“What I Wish I Knew About Distribution”

This is for all you folks trafficking in the indie film world. Ron Najor is a producer of two movies: I Am Not A Hipster and Short Term 12, both written and directed by Destin Daniel Cretton (you can read my interview with Cretton here). There was a recent article in which Najor mused:

“I often asked out loud, ‘isn’t there a manual somewhere for this!’. So this article will share some of my realizations and lessons I learned while self-distributing our movie, all of which I wish I knew before trying to get our film out into the world.”

Here are some key lessons from the article:

Sundance Institute’s #ArtistServices provided us with best-in-class digital distribution access through their partnership with the leading digital retailers. Destin, Asher, and I also found separate partners to help with our Cable VOD and international deals. Working with all of these different entities, we had to negotiate several different distribution agreements. Most agreements initially appear to be one-sided, in favor of the distributor. It is up to you and your sales agent and/or lawyer to hammer away at the points that you want to add or remove, before signing anything. I can’t go into detail regarding the actual deals we signed, but looking back on the experience, here are some interesting points I think every filmmaker should pay attention to when negotiating a distribution deal:

• Bankruptcy: If the company goes bankrupt, all rights revert back to the filmmaker. You might think this is bold, but it has happened where a company does go bankrupt and films have gotten lost in the shuffle this way.
• Release Date: Try to put in the deal an agreed upon release by date — this is called an “outside release date.” Usually it is a date that is further along than what the distributor has promised for the general release plan. That way, if distributor does decide for whatever reason to shelve your movie, you have an out date that they are required to release the movie by, within the specified distribution model that you have already agreed upon.
• Selling the movie from your website: You should try to carve out selling the movie directly from your website, both on digital streaming/digital downloads and DVD/Blu Ray, if you can. Many times a distributor will let you have this ability outright, and other times they will want to participate in the profits, so there are a few ways that you can make this work. It is an important piece either way, as it allows us as filmmakers to market and sell our work directly to our audience, and there is a lot of value in that.
• CAPS on Expenses: Put a cap on expenses, especially if the deal is one with no MG (Minimum Guarantee) being paid. An MG, also sometimes called an advance, is money given up front for your movie, kind of like a signing bonus that is recoupable by your distributor. I have often heard from independent filmmakers that after the MG is paid out, they won’t receive any additional money from distributors; sometimes this is because the film just did not perform, and other times it is because the film is sitting behind a mountain of rolling expenses that are built up ahead of revenue. Thus, when striking a deal, it is important to put in spending caps, when possible. If you can cap the amount of money a distributor spends releasing the film, you can mitigate that build of costs, and in kind, protect your potential revenue stream. It is also typical to ask for costs to be third-party verifiable, meaning: if a distributor spends a dollar distributing your film, they need to show you hard accounting as to where that dollar was spent. If they do not, then you have a case to not have that dollar counted against profits.
• Gross Corridors: This is not common practice per se, but you are seeing more and more distributors who are willing to institute a Gross Corridor payment system for films they are working with. What this means, in as basic a way to say it, is the filmmakers will see a certain percentage of income, from dollar one up to an agreed upon amount. It is important to note that this payment is recoupable on behalf of distributor against payment above the ceiling set in the Gross Corridor. That being said, this allows filmmakers to start seeing a cashflow when an MG isn’t being employed or it can be used to help supplement an MG that has been paid, thus sweetening the deal.
• Length of Rights: It has also become more common practice when there is no MG or a very low MG, to have shorter contract terms. When a distributor is paying a considerable sum for your film, they typically will look to hold the distribution rights for anywhere from 7 to 20 years. On the other hand, if the amount in question isn’t as considerable, it is easier to get a term whose length is typically anywhere from 2–5 years, depending on the platforms that the distributor is focusing the release on.

It’s a jungle out there, the indie film world. But if you’re talented, write a great script, work within a tight budget, and attract an excellent cast, all of which Cretton did with Short Term 12, you can find yourself landing gigs like this to which none other than Jennifer Lawrence is attached.

For the rest of the article, go here.

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