FreshDV had an awesome post earlier this week. They had video interview featuring Jerome Courshon on the topic of film distribution. He conducts an 8-hour seminar called Distribution 101 where he teaches his students about the reality of distribution. I’m planning on attending the March 8th seminar in Los Angeles. If you’re planning on going, give me shout out.

Below are my notes from the video interview that was posted by FreshDV.

- — -

What is current movie distribution methodology?
–
People think you make it and put it on the net or DVD. its not a viable way. Tradition is to sell it to companies that do theatrical, cable and they pay you and put it out in the market place. We’re the little guy, and they are the big guy.

Do studios sell to other distribution companies?
–
Nope. They are their own distribution companies: 20th century Fox, Disney, Timewarner, NBC-Universal — they control the distribution system, and have the most power and the deepest relationship with the market place

Instead of moving 5-10K units (copies that a indy distribution does), a major studio can do 15-20K units. More money involved. There are some indy distribution companies that can get it out in a small way or somewhat large way.

How are rights negotiated with a distributor?
–
DVD home video for example; making a deal with an indy distribution…everything is negotiable. There are things that both sides will not backdown on. Some distributors will ask for lenth of terms. some will ask for 15-20 years (unacceptgable, not needed), 7 years is common. First 2 years are the most profitable.

Domestic deals=US&canada. International rights=all nations outside of US&canada. — most home video companies in the USA are domestic dealers.

Are those rights considered to be exclusive?
–
Yes. Almost always an exclusive contract. Some companies do do non-exclusive contracts, its not impossible.

What some have done is: Make a deal with a small distributor who’s ability is limited, and you make a deal where you also work. You sell and promote too and you buy from them at cost+10%. Most dont to this.

What are different models of distribution?
–
8 basic distribution ways: Many want a theatrical release. you feel good and someone has put money into your project. If you do that then you cannot sell cable rights first. You cannot sell internet rights, etc. A theatrical company will want ALL rights for US&Canada. — When amovie goes into the theater (even if its going to lose money) it raises the value of it in other distribution areas. Thats when retails and subchains will want to buy it.

What is a specialty arm?
–
A term used to describe the different parts of a studio. ie “fox searchlight” is a specialty arm of 20th century fox.

How are profits shared with a distributor?
–
When its a theatrical release, a distribution company will want many more than 5-7 years, in some cases forever. If a distributor wants to pickup a movie at sundance then you wont own the negative anymore.

Does a filmmaker get residual income after selling a film?
–
In theory they should. Typically when a filmmaker gets money upfront, that is probably all the money they will ever get. They can possibly make money from the international rights.

What should you expect to earn after the original payout?
–
On home video market there aren’t a lot of large amounts of advances being paid upfront.

What are common terms for distribution deals?
–
There are three somewhat standard deals between distribution and filmmakers

• 70/30 — distributer gets 30% off the gross. The remainder is yours from which expenses are taken care of, such as distribution expenses such as print materials, PR, manufacturing etc.
• 50/50 — royalty deal. money comes in, expenses are taken off the top, the remainder is split between you and the distributor. This is after expenses are taken care of.
• 15,20,25 deal — Filmmaker gets say 20% of the gross, and the distributor takes care of expenses and keeps the rest. 15% is very low, and unethical. Lower than that is worse and is using the filmmaker. Fair is 25%.

What accounting pitfalls should I be aware of?
–
When makin a deal with home video and theatrical, filmmakers should get an entertainment attorney who knows distribution, not says it, but really knows it. If you get a general practice entertainment attorny then they may miss certain things that should be in there. — If they have worked for sales company or a distributor, then they will know their stuff.

• On home video should have CAPS ON EXPENSES. If they want to spend on advetising and promotion then it can be written how much they are allowed to spend. A clause can be written in that fi they need to spend more, then it can be done on written approval.
• AUDIT RIGHTS should be written in. ARBIRTRATION CLAUSE should be in the contract. It costs a lot to sue, but it should still be put in there for your own protection.
• There should be a GURANTEED RELEASE DATE. If its not released by then you get the rights back. — In the 90s there were some companies bought movies, but didn’t release it. If the companies change their mind, you get your rights back. For theatrical deal: If its with a studio, you wont get caps on expenses and arbirtration clause, but you will have audit rights.

What kind of returns can an independant filmmaker realistically expect to earn?
–
Say you made a movie for 100,000 bucks (probably dont have any big names in it.) and its a drama, romantic comedy, or comedy — it probably not going to sell. It’s a case by case situtation. If its only home video and didn’t have theatrical release then it probably wont be sold for much if at all.

If it did have a theatrical release, the artwork was kickbutt, the presskit was awesome and the title is catchy then it may make money, especially if it was a hit. — these genre’s are hard sells. You probably aren’t going to get an advance either.

If you have big names then you are looking well into the six figures. Big names mean a lot. Can you get big names for a $200,000 movie? Probably not. If you are making a million dollar plus movie then you better have some big names in it.

If you have no big names in the movie then you are not going to make much in the forign market, and maybe some in the domestic market.

If you are making a $5000 digi movie, can you make money on it? Probably. Make sure you have some good artwork and a presskit. Will it make you the next speilberg, probably not. Can it happen? it can, but unlikely.

How do broadcast and cable markets compare to theatrical?
–
Things shift every few years. HBO may go on a shopping spree one year, and not purchase for another.

If you have no names, or if you are a noname, and you have no theatrical release then it will be difficult to get a deal. If you have no names but have a theatrical release, then you can get a deal without too much difficulty. If you had names and a theatrical release then it should be fairly easy to get a deal.

Does network TV have a higher payout than cable?
–
With broadcast you will probably need a movie with some known names on it.

Is aquisition format a consideration for distributors today?
–
If you shot 35mm, then its worth using that in your promotion. It puts you a cut above the 2000 others who are shooting in digital. Does it look better? in theory yes.

If you shot on DV, dont tell people. If they ask, then tell them, but don’t put it out there. Most movies in that “Shot on DV” category are precieved as movies that are no good. In most cases they are no good.

So how do i go about securing a distribution deal?
–
There are 2 categories; dramas, comedy/romantic comedy.

You have to build a pedogry. You have people in the press and festivals that say that your film is good. Put that into your press kit. You need this pedogry to get your film be of interest.

If you make a thriller, horror, adventure…then you dont need to be so precise b/c people want to see these types of movies anyway. Give the impression that you know what you’re doing on the bussiness side of things.

If you made the latter but festivals aren’t that importnat. Make sure you have good artwork, title.

How can I locate distributors?
–
there are several directories: Hollywood creative directory, there is a book hollywood distribution directory published by them. Its not a complete book for homevideo distributors.

I give out a list as part of my seminar.

If you get a subscription to video business magazine, home media retail magazine, and get free email subscription, then you get to know who the real players are. — Filmmakers should be browsing this.

Isn’t filmmaking an art form? Do need to earn money?
–
Its also a form of business. If you want compensation for making your movie then realize that its a business.

The most successful producers know the business and have become businessmen. If certian people have had bombs in hollywood, thier career is over for a while, unless they know the business.

Is there a good way in today’s market to earn money through alternative distribution channels?
–
Generally, no, but nothing is absolute. Every couple years a movie comes along and a filmmaker is able to bypass typical distribution and make a dent. — a movie like that was “reversal” and was able to generate $25,000 a year in sales. He had a niche audience. If you have a niche audience then you can make money.

If its not a niche audience, get a vial campaign to work…it doesnt work. The only one that really worked was blair witch project. Its harder for things to go viral these days since the internet has matured.

Movies for download, and iTunes? Will people go there in large numbers? Eventually…maybe? A large part of the nation still doesn’t have high-speed internet access. A lot of people are still on dialup. They will most likely do video on demand or video rental.

Time will tell if people can really make money by selling videos online.

Currently is mainstream Hollywood considering any alternative distribution for thier films?
–
Absolutely. They are probably a little worried as more people get broadband internet, they can easily download. The audience that can do that is pretty small relatively.

Will it grow? yes. Significantly? probably not. What will probably happen is studios will try to control the pipeline.

Distribution Seminar:
–
Secrets of distribution. Get your movie disributed. Its an 8 hour seminar and people learn how to get thier movie out there. www.distribution.la

Advice:
–
If you are contacted by a producer rep, be cautious. Many producer’s reps are not effective. They are like salesmen. Most of them you don’t need. Don’t sign with them. — – Do your due diligence. Sales agents are different. They try to sell your movie to different markets. Its important to have one of those.