Film distribution deals work to benefit film distributors. If you don't believe this, read over your distribution agreement and follow the money. If you look close, you'll quickly realize that first monies out go to the distributor. And the second monies out also go to the distributor for recoupable expenses. If there is anything left over you might get paid.
In most industries, deals like this would be considered one-sided. Yet when it comes to the motion picture industry, many first time filmmakers STILL sign these types of distribution deals in exchange for validation and the HOPE that they will get lucky. (Hint – Luck is NEVER a solid business strategy.)
Most Film Distribution Deals Suck
Even though most distribution deals do not make logical sense, you're not thinking logically. Otherwise you would have chosen a more pragmatic profession (like becoming a doctor, lawyer or accountant…) Still, if you care (even a little bit) about making money with your film, I suggest you at least break out a calculator for a quick minute.
Let's say you want to make 100K with your film. To achieve this goal, you would start by making some simple assumptions. Right out of the gate, lets say you put your film into Google Play. We know that Google Play is a 70/30 split in your favor. So if you price your film at $10 dollars a unit, you keep $7 dollars. So to make $100,000 in revenue, you need to sell 14,286 units.
How will you do that? Well, that's a good question and the answers (and promotional strategy) is unique for every project. I've gone into some detail about this in my previous article on VOD sales projections. And if you are considering signing with a distributor – These are important questions you need to ask them.
Ask Your Film Distributor
When you start evaluating possible film distribution deals, it's important that you take time to get details on exactly HOW your prospective film distributor is going to help you reach your goal. Unfortunately most of your conversations will go similar to this:
Filmmaker: “I need to move 14,286 units to hit our goal of $100,000. Are you able to pay us a minim guarantee?”
Film Distributor: “We're focused on creating long term relationships and our goal is to come on as a partner and split the revenue.”
Filmmaker: “Great. So what is your plan for moving 14,286 units?”
Film Distributor: “We have direct deals with all the popular VOD platforms. And we can possibly get you special placement on the platforms.”
Filmmaker: “Great. How many sales will that get us?”
Film Distributor: “I'm not sure.”
Since most distribution deals take anywhere from 15-30 percent of every dollar earned (for the next 5-7 years), you need to really get the distributor to provide a comprehensive plan before you sign a deal.
Film Distribution Deals Do Not Guarantee Success
So what exactly will you do to help us move 14,286 units to justify the fact you're going to own 15-30 percent of every dollar earned for the next 5-7 years? Depending on this answer this question is a key factor in determining if you work with a distributor or not. I'm not here to say all distributors are terrible. In fact, there are dozens of really awesome distributors out there.
But if your goal is to move 14,286 units, and all the distributor can offer is access to popular video on demand platforms and some networking opportunity with other filmmakers – Then you need to step outside your emotions and start thinking logically. Because once again, here is how the money flows:
- Platform pays the distributor.
- Distributor takes their distribution fee.
- Distributor recoups expenses.
- Then the filmmaker gets paid.
Keep in mind, this is just domestic. If you go international, any money trickles back to you after added subtitles, language dubs, localized artwork and additional mastering and delivery expenses….
The the deal usually (with some variation) looks like this:
- Platform pays the distributor.
- Distributor takes their distribution fee.
- Distributor pays the sales agent.
- Distributor recoups expenses.
- Then the filmmaker gets paid.
So again, the question is, how do film distribution deals help you move 14,286 units? If the answer still isn't clear, then maybe it's time you do some homework. With the right influencer outreach, publicity and grassroots marketing campaign, it's conceivable that you could simply work with a flat fee for service aggregator for your domestic launch.
Structure Your Film Distribution Deal
In this sense, you become your own distributor. Of course many filmmakers don't like this idea. And I totally get it. You worked so hard to produce your film and you're tired. You're probably not speaking with your cast and crew. And you're sick of your family asking you all the time “when can we see your film?”
So if you emotionally NEED to sign a traditional deal, so that you feel validated, you could always license out your international rights. This is called a hybrid strategy. And it provides the best of both worlds. You control the stuff that you can control. And you license out the other territories.
Bottom line, DO NOT give away your film in exchange for mere valuation and some “warm fuzzies.” And if you liked this article, make sure you grab a copy of the Sell Your Movie System. Included with your investment is my Movie Marketing Blueprint where I go into great detail about how to build buzz around your film.
