7 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, it is just not the case. Realistically, expect to continue your marketing efforts because although any distributor will create a marketing campaign of their own for your picture, no one can market it as well as you can. And distributors have more than just your movie 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 or promotions. Also, don’t be afraid to ask for your producers 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 picture will sit there without getting any sales push. Work with your distributor as if you were 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 movie’s sales revenue for paying the rent or time-sensitive bills. The truth is, it can take a while before money starts actually hitting your account.
Another important reason for understanding distribution cash flow is so you can give realistic timelines to your investors on when they will start seeing repayment of their investment. The fact that it’s going to take a while is O.K., 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, here is what you can expect in terms of distribution cash fiow:
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 (hopefully!) will probably be processed within thirty days after signature of the hard-copy agreements, verified QC 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.
U.S. DVD Deal
With a U.S. 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 U.S. DVD deal, you will receive royalty payments. I recommend negotiating for quarterly statements and payments so that you recoup your money more quickly. Otherwise they may try to negotiate your getting yearly or twice-yearly accounting.
U.S. Broadcast Deal
With a U.S. 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 oftentimes the airdate will be six to eight months later—meaning you won’t see that second payment for quite some time. You can try to negotiate that they move up the airdate, or that you get paid 100 percent upon signature of contracts and QC, but that is unlikely to happen.
One other thing to be aware of with a broadcast deal 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 broadcasters.
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 department to generate contracts; rather, you have control over how quickly they 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 a serious buyer! Obviously, the key is to negotiate as much as you can up front—and if you get only 50 percent (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 and spread out payments over four equal installments, but do not fall for this. 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 want to try and negotiate as much up front as possible.
One last thing to keep in mind is that it’s not as easy to track down or stay on top of foreign distributors as it is with ones in your own country. 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 they have wired the money, 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.
Interview with Stephen Winter, producer of the indie success Tarnation
Everybody knows Tarnation as the film that was made for $215, was cut on iMovie, and got a big distribution deal. How did distribution happen for this film?
I remember at Sundance, we would have these amazing screenings with people weeping for joy at Tarnation, pronouncing Jonathan a genius, everything, the whole cake and cream. Then people would come up to me, the producer, with this woeful “Oh dear …” look on their face. After wiping tears from their eyes and congratulating me up the wazoo, they’d pull me to a private corner and explain exactly why Tarnation will never, ever be screened again. The music clearances and TV/film licensing, so integral to the film’s aesthetics, will be far too complicated and expensive for a distributor to take on. The subject matter is too intense. It doesn’t fit into a genre box, being both a documentary and experimental. It’s too this, not enough that; there’s never been anything like it before; and on and on. Just the most depressing conversations I have ever had in my life. Especially considering the effort and blood it took for Jonathan, I, and the Tarnation team, which at that time was quite small, just to get the movie off of Jonathan’s computer in Queens, onto an Avid in Manhattan, and pare it down from two rough-hewed hours to ninety complete minutes.
I shielded Jonathan from all the nay-saying, of course, and let him know we didn’t need to leave Sundance with a deal to consider ourselves a success. And of course, all the nay-saying got me down. But I knew it would be an uphill battle for Tarnation to grab the prize of distribution when I first saw it, as a two–and-a-half-hour cut, on VHS, that Jonathan gave me in August of 2003. And now, a scant five months later, we had made Sundance! An incredible amount of work happened in a very short time. The film had taken a life of its own; it was out of the chute and breathing in the crisp, cold Sundance air. The film would grow, I knew it would. All we needed was more time and faith.
What was your festival strategy?
We went the uncharted route. This film had a birth unlike any other I could think of in the sense it came directly from the street—not the film-school system or Indiewood, or from moneyed backers or foreign territory. It came from the heartland and from Jonathan’s heart. Our big break at Sundance came when we were invited to Cannes. That was our second lifeline, but also a real long shot. Unlike Sundance, there is no “Slam-Cannes.” Either you have the money to pay for hotels, publicists, lobster dinners, publicity materials, manpower, French cell phones, trade ads, and, most important, a perfectly subtitled 35 mm print, or you ain’t going to Cannes! We presented at Sundance with a digital cut, ‘cause they do that there. Cannes is different. So with Gus Van Sant, John Cameron Mitchell, Jonathan, about a dozen angels, and myself, we hit the streets looking for funds. And yes, it was all no, no, no—endlessly no—until Ryan Werner, Vanessa Arteaga, and Marie Therese Guirgis, the visionary team at Wellspring 2004, saw it and moved their corporate heaven and earth to acquire us. Then it was a race to get that print ready and get the Cannes ducks in a row. Then we went to Cannes, and then the rest was, well, easier than before. The festivals we went to after Cannes included New York, Chicago, Los Angeles Independent, London, and Toronto.
When did you come on board? When did John Cameron Mitchell and Gus Van Sant come board?
John Cameron Mitchell and I are best friends. In spring of 2003, Jonathan auditioned for John’s new film Shortbus and showed him part of Tarnation. John adored Jonathan and encouraged him to call me, saying his friend Stephen was a filmmaker too. He didn’t say I should come on board—and at that point, Jonathan wasn’t looking for anyone to come aboard anything. John just thought Jonathan and I would get along and we ought to meet. And remember, Jonathan didn’t make Tarnation with the aim of doing anything more than showing it to a few friends. Or he just wanted it out there, but didn’t know what exactly “out there” meant. When I saw the film, I had a good idea where it might end up somewhere great, and no matter what, I would put all my muscle behind getting it to that place. I absolutely loved the film, and knew Jonathan and I would work together splendidly. By trade, I was an indie filmmaker, so I brought to it that eye, and I had long made a living producing TV like Lifetime, VH1, etc., so I had those nuts-and-bolts skills too. Later, JCM brought the film to Gus in Portland, and he fell in love with it too, becoming our patron saint. It was the confluence of our collective energies that propelled Jonathan and Tarnation over the mountaintop.
Did having Gus Van Sant’s and John Cameron Mitchell’s names on the project influence distribution?
Ya gotta have some kind of name recognition at Sundance to split through all the maze of films there! Remember, we were at Sundance in 2004, the year of Saw, Garden State, Primer, and Napolean Dynamite. Only the former two of those films had names, but the latter had comedy and scifi—proven genres to help propel them. We had a new genre, at that time unnamed, since then dubbed by the New York Times as “narci-cinema.” We had so-called challenging subject matter. And to top it off, we were a late entry, so we were out of the competition and ineligible for the documentary prize. We were in the Frontiers section. And keep in mind, even though we went in with John and Gus’s names attached, we didn’t leave with distribution. That happened after months more work of hammering and hustling the streets for coin. The names helped get Tarnation in the door, but it was the quality of filmmaking that kept us in the room.
What made Tarnation attractive to distributors both domestically and internationally?
You need to get one heavy hitter to say yes, and say they want something—then everyone else who has been wavering or ignoring jumps on board. What made Tarnation attractive? Tarnation was new, refreshing, exciting, emotionally invigorating, visually and aurally dazzling, experimental in nature but adhering strictly to narrative conventions. Artistically, it’s airtight! A great film with a great behind-the-scenes story and a likable, talented, gregarious, and aggressive director/producer team. It’s the one-of-a-kind film out of nowhere that I believe most people go into the business of film in order to find and help get behind. In the press, Jonathan got compared to the debuts of everyone from Todd Haynes to John Cassavetes, and I think that is correct. Tarnation was as vitalizing to film in 2004 as Shadows and Superstar were. And we created a business model that made sense. We would bring in the final product to theaters for under $500 K, just like folks used to do in indie film in the nineties and eighties, and we did it. We delivered. And finally, people leave the theater after Tarnation astonished. That doesn’t happen every day.
Which foreign territories has the movie sold in? How has it performed outside the United States?
We sold about twenty territories at last count, and the film draws in good numbers everywhere it goes. France and England were exceptional.
If you had to do it all over again, would you do anything different?
Oh honey, of course! But at the same time, I wouldn’t change a thing. It’s a really incredible thing to go charging off into the face of the unknown. I could have led myself, Jonathan, and his entire family into financial and emotional oblivion if we failed. But you know, we couldn’t fail, because the film itself was too powerful. We believed in the film and fed off of its energy. Tarnation had to be seen—we had no choice. We just went forward blind and on faith. The best way, eh?
How has Tarnation changed the face of independent filmmaking?
I don’t know yet. That’s up to independent filmmaking to see how it will allow itself to be changed. Now that the film can be purchased on DVD, watched at home by young filmmakers, admired by seasoned ones, as it enters academia, the calendars of revival houses, written up in books and thesis projects, examined as a touchstone, reviled as a fraud, rented by kids on Netflix who live far from the cities in the middle of nowhere, used as stocking stuffers for development-studio executives … who knows? It hasn’t changed how hard it is to get a gig in this business. Jonathan and I have been, together and as a team, working to put together new projects—and it’s just as uphill a battle as it ever was. But we have Tarnation under our belts now, and we have faith.
Suggested Exercises for Part Seven
1. Prepare a little business plan for your film, something to present to potential investors, showcasing potential sales projections and cash-fiow scenarios. Even though by this point you may have already gotten a distribution deal for your movie, prepare something for a future project now that you know what to expect.