Film Financing Series: Distribution

Earlier this summer, I attended New York Women in Film & TV's "Film Financing Day" to learn from the people who live and breathe film finance, production, marketing, and distribution. This series will capture the highlights of that day. 

First up: Changing Distribution Models

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The panel for this talk was graced by industry leaders representing the spectrum of distribution possibilities available to filmmakers today: Brian Newman ( Founder of Sub-Genre, The Transparency Project), Amy Slotnick (Slingshot Films), Bill Thompson (SVP of Theatrical Sales, Cohen Media Group), Dan Truong (Director of Release Strategy & Financial Planning, The Orchard), Jamie Wilkinson (VHX TV), and moderator Isil Bagdadi (Co-Founder and President of Distribution, CAVU Pictures).

It's no secret that the film media market is flooded with content given the new and proliferating accessibility of technology, and that this glut on content makes it a challenge for filmmakers to find the traditional distribution they perhaps dreamed of when they embarked on a career in film. Simultaneously, distributors - old and new - are playing catch up with new platforms and windowing opportunities both as resources and as competition. The film distribution opportunities available to independent filmmakers have never been so varied and prevalent, but it doesn't mean that the process is any more simple or profitable. 

Here are the highlights from the panel:

• As always, know your goals.

Is it more important to you to see your film in a theater, even if it's just for a week in one market? Or is it more important to share it with as many people as possible, anywhere in the world? 

Knowing your goals can help keep you in the driver's seat of your distribution deal. If your goal is to share your film with the broadest audience possible, you'll want to see a special emphasis on VOD and VOD marketing in a distribution deal. The same goes for theatrical markets, specific territories, community screenings, etc. - knowing where and how you want your film to be seen will help you determine the best distribution deal. 

• Get everything in writing

Every deal is different and negotiable, but the basics of a distribution deal are: 

• Rights – the scope of ownership the distributor assumes in selling your project, including ancillary, sequel, merchandising (“any future technologies”), and  festival rights
• Distribution Fees - a percentage taken of the profit usually not inclusive of  any marketing or applicable expenses though those expenses will be deducted before fees are applied 
• Profit Share - the percentage of profit the filmmaker and distributor will see as revenue comes in; can be proposed as tranches to balance over time/as revenues increase
• Timeline - the amount and scheduling of time that the filmmaker makes a commitment of rights, and the distributor commits its marketing campaign and windowing
• Territories - where the distributor has the right to sell the film

As the filmmaker, it's essential that you advocate for your film and goals, and recognize that a distribution deal is often a profit-seeking venture, not a necessarily a career builder*. If you have film festivals lined up or still want to apply, make sure that's written into the distribution agreement. If there's a theatrical market of special interest or value to you, ask that it be specified. Whatever it is you want for your film, GET IT IN WRITING. 

*You can make a distribution deal a career builder with the right counsel, clear goals, and enough of a budget to make choices independent of cash flow. 

• Keep your costs low and focus on the film's "distribution currency"

What's low? According to one panelist, $350,00 is the maximum budget at which to produce a film and make your (and your investors') money back. Films in the $350,000-and-under range most consistently see a return, meaning those filmmakers can create trusting, long-lasting relationships with investors who will be available invest again. 

The dollar amount you spend on your film has no direct correlation to its value in the eyes of a distributor (though it may inform the kind of distribution deal you take, or reject). Focus on increasing the market value of your film by paying attention to the territories of special interest, market size, and audience engagement. Can you co-produce in the UK and therefore be of special interest to UK theaters, television channels, and audiences? Do it! Can you cast internationally to increase your appeal and tap into existing audiences? Do it! This kind of packaging increases your distribution currency - it gives sales agents a broader set of interested parties and more ammunition to demand a higher price. 

• Plan Your Budget & Your Release for Maximum Financial Return

Reserving or raising 30-50% of your total film budget for distribution and deliverables will give you leverage to make smart distribution choices. That chunk of change will enable you to decide if a more traditional deal is the best way forward, or if independent distribution (and independent marketing & publicity) makes more sense for your goals. And it will pay for the deliverables either way. 

Screening in 10-15 major markets positions your film for the premium VOD price point. In independent distribution terms, this means at least 300 community screenings, plus awards. 

Consider a service deal where traditional full distribution deals aren't optimal. Service deals can mimic a traditional distribution release, but the filmmaker retains rights in exchange for direct payment of marketing costs. 

• Audience, Audience, Audience

he audience is your most valuable asset whether you go with traditional or independent distribution. In a traditional deal, your audience can provide you the leverage you need to reach your goals. An identifiable audience can justify a theatrical release, improve your VOD price point, and help you hit your market benchmarks as the distribution campaign rolls out.  In an independent distribution campaign, an audience is the engine that drives the success of your film. Audiences can create a conversation, meet the market requirements for high value VOD deals, and - most importantly - become advocates of your filmmaking career. 

Jeremy Bird, 2012 Obama National Field Director, Talks Grassroots Organizing and Film: Part 1

Recently we interviewed Jeremy Bird to get his thoughts on grassroots organizing and how it can be related to film.  Jeremy Bird has become the ‘keeper of the flame’ when it comes to lessons learned from the Obama campaign. He studied under Marshall Ganz who was Obama's community organizing mentor and later worked as the Ohio General Election Director for Obama’s 2008 campaign, and served as the National Field Director for the campaign in 2012.  Jeremy recently co-founded a political consulting firm called 270 Strategies with former Obama Campaign Battleground States Director, Mitch Stewart.  270 Strategies helps clients connect with key constituencies and design innovative programs. Their current list of clients includes Cory Booker’s Senate campaign,  Ready for Hillary and Battleground Texas. Jeremy discussed the definition of grassroots and how organizing and targeting strategies from the Obama campaign could be adapted to help distribute film.

MG: What are the essential grassroots elements of the Obama campaign that you think can be translated to other industries like film. Is it going against an establishment, is it about empowering people, is it structure…What makes something a true grassroots operation?

Jeremy Bird: 1) Access to data and information.

That seems like something that just everybody does but people didn’t do that before. They would give access to their staff…but they wouldn’t give access to data and information down to the individual volunteer.

2) Real responsibility and goals at the local level.

Instead of saying here’s a packet call these people it’s, ‘let me talk to you about how we’re going to win your neighborhood and I want you to be a member of the team that’s going to do that.’ Now you’re going to do tactics, you’re going to do specific tasks but I’m going to think of you as someone who is responsible for this instead of someone who’s just going to do something because I tell you to.

3) The ability to scale and make your campaign accessible.

Ultimately what you’re trying to do is have people talking to people individually face to face as much as possible. You can’t do that if you’re centralizing the whole operation in D.C., Chicago or a different place.

4) A fundamental philosophy that volunteers can change the outcome.

I think the big difference starting in 2008 is that Plouffe and other people really believed that volunteers had the ability to change the outcome. So it all starts with that kind of philosophy and what you want to give people at the local level.

MG: In the film world there is a stunning lack of data about who is going to see what and how they are seeing it and that creates a problem immediately from a grassroots perspective. Have you ever had an experience where there is very little awareness about the candidate or issue and you’re starting from total scratch to see where they’re at? How do you handle a situation like that?

Jeremy Bird: When I first got to South Carolina no one knew who we were and no one knew how to pronounce our name so we did everything. We paid for TV ads, we did mail, we hired organizers on the ground to up our name idea, the full gamut of everything digital etc.

If you were trying to figure out who is most likely to go see an indie film for example as opposed to a Hollywood film, you want to figure out how big of a universe you need to talk to who tell you ‘yeah I like independent film’ and how can you build a model to say other people who look like them are likely to like independent film using a data set that you have on folks. You know we have it on voter file a lot of other people have it on consumer information.

But really, if somebody in Ohio had told us in 2010 that they supported Governor Strickland, that superceded any other piece of information we could ever get on them. It didn’t matter what car they drove, it didn’t matter where they lived, it didn’t matter what race they were…If they had told us in our worst year that they supported a Democratic candidate they were going to vote for Barack Obama.

The question is how do you actually ask people in some scalable way what movie they like to watch or what they like to eat or these things you want to know about them and then ask enough people that question that you can then build a model.

MG: A lot of filmmakers are stuck wondering if they should try to sell their film appealing to the broadest number of people possible like ‘this is a film that everyone can embrace’ or if they should try to target and isolate the audience that might like their film specifically. In your experience is it smarter to break up the audience and go after targeted constituencies or is it smarter to appeal to the broader elements of your candidate?

Jeremy Bird: Both. You have to have an overarching narrative that appeals to the largest audience possible, especially in a political campaign, then within that frame you figure out what are the things you really want to stress with specific constituencies…you want to have a broad narrative that ties it all together but then you want to highlight actually specific pieces for constituency to really speak to the issues that really matter to them. So I think it’s both.

MG: Have you ever had to do a campaign where people had to take action at home? That’s sort of a thing we have to deal with when it comes to people renting a movie on a certain day.

Jeremy Bird: That’s what we did for bad voting Democrats, sporadics. We called it commitment cards, or basically an ‘I’m in’ program. We would go to them and say, ‘do you commit to voting on Election Day?’ and have them fill out a card either online or in person saying ‘I will commit to vote.’ We wanted to know that they lived there still, that all the data was right but also that they were going to turn out.

The best was in Ohio we would send them back the card they actually filled out with their own handwriting reminding them that they committed to vote. In the states that did that in 2010, it upped turnout by like 4 to 7 points because people were reminded of something they previously committed to.

Part 2:

Our interview with Jeremy Bird gave us many key insights into how the Obama grassroots model could be utilized to distribute film. In our next post we will reflect more on what we learned from our conversation with Jeremy Bird, and present new ideas for how grassroots organizing methods can be used to empower audiences and improve targeting for film.

-Michael, Josh and Carl