IFH 109: Top 10 Film Distribution Rules for Success

Alex Ferrari 11:04
So I wanted to put together this episode because I think a lot of people still don't get what film distribution is really like, and what you really need to know. And there are some basic concepts and things that you need to know if you're going to try to sell your feature film or get your feature film distributed. And these are, this is not all of it. But this is the top 10. And if you have a grasp of these 10 concepts, I think you will be successful. And again, I'm going through all of this now with this is Meg, in the coming months going to be dealing with distributors, I've already been contacted by a couple of distributors who are interested in this as mag, but I'm holding off holding off, and I'm in a great position where I'm not in any hurry, I want to get the best deal, or I want to do it myself, whichever is going to give us the most exposure, and where we can make our most of our money back, that would be great. So here are the 10 basic distribution, things that you need to know about if you want to get your film distributed. Rule number one, forget about selling all of your rights to one big monstrous deal. Those don't happen very often. And it is something that you you really shouldn't be doing anyway, unless you get an insane amount of money upfront. In the olden days are what the what the press loves to promote is these amazing huge deals like Birth of a Nation $17 million, which they didn't do very well on, on that return. But you know, $8 million, or $7 million at Sundance or south by or something like that, that's what they like to, to to sell. And that means that they get all the rights for everything with that money. And by the way, whatever upfront money they got on that deal, they will probably never see another dime ever again. So any money that they made was going to be in that upfront deal. It's in general, I'm generalizing here, but generally speaking, that's what I've heard. And that's my experience with working with so many films over the years. So try to sell different, split up the rights, you don't have to sell a distributor, all your rights, negotiate those. So if your distributor is strong in DVD and blu ray sales, then give them DVD and blu ray sales us or if they have a strong distribution arm over in Europe or overseas, give them those rights. You have somebody else that understands television rights, give those rights to them. If you're going to do streaming yourself, keep the streaming rights yourself, don't give them away because believe it or not, you can go directly now to a lot of these streaming outlets. And I'm gonna have another episode in the coming weeks about how you're able to do that directly without going through an aggregator, but we will get into that a little bit later. But split up your rights. You know, the film that I worked on opposite Lydia, when I had Diane bell on the show, she she thought she had the rights for all for the for you know a movie that won Sundance two awards at Sundance, and she sold the rights, the airplane rights, the rights to play on airplanes, and she made I think she told us like 30 $40,000 off those rights, purely because it had won Sundance won a couple of words at Sundance, and she was super excited. I mean, that's huge, you know, for a small film like that, but she kept those rights and she got all of that money. So as opposed to splitting it up with a middleman or a distributor, she kept those rights. So split up those rights piecemeal it and that's a really important deal. Now mind you, if someone shows up and gives you a million or $2 million drop, and your movie costs less than that, by the way, then take it. That's fine. But it all depends on what your goals are with your movie, but generally speaking, splitting up your rights where it's foreign and domestic. And then beyond just foreign and domestic. Within those cable VOD streaming. s VOD, which is description base of video on demand like Netflix and things like that. All that stuff, split all those rights up. That's one, two. The bigger the deal, the less control you have. So the more money you get up front, the less money You're going to get on anything dealing with your movies. So understand that they'll have control over the artwork, how they cut the trailer, how they distribute it, how they get the word out, if they get the word out, sometimes they'll just throw it on a shelf, there's a million things. So understand, the bigger the deal is, the less control you're going to have over anything dealing with your movie. Now, if they're not giving you a lot of money up front, you should have a you should demand and negotiate more control over any other aspects of those of that movie. So if someone shows up with 10 grand, and your movie cost 100 grand and they give you 10 grand up front with promising on the back end, you should maintain a good amount of control over what you're trying to do with the movie. But again, it's on a case by case basis depends on the movie depends on the distributor at all, it all very relative, but these are general general rules that you have to look into. Number three, cap your film distribution expenses. So when you sign a deal with a distributor, they are going to throw in Oh, well you know, you'll get paid back after our expenses. I'm doing air quotes here expenses. Now those expenses can balloon beyond belief, I did a distribution deal with a group of short films of mine called lipstick and bullets with this horrendous distributor, which we we left after after we broke off the deal. Me and my, my aggregator. It was a horrible deal. These guys were just just raping, raping my aggregator because he had to he was the one that was paying for it. And it was read Dick aeolus how much they were charging for like a poster design. They were like charging five or six grand for a poster design, which was absolute Bs, you know, and then if you throw in a trailer trailers will run your 30 or 40 grand in the eyes of a distributor, which it really doesn't cost that much. You know, because I'm a trailer editor, I know what it costs. So these are things that will happen or if they fly out to Cannes or to a market, they're going to charge you for hotels, and travel, and all that kind of stuff. part as part of their package to go out to cannon and sell your movie. So these things you have to be careful of because it can balloon really quickly. If you don't cap your expenses, you'll never see a dime. You know, chances are, and I hate to say this, when working with certain distributors, again, not all distributors, there are some good distributors out there, a 24 gravatars the orchard there's a ton of good, very transparent distributors who really care about the filmmaker. But there are a lot of unscrupulous ones out there who, generally speaking, you'll never see a dime once you sign a deal with them. And I'm going to talk about deals in a second, but kept those expenses so you go look no more than 40 grand, I don't care what happens, no more than 30 grand, I don't care what happens. And whatever that cap is, I guarantee you will hit that gap, it's not going to be like oh, we only spent 15 grand, so you know no BS, they're gonna charge you the top of the top. So just be careful and cap those distribution expenses. Number four, beware of the middleman of aggregators. Because these guys are sometimes extremely helpful, like a producer's rep who connects you to certain people, certain distribution deals, that's great. Certain aggregators say that they're going to guarantee you this or guarantee you that if you're going to guarantee which will lead into my next, my next rule, but I'll get into that in a second. But they'll say all these kinds of things that they guarantee you to get into this and that just be careful of these middlemen, because some of them are really good. But you've got to be careful of how they structure that deal, how much they're going to take, what percentages they're going to take, and so on. And for whatever you do, whatever, whatever kind of distribution you do, if you are going to sign a deal with an aggregator or a middleman, make sure it's not exclusive. Do not sign an exclusive deal because if you sign an aggregation deal with an aggregator that's going to help you go out and get distribution you're locked up for five years and that then you're basically hang comfy handcuffing yourself, and you can't do anything with the movie that you work so hard to make. Because you've signed that deal away. So you basically have no rights no nothing can do a damn thing with it for five years so always signed a non exclusive deal, like indie rights over Linda Linda Nelson over indie rights. She all her deals are non exclusive, specifically for that matter for that reason, because they come from a filmmaking background and so on. And they don't want to screw the filmmaker. But that was one of those little dirty secrets of distributors like Oh, yeah, yeah, yeah, just sign up by the standard five year deal done, you're screwed. Alright, so sign a non non exclusive deal with any aggregators when you're working with them. The next rule, rule number five, nothing is guaranteed. We'll be right back after a word from our sponsor. And now back to the show. I don't care what anyone tells you, nothing is guaranteed, if you hear someone going, oh, we're gonna get you into Netflix, or we're gonna get you into Amazon or we're going to get you 200,000 screens or something like that. Now again, it all depends on who the distributor is. Now, if it's a big huge monsters distributor, or very reputable distributor, if they're saying, Hey, I'm gonna put you in X amount of theaters, that's possible. But if they say, I can guarantee you that I'll get you into Netflix, I can guarantee you that I'll get you into Hulu. There are no guarantees, there is absolutely no guarantees to that. And you should run away the opposite way. I can guarantee you, you know, 10,000 units sold to Walmart, not guaranteed. Not possible. Unless you're working with a huge Warner Brothers Lionsgate, those kind of size distributors, then maybe they go look, we're gonna we're estimating 10,000 units sold, because we're Lionsgate and we're packaging again with 10 other movies that weren't that Walmart's going to buy. And because we already have an output deal with them, it's a minimum 10,000 units sold. That maybe would be the case that makes sense with with a distributor of that size and magnitude. But another local small distributor, you got to be very wary when they start making promises, they just go Hey, we'll do our best we can to get you into these things. This is our projections of what we think the movie can make. That's something a little bit more on the up and up. So keep an eye out for that there are no guarantees in film distribution. Rule number six, return on investment or ROI. If you can make a movie for a budget, let's say you make a movie for $25,000. And you sell that movie for $50,000. Guess what? You are extremely successful filmmaker, if you can go again and make another movie for $50,000 and then sell that movie for $100,000. Guess what? You are an insanely, incredibly successful filmmaker. And if you can make $100,000 movie and sell it for 250 you're a successful filmmaker. These are things that you need to know about when you're dealing with distributors and also dealing with investors. They want to see that you made money even if it's a small amount of money that you made money so whatever you project that you can sell this movie for keep the budget under it that's why I'm always amazed at movies that I'm you know, pitched or act i have access or asked to do post production on on my Hey, what was the budget on this? And they're like, Oh, it was 5 million I go 5 million, you've got no stars in it. How the hell did you get money to make this movie, that movie will never ever, ever, ever make its money back. It just won't. Even if it's if it went Sundance Cannes and South by Southwest with no act and with no no names in it. Very rarely. I don't remember one movie doing that. That's why I'm saying it so bluntly. But it's almost impossible for that money, that movie to make any of its money back and its investors. Now again, a lot of times investors will invest in movies purely for a tax write off, which it is very possible. Now if you can find rich people who want to get a tax write off to help make you movie, God, man, send me send me an email, let me know where they are. Because I want that I want to know those guys as well. Because the best is an investment investor does not care about getting their money back. And I have a friend of mine who just made a movie that had investors that really did not care if they made their money back. It was a passion project. And then it was a write off after that. So they were like, Hey, I just want to make a movie. It's kind of keeps me interested. And I'll write it off. And that was it. It was a tax write off for them. And they made it it was like a $3 million budget with you know, I think it has one or two stars in it. But there's no way they'll make $3 million back, non festival non anything. So it does happen. But you guys have to understand that if you can, it's a business so you have to create a product at a certain price. If you watch Shark Tank, you'll understand this. What's your what's your margin. So if you make a movie for 10 grand, you sell it for 20 you've doubled your money, awesome. If all your money that you've spent to make that movie and market it and get the deliverables and everything else was 10 grand if you sell it for 20 golden, keep that in mind moving forward with your movies. Rule number seven, film festivals help sometimes. Now film festivals are an insanely good marketing tool for your movie and I get it. They give you an audience. They give you credibility. They give you access to reviews, and all all the wonderful things that come along with festivals and of course I created the film festival hacks course with Chris Holland over from festival secrets talking in nauseum About film festivals and how wonderful they are. But they do help. But not all the time. If you have a genre movie, festivals really don't matter. If you have an action movie, festivals really don't matter. No one cares. If you got a drama or an indie or a comedy, or like drama at like this is Megas. festivals are really important. Those laurels really mean something. And the bigger the festival, the more you can leverage that reputation of that festival. That's why a winning, having a lot, just getting accepted into Sundance is something that you can leverage getting into South by getting into Tribeca or Cannes, or slam dance. Or tell you right or any of these these top tier festivals, you can leverage their reputation to help sell your movie. So festivals are crucial for certain genres. Again, horror movies, it's nice, not a big deal. And action movies nice, not a big deal dramas, really helpful. If absolutely imperative actually, unless you've got a big monster star in it, then we're not talking in the film anymore. But even then, if you have a movie, which likes Little Miss Sunshine, had a great cast, but at one Sundance or was sold at Sundance, I don't think it was announced. But it did play at Sundance. And that helped get it sold. Because that, that that leverage of being at Sundance helped that movie get the release it was and it was amazing little movie as well. So again, there are always exceptions to every rule that we're talking about here. But we're talking about general rules for 99% of the rest of us. Now Rule Number eight is beware of the five year contract. And that's a kind of thing that I've already talked about earlier in the episode. But beware of that five year contract, but you do not want to lock yourself up in five years. And I've seen it with so many filmmakers, who they like come to me like yeah, I can't, I can't, I can't do anything with this movie anymore. I'm like, whereas I'm like, Oh, it's locked up, I can't do anything. And then they're just sitting there waiting. And then during that waiting time, they're not making any other movies and not doing anything else, because they can't leverage what they've done to show other people that show that it got released, that it made any money. It's just a complete cluster F. And it really doesn't, doesn't help anyone. So please stay away from those five year contracts unless there's a big huge payday on the front end. Number rule number nine. Rule number nine, don't get caught in post. It is the biggest place where filmmakers fail. And films fail is in post production. They run out of money, they don't know what they're doing and pose and they cannot finish their movie. And if you can't finish your movie, guess what, guys? You ain't gonna distribute it. So I have no a lot of films that have been picked up for nothing by a distributor because they literally have no more money the film has in the filmmakers have no more money. And they've been sitting on a shelf for I don't know, probably a year sometimes. And they come in to look okay, great. We'll come in, we'll pay for all the delivery and that's it, you're done. You've given your movie away, it's completely gone, you'll never see a dime, the only thing that will be helpful is that you might get a poster and get and you can tell people that your movie was finished and distributed. But you have failed as a filmmaker because you have not finished you did not properly set things up for post production. And I'm not even going to get into your deliverables list because that is something else that filmmakers always forget. Especially when it comes into distribution that they need to have deliverables the HD cams the five one mix poster art all this kind of stuff, which I'll go over in another episode actually I'm going to do a full episode about what deliverables you need for for for a distributor generally speaking. And then another thing that is part of those deliverables is E and O insurance that want to make that rule number 10 you know insurance. If you don't got it, Yang gonna get a distribution deal E and O insurance is errors and omissions, insurance. Basically it's malpractice for filmmakers. So in other words, if you're making a movie, and you shoot, let's say a guy chokes on on Reese's Pieces, and it's a suicide by Reese's Pieces, and he chokes horribly and dies by Reese's Pieces. And Reese's Pieces is everywhere. Well, that kind of puts a negative light on Reese's Pieces. So unless you've got the permission of Reese's Pieces, if that movie gets released, and you don't have no insurance, the distributor will be sued. And Reese's Pieces will take them to the bank because they have all the rights to because they did not get permission to get a to use Reese's Pieces in the movie. So you have to have no insurance for those specific reasons. Let's say you're in the bet you're shooting a street scene, someone walks in the background. They look into the camera, and you don't get a release for that person. If that person Sitting in the movie theater one day, and sees themselves, hey, that's me, I didn't give them permission for that lawsuit. That's how it works, guys, you need to have no insurance. Now, you know, insurance can range anywhere from 2500 bucks all the way to 6000 bucks, but it's something that you need to think about. Prior to releasing the movie, a lot of times a distributor will pick up that cost, but you will pay for it out of whatever your your upfront fee is, or any monies that you're going to come back out of. So you've got to make sure that's taken care of when you're going to do a distribution deal. So rule number 10, E and O insurance. And lastly, network like hell, this is a bonus rule network like crazy. It's a really small business guys. And the more I am in this business, the more I realize how small it is, I meet somebody, or I'll have someone on on the show, and I'll start talking to them. And they're like, Oh, you know, that person, oh, you know, that person. It is an insanely small business as big as it is. The film industry is very, very small. And you really got to network as much as humanly possible, because you never know who you're going to meet. And that's why social media is so powerful. And you just have the network man network as much as you can, when you're at a film festival, be connecting with people getting I mean, I know it sounds cliche, but get coffee with these people get lunches, and so on, you never know you just want to network with these people, because you never know down the line where you can help them or they can help you. And that's the key to it's not a one way street, it's not what they can do for you. You always have to lead with what you can do for them. So it is very, very important to always keep that in mind. What can I do for you? How can I help you make your movie or connect you to somebody that I might know or so on and so forth. So always lead with, what can I do for you in this relationship, to start building that relationship with that person and network with those people. So guys, those are the 10 rules plus a bonus rule for film distribution and understanding the basics of film distribution, if you can handle get the earliest grasp what I just said in these last 10 rules, you'll be much better off when you do a distribution deal for your movie. It's it's a jungle out there, guys, it's really rough, you really have to educate yourself as much as humanly possible. That's why I created the indie film syndicate. That's why I do this podcast. That's why I created any film hustle. I want to educate filmmakers from all walks of life with as much information as I can to help them survive and thrive in the film business. So if you want to check out the show notes for this episode, head over to indie film, hustle, calm forward slash 109. And again, if you guys are interested in taking advantage of that 25% off, which by the way is limited time only. It's only going to be around for this week, head over to indie film hustle.com for slash 25 off the number 25 and the word off and check out all the new courses we've been adding to the indie film syndicate. And this show is also sponsored by free film book calm that's free film book calm and go over there to download your free filmmaking audio book from audible. And guys, if you can please please, please leave me a good review on iTunes, head over to filmmaking podcast calm and leave me a great review, an honest review but hopefully a great review because it really helps us out with the rankings iTunes and again, I want to get this podcast out to as many people as humanly possible. So guys, thanks again for making this podcast so popular. And making any film hustle, grow as fast as as it has, and I've got a lot of stuff lined up over the next few months. And definitely a big 2017 man it's gonna be a really big year, and hopefully a very positive year for everybody for everybody in the tribe. So again, thank you so much guys for all your support.

I love you guys. You're the best. Anyway guys, keep that hustle going keep that dream alive and I'll talk to you soon.