by Orly Ravid, Founder, The Film Collaborative and Attorney, Mitchell Silberberg & Knupp LLP)

The following the final part of a three-part series on Educational Distribution. Part 1: “Get Educated About Educational Distribution,” by Orly Ravid, Founder, The Film Collaborative • February 18, 2016. Part 2: “Fair Use Is Not Fair Game,” by Jessica Rosner, Media Consultant & Orly Ravid, Founder, The Film Collaborative, Attorney, Mitchell Silberberg & Knupp LLP • June 1, 2016. It was offered as a handout at the Low Down on Educational Distribution Panel that took place as part of the SXSW Film Festival on March 12, 2017.

Educational distribution is often part of “Non-Theatrical” rights and generally refers to distribution to schools and libraries (not film festivals, airlines, ships, or hotels, for example). Traditional educational distribution is focused on educational institutions at the university and K-12 level. It can also cover private organizational and corporate screenings. It can involve both physical media (DVDs/Blu-rays) either sold or rented and streaming (via licenses for a term, typically 1-3 years). Not all educational distributors cover the same turf or have the same business models. Below is a summary of some companies and how they define and handle educational distribution. You’ll notice differences and a range of what the companies do within the space. This document also covers revenue ranges, technology differences and industry changes, use of middlemen, best practices, and release examples. I often use the company’s own words to explain how they work. I did not interview filmmakers who have worked with the panelists or other companies, and always recommend checking references and asking around. For any follow-up questions please feel free to contact the distributors or panel moderator Orly Ravid.

Companies explain their take on educational distribution:

Alexander Street: Offers both streaming and DVD options across its catalog. Focus is on institutional selling and providing both university librarians and university faculty with options ranging from single title streaming and DVD, to demand-driven models and wide access to packages of 60,000 or more titles.

Kanopy: We define educational distribution as sharing important stories with the next generation. Films have the power to engage and challenge like no other medium, and with students watching more film than any other resource, it’s more important than ever before that these films reach this important demographic. We take our relationships with the college librarians very seriously as they are our paying customers and work tirelessly to understand and promote Kanopy to their patrons.

We are lucky to work with such a progressive market of librarians that believed in our new model, Patron Driven Acquisition, whereby libraries only pay for what is watched. This model is now the benchmark for libraries globally and has revolutionized the industry by promoting educational streaming as a viable channel for filmmakers while offering excellent ROI for libraries.

Passion River: Selling or licensing public performance rights for films to schools, colleges, libraries, and community centers/organizations.

Ro*co Films: Distributing content (in our case, top-tier documentary films) to schools, organizations, and corporations for instructional and/or screening purposes.

Outcast Films: Sales and rentals on campuses, academic conferences, campus activities and student film festivals. There are times when we also partner with non-profit organizations both on and off campus. We want to work in collaboration with filmmakers and their outreach efforts to maximize opportunities so we can be flexible. Because the educational market is our only focus, we believe we are the best to handle and coordinate.

The Video Project: ‘Educational and Institutional’ market means all schools, home schools, school districts, offices of education, learning centers, education and research institutions, colleges and universities, libraries, NGOs, nonprofit organizations, corporations, government agencies and offices.

Collective Eye: Thinks of Educational Distribution as any film media sales and licensing made for educational intent. Collective Eye Films is very clear in defining rights to carry a film as certain types of Products; these are generally products that include Public Performance Rights (defined in the below link), Campus & Community Screening Licenses, Public Library licenses and Educational Streaming licenses. Collective Eye covers the traditional educational institutions and offers PPR licenses to non-profits and Government agencies. The company finds that “Community Screening” licenses are very beneficial to filmmakers. Because we are non-exclusive we always discuss the filmmakers’ rights and how our distribution would or would not impact their other distribution deals already in place. Public Libraries as a media right generally come within Home-Entertainment markets, so Collective Eye carries these as a service to filmmakers that do not have other home-entertainment distribution. Since we are non-exclusive we can also provide this as a product alongside another non-exclusive home-use distributor if amenable to both parties. A full list of how we define our licensing types can be found here: http://www.collectiveeye.org/pages/film-licenses.

What They Do in The Educational Distribution Space, and An Estimate of How Much of Their Company’s Business Is Educational Distribution

Alexander Street: We are a 17-year-old company dedicated to making silent voices heard to support scholarly inquiry. In 2006 we launched our first streaming video product and we have been innovating in streaming video to university libraries ever since. Because our roots are in providing databases to university libraries, we understand better than most how to package, price and deliver streaming video to universities. Our approach is multi-channel, allowing content creators to distribute their content on a title-by-title basis or in packages with multiple pricing options from one-year subscriptions to life-of-file sales. Because we offer these multiple models, we are able to satisfy the collection development approaches of all librarians while also meeting the budget capacity (or lack thereof) of all libraries. Simply put, because we offer multiple purchase models we are best positioned to generate more revenue for premium films, because premium films can easily be leveraged across all models. We work with hundreds of individual filmmakers as well as with organizations large and small, including First Run Features, Kino Lorber, Milestone Films, the Smithsonian Institute, PBS, Sony Pictures Classics, The Criterion Collection, NBC-Universal, the BBC, and many others. We are the leaders, with more than 12,000 universities worldwide using our platform to access video, text, music, images and data sets. Our focus is primarily on licensing great content and offering tools to make the content come alive for faculty and students for research and learning.

  • 95% of our business is to educational institutions, with the remaining 5% in public libraries, government agencies, historical societies and the like.
  • Territory Covered: Worldwide

Kanopy: Kanopy is a video streaming solution for colleges and public libraries delivering one of the largest curated collections of classic cinema, festival documentaries, and movies in the world through the best-in-class user interface. Kanopy streams to over 2,500 of the top colleges and universities across 100 countries. Millions of students, professors and public library members can watch The Criterion Collection, indulge in festival indie, world cinema and acclaimed documentaries sourced from award-winning filmmakers globally or learn about every subject imaginable from The Great Courses and PBS. Kanopy’s unrivaled collection contains over 30,000 curated films. Unlike other platforms, we preserve the integrity of the collection and only accept films that we know will be watched and in demand.

Kanopy is now the most watched video streaming platform in higher education due to our relentless pursuit of excellence in user experience and unwavering commitment to a democratic relationship with filmmakers. We ensure each film performs on its own merit, overcoming the problem of incumbent collection sales model where thousands of films were bundled together and sold into institutions at discounted rates.

Filmmakers receive a clean 50% of each sale with no deductions and are provided with a dashboard to track their audience’s viewing behavior and associated sales.

We are proud of being privately owned which is very rare in the library vendor world where most companies get bought out quickly by the large multi-national library conglomerates. By being independent, we are free to take risks and change the status quo to deliver on our mission of creating a sustainable economy for our filmmakers. Part of our DNA is having the user at the heart of all decisions we make to ensure we are offering an unparalleled viewing experience that is relevant and engaging.

Over half of our operating budget is dedicated to our Product & Engineering team who listen to our incessant customer feedback and continue to raise the benchmark of video streaming platforms in education.

  • Last year, the majority of our business was educational and although this distribution channel continues to grow rapidly, we are seeing exponential growth in our public library business. We anticipate our business to be fairly evenly split between education and public library channels by the end of the year.
  • Territory Covered: The key markets for any US video platform are English speaking territories. We work with pretty much every viable institution in the US, Australia and NZ and most in the UK. We do have customers on every continent too, but our main focus is obviously English markets.

Passion River: Passion River Films is a distribution company for DVD, digital, non-theatrical, and educational markets. Their diverse catalog of films has won a variety of the most prestigious awards and has also screened at every major film festival in the world. We market, sell, & license films to educational buyers & community/organization leaders.

  • 20% of Passion River’s business overall is educational, but educational sales are 80%+ of its revenue.
  • Territory Covered: Worldwide, but primary focus is North America.

Collective Eye: Collective Eye Films is an educational film distribution company that represents compelling documentaries that explore untold stories of our time. Our films build bridges between cultures and provide unique perspectives by exploring social, political, environmental and spiritual issues to bring provocative and entertaining stories to the screen. We provide documentaries to campuses, classrooms, libraries and through community screenings. We believe that film is a medium that can present critical issues, challenge audiences, and raise important questions. Keeping true to the notion that documentary films are powerful tools for change, we strive to unearth stories that make a difference.

We are a distributor primarily for Educational Rights, including DVD with Public Performance Rights for University and K-12/Government/Non-profit, Digital Site Licenses, Public and Campus Screenings, and Public Libraries. We will carry home-use DVD when the filmmaker desires an outlet to satisfy demand, but this is not our primary market. We are one of the few non-exclusive Educational Distributors in the educational ecosystem. As a boutique distributor, we specialize in Environmental subjects, Anthropology, and Criminal Justice, and offer films specific to the Pacific Northwest and by Pacific Northwest filmmakers. Our films are generally character-driven, and carry a strong advocacy angle. Because of the emphasis on films that advocate for an issue, and that “make a difference,” we offer Community Screenings and emphasize our keen ability to navigate and negotiate licensing questions with interested audiences who need support in planning their screenings. Jon Betz, Collective Eye Films director, has over a decade of experience as an independent documentary filmmaker and is a strong filmmaker advocate, often speaking with filmmakers in depth about their distribution strategies when partnering on the films we distribute.

  • Collective Eye is primarily an Educational Distributor. About 75-80% of our revenue is from licensing Educational DVD Public Performance Rights, Digital Site Licenses, K-12/Non-Profit/Government PPR and Campus Screenings. The remaining 20-25% is from Community Screening licenses and Public Library sales.
  • Territory Covered: Our primary reach is the US, including US institutions abroad. We also reach colleges and universities in Canada, the UK, New Zealand and Australia.

Ro*co Films: A leader in the documentary distribution world, ro*co films understands that a compelling real-life story can educate, entertain, and engage diverse audiences around emotionally gripping, universally important themes. A growing division of ro*co films international, ro*co educational launched in 2009 with the mission to advocate for documentary film as an educational tool, to bring these stories to schools, libraries, and other instructional environments across the country, and to broaden the impact and influence of our films by mobilizing communities to host, organize, and execute their own public screening events. Whether you are striving to illuminate a topic or issue, create change, or simply start a conversation, showing a compelling film is the best way to do it. The films represented by ro*co educational are inspiring, provocative, and challenging —connecting us to human experiences well beyond the boundaries of our own.

We are a boutique educational distributor, which means that we stay small by choice. We take on only 10-12 films per year, and have become a trusted curator and source for the best of the best in documentary film. Our films are highly-acclaimed, festival award winners, selected with their production quality, academic relevance, and impact potential in mind. For each film that we add to our collection, we produce a high quality and proprietary educational package that includes the feature film, any shorter or ‘chapterized’ versions that are available and would be valuable in an educational setting, curriculum or discussion guide, and screening kit. Subscription streaming services are also available through our exclusive digital portal, Film Platform. We bring all of these options to our network of over 50,000 active educational buyers, with a focus on public screenings and community engagement. In addition, we design custom distribution campaigns for each film we release, where we go beyond traditional marketing to find unique audiences and income streams — to not only elevate impact but also to provide the highest possible returns to our filmmakers.

  • Ro*co Films’ business is approximately 50% educational (we also do sales).
  • Territory Covered: Worldwide

Outcast Films: Outcast Films is a distribution company that assists filmmakers in capitalizing on the educational market. Focused on social justice and environmental issues, our company actively engages educators, community leaders and activists to become personal advocates for your film through targeted outreach and one-on-one engagement. We work in collaboration with producers to develop and implement strategic marketing and sales initiatives aimed at academic and public library markets as well as community-based organizations. Outcast Films can work with filmmakers in one of two ways: (1) traditional percentage split contract where Outcast Films would hold the exclusive educational rights or (2) a fee-for-hire business model, in which, you, the filmmaker, maintain 100% of your project’s rights and 100% of the profits. The educational market is vast and lucrative but can be daunting for those new to it. Outcast Films and our experienced staff will help maximize your opportunities while minimizing the time it takes to reach your goals. Our goal is not only to distribute great documentaries, but position them as catalysts for change in the community. We do this by providing filmmakers the ability to directly connect with students and teachers through multiple outreach activities.

Outcast Films will oversee the production and design of all the elements needed to manufacture the exclusive educational DVD including cover and menu design. This will be done in cooperation with the filmmaker: (i) Ordering processing and fulfillment; (ii) Organize and schedule live event screenings; DVD and DSL (Digital Site License) Educational Sales; (iii) Organize and promote screenings in academic conferences; (iv) Solicit blurbs and reviews from professors, instructors, and subject specialists that focus on and teach the core subjects that are relevant to our films for use on the DVD cover, website, and promotional materials; (v) Launch email blasts for new release announcements, awards, reviews, or relative current event news; (vi) Monitor and post news related to the film to media librarians, pertinent academic listservs and throughout our social network; (vii) Submit titles to academic journals, reviewers, bloggers and other on-line and print journals for possible review; and (viii) Assist filmmaker with outreach to NGO’s and other non-profit organizations; Provide a Platform for Enhanced Educational Opportunities through our “Research Centers” and Website. Because college classes are generally 50 minutes long, the ideal running time to teach a film in the classroom is less than 60 minutes. In addition, many states require universities to purchase films that are closed captioned so we require all of our films to be captioned.

  • Outcast is 100% focused on educational distribution. We are a small but mighty! We only pick up 6-8 films a year and focus solely on the educational market.
  • Territory Covered: Ask for worldwide but okay with just North America.

The Video Project: The Video Project was founded in 1983 by Oscar-winning documentary filmmaker Vivienne Verdon-Roe (Women for America, For the World) and Oscar nominee Ian Thiermann (In the Nuclear Shadow: What Can the Children Tell Us). Our mission is to provide the best media programming available on critical social and global issues to classrooms and communities to help advance awareness and encourage action on the most important concerns of our times. The Video Project collection features programs for all ages from over 200 independent filmmakers, including Oscar and Emmy winners, as well as films that aired on Showtime, HBO and PBS. Our films are regularly honored with top festival awards and with critical praise from major review publications. More recently, we are focused on impact distribution, combining traditional distribution with impact campaigns. On the impact campaign side, we prepare the strategies (fee based) and implement the campaigns. The Video Project only takes on 15-18 films/year and believes in the films that we distribute. They are all cause based.

The Video Project does direct DVD sales to an email list of over 10k, and works with streaming partners Kanopy and ASP. We also do email and social media marketing to reach media buyers, faculty, and students, and phone calls to media buyers, outreach to and attendance at relevant conferences, seek published reviews, organize film festival submissions, arrange publicity through partner organizations, and do sales through sub-distributors.

  • A large percentage of The Video Project’s work is educational, and we also do direct U.S. broadcast sales and facilitate digital sales. The impact distribution is becoming a larger piece of our business.
  • Territory Covered: Primarily North America, also Worldwide thru sub-distributors.

Alexander Street: In short, we work with every key customer group on campus: librarians, faculty, students, administration, curriculum development specialists, centers for online learning, and departments of continuing education and lifelong learning.

Kanopy: We have a variety of different customers we work with:

  • We have a whole team dedicated to B2B (our college and public librarians) to ensure we continue to deliver transparent usage information, relevant content and the associated ROI.
  • Professors are a very important segment to Kanopy – they are influencers and tend to be power users on Kanopy, embedding thousands of videos into learning management systems each year for mandatory viewing.
  • Of course Higher Ed students are one of the toughest demographics to reach and engage with, so we are proud of how well the Kanopy brand resonates with this market. One of the most rewarding parts of the work we do is to have student feedback declaring how Kanopy films have changed the way they see and think about the world they are living in.
  • The public library audience is managed by a separate team at Kanopy because the users are obviously motivated to watch Kanopy for completely different reasons.

Passion River: Professors, Librarians, Community Event Organizers, & Students

Collective Eye: We work with a variety of customers that generally fall into the following categories: Media, Acquisition & Subject Librarians; Professors, Students and Campus Groups; Non-profits, Advocacy leaders; and Film series coordinators, and community members of all kinds who seek to arrange community-based screenings.

Ro*co Films: Educators, Administrators, Students, Non-profits, Corporations, Individuals, Places of Worship, Community groups, PTAs.

Outcast Films: We work with teachers, campus organizations and student groups, department chairs, administrators.

The Video Project: Educational media buyers at colleges & universities, NGOs, businesses, government agencies, pubic libraries, and other organizations.

I asked these educational distributors to explain the technology used and media:

Alexander Street: Alexander Street Press provides on-demand streams through a proprietary platform we’ve developed in-house. We support IE9+ on PCs, and Safari on Mac OS X, and any browser with Flash 8 or higher support can generally access our service. Generally we provide SD and HD video using the following encodings:

  • Adobe Flash FLV format using the On2VP6 codec (we are phasing out the use of this codec
  • H.264 Baseline Profile (for older mobile devices)
  • H.264 Main Profile level 3.1 (for all devices that support it)
  • HLS (for our mobile application and tablet devices that support it)
  • MPEG-DASH (for DRM-protected content)

Kanopy: We strive to have Kanopy available anywhere on any device. We have just launched a channel on Roku but ultimately, if you have a device with internet connection, we aren’t doing our jobs right if you can’t watch Kanopy like you watch any other streaming platform.

Passion River: DVD & Digital

Collective Eye: DVD, Blu-ray, Digital Site Licenses (Files hosted on institution servers) & Educational Streaming through Streaming Partners.

Ro*Co Films: DVDs, Blu-rays, Subscription EVOD streaming services

Outcast Films: DVDs and streaming. We use Vimeo as our streaming platform.

The Video Project: DVD and streaming as described above.

Alexander Street: Standard pricing per title is:

  • $149 for a 1-year subscription
  • $299 for a 3-year subscription
  • $499 for life-of-the-file

This is our recommended pricing. Individual providers are free to establish preferred pricing.

Kanopy: Each Kanopy film can be purchased for a one-year license for $150 or a 3 year license for $350 per institution. Once expired, it must be renewed at the same price. Over 90% of our edu customers have adopted our Patron Driven Acquisition (PDA) model whereby once a film is watched 4 times, a one-year license is automatically triggered. This is fair for the libraries who are only paying for films that are watched and for filmmakers who are rewarded by merit. Libraries can also opt to license a film upfront a la carte.

Passion River: Public Performance Rights (PPR) licensing at: $199-$399. We may lower or start the pricing at $49-$99 if no PPR is included.

Collective Eye: They vary depending on filmmaker specifications, but generally are listed as:

  • $295 – Educational DVD w/ PPR
  • $295 – Digital Site Licenses
  • $125 Non-Profit/K-12/Gov w/ PPR
  • $250 Community Screening
  • $450 Campus Screening

Ro*Co Films: $95-$580 depending on format and license term.

Outcast Films:

  • $29.99 for home video
  • $325 for DVD w/PPR (public performance rights)
  • $595 for DSL (digital site license in perpetuity

The Video Project: Generally, for features with (w/PPR)

  • Colleges (DVD with digital site license) $395
  • Colleges, Businesses, Other Institutions $295
  • K-12, Public Libraries, Community Groups $89

Alexander Street: 50/50 for single title PDA and can be case-by-case.

Kanopy: Filmmakers receive a clean 50% of each sale with no deductions and are provided with a dashboard to track their audience’s viewing behavior and associated sales.

Passion River: 50-60% depending.

Collective Eye: We generally operate on a 50% split to filmmakers with a zero expense system, meaning the filmmakers receive their percentage of revenue from all sales immediately.

Ro*Co Films: 50% split with filmmakers.

Outcast Films: 50/50 on DVD+DSL sales and rentals; 75/25 (producer/distributor) for filmmaker appearances; 50/50 on Expenses.  All major expenses will be discussed with the filmmaker. More details in attached document.

The Video Project: Just the cost of creating the DVD (Cover art, closed captions, DVD authoring).  And we will use the filmmaker’s assets as much as possible to minimize those costs. We typically offer 30% royalty to the Producer.

Revenue Analysis: Gross and Net Revenue Ranges for Films and Factors that Influence

Alexander Street: The gap between gross and net is not really significant as the vast majority of our sales are direct without distributor fees or other fees. Our best-selling titles can generate as much as $25,000 in a single year across models. With nearly 70,000 titles in our catalog, the long-tail is definitely in effect. There are a few factors that can impact revenue range, such as whether the film fills a gap in coverage or establishes an authority resource in a subject area, but the biggest impact we see is where a film is adopted into a specific course. Where films can potentially become part of a syllabus is where we are focused.

Kanopy: Our best-performing films recoup over $35K per annum (the filmmaker receives 50% of this in royalties). These tend to be mandatory viewing documentaries that also resonate with themes to a wider market. The beauty of our model is that the longer a film is licensed with Kanopy, its revenue grows over the years (tends to be an opposite trend with other edu and home video platforms). A well-produced documentary that has high awareness (a festival presence, perhaps a theatrical release) and themes that resonate with an educational audience will probably recoup on average $10-15K in year one, $15-20K in year two and grow from there. Some of our best performing films didn’t have a festival release but have been marketed well by the filmmakers or distributors, making our job much easier in terms of rolling out a promotional plan.

Passion River: In terms of “units” sold, a gross range of sales can be 100+ at PPR pricing. Net can be 1/2 of what’s collected. Influences are festival runs, reviews, buzz, value of topic to community, price point, release date, and price point exclusivity.

Collective Eye: We see a wide range in revenue, from under $5,000 in gross revenue per film to over $50,000 and beyond in gross revenue. However, because we are non-exclusive we know that on some lower-performing titles, we are only seeing a piece of the sales, because the filmmaker is selling directly to their audience. Some films that we have low numbers for, the filmmakers are very happy about, because they have a hybrid strategy that is working well for them. In other cases, with our higher grossing films, we are solely handling Educational DVD and Community Screenings Sales (and in some cases home-use sales as well). Aside from carrying more or less rights, or sharing more or less of the sales with the filmmakers’ own efforts–we find that films that have performed well across the board in the mainstream arenas, from film festivals to theatrical release and broadcast, tend to perform much better in the Educational realm. It is still true that students and professors are often the ones demanding the film be purchased by an institution, and they will hear about it through traditional marketing efforts, filmmaker or distributor-driven outreach campaigns, and grass-roots marketing efforts. Films with strong Facebook follows, active audiences, and more visible releases perform categorically better in the educational sphere as well.

Ro*Co Films: $10K-$1M. Influencing factors include release windows, exclusivity of content, availability of proprietary educational materials (like curriculum, shorter versions, discussion guides, action kits, etc.), and release of other formats (TVOD, SVOD, etc.).

Outcast Films: $30-$50K

The Video Project: Gross Range is $5k-$80k. Net would be about $1.5k to $24k. The best films have some of the following: festival award winners, first in a new genre (mindfulness in schools), strong NGO support, famous people/famous VO narrator, release coincides with cultural wave/interest.

I asked each company to note if they use Middlemen:

  • Alexander Street: No middlemen.
  • Kanopy: Part of Kanopy’s success is due to the great relationships we have fostered directly with our customers so no, we do not use middlemen.
  • Passion River: No middlemen but work with partner companies that can help us expand our reach.
  • Collective Eye: Our primary sales revenue is direct to Educational Buyers. We work with wholesalers to public libraries, as well as a few third-party distributors to Educational & K-12 Institutions. For Educational Streaming, we offer Digital Site Licenses directly and also work with an Educational Streaming Partner.
  • Ro*Co Films: No middlemen.
  • Outcast Films: We only use two: Kanopy assists us with streaming but we only release our films to them after a year of exclusivity with Outcast Films (we also offer streaming services). We use one sub-distributor who works only with public libraries. They do a lot of other work that public libraries require, like cataloging, which Outcast does not do.
  • The Video Project: Yes, we use several sub-distributors to reach most public libraries and colleges that prefer to deal with one sub-distributor.

Alexander Street: We attend nearly one hundred conferences a year exhibiting to reach librarians and faculty. We do daily email marketing to faculty and librarians to promote exceptional titles. We do extensive direct mail of catalogs and title announcement pieces. We are data-driven and use the results of these hundreds of campaigns and millions of contacts to adapt and refine our marketing strategy. Co-marketing with video content providers is in our DNA. We work with you to feature the content you know is best received by university customers based on your knowledge and your experience.

Kanopy: Kanopy attends all the key librarian conferences and has targeted email marketing to faculty, but our strongest way to reach our users is on-screen (personalized content and messaging), social as well as personalized emails. Our most successful form of onboarding is users referring the platform to each other – possibly the most important way to onboard new users.

Passion River: Library conferences, National Media Market, ALA Midwinter, ALA Annual, EDNET, & regional specialty markets.

Collective Eye: No Response Provided

Ro*Co Films: Varies by year and new release strategy.

Outcast Films: We work with all the academic conferences: ALA, Women’s Studies, SCMS, Charleston, and other subject-specific academic conferences.

The Video Project: National Media Market, various conferences.

The panelists and others comment on best practices for best results, windowing and distribution timing:

Alexander Street: The most important practice for film providers is to identify the titles with the highest likelihood of success for educational streaming. Many distributors know titles that have been requested by faculty and librarians. Second, by working closely with our marketing team to craft and deliver targeted faculty-specific marketing for email, social media and conference participation the chances of success accelerate. Maximizing total return requires a strategy of leveraging the different packaging and pricing models to leverage high price point single title sales for new content along with wide-catalog sales across the backlist in packages and collections.

  • Best performance examples: Basic Attending Skills, a counseling and therapy title, has routinely sold in excess of $20,000 a year for more than a decade across multiple editions. We have an anthropology catalog of several hundred films that generated more than $1m in revenue in a five-year span.

Kanopy: We have been trialing day and date releases with some distributors to leverage the awareness they are generating through theatrical releases and associated press. To be honest, windowing doesn’t have a big impact on Kanopy – if we have the film and the subject matter resonates with our audience, we will perform well regardless when we have it. The sooner we have it, the faster we are paying growing royalties to the rights owners!

  • Best performance examples: Some of our best performing documentary films include Killing us Softly, Miss Representation, and Race –The Power of an Illusion. These films have performed well as the universal themes they deal with around women’s issues and race are timeless. They have also had the benefit of streaming on Kanopy for many years so are well into their growth curve. The Criterion Collection is of course a top performer as it is mandatory viewing at all the film schools, and historically their DVDs have been part of nearly every university’s permanent collection. New Day Films and documentaries of that caliber also tend to perform well on Kanopy.

Passion River: Make PPR available as soon as possible. Take advantage of awareness starting from the film’s first public screening. Once the film is released “wide” (to consumers), expect higher price point sales to drop because if there are lower pricing options available ($19.99 SRP vs. $299 PPR), buyers may acquire at the lower price. So delaying a consumer release can help maximize higher-priced educational sales.

  • Best performance example: Rich Hill – 1,024 units sold

Collective Eye: It is helpful to have a strong launch in tandem or prior to Educational sales, such as a theatrical or screening tour/and multiple film festival selections/awards prior to or during the Educational Release to create initial community, audience and professor/student demand. If the film is a known entity to students and professors alike, it stands out when it is released. The more cities your film actively screens in during its educational release, the better it is for institutional sales, always. Broadcasts don’t hurt either, either before or during the release window. Because we are non-exclusive, we work with filmmakers’ existing outreach campaigns to launch educational sales on a timeline that allows the filmmakers to benefit from the arrangement all-around. In best-case scenarios we exist in the area between a theatrical launch and a home-entertainment release. Existing prior to VOD and DVD Home-Use prevents cannibalization and the possibility that professors may acquire a home-use for direct peer-to-peer teaching, and also maximizes screening sales at a time when screenings are the only way to watch the film outside of an educational institution or theatrical run. We do work with filmmakers who are just releasing their film educationally, at a time when other rights have already been released, so it is not required that we work in this window before home-entertainment release; we just find it is a stronger potential revenue when we come in at that time. In all cases, distributing films that have active campaigns and active filmmaking teams who are championing their film throughout the first year of release makes a huge difference in overall sales revenue.

  • Best performance examples: We’ve had a number of stand-out titles across many categories. A few highlights include:
    1. Watershed – Executive Produced and Narrated by Robert Redford and Directed by award-winning filmmaker Mark Decena, WATERSHED tells the story of the threats to the once-mighty Colorado River and offers solutions for the future of the American West. (Played at over 35 Film Festivals and won numerous awards).
    2. The Greenhorns, a powerful grass-roots-driven film that follows young farmers across the U.S.; Monoculture, monopoly, cheap food and poor diets– these are the consequences of an agricultural system gone awry, driven by policy and corporate control. These young farmers have vision: a prosperous, satisfying, sustainable food system. It is ambitious, it will take work, but it won’t be boring. (Very strong grass-roots following).
    3. Girls in the Band – tells the poignant, untold stories of female jazz and big band instrumentalists and their fascinating, history-making journeys from the late 30s to the present day. (Good mix of Filmmaker DIY distribution savvy and good curriculum uptake, as well as an entertaining and uplifting story that plays well for community screenings.)
    4. Broken on All Sides – Mass incarceration has emerged as America’s new caste system. How could this happen? With Philadelphia as an entry point, BROKEN ON ALL SIDES explores the intersection of race and poverty within the criminal justice system. (Strong inclusion in many departments’ curriculum.)
    5. SEED: The Untold Story – In the last century, 94% of our seed varieties have disappeared. As biotech chemical companies control the majority of our seeds, farmers, scientists, lawyers, and indigenous seed keepers fight a David and Goliath battle to defend the future of our food. (Theatrical Release, US Broadcast PBS Independent Lens, Strong grass-roots following.)
    6. Girl and a Gun – Reaching far beyond Hollywood’s hypersexualized femme fatales, the film candidly explores the modern American woman through intimate portraits encompassing issues of protection, power, feminism, and violence. (Theatrically released by First Run Features, unique content that provides a new subject to Women’s Studies curriculum.)
    7. Get the F&#% Out – Sparked by a public display of sexual harassment in 2012, GTFO pries open the video game world to explore a 20 billion dollar industry that is riddled with discrimination and misogyny. (SXSW, timely subject and unique approach that provided an important subject for Women’s Studies curriculum and taps into gaming subculture.)
    8. Starfish Throwers – Worlds apart, a five-star chef, a twelve year-old girl, and a retired schoolteacher discover how their individual efforts to feed the poor ignite a movement in the fight against hunger. This documentary tells tale of these remarkable individuals and the unexpected challenges they face. (13 Film Festival Awards, Strong and meaningful story that found demand with community screening audiences.)

Ro*Co Films: Always exclude educational distribution from any larger deal where educational rights may not be exploited. Maintain exclusive educational window for as long as possible before available elsewhere (TV, TVOD, SVOD, Home DVD, etc.).

  • Best Performance Examples: Executed successful distribution campaigns for films like Trapped, Life, Animated, Do Not Resist, Miss Representation, The Hunting Ground, Chasing Ice, A Place at the Table, Inequality For All, Girl Rising, This Changes EverythingPoverty, Inc. and The Music of Strangers. (See Orly’s previous blog that discusses revenue ranges. Ro*Co can be on the higher end and works with a select few pedigree films often from top festivals.)

Outcast Films: Ideally, we would like to begin working with the filmmakers during their initial festival run. The academic market is slow, so the sooner we can begin the process the better. We ask for a 6-month (at least one semester) hold back from streaming and home video. It really helps educational sales if the filmmakers are involved in the process and that other markets are exploited. For example: the films we distribute that also have a good festival run, limited theatrical, or a broadcast deal ALWAYS do better that films that don’t exploit those other markets.

  • Best Performance Examples: Big Men, Shored Up, She’s a Boy I Knew

The Video Project: Windowing and timing: for best results we prefer to release educational with a 6-month window before the consumer release. Better results in educational if the film is already available in time for tentpole marketing events such as a broadcast or digital premier. Best times to market are Jan-May, and Aug-Dec.

  • Best Performance Example: Room To Breathe – $80k+, first really good film on mindfulness, strong NGO support, it caught the “wave of interest” in the educational world.

Alexander Street: The consumer market for streaming video products and access models is having an outsize influence on the models institutional customers in the library are expecting. This, coupled with data-driven access models and usage analysis systems to inform cost-per-use and return-on-investment decisions, are the major forces we see at work shaping distribution and access.

Kanopy: The major shift in educational video distribution is without doubt the demand coming from the audience. It’s not ok any more to have a corporate-looking platform with no UX and videos that don’t play well. In terms of technology, we don’t see ourselves competing with library vendors any more, but with home video platforms. Our audience demands Kanopy to be as cutting-edge as, say, Netflix, which keeps us developing, innovating and upsetting the status quo in the name of bringing an even better viewing experience to our users.

Passion River: Buyers are getting smaller budgets every year for buying media, so they’re unable to acquire everything they want. Also streaming is impacting the market by offering additional options to buyers.

Collective Eye: No specifics about change in industry.

Ro*Co Films: While DVD continues to be the preferred format for much of the educational market, demand for streaming is growing year over year.

Outcast Films: Like the rest of the markets in film distribution, libraries are moving more towards streaming, although most of our business still lies in selling DVDs. With the flood of films in the educational market, it’s getting harder and harder to make noise and get noticed. Also, teachers do not have to have the PPR to show the film in their classroom which is driving down the average price. We market to both teachers at the home video price and to institutions who need the PPR.

The Video Project: Steaming is becoming more prevalent. Access to media is much easier, so films need to be of very good quality and marketed well to reach their audience.

Other educational distributors or companies that do educational distribution are: Film Sprout, Zeitgeist, Kino Lorber, First Run Features, Icarus Films, California Newsreel, Women Make Movies and Swank Digital Campus. These companies, and a few others, are listed on the ResourcePlace™ section of the Film Collaborative website: thefilmcollaborative.org/resourceplace.

March 23rd, 2017

Posted In: Digital Distribution, Distribution, education

By Mark Hiraide, who is a partner at Mitchell Silberberg & Knupp LLP. He defends directors and officers in securities litigation and counsels companies in corporate financing transactions.

The final tremor of a monumental shift in federal securities laws took place in May 2016, and when the shaking stopped, entrepreneurs had gained unprecedented access to capital. For the first time in the history of federal securities regulation in the United States, emerging businesses may raise capital from the general public without registering a securities offering with the Securities and Exchange Commission. This expansion of the funding universe is the heart and soul of the Jumpstart Our Business Startups (JOBS) Act of 2012. The JOBS Act removed restrictions making it easier for entrepreneurial clients to fund their ventures using OPM (other people’s money).

The JOBS Act legalized equity crowdfunding, fostered private peer-to-peer lending, created a new regime for regulating “mini-IPOs,” and paved the way for the SEC to create new sources of liquidity for early-stage investors through secondary “venture markets.” The law already has spawned new and innovative financial intermediaries dispensing capital to startup and growing businesses. It has been heralded as “democratizing” access to capital by “disintermediating” Wall Street from the process of selling securities. Many hail the JOBS Act, in particular its provisions for equity crowdfunding, as allowing everyday people to invest in an asset class previously reserved for venture capitalists—crowds of small investors now may directly fund startup businesses that pique their interest. Yet others are skeptical. There is concern that the new regime for raising capital from unsophisticated investors lacks sufficient investor protections.

Prior to the JOBS Act, companies could not publicly solicit any investor unless they registered and subjected the offering to scrutiny by the SEC and/or state securities regulators. The JOBS Act’s elimination of the regulatory burdens on private offerings, and the associated reduction in cost, will make public capital markets attractive to many. No longer will early-stage financing be reserved for those few with the resources to attract and engage Wall Street investment bankers and lawyers. This “uberization” of capital markets will make capital more readily accessible to every budding entrepreneur.

The strict federal securities laws that regulate raising investment capital—well-intentioned in the aftermath of The Stock Market Crash of 1929 and the Great Depression—made the ambition of successfully raising capital for startups unattainable for most people. It relegated entrepreneurs to raising seed capital from friends and family and others with whom the entrepreneur had the requisite relationship.

The term “crowdfunding” generally describes campaigns that accept relatively small amounts of money from large numbers of people. Modern crowdfunding started with campaigns soliciting donations for social causes or new business ventures; in exchange for a donation, individuals typically received a token of appreciation for their donation, a t-shirt, a first opportunity to purchase a product, or a movie-production credit. A stark example of the difference between non-equity and equity crowdfunding is illustrated by the crowdfunding campaign of virtual-reality pioneer Oculus VR. Many of the 9,522 people who contributed to Oculus’s non-equity crowdfunding campaign on Kickstarter may have been surprised to learn that they would not share in Oculus’ gains two years later when Facebook announced in March 2014 that it was acquiring Oculus for $2 billion.

Promulgated under Title III of the JOBS Act is the new Regulation CF, commonly known as the “equity crowdfunding” exemption. Effective last May 26, this regulation enables entrepreneurs to raise up to $1 million during any 12-month period from anyone who wants to invest, subject to certain dollar limits on the amount of the individual investment. There is no requirement that the investor be accredited or sophisticated. If the investor’s net worth or income is below $100,000, he or she is subject to an investment cap of the greater of $2,000 or 5 percent of the lesser of the investor’s annual income or net worth. If both net worth and annual income are at least $100,000, the investment cap is 10 percent of the lesser of the investor’s annual income or net worth, not to exceed an amount sold of $100,000. These caps reflect the aggregate amount an investor may invest in all offerings under Regulation CF in a 12-month period across all issuers.

An offering statement is required, which must include general information about the issuer, officers and directors and significant shareholders, the intended use of proceeds, the company’s ownership and capital structure and financial statements for the two most recently completed fiscal years. If the offering amount is greater than $100,000 but less than $500,000, the financial statements must be reviewed by an independent accountant. If the offering amount is greater than $500,000, the financial statements must be audited, unless the company is conducting its first Regulation CF offering, in which case the financial statements need only be reviewed. For offerings less than $100,000, the financial statements need only be certified by the issuer’s principal officer. The offering statement must be filed with the SEC, but it is not reviewed by the agency. Once the offering statement is filed with the SEC, the offering may immediately commence and the company may accept investor subscriptions. The issuer is required to set forth a minimum or target offering amount, and proceeds must be deposited in a third-party escrow account until the minimum is reached.

A significant limitation under Regulation CF is that all offerings must be conducted through a single Internet portal, which must either be registered with the SEC as a broker-dealer or as a new form of regulated entity, a “financing portal.” There are limits to advertising an offering and, given the potential liabilities, consultation with good legal counsel is a must.
In theory, Regulation CF enables anyone to reach out to capital sources and raise seed levels of money. No doubt, without the benefit of professional financial intermediaries, such as investment bankers, entrepreneurs on their own will face challenges raising capital. What the JOBS Act offers, however, is a pathway for companies to access capital previously available only to the most privileged few. Fasten your seatbelts, it’s going to be a bumpy night.

February 2nd, 2017

Posted In: crowdfunding, Legal, Uncategorized

We are gearing up for a big article on DIY Digital Distribution, which will be posted very soon. In the meantime, we liked this No Film School case study article on DIY DVD Distribution so much that we had to link to it on our blog as well as SM. Enjoy!

August 17th, 2016

Posted In: case studies, Distribution, DIY

by Jessica Rosner (Media Consultant) and Orly Ravid (Founder, The Film Collaborative and Attorney, Mitchell Silberberg & Knupp LLP)

This month’s blog is co-written by Jessica Rosner, who has been a film booker in the theatrical, nontheatrical and educational markets since the days of 16mm. Recent titles include Jafar Panahi’s THIS IS NOT A FILM and John Boorman’s QUEEN AND COUNTRY.

leviathan

One area of film revenue that is both increasing exponentially but often neglected by rights holders is the educational streaming market, which basically allows institutions to stream films to students for classes. Old models of showing films during classes or having students watch copies in the library are being largely overtaken by instructors wanting students to watch films wherever they are from a dorm room to a Starbucks. Unfortunately, while tens of thousands of films, both feature and educational, are being legally streamed, there are others that are being illegally streamed and many thousands that rights holders are not making available. In both cases revenue is being lost. Major rights holders represented by the MPAA have been overreaching by attempting to prevent academic use of clips from DVDs. And, they are ineffectual by refusing to directly challenge claims by some academic institutions and organizations, including the American Library Association, that they can stream an entire film without a license.

Films ranging from shorts produced for the educational market to feature films from studios have been used in classes for decades, first largely in 16mm (rented or purchased from rights holders) and then in a variety of video and digital formats. When videos started in the 1970s a special provision of the copyright law known as the “face-to-face” teaching exemption was enacted that allowed any legally produced video (and later DVD) to be shown to students in physical classrooms supervised by an instructor. (U.S.C. § 110 “Limitations on exclusive rights: Exemption of certain performances and displays”). Few instructors now want to use class time to show films and few students want to go to the library to view or check out physical copy of a film so streaming has become the most popular way to use films for classes. There are many platforms and companies which are servicing this growing market, notably Swank, which handles many of the major studios, and a few that handle independent films, such as Kanopy, Alexander Street Press, Films Media Group, and, for documentaries, Docuseek2. While the vast majority of streaming films done legally through licensed platforms or contracts, there is a segment of the academic community including many influential institutions and organizations which have asserted that under “fair use” they can stream entire films without paying right holders. “Fair use”1 is a long established part of American copyright law which allows portions of copyrighted works to be used in a variety of contexts including education, satire and creating new works. (U.S.C. § 107 “Limitations on exclusive rights: Fair use.”)

In 2010, UCLA (Regents of the University of California) was caught streaming thousands of films from studio features to documentaries, they used in classes without any payment or license to rights holders. When sued by Ambrose Video Publishing (an educational video producer) and the Association for Information Media and Equipment (a consortium of educational media companies) for unlawful copying and reformatting DVDs of BBC productions Shakespeare’s plays and putting them online for students (on UCLA’s own system), the case was initially dismissed due to issues involving lack of standing (Ambrose was not the rights holder) and sovereign immunity. UCLA’s claim that streaming an entire film was acceptable under “fair use” was never actually fully litigated. See Ass’n for Info. Media & Equip. v. Regents of the Univ. of California, No. CV 10-9378 CBM MANX, 2011 WL 7447148, at *1 (C.D. Cal. Oct. 3, 2011); Ass’n for Info. Media & Equip. v. Regents of the Univ. of California, No. 2:10-CV-09378-CBM, 2012 WL 7683452, at *11 (C.D. Cal. Nov. 20, 2012). UCLA also had streamed hundreds of major studio films not included in the lawsuit. The court noted in 2012 that “no Court has considered whether steaming videos only to students enrolled in classes constitutes fair use, which reinforces the ambiguity of the law in this area.” Although no precedent was set by this case because it was dismissed, the failure of other rights holders to challenge this has left their films vulnerable to the claim that streaming an entire feature film for a class is “fair use.”

However recent decisions involving publishers rejected the legal claim that putting an entire work online for a class is “fair use.” In both the Google Books and Georgia State cases, Federal courts ruled that only portions from “snippets” to chapters could be posted online for academic use not an entire book.2

On October 27 the Library of Congress issued an update to Digital Millennium Copyright Act which is the key law on copyrights of digital materials. It allowed far broader access by the academic and non-profit community to numerous digital formats for a variety of “fair use” activities over the strong of objections of the MPAA which had not wanted to allow the breaking up encryption even for legitimate “fair use” such as clips. However, the Library of Congress flatly and clearly rejected the request of representatives of the educational community to be allowed to access entire works stating it was “declined due to lack of legal and factual support for exemption.

Despite the recent court rulings and the new DMCA rules, various educational institutions and organizations continue to assert that entire films can be streamed without permission or payment to rights holders. One of the more novel claims is that since feature films were made for “entertainment” and they are now being solely used for “education,” thus transforming their use to qualify as “fair use.” The latter claim is without precedent and directly contradicts numerous precedents in copyright cases that creative works are given a higher level of fair use protection than factual works. E.g. Cambridge Univ. Press, supra, 769 F.3d at1268; Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 497, 104 S. Ct. 774, 816, 78 L. Ed. 2d 574 (1984). Moreover, such a claim would then justify scanning and streaming online a swath of modern fiction books used for courses.

It is crucial for distributors and filmmakers to engage the academic community to protect their rights. It is equally important that they make their films available for legal streaming. Many colleges are frustrated because they are trying to pay and legally license the material only to find that, while a title is available on DVD and some digital platforms, they can’t license that same title for use by students in classes via streaming. Most schools would prefer to license a title directly to ensure availability and not force students pay for Netflix, Amazon, and Hulu memberships even if film is available on those services. Some substantial libraries from Sony Pictures Classics, HBO and a variety of small distributors and individual filmmakers have not allowed their films to be available for streaming by universities. Not being able to access Leviathan, Still Alice, 4 Little Girls, etc. via direct streaming is a major problem for educational institutions. While the license for an individual film to one school might only be $100-$200, there thousands of potential institutions for a wide variety of films. Streaming of feature films for educational use is only going to keep growing.

The film community, from distributors to producers, needs to work with the academic community to make sure all films are directly available to students via their school in the highest quality streaming formats, while also ensuring that rights holders are fairly compensated.

Notes:

1The U.S. Copyright Office has now launched its “fair use” index—a (free) searchable database of U.S. court opinions on copyright fair use dating back to Folsom v. Marsh (1841)…

Here is their description of the database:

Welcome to the U.S. Copyright Office Fair Use Index. This Fair Use Index is a project undertaken by the Office of the Register in support of the 2013 Joint Strategic Plan on Intellectual Property Enforcement of the Office of the Intellectual Property Enforcement Coordinator (IPEC). Fair use is a longstanding and vital aspect of American copyright law. The goal of the Index is to make the principles and application of fair use more accessible and understandable to the public by presenting a searchable database of court opinions, including by category and type of use (e.g., music, internet/digitization, parody).

Here is the link to the Fair Use Home Page.

And here is the actual link to the Searchable Case Database—you can filter it by federal circuits and/or by types of works (literary works, films etc.).

2 See Authors Guild v. Google, Inc., No. 13-4829-CV, 2015 WL 6079426, at *20 (2d Cir. Oct. 16, 2015) (Second Circuit affirming the finding of fair use as to Google’s unauthorized digitizing of copyrighted works, creation of a search functionality and “display of snippets” because the “purpose of the copying is highly transformative, the public display of text is limited, and the revelations do not provide a significant market substitute for the protected aspects of the originals” and that Google is providing digitized copies to libraries that had the books with the understanding that the libraries will follow copyright law.) See also Cambridge Univ. Press v. Patton, 769 F.3d 1232, 1283 (11th Cir. 2014) (three publishers sued Georgia State University for scanning and posting portions of books and journals for students to access via the university’s e-reserves; Eleventh Circuit reversed and remanded, instructing the lower court to apply the fair use factors more holistically and give more weight to the threat of market substitution). The case (still partly on appeal) is important because it maintains that only a portion of a work may be digitized for fair use.

June 1st, 2016

Posted In: Legal

Guest blog post by Wendy Bernfeld

Logo TV Festival 2011 BLANC

The Cannes Film Festival starts today, and any Cannes season would not be complete without an update from our dear friend and colleague Wendy Bernfeld, Founder and Managing Director of Rights Stuff and co-author of our second case study book in 2014 Selling Your Film Outside the U.S. (free on Amazon Kindle and Apple iBooks. Wendy specializes in Library and Original Content acquisition/distribution, international strategy / deal advice, for traditional media (film, TV, pay TV), digital media (Internet/IPTV, VOD, mobile, OTT/devices), and web/cross-platform/transmedia programming, and also active on various film festival / advisory boards, such as IDFA, Binger Film Institute, Seize the Night, Outdoor FilmFest, and others, including TFC! Follow her on Twitter: @wbernfeld.

Selling Your Film Outside the U.S.

What’s happened out there in the two years since TFC first published Selling Your Film Outside the U.S. (“The Book”)?

My introductory chapter to the book, entitle, “Digital Distribution in Europe” provided a snapshot of the evolving sector at that point in time. However, by now, the sector, particularly in the area of SVOD and AdVOD, has leaped even more forward, and includes more mature services as well as new niche and thematic services out there— as well as some services with an increased appetite for foreign language, art house and documentary films/series (finally).

A. Blurred Lines — Traditional vs. Digital — Hybrid Platforms

More recent trends 2015-16 include increasingly blurred dividing lines between so-called traditional vs digital players .

  • Traditionals: Many traditional players, internationally, (like telecoms, cable and free tv) have now become more digital, by either 1) bysetting up their own competing, or complementary, multi-window VOD offerings such as SVOD services (e.g. Channel 9’s STAN in Australia or Liberty Global’s MyPrime in both Switzerland and Netherlands); or 2) electing to instead “sleep with the enemy” by just hosting digital channels like Netflix, Spotify, etc. on their set-top box (e.g. Orange, ComHem Sweden, Virgin UK). Some traditionals opt to distinguish the brand identity of the VOD service from the main service, (different names); while others unite both services under one brand, such as CanalPlay (C+) or Viasat’s VIAPLAY. Recent developments include BBC announcing it will start SVOD internationally, after also migrating its Channel 3 to digital-only online offering; and ITV starting CURIO, a nonfiction SVOD in the UK.
  • Digitals: Correspondingly, the so-called formerly digital-only players like Netflix, Amazon (previously more complementary or second window) are now acting a great deal like the traditional players. Think: old-fashioned commissioning broadcasters who increasingly require first-window status and exclusivity, and who are funding “originals”, getting involved competitively commissioning films from development stage etc. and fashioning game-changing windows.

Despite the complexity, this is overall great news for creators/rights-holders since it allows even more opportunity to maximize revenues and audiences per successive window, platform and region, if one takes the time to do it right.

B. VODs Per Window:

Lets look at various platforms in each window today, from TVOD, DTO, through to SVOD, AdVOD, etc. Note that many deliberately offer MULTI-model consumer services – such as Orange, Canal Plus and BSKYB (TVOD/DTO, SVOD), Amazon (Instant and Prime, for TVOD/DTO and SVOD, respectively) and Wuaki – while others (Netflix and Curio) operate under just one consumer business model.

  1. TVOD/DTO:
    1. For the Big5 (Google, Amazon, iTunes, Xbox, PS), one still generally goes through a digital aggregator, like Juice, Cinedigm, Kinonation, and Syndicado in N.America. Outside N.America, EMEA counterparts in include one of Rights Stuff clients MOMEDIA (attractive multi-platform new biz model, lower cost for more platforms and combined with social media/marketing) – and others like DoCo/ODMedia (NL), MoviePartnership, and Under the MilkyWay.
      Shop around…these aggregators they have different models and price alone shouldn’t be the only indicator. Also look at their marketing/positioning: some take your IP, others (like Rights Stuff, TFC) do not.
    2. Going direct to the others in TVOD/DTO:
      Don’t stop at one or even all of the Big5. The play is to have multiple deals , non exclusive, staggered, in all the windows, in each region. Virtually every country has an active telecom and cable or DTH competitor in the region, as well as mobile and online /consumer electronics players who offer VOD, so licensing non-exclusive TVOD to them on top of others is a good first step in the chain.
      Beyond the utility companies, some other examples in TVOD/DTO include premium pay tv services or platforms like CanalPlus (France and other regions) and BSkyB, (UK, Germany, Italy, New Zealand). Also theatrical chains in some countries, such as Cineplex in Canada or Pathé in Holland, have VOD arms and thus can offer complementary marketing of films in theatrical window with the subsequent TVOD/DTO window. Also check out online VOD indie film specialist FilmDoo (well-curated indie/art house focused, now in UK/EIRE and soon expanding), and as earlier written, Curzon offers day-and-date theatrical combined with VOD in UK. Wuaki announced moves into 15 countries internationally by end of 2016, most are now TVOD/DTO but the Spain HQ is an SVOD OTT platform. The NFB in Canada started TVOD/DTO in N.America and recently in 2016 an SVOD service, and they now buy docs/films from other sources and regions, too.
    3. Deals: TVOD/DTO continues to be typically a rev share model and sometimes only a loss leader, but can help drive critical awareness, especially when accompanied by social media marketing and audience engagement strategies. Sometimes, film dependent (for eg if a very niche film) it saves money to skip the big5 (who require costly specs) and license direct to the other international tvod/dto platforms, as then at least one participates from day one in revenues, vs having to recoup expensive deliverables.
  2. SVOD/PAY – whether first and second windows:

    As predicted, this window has so far overall been most remunerative since it’s usually structured by a flat fee license fee (although smaller or niche thematic platforms in the larger USA market (such as Fandor or Indieflix) are still offering just a revenue share formula, which can make the returns lackluster). We generally favor licensing to platforms that pay even a modest flat fee, upfront. Or in some cases in the ‘’back end’’ i.e. rev share to start, then if the revenues at the end of a year (or the window) don’t reach, say, $1000, the platform pays the difference. That sort of model can be attractive for startup platforms who truly believe in the power of their SVOD service but are cash-strapped at the start. So one can license to a less remunerative platform, which does a great job of curation, editorial, placement, and also license other SVOD platforms who may be more remunerative for you.

    1. In the USA, you’ve finally seen growth since 2015 in the SVOD sector for documentaries, including the Curiosity Stream SVOD OTT platform (by former Discovery founder, John Hendricks), whose programs tend towards educational and traditional. They are usually on a rev-share only model, whereas competitor xive.tv (SVOD OTT) also buys docs features/series, but over a wider range of topics including more populist/reality content- and xive.com works on a flat fee and/or combo deal model. And a deal with well-curated xive.tv delivers an extra ‘lift’’ in reach by providing carriage on other platforms (Hulu, Roku, Amazon, etc.).
    2. In EMEA/beyond, some other SVOD OTT platforms for docs and arthouse have arisen such as CURIO in UK (via ITV), Filmin (Spain, Portugal, Mexico). Mobil has now transformed its model to a curated daily film+library, a lower price and is complete with hefty investment by Chinese backers/reach into China. They also started paying some flat fees, or MGs, for select higher-end indies, as opposed to the pure rev share SVOD model of earlier days.
    3. There’s been a surge of local SVOD players popping up to compete or complement as Netflix or Amazon/competitors rolls into each new region. Some present outright competition, engaging in bidding wars for similar mainstream content offerings and price points. For instance, MNET South Africa, a premium pay tv operator, launched ShowMax locally and soon after announced further expansion. Other examples include: Videoland Plus (owned by free tv RTL/& SBS channels in the Netherlands) and Maxdome (owned by Prosieben in Germany).
      Others are complementary SVOD services, offering older library services in general interest. And still others exist at lower price points in narrow verticals/themes, like kids, anime, arthouse, etc. Hopster (UK/USA) is a buyer of purely kids programming, recently launched also in Iceland on Vodafone platform; similar to MinBIO (Nordic kids), which buys from international producers as well as from studios or locals, and Kidoodle (Canada svod ott). Cirkus in Nordic focuses on best of British programming (SVOD OTT).
      Recently in 2016 there’s a raft of SVOD platforms in developing regions like the MidEast and South East Asia: such as multi-region IFLIX and ICFLIX. As before Australia has pay and svod services such as Foxtel’s Presto (Australia); Lightbox (New Zealand), and Stan (channel 9).
      SVOD Deals: Producers should usually seek flat fee, but some platforms perform well on rev share. Particularly if you license multiple platforms in the same window and cross-promote so consumers find you from whichever entry point. In the lucky case where you can play off one against the other (e.g. traditional pay tv vs SVOD first-run) a stronger case can be argued for the license fees, as the buyer is “not the only game in town” anymore. In other cases, non-exclusive, multiple-platforms deals in smaller amounts still add up the revenues and audience. Prices can range from €250-2000 for an indie doc of film if old library and yet also up to 5- and 6-figure sums if a higher-end indie/doc or original/first-run. Pricing is also obviously affected by volume of the films in a deal, the number of regions, the awareness (platform, audience), popularity, critical acclaim, and language and cultural portability.
  3. ADVOD:
    Although TubiTV/AdRise in USA and Hulu (multi-model in AdVOD and SVOD) are strong platforms offering solid returns to producers in the AdVOD sector, there aren’t many doing the same in EMEA. Here, again, it’s worthwhile to have your films spread on other free AdVOD platforms (vs pirate sites) so the returns are cumulative and there’s cross-promotion. Sometimes a film sampled on AdVOD can help to yield revenues from DTO (e.g. if a consumer discovers a lesser known film on an AdVOD platform and decides then to buy it on iTunes, while they’d not have bought it unknown before).
    Some updates on the AdVOD sector in EU: Viewster.com (27 countries in EMEA) has shifted focus (since our last reference in the book) from buying arthouse/festival films, to millennial content, including edgier, fast-paced docs, some originals and anime. In 2015 they had added an SVOD anime service, but in March 2016 shut it down, as others have become more aggressive in that space. DailyMotion, EU competitor to Youtube, were sometimes paying flat fees and sometimes commissioning series, but a recent sale by Orange to Vivendi may bring changes. Channel4 (UK) recently launched WalterPresents, an AdVOD site focused specifically on dramatic series and some films strictly from outside the UK.
  4. HOW TO REACH THE PLATFORMS:
    As before, one goes via aggregators for Big5, but your agent/representative, or distributor/sales agent, OR YOU YOURSELF can hit up the others direct.
    REPS: I highly recommend interviewing your potential sales agent/distributor, with new questions such as asking 1) if they’ve been active in digital lately vs just their traditional buyers; and 2) if so, then with which types of platforms—Big5-7 or also beyond to International? If not, it doesn’t have to be a barrier, if they’re willing to allow nonexclusivity in digital, and/or to allow you or digital agents to assist and collaborate alongside.
  5. FUNDING (including by SVODs):
    Although beyond the scope of this article, note In 2015-16 there’s been increased activity in 5-6 figure prebuying/funding of originals or premieres (film, series)—not just from English regions and not only via Netflix and Amazon, but also other international and EMEA services like OneNet Poland, IcFlix, Telenet, KPNPlay, Vimeo, Vivendi/Canal+, etc.
    On the Amazon front, aside from bigbudget originals via Ted Hope’s division such as ChiRaq at Berlinale and Woody Allen this Cannes, they also fund weboriginals, digital series, via prototyping schemes and audience involvement/feedback. Netflix has been intensely active in funding originals, including docs and nonfiction (while a few years ago that was a rarity); more deals in arthouse, docs and foreign will be announced at or after Cannes.
    In Canada there is a funding for coproduction in digital programs; And in France/EU, Vivendi (owner of Canal+ and DailyMotion) just in April 2016 launched its “Studio+” initiative &,dash; funding short-form original series for mobile and telecom operators.
  6. TAKEAWAYS
    As before in the 2014 Book, the following have intensified:
    • Act quickly and work collaboratively (filmmakers + agents/distributors) to seize timing opportunities, particularly around certain countries where (s)VOD activities and platforms or hotly competing.
    • Balance traditional and digital platforms, buyers and funders carefully in order to capture the cumulative and incremental revs in the nonexclusive deal sector, while also developing a longer term platform pipeline for future.
    • Don’t stop at just one deal, unless exclusivity or funding elements are in play and worth it.
    • Don’t be blocked per se by rights issues. Pragmatic business deals where others are “cut in” can help make those melt away
    • Hybrid distribution: We as consultants/agents, aside from working direct for producers and platforms, now increasingly are retained by sales agents, distributors and even aggregators – as although they have the IP, they don’t always know all the others to sell to after going beyond the Big 5-7; this type of collaboration with producers and other reps on distribution yields good results (although time consuming at first) with each stakeholder getting a smaller piece but of a bigger pie. At the end of the day, 100% of zero is still zero.
    • If not using a middleman at all, consider teaming up (especially if only selling a single film) with other producers to co-curate a mini-package of films around specific themes (e.g. eco, female, etc). This is particularly useful where the platforms don’t know you or your films, and it also helps program the service for their platform.
    • Don’t abdicate distribution entirely to third parties, as in traditional past; now it is increasingly key to be aware of (if not participating more in) distribution and marketing (e.g. via social media). Help audiences know where to find your film!

Looking forward to seeing your films over here in EMEA!

May 11th, 2016

Posted In: Amazon VOD & CreateSpace, book, case studies, Digital Distribution, Distribution, education, International Sales, iTunes, Netflix

TFC commissioned this guest blog post by casting director Matthew Lessall, CSA because casting decisions have a big influence on distribution… and that we have never covered the subject before…

Matthew Lessall, CSA is a freelance casting director with credits that include the 2015 Cannes award winning film for best screenplay, “Chronic” (starring Time Roth) and the 2016 film “Miss Stevens” (starring SXSW best actress winner, Lily Rabe). Matthew is Co-President of the Casting Society of America. He is in the final stages of his “how-to guide”: “HOW TO CAST LOW BUDGET INDEPENDENT FILM – A guide for first time producers, directors and film makers.”

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THE CASTING PROCESS

I think what is so unique about what I do, is that every film is different. The bones of what I do, how I do it, the pace, timing, knowledge, it is all part of the experiences I have had on previous work – but every job is different with different circumstances. Saying all of that, there are basic “actions” to tackle when casting.

Being ready to start can mean so many different things, but for the sake of pairing down what I do to basics, let’s assume that a film has a producer, line producer, attorney and director attached. Financing is in place (or at least some of it) and its now time to talk about casting. This is when I come on board.

The most important thing in my mind is that I have a firm grasp on story, characters, plot, tone and a mutual understanding about the direction the film makers want to take the film in. My number one casting philosophy is, “Everyone must be in the same film.” Meaning that all of the actors cast must feel like they are part of this universe being created. But possibly more importantly is that the crew needs to be on the same page. If the producer and director are not communicating well, if the costume designer or set designer, lighting, if everyone is not “on point” then you are going to have troubles.

From the start, what I do is flesh out who could be in the roles of the film. I create lists. I sit down and spend hours on each role trying to think about actors, the obvious ones who are box office draws, to the ones I have seen in theatre or film festivals, or met on a general a year or often years before. What I do is what I like to call, “casting director stalking,” following the careers (or the lack there of – because sometimes that’s where the gems are found) and cobble together the potential of what could make a great cast. This all takes time, because anyone can go on IMDBPro and make a list of actors, but a talented casting director gets into the mind of the writer, thinks about what an actor whom nobody else is thinking of could bring to a film and fights for those actors to illuminate the story in ways not thought of before. This concept may seem to contradict the, “everyone must be in the same film” philosophy, but if done correctly (it’s an art by the way—watch the HBO doc ‘Casting By’ and you will see what I mean) the casting process should elevate the script, enlighten the story, enhance the possibilities, and illuminate where there was no shine.

You have to remember we are talking about actors. Actors, the best ones, are artists, they are practicing a craft. When you watch great acting, you should feel transported. Your very state of being should be “out of body” you should not feel like you are watching, you should just be feeling. I know it sounds hippy-dippy, but that’s what I think I try to bring (under the best circumstances) to the job. I don’t hit it out of the park every time, it doesn’t always happen, but it was I strive to do – when I am given the freedom to do so.

Now that you have my philosophy, the basics are, I read the script, write a breakdown of all of the roles, write my own version of a synopses and log line (see if it matches what the writer has written) and then I consult with the director and producer. I bring the lists, I show my ideas, I send links of actors. I send the breakdown out to agents. I call the agents who I work with, I get the film covered by the agents. I think about who at every top agency has someone who may be right for the film. I discuss the budget with the agents so they know what the deals would look like. In general, I would say any film under $5 million dollars, the representatives have a good idea of what the standard fees and offers are going to look like. I then talk to my team and we start to figure out who we would make a direct offer to, who they would want to meet and I start auditions to introduce the director to actors and to give actors who want the chance to be seen (whom I think could be right for the role), a shot in front of the director.

Auditions are where a lot of creative work is done. It is often the first time the director has heard the words spoken out loud. It gives me a chance to see how the actors are responding to the script and to the director. And it shows me how the director communicates with the actors. I could write more on this topic, because this is a big deal: how the Director communicates – it can sometimes sabotage the casting process. But assuming everything is running smoothly, auditions are also where the characters as written can change from male to female, Caucasian to Latino, where can we see different types of actors who truly populate the world we are creating and/or reflect the world we live in.

I call the agents, set up the offers and deal points and confirm everything in writing, copy the production attorney and wait for an actor to accept the role. Once that happens, there is additional negotiation and additional deal points that need to be hammered out. Depending on various situations, I will do this work or the production attorney will take on closing the deal.

In general, anyone that is considered a scale player with no back-end or a day player, I will close that deal. Once a deal is closed, all of the paperwork is sent to production and they handle travel, housing, call times, etc…

ATTRACTING “NAME” TELENT AND HOW THIS EFFECTS DISTRIBUTION (AND CASTING GODS)

Many times I am asked to try to get a name actor into a film. This mostly has to do with the foreign distributors, because they feel more comfortable selling a film that has someone in it that they recognize. Every distributor is different, they all have different ideas and lists of who means something for their specific territory. In general, my rule is, if my Mother knows who the actor is then the distributor will be happy. It’s that simple and that lame all at the same time.

One thing I have seen time after time is that the more known names you have in your film the better chance you will have with distribution—this is true. This does not always correlate to creating a beautiful film. My second philosophy on casting is this: “Cast the best actor for the role.” You will always be happier doing this, it may mean more work from your producer or sales team to get the film in front of a distributor, but the film will be better for it and at the end of the day, that is what you want right? Not to sell out your integrity as a film maker? But so many do sell out—please travel to AFM, EMF or the Marche—where you will see film titles that make you wonder, “how is that film watchable?”

If you don’t have a ton of money to spend on an actor, then you better have a combination of the following to attract A-list talent: A director with an excellent festival history or some cool quotient like directing A-list music artists in music videos, or winning an Academy Award for a short film, or a writer/director with a script that wins a prestigious awards, like the Nicholl Fellowships in Screenwriting. A producer who has a great track record. An attorney who has worked on award winning low budget independent film. You should be able to show how amazing your cinematographer is. The vision of the film should be clear and presented in a look-book, on a website, with examples of how the film is to look. Any crew members with distinguished credits on their resume should be highlighted and touted. If you have an actor attached, who is that actor? Is your director or writer or producer represented by a major agency or manager – this can help a lot.

Try to remember that your film is not the only film that is being cast. You are competing with hundreds of films, television shows, theatre – all of them are trying to get the same 10 actors into their shows and getting an actor to read your script even with an offer (let alone getting the agent to read it) takes time. And if the casting situation is time sensitive, then you must have some combination of the above…or faith in your Casting Director to make a miracle happen.

As an example, last year, I cast a film called A POSTHUMOUS WOMAN. It was shot in Northern California and the budget for the film was under an Ultra-Low Agreement. I loved the script, and we had a well known, successful independent producer with known festival award winning credits to back up the film with a co-director/writing team that had never directed a feature film before. But the script was great, and Lena Olin’s manager liked it, so we made an offer to Lena Olin for the lead role. It took six months from the moment I offered her the role to the time she accepted the role. The only reason she even read the script is that her husband picked it up and read it randomly and told her that this was a role she had to play. I had faith that this material was going to connect with Lena Olin – I just prayed to the Casting Gods to make a miracle happen. And by the way, these are the only Gods I believe in, because let me tell you, they have come through multiple times in my career!

#iknowisoundcrazy – but it’s the truth.

There is a deep faith your casting director must have in the material in order to punch through getting A-list talent onto a low budget film. There is strategic consideration, strategic phone calls, placement of how to pitch the team, I try to make the film the coolest project ever – things like that that go into getting that talent to say yes and into getting the best cast possible.

SOME CASTING DOS & DON’TS

Do research who you want to cast your film. Look at films that you love, films that you think are similar to the one you are making and find out who cast that film. Reach out to that casting director and see if there is interest from them to cast the film. Just like actors, some casting directors will meet with you without an offer, some won’t.

Do trust your casting director: they are usually the ones who won’t bullshit you or sugar coat things. They are the ones who want this cast well too – it’s their name in the main titles – so it is in their best interest to make the best film possible.

Do have a strong opinion about actors. Know actors! If you don’t know actors, don’t poo-poo suggestions because they are not “The Ryans” (Gosling, Reynolds, Phillippe). If Joseph Gordon-Levitt or Rachel McAdams are on your list, you should probably have a back-up.

Do have a strong vision for your film. Answers like “yes” and “no” help us a lot. Casting Directors can work with “yes” and “no”, wishy-washy, not specific answers are not good. My high school acting teacher said it best, “God is in the details!”

Don’t show up late to auditions.

Don’t text during auditions. Pay attention to the actors!

Don’t ever ask how old an actor is while in the audition. You will be breaking State and Federal employment laws. Anything that you need that is personal background information on actors can be found out after the audition via the Casting Director speaking with the actor’s rep. And if you want to get to know an actor more, take them out to coffee after the audition to find out if this is the person you want to spend the next 3,4,5,6 weeks with.

IN CONCLUSION

Casting is about taste. It’s about knowing actors. It’s about connecting the written word to the spoken word by having a deep and meaningful understanding of the acting process and actors. Casting is about relationships. The relationships built with actors, agents, managers, producers, directors, etc… Casting well is about trusting in the process. Successful casting is not done in a vacuum. It takes a leader, a strong director with a vision, a producer who can execute that vision and great communication between all. Most of all, it should be the most rewarding part of the film making process.

April 9th, 2016

Posted In: Uncategorized

by Orly Ravid, Founder, The Film Collaborative

Orly Ravid is an entertainment attorney at Mitchell Silberberg & Knupp (MSK) and the founder of The Film Collaborative with 15-years of film industry experience in acquisitions, festival programming, sales, distribution/business affairs, and blogging and advising. She also contributed to the Sundance Artist Services initiative.

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Filmmakers usually think selling their film to distributors means that they will handle the whole release including theatrical, home video, and of course now digital/VOD. One category of distribution that is often overlooked, or not fully understood, however, is educational distribution. It can be a critical class of distribution for certain films, both in terms of reaching wider audiences and making additional revenue. For a certain type of film, educational distribution can be the biggest source of distribution revenue.

What is it?

When a film screens in a classroom, for campus instruction, or for any educational purpose in schools (K-university), for organizations (civic, religious, etc.), at museums or science centers or other institutions which are usually non-profits but they can be corporations too.

This is different from streaming a film via Netflix or Amazon or renting or buying a commercial DVD. Any film used for classes / campus instruction / educational purposes is a part of educational distribution and must be licensed legally. Simply exhibiting an entire film off of a consumer DVD or streaming it all from a Netflix or Amazon account to a class or group is not lawful without the licensor’s permission unless it meets certain criteria under the Copyright Act.

Initially, this was done via 16mm films, then various forms of video, and now streaming. These days, it can be selling the DVD (physical copy) to the institution/organization to keep in its library/collection, selling the streaming in perpetuity, renting out the film via DVD or streaming for a one-time screening, or exposing the content to view and at some point (certain number of views) it is deemed purchased (a/k/a the “Patron Acquisition Model”).

What type of films do well on the educational market?

In general, best selling films for educational distribution cover topics most relevant to contemporary campus life or evergreen issues such as: multiculturalism, black history, Hispanic studies, race issues, LGBTQ, World War II, women’s studies, sexual assault, and gun violence; in general films that cover social and political issues (international and national); health and disability (e.g. autism); and cinema and the arts. A great title with strong community appeal and solid perception of need in the academic community will do best (and the academic needs are different from typical consumer/commercial tastes).

At The Film Collaborative, we often notice that the films that do the best in this space sometimes do less well via commercial DVD and VOD. This is true of films with a more historic and academic and less commercial bent. Of course, sometimes films break out and do great across the board. Overall, the more exposure via film festivals, theatrical, and/or social media, the better potential for educational bookings though a film speaking directly to particular issues may also do very well in fulfilling academic needs.

Sourcing content

Across the board the companies doing educational distribution get their content from film festivals but also simply direct from the producers. Passion River and Kanopy, for example, note that film festival exhibition, awards, and theatrical help raise awareness of the film so films doing well on that front will generally perform better and faster but that does not mean that films that do not have a good festival run won’t perform well over time. Services such as Kanopy, Alexander Press, and Films Media Group collect libraries and get their films from all rights distributors and those with more of an educational distribution focus as well as direct from producers. These services have created their own platforms allowing librarians etc. to access content directly.

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Windowing & Revenue

There are about 4,000 colleges in the US and about 132,000 schools, just to give you a sense of the breadth of outlets but one is also competing with huge libraries of films. Educational distributors such as ro*co films has a database of 30,000 buyers that have acquired at least one film and ro*co reached beyond its 30,000 base for organizations, institutions, and professors that might be aligned with a film. All rights distributors often take these rights and handle them either directly, through certain educational distribution services such as Alexander Press (publisher and distributor of multimedia content to the libraries worldwide), Films Media Group / Info Base (academic streaming service), or Kanopy (a global on-demand streaming video service for educational institutions), or a combination of both. There are also companies that focus on and are particularly known for educational distribution (even if they in some cases also handle other distribution) such as: Bullfrog Films (with focus on environmental), California Newsreel (African American / Social Justice), Frameline Distribution (LGBTQ), New Day Films (a filmmaker collective), Passion River (range of independent film/documentaries and it also handles consumer VOD and some DVD), roc*co films (educational distributor of several Sundance / high profile documentaries), Third World Newsreel (people of color / social justice), Women Make Movies (cinema by and about women and also covers consumer distribution), and Swank (doing educational/non-theatrical distribution for studios and other larger film distributors). Cinema Guild, First Run Features, Kino Lober, Strand, and Zeitgeist are a few all rights distributors who also focus on educational distribution.

Not every film has the same revenue potential from the same classes of distribution (i.e. some films are bound to do better on Cable VOD (documentaries usually do not do great that way). Some films are likely to do more consumer business via sales than rentals. Some do well theatrically and some not. So it is no surprise that distributors’ windowing decisions are based on where the film’s strongest revenue potential per distribution categories. Sometimes an educational distribution window becomes long and sales in that division will determine the film’s course of marketing. But if a film has a theatrical release, distributors have certain time restrictions relative to digital opportunities, so that often determines the windowing strategy, including how soon the film goes to home video.

The film being commercially available will limit the potential for educational distribution, and at the same time, the SVOD services may pay less for those rights if too much time goes by since the premiere. Hence it is critical to properly evaluate a film’s potential for each rights category.

Revenue ranges widely. On the one hand, some films may make just $1,000 a year or just $10,000 total from the services such as Kanopy and Alexander Street. On the other hand, Kanopy notes that a good film with a lot of awareness and relevance would be offered to stream to over 1,500 institutions in the US alone (totaling over 2,500 globally), retailing at $150/year per institution, over a 3-year period, and that film should be triggering about 25% – 50% of the 1,500 institutions. Licensors get 55% of that revenue. On average, a documentary with a smaller profile and more niche would trigger about 5-10% of the institutions over 3 years.

More extreme in the range, ro*co notes that its highest grossing film reached $1,000,000, but on average ro*co aims to sell about 500 educational licenses.

If the film has global appeal then it will do additional business outside the U.S. All rights and educational distributors comment that on average, good revenue is in the 5-figures range and tops out at $100,000 +/- over the life of the film for the most successful titles. The Film Collaborative, for example, can generate lower to mid 5-figures of revenue through universities as well (not including film festival or theatrical distribution). Bullfrog notes that these days $35,000 in royalties to licensors is the higher end, going down to $10,000 and as low as $3,000. For those with volume content, Alexander Street noted that a library of 100-125 titles could earn $750,000 in 3 years with most of the revenue being attributable to 20% of the content in that library. Tugg (non-theatrical (single screenings) & educational distribution) estimates $0-$10,000 on the low end, $10,000 – $75,000 in the mid-range, and $75,000 and above (can reach and exceed $100,000) on the high end. Factors that help get to the higher end include current topicality, mounting public awareness of the film or its subject(s), and speaking to already existing academic questions and interest. Tugg emphasizes the need for windowing noting the need for at least a 6-month window if exclusivity before the digital / home video release. First Run Features (an all-rights distributor that also handles educational distribution both directly and by licensing to services) had similar revenue estimates with low at below $5,000, mid-range being $25,000 – $50,000, and high also above $75,000.

Back to windowing and its impact on revenue—Bullfrog notes it used to not worry so much about Netflix and iTunes because they “didn’t think that conscientious librarians would consider Netflix a substitute for collection building, or that instructors would require their students to buy Netflix subscriptions, but [they] have been proved wrong. Some films are just so popular that they can withstand that kind of competition, but for many others it can kill the educational market pretty much stone dead.” Yet, theatrical release is usually not a problem, rather a benefit because of the publicity and awareness it generates.

Passion River explains that filmmakers should not be blinded by the sex appeal of VOD / digital distribution—those platforms (Amazon, Hulu, iTunes, Netflix) can and will wait for hotter films on their radar. An example Passion River offers is Race to Nowhere which sold to over 6,000 educational institutions by staying out of the consumer market for at least 3 years. This type of success in the educational space requires having the right contacts lists and doing the marketing. But I would say, consider the film, its revenue potential per rights category, the offers on-hand, and then decide accordingly.

Stay tuned for Parts 2 & 3, which will go into the nitty gritty details of educational distribution.

The legal information provided in this publication is general in nature and should not be construed as advice applicable to any particular individual, entity or situation. Except as otherwise noted, the views expressed in this publication are those of the author(s). This alert may be considered a solicitation for certain purposes.

February 18th, 2016

Posted In: Distribution, education, Legal

Tags: , , , , , , , , , , , , , , , , , , , , , , , ,

Written by Orly Ravid and Guest co-Author Jessica Rosner, who has been a booker in the educational, nontheatrical and theatrical markets since the days of 16mm. Recent projects include Jafar Panahi’s This Is Not a Film and John Boorman’s Queen and Country.

fair_userecent blog by Orly Ravid covered just a little bit about educational rights and distribution. This blog is intended to develop that in response to a comment about the “Face-to-Face” teaching exception. This exception defines what films can be shown for no license or permission by the producers or rights holders.

The Copyright Act provides for an exception to needing a copyright holder’s permission to exhibit a copyrighted such as a film. That exception, however, is only for “face-to-face teaching” activities of a nonprofit educational institution, in a classroom. That’s why it’s called the “face-to-face” exemption.

I emphasized the key words to clarify that this exception does NOT apply to social club or recreational screenings of films or any exhibition that is not in “classroom” or “similar space devoted to instruction” where there is face-to-face instruction between teacher and student and where the exhibition relates to the educational instruction. Second, not all institutions or places of learning are non-profits. All this to say, the “face-to-face” exemption is not a carte blanche free-for-all to show any copyrighted work in any context as long as there are books around within a mile radius. This is important because educators and distributors are often unclear about what can and cannot be done under this exception to proper permission to distribute or exhibit a film without permission (which often includes a fee).

Below is some key information about the state of educational distribution in 2015 and can be done lawfully without the licensor’s permission (under the Copyright Act):

Viable options for educational distribution that involves either selling physical copies, download, or licensing streaming rights or other rights and type of rights or sales, including price points, terms, limitations, etc.

It’s important to understand that “educational sales & use” is not legal term and that educational institutions have the right to purchase any film that is available from a lawful source and use it in an actual physical class under the “face-to-face” teaching section of copyright law (discussed above). Also okay is for them to keep a copy in the library and circulate as they choose.

However, if as increasingly the case, they wish to make films available via streaming or to exhibit them outside of a class they must purchase those rights. A filmmaker or distributor can charge a higher price to an institution to purchase a DVD if they control all sales but that would be a contract situation and mean the film basically has no sales to individuals. This is done but mostly with non-feature films or ones whose market is intended to be only institutions and libraries.

Streaming rights offer a real opportunity for income for filmmaker provided they are willing to sell rights to institutions in “perpetuity” (meaning, forever). They will make more money and the institution is far more willing to purchase. Many if not most universities now want to have streaming rights on films that are going to be used in classes.

Exhibition of film at universities or educational institutions that is NOT paid for (not licensed or bought from copyright holder) – when is it legitimate (lawful) and when is it not so?

It is legal to show the film in the classroom provided it is legal copy (not duped, bought from pirate site, or taped off television). Any public showings outside the classroom are illegal. Streaming entire feature films is also illegal but streaming clips of films is not.

What is the reason or rationale for the non-lawful use?

If it is a public showing (exhibition) they (and this is usually either a student group or professor, not administration) claim “they are not charging admission” and/or that “it being on a campus” makes it “educational and in extreme cases they claim that it actually IS a class. Illegal streaming is far more insidious and involves everything from claiming streaming a 2-hour film is “fair use,” (which would justify showing it without permission) or, that somehow a dorm room or the local Starbucks is really a classroom. Bottom line: not all use of film can be defended as “fair use.” Exhibiting not just clips but a whole film is usually not lawful unless the “face-to-face” teaching exemption requirements (discussed above) are met.

There is a disconnect for these educational institutions between how they treat literature vs. cinema:

All the parties involved in streaming (legal and illegal) librarians, instructors, tech people, administrators know that if they scanned an entire copyrighted book and posted on campus system for students to access it would be illegal but some of the same people claim it is “fair use” to do with a film. I actually point blank asked one of the leading proponents of this at the annual American Library Association Conference if it was legal to stream CITIZEN KANE without getting permission or license and he said yes it was “fair use” when I followed up and asked if a school could scan and post CATCHER IN THE RYE for a class he replied “that is an interesting question.” It is important to note that “fair use” has never been accepted as a justification for using an entire unaltered work of any significant length and recent cases involving printed material and universities state unequivocally that streaming an entire copyrighted book was illegal.

Remedies to unlawful exhibition of copyrighted works for distributors or licensors:

Independent filmmakers need to make their voices heard. When Ambrose Media a small educational company found out that UCLA was streaming their collection of BBC Shakespeare plays and took UCLA to court supported by many, other educational film companies, academics reacted with fury and threatened to boycott those companies (sadly the case was dismissed on technical grounds involving standing & sovereign immunity and to this day UCLA is steaming films including many independent ones without payment to filmmakers). For decades the educational community were strong supporters of independent films but financial pressures and changing technology have made this less so. (Jessica Rosner’s personal suggestion is that when instructors protest that they should not have to pay to stream a film for a class, they should be told that their class will be filmed and next year that will be streamed so their services will no longer be needed). Orly Ravid gives this a ‘thumbs up’.

Of course remedies in the courts are costly and even policing any of this is burdensome and difficult. Some films have so much educational distribution potential that a distribution plan that at first only makes a more costly copy of the film/work available would prevent any unauthorized use of a less expensive copy or getting a screener for free etc. But not all films have a big enough educational market potential that merits putting everything else on hold. And once the DVD or digital copies are out there, the use of that home entertainment copy in a more public / group audience setting arises. As discussed above, sometimes it’s lawful, and sometimes, it’s not but rationalized anyway. It is NEVER legal to show a film to a public group without rights holder’s permission. Another viable option for certain works, for example documentaries, is to offer an enhanced educational copy that comes with commentary, extra content, or just offer the filmmaker or subject to speak as a companion piece to the exhibition. This is added value that inspires purchase. Some documentary filmmakers succeed this way. It is extremely important to make sure your films are available for streaming at a reasonable price.

Parting thoughts about educational distribution and revenue:

Overall, we believe most schools do want to do the right thing but they are often stymied when they either can’t find the rights or they are not available so get the word out.

Streaming rights should be a good source of income for independent filmmakers but they need to get actively involved in challenging illegal streaming while at the same time making sure that their works are easily available at a reasonable price. It can range from $100 to allow a school to stream a film for a semester to $500 to stream in “perpetuity” (forever) (all schools use password protected systems and no downloading is allowed). TFC rents films for a range of prices but often for $300. You may choose to vary prices by the size of the institution but this can get messy. Be flexible and work with a school on their specific needs and draw up an agreement that protects your rights without being too burdensome.

Happy distribution!

Orly & Jessica

August 20th, 2015

Posted In: Distribution, education, Legal

Tags: , , , , , , ,

Dear Filmmakers of the World,

I write to you to ask: what do you need, what do you want?

For five years The Film Collaborative has been excelling in the film festival distribution arena and education of filmmakers about distribution generally and specifically as to options and deals. TFC also handles some digital distribution directly and through partners. And we have done sales though more on a boutique level and occasionally with partners there too, though never for an extra commission. You know how we hate extra middlemen! We even do theatrical, making more out of a dollar in “P&A” than anyone and we do a really nice job TFC has a fantastic fiscal sponsorship program giving the best rates out there.

TFC published two books in the Selling Your Film Without Selling Your Soul series and we are probably due to write a third, detailing more contemporary distribution case-studies. I got a law degree and am committed to providing affordable legal services to filmmakers and artists, which I’ve started doing.

We have never taken filmmakers rights and find that most filmmakers are honorable and do not take advantage of that. We trust our community of filmmakers and only occasionally get burned. And we have accounted without fail and paid every dollar due. No one has ever said otherwise. We do what we say we’re going to do and I am so proud of that and so proud of the films we work with and the filmmakers in our community.

So, now what? What do you, filmmakers of the world, want more of? What don’t you need anymore?

Personally, I find it staggering and sad how much information is still hidden and not widely known and how many fundamental mistakes are made all the time. Yet, on the other hand, more information is out there than ever before and for those who take the time to find and process it, they should be in good shape. But it’s hard keeping up and connecting-the-dots. It’s also hard knowing whom to trust.

TFC continues to grow and improve on what it excels at, e.g. especially festival/non-theatrical distribution. We’ve got big growth plans in that space already. My question to you is, do you want us to do more Theatrical? Digital? Sales? All of it? More books? What on the legal side? Please let us know. Send us an email, tweet, Facebook comment, a photo that captures your thought on Instagram, or a GoT raven. I don’t care how the message comes but please send it. We want to know. TFC will listen and it will follow the filmmakers’ call.

We’re delighted to have been of service for these last 5 years and look forward to many more. The best is yet to come.

Very truly yours,

Orly Ravid, Founder

p.s. our next new content-blog is coming soon and will cover educational distribution and copyright issues.

July 29th, 2015

Posted In: Distribution, education, Film Festivals

Tags: , , , , , ,

This article was originally posted on Indiewire on July 6, 2015.

From life rights to fair use, here’s what you need to know about legal issues before you make your documentary.

Over the course of my career, as both the founder of The Film Collaborative and an attorney in private practice at Early Sullivan, I have noticed a lack of understanding by filmmakers regarding the law and documentary film distribution. I hope to provide some clarity in the following blog post. But keep in mind that this post does not replace legal advice tailored to a specific film, filmmaker and distribution options/deals. Feel free to contact me with specific inquiries (contact info at the end of this post).

1. Life rights

Recently at the Edinburgh Pitch / Film Festival a filmmaker asked me a very interesting question about “life rights.” He asked whether he could prevent a media outlet from covering a story about a person or persons in a way that competed with his forthcoming documentary. He wanted to know if his having life rights to a person’s or persons’ story would make a difference. The short answer is “no;” there really is no legal protection of “life rights.”
A life rights agreement obligates the subject selling his/her life rights to cooperate with the buyer. The subject/seller is committing to helping the buyer obtain information about the subject’s life and releasing the buyer from any claims by the subject against the eventual filmmaker, and ideally also to promoting the project. These agreements, however, cannot stop a third-party from taking an interest in the story facts and covering them.

Factual information is not copyrightable. That is not to say there are no copyright theories to protect a documentary from being overtly copied. But there is no legal way to prevent a third-party from using the same true facts and expressing those facts in another work. So, one might want to keep exposure of the story under wraps, if possible, until the documentary is out, and proceed with making an excellent documentary that demands to be seen and won’t be trumped by news segments or other content.

If this issue is coming up for you and you have a concern about being overtly copied beyond the facts, then you may want to discuss with an attorney. Chances are the other party will not copy too much beyond the non-copyrightable facts for there to be legal recourse. And many jurisdictions are not so copyright-friendly to begin with. This would be especially true for documentaries where the content is non-fiction and akin to journalism.

2. Worldwide rights deals

This issue combines legal and business issues I have encountered as both an executive and an attorney. These days, with platforms such as Netflix providing international opportunities to documentary filmmakers, one should be wary of committing to international sales agents to make the “worldwide” deal. An adept U.S. sales agent or lawyer could procure and handle a great worldwide Netflix or CNN deal. A U.S. agent or lawyer might have a better shot at the worldwide deal, hence it makes sense to exhaust that option before committing to an international sales strategy. This may be of interest because often the U.S. agents’ and lawyers’ commissions and recoupable expenses are sometimes lower than an international sales companies’ (and there is often good reason for that given the breadth of territories and markets to cover on the international front).

In my experience, many American documentaries do not do well overseas and, even when they sell, they sell small. Of course there are exceptions. Point being; evaluate the potential of one big U.S. deal with lower commissions versus using international sales agents, who typically charge more. Have an experienced lawyer or producer help you carve out rights based on these possibilities (if applicable) or perhaps to help you know if and when it is appropriate to bring an international sales agent on board. Being realistic about your film’s potential based on market conditions and appropriate comparisons is critical to effective distribution and the avoidance of mistakes.

3. Educational rights vs. digital distribution

At The Film Collaborative we often notice that the more successful a film is via educational distribution and festival/non-theatrical distribution the less successful it is via traditional television and digital distribution. In short, certain less-commercial content is appealing to film festival programmers, universities, museums and other educational/non-theatrical outlets. There are, of course, exceptions to that rule and some documentaries do well across all rights and categories of distribution. These days, educational distribution involves streaming (in addition to digital master exhibition or DVD sales) but for a higher price-point than retail streaming.

Some education institutions are savvy enough not to use commercial retail copies of your film for a classroom or campus exhibition, but some do, without realizing there is a potential legal issue. If your film could do especially well on the festival circuit and through educational distribution, then you might want to delay your regular home entertainment digital and television distribution. It is also true that many film festivals will not show your film if it’s commercially available via consumer-facing platforms such as iTunes and Netflix. Most all-rights distributors do not handle educational rights either at all or as well as certain specializing educational rights distributors. Therefore, you might want to save those rights for a company specializing in “exploiting” them. The key will then be coordinating rights and windows between distributors in any given territory. Note that splitting rights is generally not an option with the majors but it is with many others and I have personally done as many as seven deals in a single territory.

4. Rights for the future

Protecting your rights for the future while satisfying the licensee (buyer/distributor) for the term of an ongoing deal can be challenging. Most deals of the past didn’t anticipate the digital age, including the Internet and streaming. There have been scores of legal battles over contracts that didn’t explicitly address digital distribution, causing parties to a deal to fight over digital rights (for example squabbling over what is included in “all technologies now known or hereinafter invented,” home video or “videogram” rights). Another even more common battle would be over whether digital rights falls into the video (VHS and then DVD) royalty or TV/broadcast.

The reason for the fight was, of course, the fact that the royalty to licensor (producers/filmmakers) or distribution percentages to distributor differ based on rights category (classification of rights). I think the degree to which one raises this as an issue should be based on the overall potential of the film in the present and the degree to which it may be evergreen or experience an uptick based on cast name recognition or genre. I like to do deals that are not only rights class/category-oriented (e.g. broadcast rights, theatrical rights), but that are broken down by revenue, and anticipate the future. You may not always have leverage to do this but if you do, it’s worth analyzing so that you do not risk having a category of rights or type of distribution that you once took for granted all of a sudden emerges as very significant and the terms are simply not in your favor and now you are locked in for 20 years. Also, you would have other protections for such a long license term if it cannot be avoided.

5. Fair use

A quick note to enlighten filmmakers about the doctrine of Fair Use, which affords one an exception to copyright protection for content used that would otherwise be protected by copyright, but only if certain factors are met. Factors include an analysis of how much of the copyrighted content at issue is used in the work; the nature and purpose of the work (for e.g. is it educational); and the effect of the use of the copyrighted work on the marketplace (e.g. will its use likely effect the potential market for the copyrighted work). This comes into play in documentaries all the time. Documentaries use new footage, photography, movie clips, archival content, etc. Fair Use is a copyright principle that allows certain otherwise copyright protected content to be used for commentary, criticism and educational purposes.

Fair Use is a legal theory and an exception to copyright that one can use a defense. It is not a license. This means that the holder of the copyright may still sue you even if you have a fair use letter from the attorney who helped you to obtain E&O insurance. So, for example, you and your attorney may believe that your use of 15-minutes of “Magic Mike XXL” in your documentary about contemporary feminism in the least expected place is “fair use,” but Warner Brothers might think otherwise. Or, maybe they’ll love it and even offer you a distribution deal. But if the copyright owner of the content perceives they lost money because of your work or is offended by how your work portrayed their work, you may be more at risk.

Of course, my example is a tad silly but the point is that when you use someone else’s copyrighted content, the degree to which you can is not always crystal clear at the outset as a matter of law. All this to say, just remember that fair use opinions are just that, opinions. A copyright holder can still sue your distributor and/or the production company entity that made the film if they feel their content has been infringed. [This assumes that you know better than to make a film under your own personal name that could expose you to significant risk of legal liability risk.] Be sure to consult an attorney BEFORE you edit your film to final cut so that you can minimize your risk of including content that might trigger a lawsuit. Lawsuits are costly and can impede distribution.

6. Price lock for licensing rights not actually licensed ahead of premiering

Well before your premiere, resolve the price for any music, footage, etc. that you are not licensing for worldwide rights in perpetuity. For example, your production budget may not allow for worldwide licensing in all rights and you may never have good reason to pay for that. So at first you license more limitedly. But it is best practice to resolve the price for any remaining rights (and for any remaining territories) so you don’t have to worry about the price being higher once the film is finished and distribution is underway. The price most often would only go up based on any success you have, and it’s better to have your licensing details resolved before you show the film and prepare it for distribution, whether DIY or via distributors.

7. Contracts are for honest people

This one is for ALL filmmakers, not just documentaries. I have seen countless disputes between people who verbally agreed to or thought they agreed to something and then argued about the agreement. It is also much more difficult to enforce an agreement not on paper. Contracts help people clarify and establish on paper what they mean (note that I have seen many convoluted contracts seemingly designed to confuse). With proper thinking, planning and good lawyering, contracts can help clarify exactly what people intend and mean by certain terms or phrases.

Contracts help force parties to think things through. Unfortunately, people fear entering into a contract or bringing up the idea of a formal agreement because they think it’s insulting or offensive. “What, you don’t think I’m honest?” Yet if one establishes from the outset that contracts are for honest people, then the other party will likely not be offended. A clear and well-drafted contract will help avoid litigation, not create it. I have seen way too many people wronged by trusting things will work out. Friends turn to frenemies over credit, money and vision issues that weren’t explicitly laid out on paper. Someone worth having on your team will not object to having a formal, non-onerous agreement. If they do, you want to analyze why.

8. Lawyer who knows distribution

Do not have your uncle, friend or family attorney who knows nothing about distribution do your legal work for your film. That is irresponsible and will harm you in the long run. Handling distribution and film licensing contracts requires a strong knowledge of the business and supporting law. Even issues around how to enforce rights via international deals and whether or not to have an arbitration provision are specific and require industry knowledge, specifically distribution knowledge. Of course, this is especially true for rights issues.

I have been asked other questions pertaining to chain-of-title, project control, financing, etc. that are beyond the scope of this post. Please feel free to reach out if you would like me to address something specifically.

Disclaimer: This article does not constitute legal advice and you should consult a lawyer about your specific situation. Also note that the images which accompany the story represent examples of films that TFC is handling for festival distribution. They are not involved in the legal concerns mentioned in the article.

July 9th, 2015

Posted In: Legal

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