A interview with the West Coast Documentary and Reality Conference (WESTDOC) Co Founder Richard Propper. Mr. Propper is also  CEO and Director, International Licensing and Acquisitions at Solid Entertainment, a sales agency specializing in documentary films. 

TFC: How long have you been doing international sales and with which entities and films?

RP: “I have been licensing non-fiction programming for 19 years.  It wasn’t something I fell into, I had a great desire to combine the entertainment industry and international business – and I’m a current affairs and history junkie.  Having completed film school and working for a small studio for years in post production, I saw a vast number of filmmakers with great documentary films, but no knowledge of what to do next.  I wanted to be the first call for filmmakers when they thought about international sales.”

“Solid Entertainment has been successfully licensing programs worldwide for almost two decades via such broadcasters as: Animal Planet, ARTE, BBC , BBC2, BBC Horizon, BSkyB, Channel 4, Canal+, The Discovery Channels (worldwide), France 2/3, France 5, HBO, History Channel, M6, NBC, NHK, NOS-EO, National Geographic Channels(worldwide), Odyssee, ORF, Orbit, Planete, Premiere, Showtime, STAR Entertainment Channel, SPIEGEL TV, STERN-TV, SBS6, SF-DRS, TaurusFilm, The Travel Channel, TSR, TV Ontario, RAI, RTI, RTP, REAL-TV, VTM, ZDF.”

“At Solid Entertainment, our deal terms are pretty standard.  A flat rate of 30%.  No deduction for expenses. 3 year exclusive term of representation.”

TFCWhat trends do you see on sales side for documentaries?  Please be specific in terms of territories, rights, prices, types of films that perform v not etc.

RP: “They love (insert doc subject here) in Japan!” – Every new filmmaker I’ve ever met. – Richard Propper

“I’m going to throw a bucket of cold water on many peoples perceptions of the international broadcast marketplace.  In many ways, its tougher now than ever before.  There’s a huge oversupply of programs.  Technology has worked wonders for the creation of content, leading to more of it.  The non-fiction broadcast marketplace has been impacted by Reality TV. Channels need ratings and they have only so many hours they can license and co-produce.  The line has blurred between documentaries and reality, so channels gradually began to license more and more Reality. Most territories in Europe still license good documentaries, but license fees have been declining for a few years.  Asia and Latin America continue to pay modestly.  Larger US broadcasters now want all rights deals.  It didn’t use to be that way, a producer could count on the international rights as his/her “back end monies.”  Not anymore.”

“Today, we see around $8,000 for an hour in Germany.  We used to see $20,000.  France, about $7,500 and it used to be $15,000.  The UK – as high as $80,000, now $25,000.  Generally, all the digital, free follow along rights go with the license fee.  Pay VOD is still retained by the producer.  We’ve had to sell more content overall and look harder for the opportunities.”

“Uniquely, American programs don’t do very well in the international marketplace.  World history, nature and wildlife, buried treasure stories, science and technology stories all do well.  American social issues or narrow political issues are a much harder sale.  When was the last time you saw a great Italian documentary?  You haven’t.  Americans think our programs should sell everywhere, but we don’t reciprocate by programming other countries films on our networks.   The international marketplace looks for programs that are somehow universal.  It’s an art, not a science in producing programs that are attractive to the worldwide audience. I will say that some buyers recognize a well told story, others don’t.  If it’s all talking heads or about some strange subculture –  it won’t sell.  We look at everything that comes into our office for representation – there are always surprises.  If you haven’t captured the audience within the first 10 minutes, its likely the buyers aren’t going to stick around either.”

“Running times are important. If your dream is to make a feature doc, then try to come in at 75 – 100 minutes.  Have a 50 minute cut-down planned for the broadcast one-hour slots.  90% of the world broadcast slots are one-hour.  If there’s only a feature version, it has to compete with every Academy nominated doc or Morgan Spurlock’s or Michael Moore’s latest feature.  It a very hard road if you’re not prepared. But it’s not all bad news.”

“The digital marketplace is starting to come into its own.  While broadcast is challenging, there is a long tail strategy with digital – it just needs a little more time to stand on its own two legs.  It takes strategy to get a good film released onto multi-platforms and various times.  These strategies are being pioneered now.  That is exciting.  A larger audience for many films is out there, and technically there’s a way to deliver it.  You just have to find and engage that audience.”

TFC: Explain the DVD landscape.

RP: “While the general focus, and rightly so, has been on VOD and a la carte program sales, I’ve found in the last year some DVD distributors who are looking for content.  Keep in mind that there’s still a huge population of people who have this machine connected to their TV that provides supplemental content.  We’ve had good luck getting a 4 part limited series and larger multi-episode series into Costco and Target.  It’s short term sales, but its also unexpected revenue stream.  VOD and a la carte programming is great, but it requires working with the right groups to get your content out there.  While filmmakers are waiting for the magic formula to distribute digitally, DVD still has a place.  It’s going away, but not as quickly as you might think.”

westdoc 2013

TFC: What is WESTDOC and why should filmmakers attend?

RP: “Over nearly 2 decades of traveling to television markets and film festivals, I realized that LA needed a substantial documentary conference of its own. One that wasn’t sponsor driven, nor a fortune to attend. Chuck Braverman is a friend and producer, who for years would run into me at various conferences and ask me why there wasn’t a decent conference in LA (I was President of IDA at the time) and proposed that we start one. I begged off for a time and then thought  – why not?  WESTDOC was born.”

“While there are some terrific conferences in other cities, LA really has this fractured creative community.  Most filmmakers belong to several organizations.  But where are the conferences that bring in the decision makers?  Here is a true story.  I was at a conference in Cannes (MIP or MIPCOM) having a meeting with someone who worked 25 minutes away from my office.  I had traveled 9,000 miles to meet her.  How ridiculous.  With WESTDOC we’re getting these decision makers out of their offices and into an event to connect with the LA creative community.”

“When Chuck and I first sat down, we selected the best pieces from IDFA, HOT DOCS, MIP, NATPE, and all the rest.  When we were done with our mission statement and outline, we knew it would be a great conference.  Luckily, between us we had really great contacts with filmmakers and broadcasters.  To our surprise, everyone we asked to speak said they would show up!  Looking back, just our keynote speakers are an impressive bunch; RJ Cutler, Thom Beers, Kirby Dick, Joel Berlinger.  Not bad for an unknown conference!  This year we have Rory Kennedy, Ondi Timoner, and Kelly Day. We have 25 panels that are in the wheelhouse of documentary, Reality, and Digital.  In addition, this year we have The Sit-Down – 30 minute broadcaster overviews with 43+ different networks.”

The 2013 WESTDOC Conference will take place September 15-18 at the Landmark Theater in Los Angeles, CA. For a full schedule of speakers and activities, visit their website. TFC Members will receive a promotional code for a discounted ticket. Become a TFC Member today! 

About Richard Propper:

Solid Entertainment Founder and President Richard Propper is the former President of the International Documentary Association (IDA), and executive producer of over thirty internationally broadcast documentary programs. Solid Entertainment is a broadcast distribution company and one of only a handful of US specialty companies which has consistently supplied non-fiction programming to networks worldwide with a particular emphasis in Western Europe.  He has spoke as an authority on development, co-production agreements, and the intricacies international distribution at: MIPDOC, HOT DOCS, IFP, AFM, Silverdocs, Realscreen Summit, NATPE, IDA, UCLA, and USC.  Richard is also the co-founder of WESTDOC: The West Coast Documentary and Reality Conference.  WESTDOC is a three-day event that brings together preeminent producers, directors, writers, network executives, agents and distributors for insightful and unique seminars, as well as networking opportunities.

 

August 29th, 2013

Posted In: Digital Distribution, Distribution, education, International Sales

Tags: , , , , , , , ,

Further to my last blog, here’s a little advice on working with sales agents. Before you sign with a sales agent, it is critical to do some homework to figure out whether the deals you could get with their help will be better than the ones you could get on your own.

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-What films has this company sold? Are they similar to the kind of film you have? Do those films have the same assets (cast, budget level, festival pedigree, cause or interest based)?

-Where did they sell? Domestically or internationally? Only very large agencies have the ability to handle both and sometimes a large agency won’t be a good fit for smaller films. Bigger slate=less attention to go around. Bigger agencies tend to give preferential treatment to their bigger name clients so if you are just starting out or haven’t built up a strong name yet, don’t expect to get red carpet service.

-For what kind of prices? This may get cagey as many people in the film business don’t like to talk about other people’s deals (unless it is gossip of course!), but they should  be able to give a realistic narrow range of what you can expect based on similar films they have sold.

-What are the terms? Query if the fee to the sales agent and recouped expenses are worth it or if you can just do the couple small deals directly…

-Was the revenue remitted to the filmmaker? Can the agent collect? You should want to know what percentages and recoupment will reduce your share of the sale as well as this agent’s track record for collecting from distributors and paying filmmakers. On this question, you’ll need to contact the filmmakers who have worked with the company and see if they did receive their advances and further revenue. We always recommend making sure that all rights terminate upon material delay of payment. Be specific and be clear so you are not stuck in a deal where you won’t be paid.

Agencies love to show off nice catalogs of films they represent, but a list of titles will not tell you the information you need to know if you want to make your money back or make it back for your investors.

If a sales agent or lawyer approaches you or you want to approach him or her to sell your film, drill into the details. Even on the LGBT front not all films are alike. Not all of them can do the same deals, or any deals at all. Not all have the same revenue stream potentials. Documentaries are different from narratives, for example. And of course this is true of other categories of films. One of the hardest for TFC to handle and one of the hardest to sell in general, especially out of a non-A-list festival, is a drama without name cast.

Working with a sales agent that is taking a 10% commission off of the sales she brings in doesn’t bother me. 10% is not a lot of money for an agent who brings in a six-figure advance, and most likely she will bring in less for the majority of independent films. But I am concerned about paying a producer’s rep a big up-front fee, as there are many bottom-feeding producer’s reps whose business model is only collecting the fee and offering little else. For a good one who offers invaluable advice in the early stage of production and whose contacts may indeed be useful, it could be worth paying for. It is easy enough to Google someone’s name and see the kinds of projects with which they have been associated. If the only sources citing their involvement belong to sites they run, be cautious about making upfront payments and giving an ownership stake in your work.

Let me end with saying any industry professionals reading this please, please share the types of films you are handling and the deals you are doing, be specific. We share our film slate and numbers and if you do too, filmmakers can make educated choices.

I think much of the time filmmakers will still want someone else to handle their distribution and may be happy to do deals even if there is no profit, if only to establish and develop their careers. But let them make that choice as informed filmmakers, not still clinging to the allure of the 1990’s.

July 25th, 2013

Posted In: Distribution, International Sales

Tags: , , , , ,

Yes the above title is a reference to my favorite Baz Luhrman film.  The fact is that The Cannes Film Festival is truly in its own class. For domestic distribution, it is arguably the best launch pad for foreign language films and can be a high profile place to premiere English language movies too. The problem is that many of the American films are star driven, have large budgets by indie standards and/or have distribution secured before arriving. If your American film isn’t a massive media machine, you will not be premiering at Cannes and honestly you wouldn’t want to.

Cannes signs

In looking at how the films from Cannes 2012 festival have performed, one has to note that over 60% of the films acquired for US came from 5 distribution companies (and their subsidiaries). TWC, SPC, IFC, Strand Releasing, and Film Movement dominated the acquisitions zone.

Moonrise Kingdom (Focus, worldwide gross $68, 263, 166), Lawless (TWC, worldwide gross $53, 676, 580), and Killing Them Softly (TWC, worldwide gross $37, 930, 465) all had distribution deals attached when they premiered. All are three of the highest grossing independent films from 2012, but only Moonrise Kingdom could be classified as a hit. In fact Killing Them Softly is arguably a massive failure, failing to recoup its budget in its US theatrical and getting a rare F Cinemascore. TWC’s pick up from Cannes 2012, The Sapphires, has been a modest performer in its 8 weeks of theatrical release so far this year grossing just over $2 mil.

Sony Picture Classics (SPC) has long been a dominant distributor of high art foreign films and they acquired Amour, No, and Rust and Bone. All the films grossed $2,000,000 + in the US however the titles are a mixed bag. Amour grossed less than prior year’s foreign language Oscar entry, but still was a $6 mil plus performer stateside. Rust and Bone failed to get an acting nomination for Marion Cotillard and ended its domestic run with $2,062,027. Internationally, Rust and Bone slightly outperformed Amour, but both had international grosses of around $20 mil. Only No exceeded expectations. Though it has done less than ¼ of what Rust and Bone has internationally, it has actually out grossed it here in the US and it’s still playing in theaters! It’s a rare box office success for a Director’s Fortnight selection. That said, all three are the three highest grossing foreign language films acquired out of Cannes. If you’re foreign, GO FOR SPC! GO FOR SPC! GO FOR SPC! I repeat GO FOR SPC!

IFC/IFC Midnight/Sundance Selects combined for a whopping 10 acquisitions! That’s more than many companies release in a year! They chose not to report grosses though for Antiviral and The Taste of Money which is an alarming sign, even for their VOD business model. Clandestine Childhood failed to gross $10k and none of their films managed over $1,000,000. Their highest grosser (On The Road) has leveled off at over $720k so far, but was not day and date VOD and considering the film played in as many as 107 theaters in a given week, it is clearly a disappointing performer. The Ken Burns directed,The Central Park Five managed just under ½ that with $325k and surprisingly missed the Oscar documentary short list. It will likely have a long life on other platforms. Someone in Love, The Angels Share and Beyond the Hills all grossed over $100k, but only The Angels Share (conveniently in English) could be considered a modest hit as it just crept past $250k. Sightseers was released a week and a half ago and does not look likely to pass $50k. The horror remake Maniac comes out later this year.

Behind IFC is Strand Releasing who acquired 6 films! Though Strand has been around for 20 years+ this is an unprecedented amount. In The Fog, Polluting Paradise, and Mekong Hotel have yet to be released. White Elephant failed to break $10k, and Post Tenebras Lux and Paradise: Love are still in the early stages of release with neither likely passing $50k domestically.

Other low end performers include Cinema Guild’s Night Across the Street with $13,035 domestically and Well Go USA’s Dangerous Liaisons which has reported $54,000 in box office. Both films were in the Director’s Fortnight which often gets overshadowed by the main competition. Think of it as the difference between being in the Next section and the US Dramatic section at Sundance.

Performing on the low end of the main competition films is Oscilloscope’s Reality which has yet to break six figures. The director’s prior film, Gomorrah, grossed over $1.5 mil in the US.

Performing better was Holy Motors handled by the now defunct distribution division of Indomina. It grossed $641,000 despite being literally impossible to describe. However, that is less than half the gross of Samuel Goldwyn’s Renoir which is still averaging over $100,000 a weekend. Despite never playing in more than 100 theaters, this film  has quietly amassed a total of $1,484,197, making it the highest grossing film from Un Certain Regard’s program last year. It has also done more than double the box office of Entertainment One’s Cosmopolis and Lee Daniels surprise awards contender The Paperboy. Both films suffered from mediocre reviews and the fact that Zach Efron and Robert Pattinson’s fanbase can’t legally see an R Rated film by themselves.

Films yet to be released include four Film Movement acquisitions (Three Worlds, Alyah, Broken, and La Sirga), Breaking Glass has Laurence Anyways which is easily its biggest acquisition to date, Magnolia has best actor winner The Hunt, and Gkids took the animated Ernest and Celestine.

Now all of this brings me to Mud. The Matthew McConaughey and and Reese Witherspoon starrer has been something of a breakout and looks poised to pass $20 mil by the end of its theatrical run.  It has grossed over $2,000,000 for four weekends in a row now and has yet to play on over 1,000 screens. This film did not win any awards at the festival and in fact left the festival without US distribution. It did not get a pick up until August 2012 and was introduced to US audiences at the Sundance Film Festival 2013. With an A list cast, strong reviews and a distributor (Lionsgate/Roadside Attractions) who knows exactly how to handle this kind of film, it did finally find its way. Its international grosses are just barely over $3 mil, but that’s only from two territories.

Less than half of the films from the Critic’s Week, Un Certain Regard, and Director’s Fortnight have received distribution in the US. Many never will. All but one of the Competition films has yet to find one which helps pad the totals. If you have a foreign film, this is arguably your best bet to launch for a Stateside distribution deal. If you’ have an American film, it can provide great publicity, but create bad press to last a lifetime leading up to your release. American bigger budget indie tent poles will continue to use TIFF and Cannes to launch, but for every Moonrise Kingdom or Silver Linings Playbook,  there are easily 3x as many Killing Them Softly’s. The Cannes endorsement on a foreign film especially though can drive up arthouse audiences in digital environments and older audiences at this thing called a video store. A few even still exist.

A look back at last year’s Cannes titles:

Film Distributor Gross Program Section
Post Tenesbras Lux Strand Releasing $7,096 Competition
Clandestine Childhood IFC $9,017 Director’s Fortnight
White Elephant Strand Releasing $9,673 Un Certain Regard
Night Across the Street Cinema Guild $13,035 Director’s Fortnight
Augustine Music Box Films $13,616 Critic’s Week
Paradise: Love Strand Releasing $17,356 Competition
Sightseers IFC $19,037 Director’s Fortnight
In Another Country Kino Lorber $25,079 Competition
The We and the I Paladin $42,172 Director’s Fortnight
Dangerous Liaisons Well Go USA $54,000 Director’s Fortnight
Reality Oscilloscope $72,577 Competition
Beyond the Hills Sundance Selects $110,490 Competition
Like Someone In Love IFC $222,695 Competition
The Angels Share IFC $248,567 Competition
The Central Park Five Sundance Selects $325,653 Special Screening
Holy Motors Indomina $641,000 Competition
The Paperboy Millenium Entertainment $693,286 Competition
On The Road IFC Films/Sundance Selects $720,828 Competition
Cosmopolis Entertainment One $763,556 Competition
Renoir Samuel Goldwyn $1,079,000 Un Certain Regard
The Sapphires TWC $2,015,509 Midnight
Rust and Bone SPC $2,060,565 Competition
No SPC $2,163,379 Director’s Fortnight
Amour SPC $6,732,661 Competition
Mud Roadside Attractions $11,656,971 Competition
Killing Them Softly TWC $15,026,056 Competition
Lawless TWC $37,400,127 Competition
Moonrise Kingdom Focus Features $45,512,466 Competition
Antiviral IFC Midnight BO NOT Reported Un Certain Regard
Trashed Blenheim Films BO NOT Reported Special Screening
The Taste of Money IFC Midnight BO NOT Reported Competition
You Ain’t Seen Nothin’ Yet! Kino Lorber Competition
Maniac IFC Midnight Midnight
Laurance Anyways Breaking Glass Un Certain Regard
The Hunt Magnolia Competition
Thérèse Desqueyroux MPI Pictures Out of Competition
In the Fog Strand Releasing Competition
La Sirga Film Movement Director’s Fortnight
Mekong Hotel Strand Releasing Special Screening
Polluting Paradise Strand Releasing Special Screening
Ernest and Celestine Gkids Director’s Fortnight
Broken Film Movement Critic’s Week
Alyah Film Movement Critic’s Week
Three Worlds Film Movement Un Certain Regard


May 23rd, 2013

Posted In: Distribution, Film Festivals, International Sales

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

a guest post by Michael D. Akers

The world of distribution is changing constantly with the decline of DVD and the fragmentation of digital platforms.  The challenges are even greater when you turn to the international marketplace.  Like many filmmakers, we turned to a foreign sales agent to exploit the rights for our latest film MORGAN.

While we are going to use the word “agent/agency” in this article, we believe that inter-changeable terms could include Producer’s Rep, Distributor, Aggregator, Consultant, etc.  Because, as we see it, these are the middlemen who can completely destroy you by failing at their intended purpose:  to make you a profit.  Many of these companies operate under the “more is better” practice where they will take on hundreds or thousands of titles so that the law of averages puts money in their pockets.  While that may make sense for them, it makes no sense for the indie filmmaker.  After all, we’ve taken all the risk.

A few thousand dollars one way or the other can determine when (or IF) we get to make our next films.  We count on the expertise and diligence of these agents to get the best possible deals.  We need them to be sharks.  Our particular agent promised us high returns across more territories than we were capable of getting for ourselves.  All the agent wanted was a commission.  Sound too good to be true?  It was.

court legal gavel with crumpled cash

So what happens when you have signed with an agent who is not marketing your film effectively, who is not selling your film for amounts that you feel comfortable with, and/or may not be trying to exploit your rights at all?  Obviously you call them and try to work it out because, after all, you are supposed to be working together to make money for each other.  But let’s suppose your agent is a total [expletive] who doesn’t even know what a deliverable is, and you want to terminate your relationship.  You turn to your contract to see what recourse you have. If you feel really convinced you are right, you attempt to terminate it.  That is what we did.  And this is what we learned from suing our foreign sales agent to terminate our agency agreement.

1)      ARBITRATION CLAUSE.  Chances are that you have some kind of clause that may spell out how both parties are to resolve a dispute over the contract.  You probably have never given it much thought.  I know we didn’t.  We had blindly accepted the language as standard, figuring the mere threat of arbitration was a deterrent from the proceeding itself.  But, as our dispute rose to epic levels and arbitration became necessary, this paragraph became our master.  Also worth noting, we found out that generally you cannot go to court if you have an arbitration clause (possibly if both parties agree, maybe) because a judge will send the case back to arbitration, ruling that the courts have no jurisdiction.  This goes for appeals as well.  Generally, courts will not hear appeals of arbitration cases.  Nor will the:

2)      ARBITRAL BODY:  Look at the arbitration clause:  Does it specify who the arbitral body is or under which state’s laws the contract will be interpreted?  Does the prevailing party have the right to collect attorney’s fees?  You may find, like we did, that we should have really spent time on this paragraph.  We knew nothing of the arbitration company.  Did they like indie filmmakers?  Were they studio oriented?  How much do they charge?  What are their rules of process?  You will be BOUND by these rules if you go to arbitration.  Take the time to look up the company in your contract.  Ask around.  Had we looked into any of those questions, we would have NEVER agreed to use our arbitral body because of:

3)      THE ARBITRATOR.  The arbitrator is an attorney working somewhere in the entertainment industry (hopefully).  You and the opposing party receive a list of attorneys to select from, along with their resumes.  It’s not really possible to see what other cases they worked on or how they ruled in those cases.  Your attorney may be able to find out more information about them, but it’s pretty tough.  In our case, both parties agreed quickly to one arbitrator.  This is great because we wanted the case wrapped up as soon as possible so we could get on with exploiting our film.  No such luck.  Upon meeting an arbitrator, you will immediately ask yourself, WHY would an attorney sign up to do this?  Answer one:  to bill you.  Constantly.  The arbitrator charges you for everything he does in the arbitration.  He has no checks or balances in this regard.  So if your arbitrator is trying to send his kid to college, you might as well sign over your car right now because he can make up any number of hours he wants and send you a bill.  You have to pay it or you will default.  Answer two:  because he’s not qualified to be a REAL judge.  So he’s going to take it out on you.  Whatever his interpretation of the laws, whatever his opinion is of your film, your budget, your hair color, he can rule however he wants to.  (As a matter of record, our arbitrator actually told us that nobody cares about our movie or this case.)  And again, there are NO checks and balances on this because the arbitral body hides behind its motto:

4)      AN INFORMAL, EXPEDIENT AND COST EFFECTIVE PROCESS.  We elected not to have full time representation because of the cost.  Our agent however did hire a full time lawyer.  Even though we had the promise of an informal process, the arbitrator NEVER looked out for our best interest.  He let the opposing attorney antagonize and threaten us.  He let the opposing attorney cause repeated and unnecessary delays.  He scheduled paperwork to be due while we were traveling on the film festival circuit.  But he gave time extensions to the other side.  He gave the opposing attorney such wide latitude in discovery that we turned in over 1000 pages of evidence!  Meanwhile, he only required the opposing attorney to turn in about 10.  So this impartial, expedient, cheap process was not our experience.  Our arbitration took SIX months and cost a lot of money.  The entire process from breach to verdict was a year because:

5)      THE BEST OFFENSE IS A GOOD DEFENSE.  From our experience, being the CLAIMANT (the party bringing the action, namely, us) puts in you a much tougher spot that being the RESPONDENT (the party being sued, the agent).  We had to prove all of our claims, which meant that we had to turn over clear and compelling evidence.  We thought we had plenty.  But the arbitrator’s rulings slowly whittled away what we thought was our best evidence.  The respondent does not really have to do anything.  Our agent literally just sat on our film’s foreign distribution rights stalling all the energy we had been creating for a year.  Now we might be in trouble on this one, but we really would consider just breaching the contract and exploiting the film ourselves (next time).  It would then be up to our agent to prove the breach, the damages, etc.  Definitely DO NOT consider this legal advice.  It’s just our opinion.

6)      AGENCY COUPLED WITH AN INTEREST.  Scour your contract right now for this phrase.   It is crucial when it comes to terminating your agreement.  Now what we are about to say is only a general rule that (true to the law) comes with a million exceptions.  Nonetheless, in an agency contract, you (as the principal) ALWAYS have the POWER to terminate a contract with your agent AT WILL.)  It is imperative that you understand that you can still be liable for the damages that this causes your agent (i.e., the MG or license fee they already paid you, marketing expenses they can prove they spent, etc.).  Our agent did countersue us for damages.  But they also sued us saying that we did not have the RIGHT to terminate the agreement.  As we are now painfully aware, the RIGHT to terminate is not the same as the POWER to terminate.  As a rule, you CANNOT terminate your contract with an agent if it is “coupled with an interest.”  That is to say, that the agent has some kind of interest “in the thing the contract is about.”  What is this “interest”?  What is the “thing”?  Who the hell knows!  It isn’t defined by the law.  What the interest ISN’T has sort of been sketched out over the last hundred years.  Generally, simple monetary considerations are NOT considered interest (i.e. commissions, payments, etc.).   We thought we were well within our POWER to terminate because the agent did not pay any money upfront.  And since the agent did not generate any deals other than those we brought to them, it would seem TWICE as obvious that our distributor had NO interest in our film.  But, referring to #2 above, our arbitrator was grossly unqualified to interpret this kind of law (our research shows these agency coupled with an interest cases frequently end up in appeals court because of their complexity).  Our arbitrator ruled that our contract was coupled with an interest because of some postcards that the agent had printed out in Berlin (have we mentioned that you can’t (technically) appeal?).  I’m sure that now every distributor is now calling their attorney to add this paragraph, but if you, the filmmaker, can, keep it out.  The agent is covered anyway, because in the event you terminate unfairly, you are on the hook for any damages that the agent suffers (and probably their attorney’s fees).

7)      DEFINE DEFINE DEFINE.  Boilerplate.  Fear that word.  Just because everyone thinks they know what marketing, customary efforts, good faith or even all-rights is, WRITE IT DOWN.  This is your business and your money we are talking about.  Define every single term.  We did not do this.  So when we claimed that our distributor did not use “reasonable and customary efforts” to license, market and sell our film; that they did not “consult with us” on this marketing and licensing of our film; that they did not generate offers that we could have gotten ourselves, we were on the hook to prove it.  We thought it was obvious that our agent should have a Facebook page, and maybe post our movie on it, or on their website, maybe even the trailer (shocking!).  At least they should have spelled our names right on their listing!  To our 500 pages of print-outs, the arbitrator balked, saying that is was “unpersuasive.”  Outline what you think reasonable and customary efforts are.  We really recommend setting a minimum amount acceptable for the contract to remain in force.  Define marketing.  What efforts do you expect the distributor to make?  Be as specific as you can.  (I am now hearing horror stories of friends’ films sitting on their distributors’ shelves in limbo.  They won’t be getting the rights back for years and the film won’t be generating any more revenue because the distributor finds it financially unviable to exert further effort.)   Go through your contract as though you can be shot by a firing squad.  Because that’s how it feels when you go into an arbitration hearing and every sentence is scrutinized by both sides, each interpreting it to favor their position.  If the arbitrator can’t see clear convincing evidence that your definition is correct, you cannot prove a breach of contract.

8)      CONSULT WITH AN ATTORNEY.  A GREAT ONE.  Unfortunately no lawyer could have reasoned with our agent in order to avoid arbitration.  The lawsuit in and of itself was ridiculous.  Though we only had an attorney on retainer for consultation, the way the arbitrator pushed us around made us wish we could have afforded complete representation (or an assassin).  It is worth noting here that we changed our law firm part way through the proceedings.  Just like the discussion of the arbitrator above, make sure your own attorney is qualified to handle your particular dispute.  The law is complex and the process is a game.  You need a fighter.  You want to feel really great about who is representing you.  Don’t be afraid to fire people.  Keep looking until you find the right lawyer.  How will you know?  Trust me, you will.

9)      KEEP RIDICULOUSLY COMPLETE RECORDS OF EVERYTHING THAT HAPPENS…EVER.  So after all of this you may be surprised to find out that we prevailed.  (Can you imagine what we’d say if we LOST?)  How?  Every single email, letter, check, even the envelope that the check came in.  Yep, we keep all of that stuff and more.  Why?  Look through your contract and see if you find a paragraph that discusses how to amend/addend the contract.  Usually it stipulates that it has to be done in writing.  It turns out that most states consider email “written communication.”  While we were not necessarily saving all of that paperwork to prevail in a court hearing, that’s what ended up happening.  The agent not only lost their frivolous countersuit because of those emails, they were also held to a strange law in California under which two parties can “agree to agree” just by agreeing to the major terms of an agreement.  (Confused?  It would take a book to explain THIS law.)  Specifically, in those emails, we had offered the agent a sum of money to settle the case.  Though they originally agreed to accept it, they later reneged.  The arbitrator ruled that the first agreement was permanent.  Though it was on a technicality, a win is a win.

10)   BE A SORE WINNER.  But the award by the arbitrator was lackluster.  He is a studio attorney who clearly thought that our case was frivolous and meaningless.  He just couldn’t understand that to us, it meant everything.  In the end, the arbitration cost us almost as much as our film and stole a year of our lives.  We are now out to prove the arbitrator wrong.  Filmmakers DO care about their movies and filmmakers WILL care about this verdict.  He could have single-handedly moved independent filmmaking into a new era of mutual responsibility.  But instead his final opinion read more like a warning to the distributor on how to fix their contract so that they can more assuredly screw over the next filmmaker.

11)   TELL YOUR STORY.  Since we’ve started going public, we are hearing many stories of frustration and anger about these agency relationships.  Filmmakers worry that if they speak up, the agencies may retaliate.  Well, here are two things you should know.  One, they probably WILL retaliate.  Ours did.  They told film festivals, foreign sales agents, distributors and other people we do business with that our film was “unavailable.”  They tied up our film’s distribution for almost an entire year.  We were distraught.  But then we realized number two:  we are the content creators.  Festivals, distributors, aggregators and (most importantly your fans) want your content.  These agencies don’t have jobs unless someone makes them something to sell.  Thankfully, we have been able to pick up where we left off, though the film’s value has certainly suffered from sitting on the shelf for a year.

As we sat in the hearing, reading aloud the angry emails that had flown back and forth between us and our agent, we were struck by a sad realization:  this whole process was just a big waste of time and money.  WE were paying the arbitrator to decide if WE had the right to terminate a contract with an agent who was supposed to be making US money by exploiting a movie WE paid for.  Who were these people and why were they being granted ANY validity whatsoever?  We are sharing our story in the hopes that it will help save some other filmmaker from falling into the same traps we did.  And if you do find yourself having to take that big leap, remember:  arbitration is war and you have to win by any means necessary.

None of this article should be construed as legal advice.  This is our opinion base on our experience. 

About the author:

Michael D. Akers is an American film director, producer, screenwriter and editor. In 2000, he founded United Gay Network (UGN) with his longtime partner, Sandon Berg. Morgan is Akers’ fourth in a line of genre defining films.  His first film, Gone, But Not Forgotten, altered the queer indie landscape with an adept story made universal through common human drama and incidental sexuality and went on to win numerous audience awards after playing in more than 30 festivals world-wide. Gone, But Not Forgotten ultimately became one of the most successful independent LGBT films of all time.

 

April 11th, 2013

Posted In: Distribution, International Sales

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

There are many ways a film can reach its audience. While independent filmmakers often lock themselves into the path of securing a festival premiere, signing a sales agent, hoping for a sizable distribution deal that includes a theatrical release and sailing off into the sunset to make another film, they could be overlooking options that make better sense for the type of film they have.

TFC member Michelle Mower knows the indie filmmaker mindset well having worked for many years with Houston based organization Southwest Alternate Media Project (SWAMP). She too thought that her first feature film, The Preacher’s Daughter, would follow that same path.  But after sending TFC’s Orly Ravid the rough cut of the film, advice came that altered her plans.  I spoke with Michelle to find out how her film achieved distribution and succeeded in bringing Lifetime Movie Network its highest ratings for 2012.

Preacher's Daughter DVD art

SC: “Your case study is particularly interesting to me because your initial thought was you wanted to have a festival premiere and tour the circuit. But something totally different happened?”

MM: “Isn’t that normal for independent films? Isn’t the festival circuit what all indies are supposed to do? [laugh]”

SC: “Yes, totally what people think. But other opportunities came up for your film. First let me ask, how did you finance the film?”

MM: “We funded this film in stages. We raised our shooting budget first which was the ultra-low, $50,000 budget. But as we got into preproduction, we were able to attach name talent to the project, so we raised a little more and then as we got into production and post production, we got a few more investors to help us finish the film. It was very typical of most first features where you start with one budget, but end up with another and you struggle to get the film finished. We didn’t really know what would happen with the film, but we did feel like we had a great story, some very strong performances, some things that would definitely attract an audience.”

SC: “How long did it take to shoot and finish the film?”

MM: “We ended up with a total of 43 days for the shoot which is really long and I do not recommend it. We had crew changes and scheduling issues, so it caused us to prolong our production.  Ultimately, it took us over a year to finish the film.

SC: “Was the film shot mainly in Houston, Texas?”

MM: “Yes, the whole film was shot in Houston and the surrounding area. The film is set in a small town in East Texas, so I shot it in the little towns surrounding Houston.”

SC: “Tell me about casting. How did you land Andrea Bowen?”

MM: “It’s a funny story. I sent out a casting notice in LA. Initially, I wasn’t intending to cast there because I didn’t think I could afford it. But I was out there for the Los Angeles Film Festival so I thought if I’m out there I might as well see what would happen. I posted on Breakdown Services, and within 24 hours I had 1400 submissions just for the lead role alone. I narrowed it down to a couple hundred and then my casting director went through those and we invited about 60 women to audition. 36 showed up and one of them was Andrea Bowen, from Desperate Housewives.”

“I had no idea who she was. I had seen Desperate Housewives, but not for years and she was probably around 13 years old when the show started.  To say she nailed that audition was an understatement. She’s an extremely talented actress and it was very apparent that she knew what she was doing. When she left, I turned to the interns working with me and they told me who she was and I had mixed emotions because she was so awesome, but I didn’t think I could afford her. I wasn’t even going to waste either of our time in trying to contact her. But that was my naive reaction and I have learned since that actors do want to work, but they also want good roles.  If you have a good script with a really strong role, they are willing to work with you.”

“Her agent contacted me, we sent over the full script. Andrea loved it and that gave me confidence in my writing because I am sure she reads scripts all the time. So we negotiated with them and were able to get her on board. She was wonderful to work with and I am sure the film would not have gotten nearly as far as it did without her.”

“Our male lead, Adam Mayfield, is from Houston so we had some mutual friends. He is based in LA too, and I was leery about bringing in too many people from other cities because of the budget constraints. But he was in town one weekend and we met for lunch and I just knew he was the right guy. He was just coming off of his role on All My Children and he wanted to work with Andrea so it all worked out.”

SC:”So what happened to change your course on distribution? Was the film premiered anywhere?”

MM: “I met Orly at the annual Business of Film Conference in Houston that is presented by SWAMP when I was in production and she told me to keep her apprised of what we were doing with it. I joined The Film Collaborative and once I had a rough cut, I sent it to Orly and asked her to give me feedback and guidance. I was thinking about festivals until she came back and said it wasn’t a festival film because it was too mainstream, too commercial in feel.  It probably wasn’t going to be programmed by the bigger festivals. She said I needed to think about other options. We had already submitted to some festivals, like SXSW, and it did not get in so it made me rethink what I was doing with the film and look at other options.”

“Orly introduced me to Imagination Worldwide, a sales agency, because they often work in broadcast licensing. I sent them a one sheet and that made them ask to see the film. I sent them my rough cut and they asked to rep it for the cable market. This was November 2011 and they took it to EFM the next February. They always knew that it might be of interest to Lifetime, but I didn’t get my hopes up. I was really still trying to raise more funds to get it absolutely completed.”

“We went ahead and did the world premiere in Houston in April 2012, and in June we sold to Lifetime Movie Network.  I did have to cut down the film because there is certain content that Lifetime won’t air, curse words and nudity and stuff. It premiered on August 31, 2012 on the Lifetime Movie Network, one of Lifetime’s specialty channels.  It was the  highest rated movie on the channel in all of 2012.”

SC: “Were you involved in the promotion of it and do you know what they did?”

MM: “I had been promoting it in my social network for a long time. I always thought it would go into the festivals and I would need my network, so I had a Facebook page for the film and we started our own audience building from the get go.”

“When Lifetime took the film on, their promotion came through TV ads. I expected the promotion on the Lifetime Channel  because they typically do that, but I didn’t expect to see it on OWN, NatGeo and Bravo and all of these other cable channels. I asked my Facebook fans to let me know what channels they were seeing the promotion on and we counted 9 different networks.  So they did a great job promoting it in the broadcast world.”

“I had been told earlier in the post production process that this was not a marketable film. It wasn’t a Christian film because it was too edgy and it wasn’t an indie film because it wasn’t edgy enough. But Lifetime was able to market it well.”

SC: “So in your deal with Lifetime, are you able to still sell internationally? Or sell on your own?”

MM: “My deal with Lifetime is for North American, Latin American and UK broadcast rights. Pretty much every other territory was open, but we have sold to about 7 other territories in the world now.  We will have a DVD/cable VOD release this month in the US [DVD will be available on Amazon April 9). It will be the director’s cut so all the scenes that I had to cut out of the broadcast version will be back in. Per our contract with Lifetime, we cannot do Netflix, iTunes, Hulu streaming until after the license expires in 5 years.”

“If you had told me when I started this process that my movie would reach millions of people, I would have laughed. But things happen the way they do for a reason.”

SC: “I think it is wonderful for a first feature film to sell, repay the investors and air on a network where millions would see it. Not many first timers ever achieve that.”

MM: “I have seen many strong feature films in my former work with SWAMP and I have attended many workshops and conferences so I knew the challenges I faced as a first time feature director.  I know it is very difficult to achieve distribution for indie films and even if you do, often it is for no advance or very low advance. If a theatrical release happens,  it is for a one week run in New York and LA, the two most saturated markets for films. Then on to digital release where very little is done to promote it. In that scenario, it is nearly impossible to make money back for investors or for the filmmaker. My advance did repay my investors.”

“I started out thinking I wanted to go that route, the festival-theatrical-digital route. But when I faced the reality of it and thought about what the Lifetime offer meant, it was really a no brainer. Make your investors’ money back and have millions of people watch your film. Pretty simple decision really. Plus, because of that deal, opportunities come to me that weren’t there before. When I call for meetings, people take the call. I have people interested in what projects I am considering. Not only did I sell to Lifetime, it was a success for them so that helps get more interest from the industry for my work.”

SC: “So what is your parting advice for filmmakers, either new ones or those who are working on their second or third film?”

MM: “I sat on this script for 9 years because I was afraid. What would happen if I made the film? Would I put my family in financial hardship? I made all kinds of excuses for why I shouldn’t make it at that time. My advice is stop making excuses. Make your movie. No one is stopping you and there are opportunities to sell it if you are open to them. Figure it out and make it happen.”

Thanks Michelle, for your candid answers and hopefully there are a few filmmakers out there re-evaluating how they plan to release their films.

 

 

 

 

 

April 4th, 2013

Posted In: Cable, Distribution, International Sales

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

written with input from Recreation Media’s Ariel Veneziano and TFC’s Bryan Glick

I remember reading an article in the trades a couple of years ago that described the way that the film executives at the Berlin International Film Festival typically trudge through the German winter in endless circles from the EFM market building to their screenings and back again actually “reminds them metaphorically of their miserable existence travelling in circles around the globe from one market to the next, doing the same trips and seeing the same people, year after year.”

European film market sales floor

Of course, its arguable that being in a business that takes one from fabulous locations such as Sundance, Rotterdam, Berlin, Cannes, Los Angeles, New York, Hong Kong, Guadalajara etc. should be called miserable. But I knew exactly what the journalist meant. After all, it is really cold Berlin in February, and in truth so many of the movies are truly bad. And even the best movies are usually artsy stuff that is challenging commercially – so it’s enough to drive a business executive truly mad.

So I tried to avoid that this year. I tried to use the vast tapestry of the sprawling, thriving, constantly evolving German capitol as a canvas for private meetings in cafes, restaurants, and bars at least a little off the beaten track (once you know the subway system, it only takes 10 minutes to get anywhere anyway). I tried to go to movies ONLY after they had been recommended to me – so as to cut down on the number of movies I would stay only a few minutes in before I walked out. And amongst all the trudging, there are certainly sufficient networking parties and events – not as many as say Sundance or Cannes by any means – but still plenty to enjoy and use as opportunities to get caught up with important contacts and valuable intel on the state of the Business.

Given the difficult the independent film business has been in the last few years – especially given the precipitous decline in the DVD business – what emerged from Berlin…in a positive sense…was at least the feeling of a business that has found its bottom and is holding steady. Not necessarily progressing…but not regressing either.

In certain ways, Berlin appears to be getting more important as a European market than ever. Because of the tough business climate, less and less European companies make the annual trip to relatively far-flung markets like AFM in Los Angeles. As such, Berlin has become an even more important trip for European companies looking to license product…and this extends beyond the usual “high-art” companies that typically frequent the Berlinale and further into the TV and ancillary market that has traditionally done its business at more expensive markets like Cannes and AFM. There is still a paucity of companies from both Latin America and Asia at the Berlinale, but in fact the representation of companies from Europe is actually better than ever, largely due to the economics.

Also tied into the need to save money, is the continuing trend that the market gets shorter and shorter every year…such that the market that begins on a Thursday afternoon is largely over by Tuesday afternoon. This isn’t necessarily a bad thing…actually it is probably the opposite. Because of today’s cloud-base communication technology, long gone are the days when a buyer goes into a sellers booth to “discover” what they are offering and sits down to long meetings of watching trailers and learning about the films for the first time. Today, we all arrive at our meetings having watched trailers and screeners online, knowing what we are interested in, and having highly focused, more productive meetings than ever before.

If any themes emerge from these meetings, it is mostly the same stuff we’ve been hearing for several years now….namely the questionable future of VOD/digital platforms in Europe. While VOD markets are relatively mature in the United States now, they are still nascent and unproven in Europe…but represent the direction our business MUST go if a truly healthy business will re-emerge for independent film. Unlike a few years ago, European companies no longer look down their noses at the digital distribution models…they all recognize their necessity moving forward. But still there is no PROOF that an emerging digital distribution network will be able to replace traditional distribution networks, and so what we find is more HOPE than EVIDENCE or hard numbers to back up the supposition that VOD is really the way of the future. This fact seems to weigh heavily over most discussions of independent film distribution in Europe, as we look to new sources of revenue.

From a traditional Acquisitions perspective — focusing on U.S acquisitions – sales of world premieres at the Berlinale were slow. Roadside Attractions nabbed Gloria and The Weinstein Company took US and English speaking Canadian rights to opening night film The Grandmaster. Cohen Media group acquired Elle S’En Va (On My Way). 

One should expect to see sales for other Berlinale films announced at SXSW, Tribeca, and Toronto as distributors get a chance to discover the films and when the asking prices are more reasonable for small indie outlets. Expect to see the award winners eventually receive distribution and any of the first time filmmakers who wind up getting into 2nd tier festivals here in the US can reasonably expect distribution.

However, following the sales rush of Sundance and the sheer volume of films at EFM, many films from Berlin are slower to sell and even more will not get picked up for distribution in North America. From last year’s competition slate only about 60% have North American distributors, including Oscar nominees War Witch and A Royal Affair.

While the odds of Berlinale films breaking out into North America are slim, the numbers (especially for foreign films) can be quite rewarding when they do happen. Marley, A Royal Affair, and Farewell My Queen grossed over $1,00,000 in the US out of the Berlinale. But those films are of course exceptions to the rule.

I will end with a final thought for now. For those of us immersed in the film festival business, the Berlinale is still an unmatched hub for Festival programmers and festival enthusiasts. Unlike Sundance and Cannes, it is anything but crazy…and there is an unmatched confluence of colleagues able to sit down together in a productive environment to strategize our ways of moving forward together. In that way…it continues to be a truly vital environment for creating community and change in a business context. Even if it is REALLY cold!

 

 

 

 

 

 

 

March 5th, 2013

Posted In: Film Festivals, International Sales

Tags: , , , , , , ,

Written by Orly Ravid

Now that Sundance has announced its new line up, it seems appropriate to discuss the issue of a film’s distribution after premiering or acquisition at festivals.

It is often the case that films do not get released until 6 months to a year or even more from when the film had its festival premiere…At least this is the case when traditional distribution is pursued as opposed to planning the distribution and marketing to coincide with the premiere and work off that plan accordingly.

Here are 10 reasons for the delay in time between a premiere launch at a festival and traditional distribution into the marketplace:

1.  The time it takes to find buyers. These days the market cycle is longer than it’s ever been. Sometimes even a year after a festival or market, sometimes longer to sell titles.  It’s a buyer’s market, so few films enjoy the pleasure of contested bidding that forces prices up and faster closings.  Sundance, of course, is one of the few festivals that commands such a dynamic and more films than at most other festivals will secure distribution, at least domestically, as a result of premiering there.

2. Once a deal is closed, then there’s the contract and delivery which takes time… months sometimes.

3.  Long lead times for press are required, at least four months, and that planning usually does not happen until after deal closure.

4. The distributor needs time to find open slots/appropriate slots in the calendar for theatrical – and it’s competitive out there so getting a booking takes time, and getting the right one for the film takes even more time, again, months.  Sometimes even 6 months is needed to book the right theatre for the right time.. Some of the best screens are locked in well in advance.

5. Cash flow is needed to launch marketing campaigns. This can be an issue for some distributors. Recouping some revenue from previous releases will be needed in order to fund future ones.

6. Major digital outlets take several months to upload and make a film available. Cable VOD has solicitation windows. DVD and digital also require set up times and announcing the title and marketing it ahead of time so again months of planning and slotting. One wants to be strategic about release time.

7. The time of release is sometimes specific to the film. It may be theme driven and demand specific timing or it may want to avoid direct competition. Also inventory shifts in retail stores dictate the optimal time for DVD release (ie. certain times of year, like Christmas or Halloween, call for more of a certain kind of film).

8. Internal scheduling of the distributor. As you know, distributors will have other releases that they need to navigate given what their key outlets have planned.

9. Grass roots and other marketing also demand lead time.

10. Overall, the difference between DIY and traditional distribution is that in DIY, you can plan months in advance to set up the outlets and use the press attention at a festival premiere to catapult the film into the market, even if you aren’t 100% sure which festival will be your premiere. Having everything in place to pull the trigger when you get that acceptance puts you in a good position to release. In traditional distribution, the distributor cannot do advance planning and so the planning starts after the initial buzz has been created at the festival.

I know some of you have been confused or frustrated by the lag time between a festival premiere of a film and the release. Hopefully this helps to explain the matter.

November 30th, 2012

Posted In: Distribution, Film Festivals, International Sales, Uncategorized

Tags: , , , , , , , , ,

In our continuing look at film sales, today we are featuring an interview with an international sales agent for independent films, Ariel Veneziano of Recreation Media. He has handled international sales for many films including the highest grossing documentary of its time Michael Moore’s Bowling For Columbine, the highest grossing independent film of all time Mel Gibson’s The Passion of the Christ, and America’s most watched television show CSI: Crime Scene Investigation. The Film Collaborative works closely with Recreation Media for its international sales efforts.

SC: How are things different now than they were 5-10 years ago?

AV: In one word: worse.  Sorry to start this off on a down note!

SC: Do you mean money-wise or just sales interest at all?

AV: I think both. It is best to acknowledge what the reality is. At the same time, there are some opportunities that have emerged, new ways of doing business that didn’t exist several years ago. It is important for filmmakers to have a reality check that there have been changes in the way viewers consume media and that has led to radical changes in the market. People go to movie theaters to see independent films much less than they did. Although global box office appears higher, this is only for a very small percentage of films. We’re talking Twilight, Iron Man, Dark Knight, James Bond. That share of the box office numbers is cannibalizing all of the other films out there.

Home entertainment revenues have been shrinking. DVD is progressively becoming marginal, and while broadcasters are multiplying, the license fees they are paying, especially for independent product, are getting smaller. While VOD and digital distribution are on the rise revenue wise, there is also an overabundance of product being made because of the sudden availability of low cost production methods.

Piracy is a threat to revenues. People still watch movies, but they don’t always pay for them. There is now a generation who sees this like going to the faucet and turning on the water, you don’t pay for every glass you fill. You pay a monthly fee and you can get a lot of water. Same with many internet subscriptions, one fee, unlimited choice. The good side to digital and particularly online distribution is the ability to, in theory at least, reach a broad audience without need for a large infrastructure. Are there ways to capitalize on that trend? Yes. Are they easy? Not necessarily, it is a very fast moving situation and even the so called experts who have done this for years, they don’t know what is going on. There’s a lot of chaos here, the wild west.

SC: If we were to look at 5 years ago, what would have been a pretty normal deal scenario for an independent film with no names, but some festival pedigree?

AV: If we’re talking about one of the major festivals, like Cannes, Venice, Berlin that you could put on the poster, those are the big 3, you could have made several hundred thousand dollars in worldwide sales. But that’s not necessarily the case anymore.

SC: Right, I was noticing out of Toronto in September that films with more than notable names were being picked up in groups for $5 million, when their budgets must be nearer to $20 million combined. Lionsgate/Roadside Attractions bought Stuart Blumberg’s “Thanks for Sharing,”(Gwyneth Paltrow, Mark Ruffalo, Tim Robbins),  Shari Springer Berman and Robert Pulcini’s “Imogene” (Kristin Wiig, Annette Benning, Matt Dillon) and Joss Whedon’s “Much Ado About Nothing”, all of them for a reported $5 million. So those films are not making their money back in advances. It used to be you could be made whole or close to it, but now that is not nearly the case.

AV: Right, it means you have to be smarter with the budgets, keep them low. Smarter with the finance plans and use soft money, something that isn’t going to be high risk for investors. What happened in the music industry is now happening to film. When is the last time you bought a CD? With technology progressing so fast, storage capacity growing, speed of transmission of data, availability of mobile devices. Few people are going to want a DVD collection, why? I can access a gazillion movies in my cloud storage. So if people aren’t really spending money on music, the revenues for albums have gone way down. Why would they continue to spend for films? If you want to know what the future holds for the film industry, look at the music industry.

And because there is so much uncertainty, buyers are trying to safeguard themselves. They are being much more particular about titles they take on and for what prices because they don’t know how well it will sell.

SC: So when you go to a market, what attracts their interest to buy anything?

AV: Bigger theatrical pictures. For foreign buyers, they want to know the film will have a wide domestic theatrical release. Some domestic distributors can promise that like Weinstein, Summit, or if you are an international sales agent who struck a deal with a studio early on to release the film with a minimum 1000 screens, buyers are receptive to that.

Cast of course makes a difference. Certain genres like action do very well. Everything related to action travels well. So, adventure, sci fi, thriller, fantasy are all cousins of the action genre and those typically do well.

SC: One genre I see a lot in indie film is the “coming of age” drama story. How well does that kind of story do?

AV: AWFUL  in terms of revenue. I am talking as a businessman. As a viewer, I love coming of age dramas, but I can’t sell them. Nobody wants to buy them unless: 1) it is directed by a world class filmmaker. If it is a Woody Allen or Terrence Malick film, you’ll sell it 2) big names in the cast and when it comes to getting buyers excited about the cast level, the bar has gotten a lot higher as far as this  3) based on a best-selling novel 4) selection in a MAJOR festival. For international revenue that would be Cannes, Berlin, Venice. Sundance has an impact domestically, but internationally people don’t care. Toronto the same, it is fine for a repeat screening, but if that is your only claim to fame, not going to help you that much.

Coming of age drama is one of the worst for travel; that and comedy. Buyers just flee unless it comes with any or lots of those 4 criteria. So Terrence Malick’s Tree of Life, fits 3 of those criteria. World class director, A level cast, major festival selection. That is desirable to buyers.

SC: So you are really saying that a microbudget indie film with all of those things absent really has no chance for a buy at a foreign market?

AV: None.  Absolutely zero.

SC: This is good to know, we’re tempering expectations here. This doesn’t mean there is no audience for the film. It simply means that it has no value to a buyer.

AV: It is going to bring in too little money for them that it isn’t worth investing in. But you’re right, does it mean you can’t put it on iTunes or some other online outlets on your own and get people in foreign countries to pay to see it? You can absolutely do that. But since it is such a wild-west scenario at the moment, the revenue could still be zero for you.

SC: Are you saying that there are no prospects even in broadcast for this kind of film?

AV: No prospects, but as with anything there are a few exceptions. A Lifetime movie, like a women in peril kind of film. If it was bought by Lifetime in the US, then there could be some broadcast value elsewhere. But that is a very specific kind of film, very formulaic.

SC: What about a low budget documentary? What if it was picked up by HBO in the States?

AV: Now we’re mixing types of films. Docs are a little bit different, but it depends on what they are about.  If it strikes the right chord with something timely, you find the right broadcaster who is filling their schedule with a thematic type of programming and your doc fits that profile, then boom you have a deal. A small deal probably, but still a deal.  A theatrical doc is the exception, docs are mostly for TV. Having it on HBO? No, it doesn’t make a difference. Not PBS either. It is more about the right subject matter, being topical.

The brands broadcast buyers respond to for narratives are Syfy Channel, Lifetime, Disney, Nickelodeon,  maybe Hallmark. Again, those films are very specific and formulaic. No fancy effects, no flashbacks and weird montage, just very straightforward stories.

SC: A foreign sales agent does what? You go to markets, but what is done in between? Should I get a specialist foreign sales agent or a worldwide sales agent?  

AV: Typically domestic and foreign markets are two different animals. There are some sales companies that can act as a good one stop shop, handling both within the same company and that can simplify administration. But the option to hire a dedicated domestic sales agent – also known as a producer’s rep – is a common way to go as well.

What we do as a sales agent is that we help you maximize revenue on the film from all available sources around the world. So that entails marketing, highlighting an existing campaign or creating a new one; working the press, getting a film into the right festival. Then leveraging the relationships we already have with buyers around the world. Negotiating and papering the deals. Delivering the movies. Invoicing and collecting the revenue. Monitoring how a film does in a territory and requesting (or demanding!) the revenue reports. Structuring the deal correctly so you can have some money up front and then see more money later down the road – if the film does well. It is a “technical” job and is very relationship driven.

Probably the most important aspect for a filmmaker in electing a sales agent, is working with someone you can establish a relationship of trust with. Trust can be an elusive thing sometimes. You keep hearing stories about filmmakers being ripped off by sales agents. Some films are probably not meant to be handled by a sales agent because it is just too many layers of middlemen for too little available revenue, and the filmmaker would have been better off handling it themselves for the amount of sales revenue that can be gained from it. It will be a lot of work though for the filmmakers and some people are very naïve about that, thinking ‘oh who needs a sales agent?’ and they take their film to markets or put it up for sale themselves online and at the end of the day, a lot less revenue comes in than they thought. It is a lot harder to make money than it seems…

SC: Sometimes filmmakers try to call buyers and they find their calls aren’t returned. Buyers don’t know who they are.

AV: Trust me, sometimes we have trouble getting them to return our calls too! And they do know who we are.

SC: What is the typical length of time for a sales agent agreement?

AV: There are two types of agreements. One is a straight distribution agreement where the sales agent comes on just to sell the film into territories. Another is when a sales agent comes in with a minimum guarantee, some money upfront. If they put in some money, they will be more demanding on the terms. If it is just straight distribution, the filmmaker has more leverage to negotiate it.  So a typical term is 10-15 years.

SC: Why does it need to be that long?

AV: Well there are two questions here. The first is the sales agent’s engagement term. How long is the agent going to be selling the film? And the second is for how long is the agent allowed to sell the rights? How long will the contract last for each deal brokered?  I might sell the film to a buyer in the first year, but the buyer might want a 20 year contract on that film especially if it is an all rights deal where they can exploit each window over a long length of time. They might spend a lot of money to release the film theatrically and make up the bulk of that money on DVD/VOD and then digital then broadcast which can then mean relicense and relicense over a long period of time. You know, when you watch TV, there are rerun movies, things that came out a long time ago. Those  have been relicensed over time.  So if you are going to all this effort and expense, you want to have a long period of revenue coming in on that.

If a producer and a sales agent have a good relationship, they should both want that. It is not just about selling and walking away, there is the monitoring of the sales.  You may get an advance from the buyer, but then there is a revenue sharing structure that has to be enforced. A buyer might release theatrically and not make money, but then it goes into DVD and broadcast, and especially in Europe broadcast is where a lot of the money is, when that revenue is coming in, you have to make sure reporting is being done correctly.  That can be many years after the fact.  If a film is doing really well, you may have to check the reports or audit them to make sure you are getting all that is due.  It can be complicated to do this and costly. You want your buyer to comply, but you may have to send in someone to check the records. You need to manage the revenues coming in, the agent gets commission and expenses and then the rest flows through to the filmmakers.  So for us this lasts 15 years typically.

SC: 15 years to maintain the film, the sales contracts on the film?

AV: Yes.

SC: So then the question is if after a year or two, the agent hasn’t made deals in many territories. Why should they still hold the rights to my film for 15 years? If I know that I have an audience in Indonesia based on my website traffic, but it isn’t enough to satisfy a broadcaster or a distributor in that territory, I could service them directly from my website, but I can’t do that because legally I don’t own my film, the agent does.  An agreement for that length of time in this case doesn’t seem to serve anyone.

AV: Well in TV sales it can take a while for a sale to come through. The decision making process is slower in TV.  Also it can be about the right theme being programmed in the schedule.  A film may not be a fit for this year’s schedule, but maybe for a schedule 2 years from now.  If the agent has the rights to a film that fits, a sale can be made then.

But I think good practice for a sales agent is to yield to the filmmaker if they find after a reasonable amount of time that there is no real sales potential.  A clause should be worked into the contract that after X amount of time, if no sales are pending and interest is limited, then the rights go back to the filmmaker or the sales agent agrees to arrange for another type of distribution (iTunes aggregation or other kind of digital VOD distribution) and any revenue would be subject to whatever commission was agreed – if the sales agent helped to get the film onto a revenue generating platform, then they should get a commission out of it.

SC: Walk me through the revenue flow. If it is just a straight distribution deal, the agent has not given the filmmaker an MG to represent the film, how does the money flow from the buyers through the sales agent to the filmmaker?

AV: Everything is up for negotiation, but here’s the typical structure. The revenue comes in from the distributor, the agent takes a commission,  then the agent takes reimbursement on the expenses that have been capped and agreed, then the filmmaker gets the rest. Let’s say there is $100,000 of revenue. Commission is 20% and the agent spent $10,000 in expense. The commission is $20,000 plus the $10,000 for expenses so $70,000 goes to the filmmakers.

SC: Ok say that it isn’t $100,000 in one go. Say it is $2,000 this month and $5,000 last month and all of this revenue flows through the agent.  Does that mean every time there is revenue, the agent gets 20% of it, or is this a flat 20% of all revenue?

AV: Usually reporting is on a quarterly basis in the first year or two and after that it is only twice a year.  So every time there is a statement, commission is disbursed.

SC: And how do you show me expenses? How do I know what my expense was for the trailer or the one sheet design and printing or the market booth?

AV: Again different companies have different practices, but typically expenses are amortized across all of the current titles the sales agent is handling. We have costs from the markets that we split across the slate of films. We do a fair assessment of the films we are actively selling and then there are direct costs. If we hold a screening of a film in a venue during the market, 100% of that cost is going against that particular film. But a booth at Cannes for all of the active slate of films, that cost will be amortized across the slate. So everything should be documented as far as expenses. If you feel like the expenses are unfair, you should have audit rights in your agreement.

When you have that ongoing relationship with your sales agent and they are motivated to do repeat business with you, they will want to do things right. Ideally you want to work with someone you can 100% trust, but we hear every day how there are disputes in Hollywood studios, independent studios. Lots of creative accounting, people don’t always report accurately and things end in arbitration or litigation.

SC: A few years back someone on a panel said that especially in low budget filmmaking there are a lot of first time filmmakers, but not a lot of second time ones. So relationship building on either side, the agent or the filmmaker, there isn’t a lot of loyalty there. The filmmaker may  never work again, the agent may not even want another film from this person, the filmmaker will choose whatever agent seems to be bringing them the best deal.  So is the motivation to be loyal and honest really there?

AV: Well maybe filmmakers should have more of a career plan. Don’t think one film at a time, but have a vision for what your career will look like and plan for the relationships that will help you realize it over time. Also, films aren’t made by only one person. There is the producer, the director, the writer, the cast and sometimes cast members are also producers. There can be relationships with all of these people that benefit a trust factor being present.  And then there is the carrot and the stick principle. Yes, we want to have relationships where we believe all are being honest, but we know some people are more honest with those they know than with those they don’t. You have to trust, but verify.

You can always question what doesn’t seem like a reasonable expense.  You won’t go through every receipt and say ‘are you sure at that dinner you talked about my movie?’ Come on, you aren’t going to do that. But if you see some weird expenses for things you don’t remember happening, like a screening at a market, then you should question it and request backup documentation. The sales agent should be able to provide it.

SC: Lastly, what kinds of things should be included in my sales agent contract. Should there be non performance clauses, bankruptcy clauses, a limit to the years my title is held by the agent?

AV: Well, I am going to be on the other side of the negotiating table and I will want less encumbrances of course. So who am I advising here?!

SC: If we are transparent and honest people who really want what is equitable, we should be honest about this. Also  what kind of things are you expecting from the filmmaker in the contract?

AV: I will want to be efficient. I want to know that they have all the deliverables ready or in a timely manner. This includes master drive or prints as physical material, but also legal documents. Chain of title, music clearances, E&O everything that is included in the delivery list. So many times attention isn’t paid to the details of this both from the physical perspective, but also the budgeting perspective.  Often these materials have to be created and that costs money and a budget needs to be available for this. We might have an offer that will bring in a good amount of revenue, but if the producers can’t deliver the items required by the buyers, there is no deal.

Sometimes we take on that expense ourselves say a 35mm print might be needed, but one wasn’t made. We wait to see how interest goes at the first market and if 5 territories want to do a theatrical release,  then we will take on that expense because we know it will be recouped.  A 35 mm print may be optional depending on the film, but there are other things that are required. For example an M&E track so that the film can be dubbed in foreign territories.

SC: What is the worst thing people tend to forget or deliver in the wrong format?

AV: One thing that happens a lot is stalling, letting things drag and not delivering the final elements. The final music tracks are being cleared or the M&E track is being finished. Several situations where the film never really seems to be finished.  The deals were struck, the buyer is getting impatient waiting for everything to be sent over. A film isn’t like red wine, it doesn’t get better with age, it doesn’t gain value, it does the opposite.  The film got old and it never came out.

Also, one thing that is perpetually a disappointment: still photography. Good photography is super important to promote the film, to design into the campaign. Buyers really want good stills.  On low budget films, good photography is perpetually dismissed. Make everyone’s life easier, get lots of on set shots. Not behind the scenes stuff with the crew goofing off and doing set ups.  Get shots from the scenes, good shots of the cast, the atmosphere of the scene, things that we will see on screen.

SC: What would you tell someone who hasn’t yet made their film, but they are about to embark on the process. What to expect?

AV: First start with why you are motivated to do this? Making money isn’t always the prime objective for some people. They have an urge to tell a story and yeah, maybe some business person may find it genius, but it is ok if they don’t. Be very clear about that with yourself and others, that you are doing something that has only a remote chance of making money. That way, you won’t be this frustrated filmmaker who is suddenly surprised when all the odds are against you. You knew it going in. Maybe this first film is a calling card and all part of the career plan. Ultimately, if you want to make a career in this industry, you are going to have to make film that connects with paying audiences and make some commercial sense. First films can be something very striking visually or artistically, but not make much or any money. They can have an artistic integrity that isn’t necessarily attractive to a buyer, but can find a small audience.  In order to capture industry attention, the films are going to have to be accessible to an audience.

I thank Ariel Veneziano for sharing his time and information with us. Remember, The Film Collaborative does handle films sales on a limited basis and we are always open to advising our members on the best course for getting their films out to market.

November 20th, 2012

Posted In: Distribution, International Sales

Tags: , , , , , , , , ,

In light of the American Film Market just wrapping up and Sundance on the horizon, we thought we would devote some time to explaining how film sales works and what the landscape is looking like for independent films at the moment. Many of you may not truly be aware of how a sales agent relationship works. Indeed, by conversations we’ve seen on forums and in social media spaces, many newer filmmakers do not understand the repercussions of signing a sales agent agreement for their films.

Typically sales agents do not act like real estate brokers, but more like intermediary distributors.  What I mean is they do not facilitate a deal that a filmmaker does directly with third parties and then charge a commission that gets paid out as does a real estate broker. Typically, sales agents first license all the rights from a filmmaker (meaning they then possess all the rights, meaning the film isn’t yours to control during their agreement term) and then re-license them per territory or in a worldwide deal depending on the territory they have been assigned to sell in contractually. The agreement is between the agent and the buyer, not between the filmmaker and the buyer.  Often sales agents’ terms are 20 years, or 15, 12, 10, 7, but rarely less than 7 and the more old school ones are longer. The reasoning is that they need the rights to be able to sell the rights. So for at least 7 years, the film is no longer in your possession and by the time you get control of it again, it is indeed considered an old title.

Film sales office Asian Film Market

There are some advantages to working with a sales agent of course.  They will spend money traveling to markets, producing sales materials, courting buyers and they handle all delivery and oversee the distributors they’ve signed agreement with, keeping a watchful eye and monitoring accounting.  Sales agents usually have better buyer contacts than most filmmakers and more leverage, and they have more market intelligence. Bear in mind that they front this money for the film (that they own for a time), but it all must be recouped from the sales revenue with sales commission before any is passed back to the filmmaker. There are also times when the delivery items (also known as deliverables in a sales agent agreement) must be completed and paid for BEFORE the agent will take it out to buyers. In some cases if this hasn’t been delivered upon signing the agreement, an agency may pay to have these items fulfilled if they find a buyer who requires them (like 35mm prints) and the deal is large enough to recoup this additional cost plus commission.

The taking rights component is an issue because these agreements last for a number of years and the filmmaker is shut out of much or all of festival distribution and the ability to conduct direct distribution efforts (internet distribution) plus all the rest.  I’ve written all this before; and many seasoned filmmakers already know it, but I write it again to remind of one key thing during this AFM/film sales season: DO THE MATH.

At The Film Collaborative we do sales too, sometimes, in a very boutique fashion.  We spend little at markets; we sell only certain strands of films that we have lots of experience in handling.  We do NOT take rights ever and the deals are, almost always, between the BUYER and the FILMMAKER.  Rare exceptions are when we are doing a bulk TV deal and even then filmmakers still have 100% approval and collect within a few days of us having collected from the broadcaster.

There’s more that can be said about the specifics of sales and samenesses v. differences between our model and the traditional one, but the point is to remind of this one key point: Oftentimes the potential deals that a traditional sales agent can do for you and what you can do for yourself or with us are the same, but the math (because of fees and expenses) will net you less.

There are times when certain types of films have a certain sales potential that may be better served by a motivated sales agent who has the cash to augment the deals and can command more and stand better to collect etc.  But most of the time, for indies, the deals these days are so few and far between and for such small prices that if one does not pick a company that follows our model, one will get screwed.  Sometimes, the screening fee from festival distribution is the same or more than the sales money (yes, screening fees can be negotiated!).  Sometimes the benefit of DIY distribution by the filmmaker can net  more than an MG on a sale.  Sometimes there are no sales.  Sometimes the expense recoupments due to a sales agent exceed the sales revenue.  So the key is get real sales projections, back up with corroborating information, and DO THE MATH. Admittedly, this is no easy feat these days and sometimes the sales potential isn’t pretty.

Sometimes films represented by veteran agencies do the exact same deals we do, but instead of the filmmaker getting the money directly from the buyers, it passes through a sales agent who recoups expenses and higher fees such that the net is ultimately less to the filmmaker, who cannot even exploit any rights to her own film.

Before signing agreements with sales agents, ask the agent about the sales potential of your film, the one they are asking to represent (and own for a time). Ask to see the projections in writing and analyze that they really are comparable films (genre, actor names, topic, timeframe of the sale should be in the last year or two, not 5 years ago when the film world was very different). Ask about their intentions for marketing your title, beyond designing a one sheet and perhaps a new trailer. Ask how many films they are representing this year at the markets and will your title get its proper attention. Beyond the markets, will your film be promoted in any other way (publication coverage, special screenings, social media outreach, highlighted on their website and in their weekly email blasts)? Think if it will be worth it to relinquish all rights to your film for at least 7 years. Be  in reality about the real sales potential of your film, do the math, and make your decisions accordingly.

November 13th, 2012

Posted In: Distribution, International Sales

Tags: , , , , , , , ,

by Orly Ravid

It is difficult to definitively explain what The Film Collaborative (TFC) does in a few sentences. Often, when asked for a company bio for a speaking engagement, we are asked to sum up in a few words, but here is the thing…we do different things for different films and that is what makes this non profit company devoted to independent film distribution different. We are a membership organization and we offer a menu of services that are separately available.  For our members, we are largely an educational and informational organization. We will work with any film/filmmaker to provide consultation and educational resources which are included in our membership fees.

We can provide services such as: worldwide festival distribution, worldwide sales, domestic sales, worldwide direct digital, domestic theatrical, limited domestic educational distribution, grassroots / social network marketing services, and contract negotiation services. These are all subject to additional fees so the filmmaker must have significant budget to allow for the labor and expenses incurred and our acceptance depends on the workload currently undertaken by the company.

We also serve in a sales agent capacity with SOME films. Due to this dual nature (educational and service oriented), we are very discerning about the films we take on in this capacity. We can work on any aspect of distribution, but with a strong emphasis on direct distribution being part of  your overall distribution strategy. We can connect you with service providers/buyers we think are right for your film, and ones we trust and recommend, but WE NEVER OWN YOUR RIGHTS and filmmakers can cancel the service at any time. This clearly sets us apart from other sales agents and can be confusing to those who are accustomed to typical sales agent arrangements. The deals we make are almost always between the buyer and the filmmaker. The only exception to this are bulk deals whereby doing the deals individually is just tortuous for all involved.  We are very boutique in our sales agent offerings, not wanting to disappoint or take on more than we can handle. If we don’t think a title is suited to our strengths and our mission to offer quality films of artistic merit with strong distribution potential, then we don’t take them on for sales representation. Which brings us to merit…

Not all films will have distribution potential, not all films are good, not all films have an audience, or not a significant one. There, we said it! Time and again we see filmmakers willingly, enthusiastically going into debt, either raising money from investors or credit cards and coming to us for help in getting their creations out into the world. Sometimes those creations just won’t have a life out there and no matter what is spent in time or money, a significant audience won’t be found. We drill down into every member’s film in order to give the best assessment, but there are times when the prognosis is not favorable to the kind of success they are seeking.

For members’ films, we remove our  personal tastes from the equation and try our best to determine WHO in the world would be enthusiastic for the film and how many such folks are out there? And where are they? And can they be reached given the resources available? When you made the film, were you thinking of an audience?  When you came to us expecting the film to: get TV sales, international sales, a nice Netflix fee, a theatrical release, a theatrical even after you did a DIY DVD and iTunes release, were you basing that on another film that is similar? Do you understand the decision making process involved in the buying of films for release? Was any research at all conducted BEFORE the production started? With the amount of information on our site and thousands of others online, there is no longer an excuse for not knowing the answers to these questions well before a production starts.

I am starting to want to be the tough love nursemaid and say we don’t want your babies to be orphans. Filmmakers now have to educate themselves a bit before conception and well before giving birth so they will be able to  cover all the rearing their film baby is going to need to claw its way through the mobs of other film babies, their TV siblings,  Webcontent cousins, and the rest of their multimedia distraction family. As with conceiving real babies, it is all fun and games until the reality of raising a child sets in. You need to be fully prepared for the long haul.

We have information, we keep up with the current shifting sands of distribution, we receive opportunities because we represent quality films, we have contacts, years of expertise, we’re friendly, we’re not gonna f*ck you over, but we cannot save every film from oblivion nor can we convert every film into a success however you define it.  So much of that has to start with you, being clear and honest with yourself, before you say “action”.

 

photo credit: Adam Foster | Codefor

August 8th, 2012

Posted In: Digital Distribution, Distribution, International Sales, Marketing

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

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