Sales Agents: Are they Distributors or like Real Estate Brokers?
Our friend and beloved social network marketing guru Sheri Candler posed a question to me today. She noted that filmmakers are often confused by this issue of “what is the difference between a sales agent or distributor selling a license to your film or selling your film outright for 15 – 20 years?”. She posited a real estate metaphor. So here I go: Sales agents are *not* like Re-Max brokers who only have the right to sell your house for you, if you approve. Following the metaphor still: They usually take your land and then resell it and its territorial clones all over the world, or as much as they can. Meaning, they first take the rights and take delivery (at least usually that is the way they do it) and then they license those rights territory by territory for a term, a minimum guarantee, and usually a royalty split. Sometimes all rights deals are done and sometimes rights are split.
I just did a redline to a sales agent’s deal/contract for a documentary we are consulting on. We do our best to protect filmmakers in these deals. We also do foreign sales so we do both the contracts with the filmmakers to handle their sales and we help them do contracts with other companies handling their sales. Here’s how it shakes down usually:
Many foreign sales companies do deals as if they were actual distributors in that they take rights. One is actually licensing them rights full on, in all media usually, for a very long time which is yes, sometimes as much as 15- 20 years. This is very much the old standard and I started in foreign sales twelve (12) years ago and saw it shake down even on napkins in Cannes. The sales company gets the rights to the film for a long time (though to be fair to them, often they pay producers up front for that though less and less these days). The sales companies also spend money shopping the films, but they also recoup expenses against any income that comes in and those expenses are not always actual and even when they are, they are not always sensible to put it mildly. It may be a bunch of films that are all paying for the same expenses, over and over again if you get what I mean. Not all companies are that way of course but we have seen statements from sales companies that will make your hair curl if it’s straight and straighten if it’s curly.
So, those companies like to take ALL your rights for a big fat TERM of 10, 12, 15, 20, 25 years and they will usually just resell those rights to a distributor who takes all rights for a particular territory (e.g. Germany and German Speaking Europe, or Korea, Japan, Greece.. you get the idea) in a market or via phone / email. They may also use those rights directly let’s say for Broadcast deals or DIGITAL platform deals (for example MUBI, or Content Republic or Love). Once the sales agent or sales company has those rights the rights are THEIRS to do what they want, unless you are contractually resolved otherwise.
The Film Collaborative does foreign sales in house and also with its partner Ariel Veneziano or Recreation Media. We do NOT take rights, our deals are done directly between BUYER and FILMMAKER almost all the time (exceptions only when buyer insists because they only want to work with companies). We are even offering a low fee program to have films positioned for sale at markets, again, no rights taken and filmmaker makes all decisions. TFC also helps filmmakers do deals with other sales companies / sales agents as I said above. Not all companies are quite as transparent and filmmaker friendly but they can still be worth doing business with because they have certain relationships that you don’t and they are going to markets that you aren’t and they have leverage with buyers to get paid because they have a steady stream of ‘product’. So we don’t say not to all those options. We do however say this:
Do not do a deal for such a long term as 15 or 20 years or even 10 for that matter. Put in performance clauses and of course there are loads of other needed protections that should be part of any deal that are beyond the scope of this blog post. You can let them enter into longer deals if necessary and for the right price but there is no reason they should have such a long deal. Also try to let them have buyers pay you directly, though most won’t do that. At least get approval rights for deals and get complete accounting. Approve and CAP (i.e. limit) expenses. Get references before you get into a deal to see if you have some hope of seeing any revenues. Do not give or license rights to them if you can help it but rather give them the right to enter into deals licensing rights and have you be a party to those deals (if you can do that). Many sales companies won’t play ball this way but we do and we recommend you try hard to do it this way so that you don’t live in regret watching your sales agent travel the world and eating well at film festivals while you get tiny checks, if any at all. I heard an amazing story of a sales agent who called a filmmaker and thanked her for making her (the sales agent) millions, so many that she was now retiring in the South of Spain. The filmmaker never made a dime over the advance. That’s the other thing, if possible, get an advance, always, that may be all you see. Of course that may not be possible so you have got to do your best in negotiating and being protected. In any case, save the direct distribution for yourself if you can unless there’s a great deal your sales agent can get you that you cannot do yourself but have the right at least to approve that. And as technology changes, you will able to do more and more yourself. The pirates manage to do it all, including subtitling and getting film seen around the world so surely, so can we.
TAKE HOME: Do a deal with a sales agent as close to the real estate model as you can, because if you don’t, you may end up as just a part of their library being monetized for their sake, and not yours.
Orly Ravid September 16th, 2010
Posted In: International Sales, Uncategorized
TFC Tidbit of the Day 31- Aggregators and Distributors to Get Your Film on iTunes
New Video-They are choosy about the films they represent and they charge 15% of all revenue generated.
IndieFlix– They go through New Video and charge a 30% Fee on all revenue generated (we think that’s inclusive of the New Video fee but are waiting to confirm).
Indie Rights– They go through New Video and charge a 20% fee in addition to the New Video fee.
IndieRights and IndieFlix also work with platforms other than iTunes as do we at TFC so that should be factored in when making distribution decisions.
Tunecore-Aggregates straight to iTunes. Distribber uses Tunecore to access iTunes. Distribber charges a flat fee of $1,295 for iTunes and all the revenue flows back to the filmmaker, no backend fees. TFC uses Tunecore and works with Distribber as a partner (we are working with them for no extra charge to filmmakers).
Gravitas– A VOD / digital aggregator (who often goes through Warner Bros), they will handle your iTunes submission, but that’s two fees (each at 15% as we understand it and they claim that Warner Bros and studios in general get better revenue even from Apple).
Warner Bros and Lionsgate- TFC works with Lionsgate and it seems that both have more marketing leverage (as does New Video) to get best promotion possible on iTunes. This can make a big difference and should be factored in along with analysis of backend splits and fees.
TFC works with both the flat fee and commission models because of the fact that when cable VOD or even sometimes DVD is a valuable option, regular digital often goes with them.
Orly Ravid August 9th, 2010
Posted In: Digital Distribution, Distribution Platforms, iTunes, Uncategorized
Tags: Digital Distribution, Distribber, Gravitas Ventures, independent film, IndieFlix, IndieRights, Lionsgate, New Video, Tunecore, Warner Bros
TFC Tidbit of the Day 30 URGENT: Build Some Distribution Expenses into Your Production Budget
Nothing is more disconcerting than filmmakers who spend $100K (or whatever) to make their film, but now have nothing left to make screeners, exhibition masters, hire publicists, set up buyer screenings, hire a team to oversee their web presence, etc. A film in the can is only a tree toppling in the forest, and if you have nothing left in the bank then your tree will certainly fall silently on deaf ears.
Remember that everything AFTER you complete your film will still cost some money, even if it is only Festival submission fees; the postage and assistance to get the film out there; a few key trips to important Festivals and markets where you can promote your film; and distribution deliverables (including MUSIC CLEARANCES). A good guideline minimum is 10% – 20% of your production budget to help you start the distribution process…so if you are thinking your film will cost $100K to make, then make the budget 110 or 120K at least.
Don’t get caught in the ultimate trap that so many filmmakers find themselves in; a film in the can with nothing more they can do with it. You didn’t max your credit cards to end up in this dilemma! Think about distribution expenses IN CONJUNCTION with production expenses. Please!
Orly Ravid August 6th, 2010
Posted In: DIY, Film Festivals, Marketing, Uncategorized
Tags: distribution budget, distribution expenses, festival submissions, music clearances, production budget
Theatrical: To Do…or NOT To Do. (or perhaps more, HOW and WHEN To Do)
We all struggle with this, filmmakers, distributors alike. I remember giving a presentation to distributors about digital distribution and theatrical came up. I talked about the weirdness of showing a film 5 or 6 times a day to an almost always-empty house save a couple showings. This makes no sense for most films. When I released Baise Moi in 2000, we broke the boxoffice records at the time, and the “raincoat crowd” did show up at the oddest morning hours, but that is the exception, not the rule. Not every film has an 8-minute rape scene that just must be seen by post-punk-feminists and pornography-lovers alike. It’s an odd set-up for smaller films and it’s not the only means to the end we are looking for.
Recently, The Film Collaborative released Eyes Wide Open in NYC, LA, Palm Beach and Palm Springs. We have a little over $10,000 (all in it will be about $12,000 tops). We have made our money back and the great reviews and extra marketing / visibility will drive ancillary sales but we also did not invest or risk too much as you can see. That is a great formula (one that small, disciplined and seasoned distributors such as First Run Features, Strand, Zeitgeist, employ) but it is not viable for all films. First of all we have an “A” list festival film (Cannes & TIFF & LAFF) and second it caters to two or three niches (gay and Jewish/Israeli) though one can argue that the niches also slightly cancel each other out to some extent, the film did well so obviously the campaign worked.
But there are many films for which that strategy would not work. Either theaters could not be booked, or reviews would not always be great, and / or the film would simply not galvanize a theatrical audience. Plus, once you start adding up 4-Wall fees, the bottom line leans more likely to be shades of red. The Quad Cinema sent an E-blast promoting its 4-Wall program. It was a good sales pitch and I am not going into it all here, but the take home is that you’re more likely to get a broader theatrical, and/or a distribution deal, and/or picked up by Netflix and other digital platforms if you open theatrically in New York. I would argue that is true to some extent but also VERY MUCH dependent on the FILM itself and there should still be a cost-analysis and overall strategy consideration before one pays the Quad for their services and hopes for the best. Here is a link to the info and we are happy to email the blast to any who request it www.quadcinema4wall.com . It should also be noted that generally speaking, The New York Times does not consider your film among “All the News That is Fit to Print” unless it’s opening wider than just New York.
So how to decide? Companies such as Oscilloscope are all about theatrical, but they pick their films carefully and my guess is Adam Yauch can afford to lose money too if it comes to that. Home Video companies such as New Video, and Phase4 are doing some theatrical, but on an as-needed basis and yes, to service the ancillary rights, but that’s a very experienced analysis on their part. When we posted on Twitter about the Cable Operators warning they will start requiring a ten (10) city theatrical, all at once, believe me, if everyone blindly follows suit, the bar will get raised even higher right until we all go broke. The point is to mitigate the glut and distinguish films in the marketplace not get us all to be lemmings and empty our bank accounts. There is math to be done and I know it’s hard without all the back-end numbers at your disposal, but they are coming. We will publish case studies of all our films and we encourage you to get down to the detailed back-end numbers analysis before spending more on the front end and often gratuitously.
We have experienced and heard about the impact a filmmaker can have in his or her city when working the film and then really impacting the gross and that is inspiring, but usually not long-lasting because it takes a lot to get people to pay to see your film in a theater when there are so many other films and so many more marketing dollars behind them. And what’s in it for you? The only reviews that matter are the big ones and we all know what they are… and remember what we said above about The New York Times.
The general perception of indie film releases is interesting. Most don’t take into account the money that is spent to get the “gross”. More of the time the distributor (or whomever booked the film) gets less than half of the box office revenues. Sometimes as little as 25% – 30% though of course sometimes more. And there are the expenses. The Kids Are Alright may not even be in the black right now, but you’d never know that reading certain coverage. I love Exit Through A Gift Shop and actually flagged that release as a stellar release and then I learned that the marketing spend was actually a lot more than I realized such that the spend may be up to a million dollars. I don’t actually know, and not sure anyone will tell me. I do know that the bottom line for many of The Weinstein releases was reported to be in the red because of spending. If you have a film that can sell a lot of units and especially in an evergreen manner, and if you can trigger a great TV sale and if you have foreign sales legs, then there’s a real upside. If you don’t, then be clear what you’re goals are. Sometimes it’s just a career move and that makes sense. Canadian filmmakers need a theatrical release to get their next projects funded (say that like this: ‘pro-jects’). Sometimes people just want the awards qualification and that’s another ballgame.
We have written some of our TFC Distribution Tid Bits about Hybrid Theatrical and Marketing options, but here is a bit more on the topic:
If creating buzz is what you want, you don’t need a traditional theatrical and you definitely don’t need to overpay for the privilege.
Some OPTIONS – try HYBRID THEATRICAL – do FILM FESTIVAL, CREATE EVENTS, HOLD A SCREENING WITH ORGANIZATIONS, show in MUSEUMS (in some cases), other ALTERNATIVE VENUES depending on the film, and also there are all sorts of ways to book a few days here and a few days there at theaters (we cover that below). Theaters are and will continue to do this more and more. AMCi announced their intentions and they are still in the marinating phase, but we know you’ll all be ready when they are.
We’re interested in these companies and services:
- Cinedigm: They have a program in the works that is meant to be similar to ScreenVision and Fathom (which is no longer handling indie films generally speaking, as far as we know) but aimed at independent cinema, and working with all the big theatre chains (Regal, AMC, Cinemark). I asked them to write a few words for me about themselves and their plans: Cinedigm Entertainment, a theatrical distributor, has built several “channels” of content for movie theatres. This is niche content that plays at what is traditionally slower times for the theatres. Examples are; Kidtoons a monthly matinee program; Live 3D sports, like the World Cup and NCAA Final Four basketball; and 3D and 2D concert films with artists from Dave Mathews to Beyonce. For each “channel,” the most appropriate theatres are chosen and theatres sign on to play the content as a series, thereby creating the expectation in the marketplace for the next installment. In the company’s newest “channel,” it looks to apply the concept to indie-films which will provide filmmakers with the theatrical element for distribution.
- Emerging Pictures: Owned by Ira Deutchman (now also a Film Prof. at Columbia University). I spoke with Joshua Green, whom I have known for a while and booked with, though no real revenues were made in the past, their latest network of theatres sounds potent. They connect up to 75 theatres and they do very well with Opera, Ballet and Shakespeare, but also indie films. They work with all the usual indie film distributors either taking on 2nd run of films in major markets or handing the first run in secondary markets. On screen now for example is Mother & Child, My Name is Love, and Girl with a Dragon Tattoo. 30% of the Gross is paid to the distributor or filmmaker. They charge usually a 1-time encoding fee to get the files needed for the theatres. The fee is $1,000. If that’s an issue that can sometimes in advance to make sure the bookings will happen to make the fee worthwhile. They create a Hi Rez file 720p VC1 file which is a professional HD version of MS Windows. They work with the Laemmle theatres in LA and Sympany Space in NY and lots of others across the country. What does well on the Art House circuit will do well with them I was told. Makes sense.
- Variance Films: Dylan Marchetti (former exec at Imaginasian and Think Film) is a firm believer in Theatrical and it’s his business. He may promote its necessities a bit more than I will and its not his money to spend and he was honest about the range of success (meaning not all films work theatrically and sometimes money is lost, and we know of at least one example, but it happens). We spoke for the first time and I was comforted by his grassroots approach (they do that work themselves) and his commitment to alternative low cost venues: event screenings, niche-specific / lifestyle specific venues, as well as traditional theatres (all the usual chains and small theatres etc). He noted that generally speaking, they do not charge more than $50,000 and that they get paid via back-end fees only. He said a release in NY and LA for $20,000 can be done. Variance is not a believer in print advertising; they have to believe in the film to take it on; and Dylan said that there is no correlation between P&A spending and a film’s success. Amen. They don’t do PR but rather refer out to outside agencies, as does The Film Collaborative. NB: Dylan Marchetti of Variance makes a correction to this. “Fees vary wildly depending on the film and release”. So sometimes they can do backend tied fees only, but not always.
The Film Collaborative is theatrically releasing UNDERTOW (which won the World Cinema Audience Award at Sundance). Stay tuned.
Orly Ravid July 28th, 2010
Posted In: Film Festivals, Marketing, Theatrical, Uncategorized
Tags: 4 Wall, Adam Yauch, Alternative venues, AMCi, Cannes, Cinedigm, Dylan Marchetti, Emerging Pictures, Exit Through the Gift Shop, Eyes Wide Open, Girl with the Dragon Tattoo, Hybrid theatrical, Ira Deutchman, Joshua Green, Laemmle, LAFF, marketing strategy, Mother and Child, My Name is Love, Netflix, New Video, New York, Oscilloscope, Phase4, Quad Cinema, Sympany Space, The Film Collaborative, The Kids are Alright, The Weinsteins, theaters, Theatrical, TIFF, Undertow, Variance Films, VOD
TFC Tidbit of the Day 23- Consider Innovative Ways to Theatrically Release Your Film
Instead of spending tons of money trying to inspire boxoffice success or buying it, create “events” around screenings….have live performances, Q&A’s, invite big groups of people to bring their members, etc. Don’t be passive….fill that theater with everyone you know and you just might convince other people that there is a built-in audience for your film.
This does not have to happen via the traditional theatrical model though. That can be a small part of the release to get reviews, but the rest can be a sort of EVENT THEATRICAL or HYBRID THEATRICAL release and you can sell DVDs at the screenings and build your community list and dialog too. Companies such as Fathom, Screenvision, Cinedigm offer alternative theatrical bookings and event screening options in traditional theatrical chains such as AMC, Cinemark, and Regal. (Stay tuned for our next blog on this topic and we’ll cover services such as Emerging Pictures too).
Selling DVDs at festivals and event screenings is a key revenue stream and should not be overlooked.
Orly Ravid July 27th, 2010
Posted In: Film Festivals, Marketing, Uncategorized
Tags: AMC, Cinedigm, Cinemark, Emerging Pictures, Event Theatrical, Fathom, Hybrid theatrical, independent film, Regal, Screenvision, The Film Collaborative, theatrical distribution, theatrical release