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DouglasHorn.com

What do I look for in an online release deal?

by on Jul.05, 2010, under Distribution, Questions

Hi Doug.  Your site is kick-ass.  When I grow up I’m going to have one just like it.  My question for your wise counsel: my independent film, which was mostly shunned by festival programmers for being “too light,” and then was handled briefly by a sales rep who went belly up in the latest financial meltdown, has attracted the interest of an online distributor that is one of the top two most reputable such organizations.  They are asking for a six month exclusive window, are promising a nice launch with splash promos, and tie-ins with a major market, where they are a presence.  Please give me your thoughts about what you would look for in any deal of this kind, I know you’ve been through this circus ride a couple of times.

Yeah, I know that circus ride well.  My feature Entry Level was considered “too light” by some festival programmers.  Often, I think that’s indie film code for, “a film that audiences will actually enjoy.”

Before I mention what I’d look for in an online release deal, I want to mention that there are probably three routes open to a filmmaker at your stage of the game.  Depending on your film, these are the options you could consider:

Go big

If you’re burdened with a lot of extra money, you could remedy the situation pretty easily by hiring a publicist and/or film rep to try to give your film a higher profile.  I’ve seen a number of indie films that garnered the acceptance and publicity they needed largely because someone had the funds to buy some attention early on in the game.

On the flip side of that, I’ve seen a number of films that had the potential to reach a broader audience if only they’d had the budget to do some publicity.  Today, a couple years after Entry Level‘s completion, one of my biggest regrets is that we didn’t/couldn’t put together a proper initial marketing campaign for the film.  Some publicists had offered me sweetheart deals because they liked the film, but the cost of materials and time were just more than any of us were willing to add to our budget at the time.  In retrospect, I believe this was the biggest mistake I made on that film.  But only hindsight can tell you that.  Often a big marketing push on a film that isn’t terribly marketable is just a waste of money.  Each producing team has to judge this for themselves, and it’s a difficult choice to make.

Go again

If you think your film has what it takes to draw an audience, but for some reason didn’t get a fair shake the first time around, you could always consider a do-over.  I know of a number of films that get a new title, key art, marketing package and re-edit for a different running time, and then hit the festival circuit or film markets all over again.  Odds are, no one really took much of a look at the films the first time around, so they won’t notice the similarity.  Of course, this could just be another chance to be ignored again, unless your marketing is more resonant this time around.  But it happens more often than a lot of people realize and sometimes it’s the right choice.

Go with what you got

At the moment, it seems like you’re considering the time honored approach for a lot of indie filmmakers which is, “Just get it out there, already, I need to move on with my life!”

There’s no shame in wanting to have your movie out there.  It sounds like you’ve tried all the traditional routes without a finding the success you hoped for.  I’ve been there!  Even when I did find a well known distributor for Entry Level, they ended up closing their DVD label the same week as they released my film.  So landing a distributor is no guarantee of success–especially with the state of film distribution these days.

I think you’re probably on the right track by getting your film out there now.  You ran your film up the traditional distribution flagpole and they didn’t salute.  There’s no shame in that, especially right now when traditional distributors are staring down their own mortality.  Now’s the time to get the film out there and see what happens.  That way, you can at least support it, begin making sales, and give it life.

Here’s what I’d look for in an online release deal:

Non-exclusivity.  If you’re not going with a traditional distributor, you want to be open to as many arrangements as possible.  If someone wants exclusivity they ought to be offering something worthwhile.  An advance or some publicity might be worth the six months of exclusivity this distributor is offering–but be sure to have their responsibilities spelled out in the contract.

Specialization.  Many distributors specialize in one or two areas of distribution, but only dabble in the others.  I recommend a frank discussion with each distribution partner you’re considering to find out where their strengths are.  Then only offer them distribution rights in the areas where they specialize.  For the remaining areas, go out and find someone who specializes in that.  It’s a few more distributors to deal with, but in the end you’re likely to have better results overall.  (Even though you’re going to mostly be making non-exclusive deals, I believe this is still a better approach than just giving every territory to every distributor.)

Track record.  Another lesson I’ve learned is that some distributors are a lot better at making sales than others.  And some are more honest with their licensors (us filmmakers) than others.  Being bad at either of these is a red flag.  For example, I’ve dealt with sales agents who were very honest, just not very effective at closing sales.  And I know of some who are effective, but dishonest.  Neither one of these put a lot of money in the filmmaker’s pocket.  So ask the producers of other films these distributors represent about whether the distributor is effective in making sales and honest in reporting them.  And it probably wouldn’t hurt to run a Dunn & Bradstreet report on your distributor.  I know a few filmmakers who are owed money by distributors who have no money to pay them.

Transparency and Accountability.  You should look for a high level of transparency from your distributor—quarterly statements are standard.  Your agreement will spell out what you can do to verify sales.  Marketing expenses should be, “bona fide, verifiable, third-party.”  You should have the right to audit at least once a year with the distributor paying for the audit if it reflects more than a 3%/$3,000 discrepancy (or some similarly low threshold).  Late payments should compound meaningful interest from the day they were due.  And you should negotiate an escape clause from an agreement if it hasn’t produced a reasonable dollar return in a reasonable amount of time.

A partner you like, who likes your film.  This really isn’t a contract point, but a general business observation.  You’re going to be working with your distributor for years to come, even if it’s only occasionally.  It’s not absolutely necessary that you like them, but it doesn’t hurt.  And they should really like your film and not just be trying to fill out a slot in their release schedule or fatten their library.  When I say that you should like your distributor, I mean more than just the acquisitions exec who you made your deal with.  Acquisitions executives are the most filmmaker-friendly end of the distribution game.  They typically like films and filmmakers and will promise a lot.  But you probably won’t be dealing with them when your quarterly statement is three months overdue and the promised payment is nowhere to be seen.  So before executing your deal, try to speak to some of the folks in the day-to-day operations to see what they’re like.

These caveats really apply to any distribution deal you might make for you film, online or traditional.

Good luck with your film!

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2 Comments for this entry

  • Sheri Candler

    I would agree with what Doug says regarding exclusivity, especially with online outlets. That is a very expensive privilege and shouldn’t be handed over without some significant upfront money and a cap on marketing expenses (you know you are paying for that eventually right?).

    An organization you should have a look at is The Film Collaborative, a non profit organization dedicated to helping filmmakers figure out the best distribution deals for their films. They take no rights for their service and their fees are extremely affordable. Visit their site http://www.thefilmcollaborative.org and read the testimonials from the filmmakers they have helped. They have worked as sales agents in the past and just got fed up with the excessive middlemen fees and seeing filmmakers receiving little to no return on their work.

  • admin

    Thanks Sheri.

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