Welcome to what will hopefully be my most discreet blog because if I wrote what I really wanted to say, and named names, I could be sued and I would also alienate filmmaker friends and colleagues who have been kind enough to share the details of their miserable deals with me.
Let me sum it up like this: Distributors are people who want to make money from your film, but don't necessarily feel the need to see you do the same.
That is no exaggeration.
I was a participant in a question and answer session with a major indie distributor. A filmmaker was asking the distributor about recouping the his costs to his investor. The distributor just laughed. He said he didn't care whether the filmmaker's investors made money. The only thing that he was concerned about recouping was his prints and advertising costs.
That about sums it up.
The distributor is not your friend.
I have worked with and met a lot of people in various capacities in the film business. I have heard one horror story after another concerning distribution deals. I have run across very few success stories. The producer of one of the first features I edited got a very nice upfront advance for North American video that covered his production costs. He was a rarity. Most of the time you will receive no advance and no royalties for your movie. All you will get receive is an entry on the internet movie database, and, hopefully, good enough reviews to help get you another movie.
I am not saying most distributors are dishonest. I'm sure most of them live up to the terms of their contracts. The problem is that the terms of the contracts are weighted so heavily in favor of the distributors that the filmmaker is virtually guaranteed not to make a cent. A couple of companies expressed interest in "21 Eyes," so I handled quite a few contacts. (And heard about many more second hand.) Most of what you read is boilerplate. The main points of contention, which vary from company to company, involve percentages and billable costs. The percentages usually don't sound too bad. Generally, they will take twenty-to-thirty percent of the profits, leaving you with eighty-to-seventy percent. Sounds great, doesn't it? Well, don't buy the Jag yet. Now come the fees which include artwork, advertising, manufacturing, travel to festivals and markets, office expenses, long distance phone calls. You get the picture. The costs will continue to pile up and you're never going to get to that twenty/eighty split. Some distributors, who claim to be more honest, will eschew costs in return for a one time flat fee of, say, if you are going straight to video, fifty-to-seventy thousand dollars. That's no deal. Most films released by these small companies will take years, if ever, to recoup that fee.
Why do filmmakers tolerate this? Because we're desperate. After a year or two of kicking around, filmmakers are willing to practically give their films away for free just to get them out. That's why you can't expect to get a decent advance for horror movie. Why would a distributor give you an advance? Next month he's going get another fifty films in the mail from desperate filmmakers who will let him have them for nothing. Why should he pay you? It's simple economics.
I used to do some work with an old school negative film cutter, the late, great Donny Bono, who told me that back in the 'seventies and early 'eighties that ANY finished film found a distributor. Why? Because it was so expensive to make a film in film that few independents dared. The distributors were starved for product. Now, thanks to the video and HD revolution, the market is flooded with films. Supply has far outstripped demand.
Do I feel we were ripped off with "21 Eyes?" No. Vanguard Cinema did give us an advance. We liked their artwork. And they have been giving us the proscribed sales reports. Everything seems to be on the up and up. The problem came with promotion and advertising. There was none. They sent out a press release, and emailed their mailing list. That seems to be it. They seemed to have little reach into the world of brick and mortar retail other than Tower Records, which essentially collapsed right before our film was released. Fortunately, the film is readily available for rental and instant streaming at Netflix, and available for sale online practically everywhere.
(Pssst. Wanna know a secret? We're actually making more money from downloads on various sites than on DVD sales. Some folks in Hollywood say it's the way of the future.)
I have two pieces of advice:
Filmmaker Mark Redfield taught me a valuable lesson: Make sure the distributor is really a distributor.
Too often, people sign with so-called distributors who are essentially sub-distributors who simply license the films they sign to real distributors. Here's how it works. You sign with Joe Distributor. He calls you a couple months later to tell you that MiniMajor picked up your movie. Wow! You immediately think you've died and gone to dog heaven. You see your film on the shelves at Blockbuster. On the aisles in Best Buy. You read in the trades that your film is raking up dollars. Now you wait for the check. And wait. And wait. It never comes. Why? Because now there are too many hands in the pot. Let's say you made a 20/80 percentage deal with a flat $50,000 fee for costs with Joe Distributor. Well, guess what, Joe's gone off and made a 30/70 percentage deal with a flat $70,000 fee with MiniMajor. The difference is that, unlike you, Joe got a $20,000 advance from MiniMajor that he doesn't have to share with you since he hasn't recouped his $50,000 fee yet. It doesn't matter him whether he sees a percentage from MiniMajor. He got a film from you for free and put $20,000 in his pocket. Next month, there will be another fifty new movies in his mailbox for him to choose from. Everybody's happy. Everybody's made money. Except you.
The key is to cut out this sub-distributor. How can you tell the difference? The real distributor is the one who manufactures the disks and puts them in the stores. Now this isn't to say that a quote/unquote real distributor won't rip you off. He might. But at least he'll be the only one doing it.
Here's the second piece of advice:
Do all the research you can. Talk to other filmmakers who they have distributed. If they made money, you might too.
Here's a great filmmaker survey about distributors on Entertainment Attorney Mark Litwak's webpage. Definitely check it out:
Filmmakers Clearing House