payments will be coming via foreign money wire, so keep that in mind as well. From the time the buyer says the money has been wired, it could take up to one week or longer just to reach your account, especially with the level of security over bank wires these days.
VOD
With Internet video-on-demand revenue, the timing of cash flow is entirely platform dependent. For example, at the time of this writing, if your film is on the Amazon VOD platform, you get paid by direct deposit every month. By contrast, iTunes pays out to filmmakers quarterly. Most other platforms also send out producer reports and checks quarterly, but others might be only a couple of times a year. If you are working directly with the digital platforms themselves, then it’s important to check the fine print and see when they actually pay the producer revenues owed. If you are working with digital aggregators, it is their job to collect revenues for you from each platform and pay you what’s due to you on a quarterly basis.
With cable VOD revenue, you will typically get paid 60–90 days after your two- to three-month run on the cable net. Because you most definitely have to go through an aggregator to get onto cable VOD platforms these days, your portion of the revenue will be sent directly to the aggregator; it will take its cut and send you the rest probably the following quarter.
Filmmaker James Colie, In His Own Words, On Distributing and Marketing His Film Beyond Biba (www.beyondbibamovie.com)
Beyond Biba is a documentary about the life of Barbara Hulanicki (a well-known UK fashion designer from the 1960s and 1970s and the founder of the Biba) and made for a budget of just $25,000. From the first screening, we decided that the film had to bring in revenue, as we couldn’t afford to take the long approach of submitting the film to festivals and crossing our fingers. Barbara Hulanicki has a small but dedicated following in the UK, but as with all DIY-released independent films with no marketing budget, it can be really tough finding them.
I had never released a film before in the UK, so just to test the water, I called my local theater, the Picturehouse Cinema in Notting Hill, which was close to one of the original Biba shops. It would cost $2,000 to four-wall the cinema for one night, which was way beyond our means. A few hours later, we got a call from the cinema’s head office offering us a 35/65 box office split, the only requirement being we had to make a Digital Cinema Master at a cost of $2,000, which could then be delivered to each cinema on a hard drive.
The screening sold out four weeks in advance, which amazed us all. Hulanicki gave a talk at the screening, and we sold $1,200 in merchandise (film posters), and along with $1,000 from our box office, we were ahead. As a result of the screening, Picturehouse offered us one-night screenings in Edinburgh, Glasgow, Oxford, Leeds, and Brighton. We carried on screening the film for a year around the UK, culminating in over 60 screenings followed by a successful DVD release selling over a thousand units.
We were fortunate enough to have a marketing hook for the film, which was what happened to Barbara Hulanicki, who walked away from London and Biba. Once we started screening the film, national newspapers started featuring the film, which was critical in getting the word out. Not having any type of marketing hook to your film, you’re really stacking the cards against yourself, and you’ve got a big enough challenge already ahead of you by making an independent film and getting it out there.
After selling the UK TV rights to SKY TV, we decided to partner up with the sales agent 3DD Entertainment, based in London, who went on to sell the film to a number of different territories, including the Sundance Channel, who bought the rights in over 20 countries.
The rewards from doing a DIY and hybrid distribution were great. I now have fantastic contacts with companies, venues, and individuals across the world. The downside is I’m regularly working till the early hours of the morning, but I can’t wait to do it again!
YOUR DISTRIBUTION MARKETING CAMPAIGN
Here’s the thing about distributing your film: you won’t actually succeed in making sales of the film if it’s not marketed properly. If you are fortunate enough to get a traditional distribution deal for your film, then theoretically it’s the distributor’s job to market and promote your film, but practically speaking, you have to get involved in the marketing, too. Ask any filmmakers who have gotten a distribution deal for their film, and they will tell you the distributor did a lousy job of marketing their film. So at the end of the day, it’s still your responsibility to get in there and do what you can to help support the marketing campaign.
Now let’s say you don’t get traditional distribution for your film, or you decide you don’t want traditional distribution for your film and you go the direct distribution/DIY route. Well, then, you really have to be worried about marketing your film because that entire responsibility is now yours. Of course, if you have the budget available, you can hire someone or a company to do the marketing for you, but you still need to be the one driving the ship. Fortunately, you can also hire a Producer of Marketing and Distribution (PMD) whose sole job it is to look after the marketing and distribution for your film (see the interview with PMD Adam Daniel Mezei from Chapter 2). Depending on the type of film you have and who your target audience is, you’ll want to utilize a combination of a platform theatrical release, social media marketing, partnerships, and advertising to get the word out about your film and promote it to its highest potential.
The bottom line is that distribution is only half the game.… The rest is all in the marketing! It doesn’t matter a hill of beans if your film makes it to market; if no one knows about it, you will completely defeat the purpose, and your film will go completely unnoticed. The final point I’ll make here is that you should not just think that you’ll be able to outsource the marketing function completely to someone else. Ultimately, it is YOU who has to take responsibility for making sure your film is marketed well and to the right audience.
Interview with Laura Kim, Film Marketing Expert, Inside Job LA (http://www.insidejob-la.com)
Q: How important are festivals today in the overall marketing campaign of a film?
A: Festivals are really important to many films—films that can benefit from the press and word of mouth that come from them. For many films, festivals can be key in the film being acquired, as well as on their road to release. And for other films that may never get any real distribution, the festivals will ultimately serve as their actual “distribution.”
Q: Is it okay for certain films to skip the festival circuit and go straight to distribution?
A: There are also many films that aren’t really “festival” movies. Some just might not play to audiences as well as one might think or hope, and then there are films that have budgets large enough that they can forgo festivals altogether. These films do not need to rely on fests to generate awareness and can just buy media and exposure.
In terms of criteria for choosing festivals, you should ask yourself some basic questions: What are your objectives? What are you looking to achieve by going to festivals? To potentially get a distributor on board? To get reviews? To generate word of mouth? If these are your objectives, submit to festivals where industry/buyers, press, or audiences turn up. Other questions to ask yourself: What kind of film is it? What festivals are the most appropriate for this kind of film? What festivals make the best sense for the time frame of your film? Remember, most of the festivals you really want to be in may not choose to screen your film if you’ve screened elsewhere, so have a festival strategy in mind before you start.
And don’t rush and show your film if it’s not really done! Before you lock picture, screen it for a really smart, honest group of friends whose opinions you trust before you submit to festivals and get their thoughts before showing it to a real audience filled with reviewers, buyers, etc. Make sure it is the best it can be.
Should you ever skip festivals altogether? Be honest with yourself. Are you pretty sure your film will be reviewed well? Will the word of mouth be effusive and positive? If you’re not really sure, you might want to reconsider.
Q: I’m noticing a lot more “event” screenings nowadays. What are they exactly, and how can they benefit a film?
A: Event screenings are generally (1) one-off screenings as opposed to a bona fide booking in a commercial theater, or (2) screenings that are used to generate awareness before a film opens in theaters or comes out in some capacity. People may choose to do this in an effort to get generate awareness, create word of mouth, get some publicity, and hopefully boost the film’s ancillary values.
For many films, the film is the best tool, and there’s nothing more compelling than great word of mouth, whether it be for one night only, or just before the film opens, or premieres on VOD, etc.
Also, many films may not justify a full week run, and one packed night at a theater might get you the same result as a few people in each show time during a weeklong run.
Q: How important is having an existing fan base when embarking on a marketing campaign for your film?
A: There are a hundred ways to get to the same place. It is reassuring to know there’s a built-in audience, but a great movie is always the best place to start. Also, just because there may be a built-in audience for a film, you must be able to reach that audience and create a compelling reason for them to go. Do not assume they are coming!
Q: You come from a studio marketing background. I’m curious how the marketing campaigns you work on currently differ from the campaigns you used to do?
A: The principles are largely the same, but when working with smaller budgets, you have to be really resourceful. It takes a lot of elbow grease and effort to get the word out as opposed to being able to spend money to get the awareness.
Q: What are some of the biggest mistakes you see filmmakers making with their films?
A: For independent films, in my opinion, thinking too much about the marketing of the film before and during the making of the film, rather than concentrating on making the best film possible, is a mistake. Of course, these things are important; they should be considerations. But if you have a great film and great reviews, that will give your film the best lift possible. Also, spend the money and get great materials (photography) during production.
Virtual Seminar: “Distribution Economics: How Does Revenue Flow from Distributor to Producer”: www.FilmSpecific.com/DistributionEconomics