Do-It-Yourself Doesn’t Mean Do-It Alone: Assembling Your Distribution Team and Securing Revenue
A Special Discussion with:
- Rob H. Aft, President Compliance Consulting LLC
- Glen Reynolds, founder/CEO, Circus Road Films
- David White, CE), IndieReign
Recorded at Digital Hollywood, Los Angeles, May 7, 2014
For podcast release Wednesday, May 14, 2014
Moderator
- Christopher Kenneally, Copyright Clearance Center
KENNEALLY: Welcome, everyone. My name is Chris Kenneally. I’m with Copyright Clearance Center. Our program today comes with a warning in the way of free advice for independent filmmakers. Do it yourself does not mean do it alone. If you want a thing done well, do it yourself. Apparently, according to Google, Napoleon Bonaparte was the first to make that point. But you’ve likely heard the wisdom from many others, starting with your parents. But did you listen? I only know that Mark Twain was on to something when he said, the older I get, the more right my father becomes.
As independent filmmakers, you have to listen to everyone, from the cast, to the crew, to the lawyers, to the investors. But if you listen well to anyone at all today at Digital Hollywood, you may get the most of what our panel has to say. They will offer insights on what to do at various stages, from development, production, postproduction and distribution, that will increase your chances of distribution success. In fact, assembling your distribution team is probably as critical as putting together your cast or script, because it’s the distribution team who will see you get paid, not the other way around.
Copyright Clearance Center is a nonprofit based in Boston that promotes the value of intellectual property and develops services and solutions that make copyright work for everyone. Fundamentally, that’s exactly what your distribution team is charged with accomplishing, too. So by way of introduction, I want to welcome you again, and I want to introduce our panel. I’ll start with Rob Aft. Rob Aft, welcome.
AFT: Thank you.
KENNEALLY: Nice to have you back at Digital Hollywood. Rob Aft is president of Compliance Consulting, a Los Angeles-based media finance and distribution consultancy serving a variety of clients, including banks, lawyers, producers, and distributors across the world. Rob had headed distribution and sales at a number of independent film companies, and has served seven terms as a member of the board of directors of the Independent Film and Television Alliance.
Of note as well, and I have a copy here, he is the author of a wonderful book, which I suggest should be on your reading table, published by WIPO, the World Intellectual Property Organization, From Script to Screen: The Importance of Copyright in the Distribution of Films.
AFT: Yeah, don’t keep it by your bedside table unless you really, really have trouble sleeping. (laughter) Yeah, it’s a free publication. You can get the PDF on WIPO’s website or just Google WIPO and From Script to Screen. You’ll get it.
KENNEALLY: A very useful and handy publication as well.
F: Google what?
KENNEALLY: Just Google for From Script to Screen.
AFT: And W-I-P-O, all squeezed together, WIPO, and it’ll be the first thing that comes up.
KENNEALLY: And then to Rob’s right is Glen Reynolds. Glen, welcome.
REYNOLDS: Thank you.
KENNEALLY: Glen is owner and CEO of Circus Road Films, which he founded in 2006 to provide strategic advisory services to independent filmmakers. Glen takes the lead in film sales and negotiation for Circus Road. In addition to selling hundreds of titles, he’s produced and executive-produced several films, including Conversations with Other Women with Aaron Eckhart and Helena Bonham Carter, and Night Train with Danny Glover and Steve Zahn.
He holds a BA in English from New York University, a graduate of the Neighborhood Playhouse in New York, and he grew up on Circus Road in London. To make this a thoroughly international panel, we have, from New Zealand, David White. David, welcome.
WHITE: Thank you.
KENNEALLY: David is a leading expert in digital film distribution and the CEO of Auckland-based indie film VOD provider IndieReign. I suppose I ought to spell that. I-N-D-I-E-R-E-I-G-N, IndieReign. He regularly advises the New England – sorry, the New England – the New Zealand Film Commission on digital sales strategies as well as coaches the San Francisco Film Society filmmakers in residence on digital marketing and distribution around the globe.
Really, a great panel to address these question about distribution. Rob, I want to start with you, because I suppose a place to begin is around which aspects of distribution a producer can handle on their own and which they can’t. This is the first question people have to ask, and I suppose honesty is the best policy.
AFT: Right. Just to back up, back to the days when I started, usually what most filmmakers did back then, and most continue to do, is make their film and hand it over to a trusted distribution company – Lionsgate or a studio or somebody that has a lot of experience, knows exactly what they’re doing, how to work all of the various windows and generate the revenue streams, check those revenue streams, hopefully turn some of that back over to the producers at some point in time.
There were always sort of these rogue heroes. Walking Tall – I remember everybody thought, oh, yeah, he’d take that print of the film around in the trunk of his car, and he made millions of dollars. That was great. And you could do that. You can still do that. It’s not an impossible thing. It’s just people don’t realize that he spent a couple years of his life doing that instead of making movies, which is what he should have been doing. You should be making movies. You’re producers, you’re directors.
Then about 10 years ago, especially with the explosion of the Internet, people started thinking, oh, I can do this myself. Yeah, if you want to take the time and the effort and spend years learning how to distribute movies and how to get paid, which a lot of – you think the studios take advantage of you, wait until an independent film cinema plays your movie for three weeks and then gives you nothing. What do you do? Do you sue them? How do you even know what they should have given you?
So what’s developed over time, instead of this sort of complete do-it-yourself idea, where I’m going to get it onto the Internet – well, yeah, you can get it onto YouTube, but can you get it onto Netflix? Can you get it onto Amazon Prime? What about Time Warner cable video on-demand, which is where the real money is? No, you can’t. It’s aggregators and it’s specialists who work in that world.
The background I come from, the international world, forget it. International clients do not want to buy movies from individual producers. That’s just not what they do. It’s not the system. Changing that is just never going to happen. It’s not part of anyone’s thinking.
So what you need is a team. You need people who are specialized in all of these different areas. In the same way that you needed specialists when you were putting together your financing and specialists when you were actually making the movie, there are specialists who hire out and people who can help coordinate those things. I believe that my fellow panelists know a lot more about that than I do.
KENNEALLY: In fact, I want to turn to Glen Reynolds, because the point Rob just made, Glen, was the producer of Walking Tall lost a year or two of filmmaking time by trying to get the film sold and so forth. Obviously we want to compress that time we spend on distribution to make it as efficient and as effective as possible. Do it yourself or do it with a team – there are two tracks there. As I understand, you can work on them at the same time.
REYNOLDS: Sure. I think from the very beginning, when you’re first developing your project and going into preproduction, you can put a part – side of your budget for eventual marketing dollars, whether it’s actually pressing DVDs eventually, or advertising in some way, or doing a theatrical release. That’s one way to prepare for the fact that you have a low-percentage chance of getting distribution. That’s just true for all independent film. Or at least meaningful distribution. Ultimately, we strike deals all the time for our filmmakers, even when they get distribution, for them to do it themselves at the same time.
It’s different from company to company. Some companies will allow you to do your theatrical release if they’re not doing a theatrical. Some companies will sell you DVDs and treat you as a wholesaler, so you can go sell them on your own website. Less of them will let you do something digitally. They just worry about how that’s going to conflict with whatever rights they’re trying to exploit.
That being said, most of my filmmakers that want this right to sell it themselves, go into it themselves, ended up selling about 10 copies to their friends and family and not much else. Because as Rob was saying, what really goes into distribution is a lot of time and a lot of effort in order to make it work. You really can’t just turn on a dime and sell it to hundreds of people just because you’re on the Internet.
KENNEALLY: But on the notion of that multi-track approach, it sounds, I’m sure, to some people, as if you’re competing with yourself. How do you reconcile keeping all those balls in the air?
REYNOLDS: Well, in a way, you’re not really. Most distributors are OK with you doing it directly, because they don’t see you as competing with them. Most of what they’re doing, especially if you’re not a big theatrical film, if they’re putting it in stores or putting it on the Internet, they see it as mostly point of purchase. People see it, and they buy it. It’s not so much that they’re being marketed to and they go find it. They figure if you’re going out and trying to sell it, you’re going to people you directly market to. They aren’t going to see the film anyway.
So there’s really not that much competition. If you do have a good plan and the time to do it, it’s not a bad thing to do, to do it yourself at the same time that your distributor’s doing it, as well. You’re getting a higher margin for doing so, but you’re also spending a lot of time.
KENNEALLY: David White, you work closely with independent filmmakers around the world. I suppose for many people in the room, for those of us who just watch these kinds of films, we think that the script, the story, is really what comes first. But you’re here to argue the distribution is as critical.
WHITE: Yeah, absolutely. I think you summed it up pretty well in your intro, Chris. That if you want a financially successful movie, then your distribution strategy needs to be seen as importantly as your script, and your planning needs to start back when you’re writing the script.
I’ll probably be able to talk more from an international distribution perspective, more from what we’re seeing in the indie layer, maybe how to get some traction on some of those platforms. I do believe you can go direct yourself, but you need to become experts. Are there any distributors of sales agents in the room? OK, no offense. (laughter) The fact that you’re here is great, because you want to learn about the space. But sales agents and distributors, from my experience in North America, have no idea about how to get your film outside of the big brands, outside of the US. US is 5% of the world’s population. The rest is global. And there is a market for your film. There’s hundreds of platforms.
KENNEALLY: Can you tell us about which particular markets are the most exciting right now?
WHITE: Sure.
KENNEALLY: What I hear is that they are building – I think the figure is 100 movie screens in China every week. Is China on that list?
WHITE: China’s booming. China’s very hard to get your film into. You probably won’t be able to get your film into China. However, India has a billion people. India’s an emerging market. You’ve got an emerging middle class, and they’re hungry for content. We’re seeing a lot of sales happening through India. We’re seeing sales of US content into India, which is exciting.
What we also do is we build VOD platforms for other companies. I know how you can get your film trending on those sites, because sometimes you’ve got to look a little lower. You want to be on iTunes, but on iTunes you’re lost in a sea of content. You’re not going to be on the homepage. You’re not going to be at the top of a genre listing. You may be, but you probably won’t be. My advice is we look at that tier down. What exists, and what gives you the best opportunity to be found?
KENNEALLY: At the same time as there’s a great promise in the international market, I suppose, again to Rob’s earlier point about you have to be honest with yourself. If the movie’s about baseball, that’s not going to do so well in India.
WHITE: Rob’s correct, and it’s very hard. But I’ll just say it can be done. With the right strategy and team, you can get your film trending by strategically leveraging your cast and crew, family and friends to go to that platform, or buy, watch, and review your title over a set period of time in groups, and your film will trend just as high as any blockbuster film that’s on there.
If you’ve got those tactics and you’re thinking about those very early, you can plan for that, and you can have a very smart release cycle, where you can get up the list. It’s just like trying to be number one in Google in search rankings. This is the next, I think, holy grail of SEO you want to get your film ranking on a digital platform, and there’s tactics and ways you can do that.
KENNEALLY: If you get successful there, obviously we’re driving sales. That’s the critical point about all of this. What kinds of retailers are interested in independent films, specifically?
WHITE: From what we’re seeing, say if we look at Europe, nearly every VOD platform are launching an indie/art house genre channel. We’re seeing tailored VOD platforms. There’s hundreds of VOD channels around Europe. Europe is such a landlocked country, and there’s so many different countries that you can actually release in one transactional, then you can window on to subscription and then on to ad support, and then you can rinse and repeat across every country. If you’ve got that model and you’ve got that planned right, you just do it again and again and again. I’m not talking huge success, but you can have these small successes across multiple countries, and you can make money.
KENNEALLY: It’s a lot of little raindrops. Rob Aft, it is very much a changing scene. You were describing that in your opening remarks, just how the world has changed. Talk about the way distribution is changing right now. Netflix used to buy a lot. No longer the case.
AFT: Right. I think a lot of the platforms that we’re building have matured in the same way that a lot of the pay TV service has matured. HBO and Showtime, they realized that they didn’t need the indie titles so much to drive their subscriber base. Netflix, by all accounts, is cutting back somewhat on the amount of independent material they’re purchasing, but making up for it in in-house production. They’re just shifting the dollars. They’re still spending a lot of money. If you’re making House of Cards, you’re thrilled. That’s what they’re doing. But if you’re making little indie action movies that they used to purchase in bulk, not so much.
But a lot of indie filmmaking right now is watching these trends and knowing that 12 months from now, when your film’s finished and ready to be released, it’s going to be a different world. We used to laugh back in the days when the industry was changing in the ’90s. I feel really old, but when it was changing in the ’90s, and looked back at the guys who made movies in the ’80s like dinosaurs.
They were making these little indie action movie, the Cynthia Rothrocks. Jean-Claude Van Damme was a big star back then, but it was sort of that same genre. They kept making them and kept making them, even though the market kept shrinking. We used to say, don’t they realize that there is no $55-a-pop videocassette rental marketplace out there anymore? No, they didn’t. Things are changing even faster now.
It’s important to look at when your film’s going to be finished and what platforms are going to be available for it. How do you access those platforms? I guess part of what we’re talking about here is what people do you need to be in touch with in order to try to access those?
KENNEALLY: Answer that question. You’ve been talking about some of the economic realities. What are the things people should be evaluating?
AFT: I think that any filmmaker ever making a certain type of genre or budget level of picture should be a consumer of that material themselves and somewhat aware of what else is being consumed. Obviously, if you look at if you go on Netflix or you go on Amazon Prime or Hulu Plus, they’ll tell you what’s trending. They’ll tell you what people are watching. If you watch a few of the movies that are similar to yours, they’ll tell you what other movies are doing well in that same genre, and you can look at those and do your research that way. I’m not saying that you should then go out and try to make exactly those movies. That’s not filmmaking. But an awareness of those platforms and how do people get on it?
People will say, oh yeah, your film would be great for Amazon Prime. You can’t call the guy at Amazon Prime and try to sell them your movie. They only deal with aggregators. So you’ve got to know what an aggregator is, and you’ve got to get your movie to the aggregator and know what the aggregators are looking for. It’s research, but there’s a lot of information on the Internet about all that.
KENNEALLY: But there’s a shortcut, Glen. I suppose they could work with you?
REYNOLDS: Call me. That’s right. No, for sure. When we work with a film, we’re usually – for most films, we’re starting with the bigger distributors to see if we can just get it out of your hands, so you don’t have to do all this stuff. If that doesn’t work, then there’s mid-level distributors, smaller distributors, that have different levels of access to the DVD retailers, to theaters, to the digital platforms.
I think that it is hard when you’re in the very early stages to figure out exactly what your distributional plan will be, given what Rob said that everything’s going to change in 12 months. I think it’s just important to, if you can, put away some money, so you can try something if everything doesn’t work. You’re making a movie. No one’s stopping you, so you might as well try to get it out there, right?
I think that just one point with regard to Netflix. Yeah, they’re not buying the individual little movies anymore and just filling up their coffers with movies. But there still are companies that they’ll pay a certain advance to for a certain level of theatrical release. That’s where we can come in. We know which companies offer that deal, what it has to be, whether the name value’s right or not. Some of those deals make sense, and some don’t. The money going out necessarily might be more than what you’re going to get. So it’s even you have to be careful with that as well. But definitely we come in to help at all different levels of trying to figure out what to do with it, distribution-wise.
KENNEALLY: You know what some of the distribution deals look like. You also know where some of the opportunity lies, as well, I would imagine. To David’s point earlier about helping maximize the visibility of a film, you know where there might be a potential niche market for a particular film.
REYNOLDS: Certainly, we have to deal with what’s coming in the door. We see all kinds of movies. But we’re staring at mostly – when we’re taking a film out, at a top level, we’re trying the Magnolias of the world, and that’s about it being auteur-driven, about being at a major festival. There’s nothing scientific about it. It’s like, what makes a great movie, and what makes it acceptable to those guys? Just things click with an audience, things click with Sundance. Then it clicks with them.
KENNEALLY: You just used the F-word, right? Festivals.
REYNOLDS: Yes, dirty word.
KENNEALLY: I understand that one of the approaches that Circus Road takes is to start talking as early as possible to the festivals about a movie.
REYNOLDS: Sure. One of the things we do is, over the years, we’ve gotten to know all the programmers at the major festivals and some of the secondary festivals. We definitely help our filmmakers by calling them to plug the film and to help get it in. We don’t have any kind of silver bullet to get it in a festival. But certainly we can make sure that it’s going beyond the volunteers and the interns that are usually the first line of defense for watching these movies. We can make sure that someone significant is watching it, at least to give the film a fair shot.
KENNEALLY: There’s more out there than Sundance.
REYNOLDS: Absolutely, yeah. To a certain degree, Sundance and Toronto are unique among North American festivals in having all the buyers there and creating that atmosphere for trying to sell a movie to a big player. Even stepping down, though, to South By and Tribeca and a few of those festivals – still great festivals, but there’s only one or two big buys coming out of those, and it’s still hard to get buyers in a room at those festivals. But there it’s great branding, it’s a great launch pad, so sometimes we’re starting to sell a film there and eventually selling it right thereafter.
We even use smaller festivals, where you may not see a single buyer. Some buyers may show up to be on a panel, like at Seattle or Austin or something like that, but they’re not really there to see movies. But still it’s a festival that over time has a great reputation. It looks good on a box. We’ll use that. There’s nothing definitive about it, though. You can have great laurel leaves and not make a difference, too, but certainly we use every asset we possibly can.
KENNEALLY: Certainly makes you feel good and your can show your mom back home.
REYNOLDS: Yeah. (laughter)
KENNEALLY: David White, what’s interesting is there that Glen’s talking about a more traditional theatrical approach to things. IndieReign is really about VOD. So distinguish that and help people in the room sort of weigh those options.
WHITE: Sure. I’ll jump on a couple of points Rob made, too, which were really valid. I think one thing I would say is don’t look back and 24 months later, still be on the festival circuit. Sometimes you’ve just got to get to market and just let go of that dream you’re going to get picked up for a three-picture deal. Just let that go and just get to market. If you’ve got that plan at the start, then that’s not such a scary option. You’re prepared for that.
One thing I would say also that Rob said is keep a little bit of budget back. Your most important asset in all of digital sales is your poster, and your poster at that size. That’s what people click on. I just get so frustrated when I see a poster that’s made by someone’s cousin who did design at high school. That’s their poster. They’ve got this brilliant film, but it looks rubbish.
We’ve done experiments where we’ve put a little film laurel on a poster and one without it, and we had 130% increase in click-throughs. Those clicks mean revenue. It’s all about clicks. For example, Google will change. They tested hundreds of shades of blue before they get to the blue that gets the most clicks. Every little detail matters when you’re selling online. So you do your research, the platforms you want to be on. Sometimes you can’t do this until right at the end, like you said. You’ve got to look, and where is my film going to list on the site? Is it this genre, this subgenre?
All of the posters that’s there, take a screenshot, put it into Photoshop or something. Put your poster somewhere there. Does it stand out? How can I change it? Be bold with it. All you need is someone to click, and then they’re reading a synopsis or watching a trailer, and that can just mean so much to the bottom line. It’s not crazy. If I had a marketing budget, I’d put it all in my poster. It would be my top here.
KENNEALLY: A great tip. I bet people will write that down or tweet it. But talk about resources management otherwise. Beyond that, you said keeping an eye on your budget, watching your dollars, making sure you’re not burning cash too fast.
WHITE: Yeah, exactly. It’s very easy to put it all in going around a festival circuit or into staying in hotels or whatever. Just make sure you’ve maybe identified a good graphic designer or a poster artist and just put your budget into that.
Then some sites show a big trailer, and they’ll have a film still there. That’s very important. So you’ve got to look at how they display the content and tailor your artwork for that. You might get a poster that’s getting click-throughs, and then you’ve got a rubbish still, where they’ve taken a screenshot from the middle of your film. You want them to click on the poster, and if there’s a big trailer, you want that to look just as inviting when they play it, and then hopefully you’re doing all these things to help conversion. An extra 3% in conversion can mean hundreds of thousands of dollars. An extra 100% or 1,000% conversion, which is easily done, can mean so much. Again, that helps your film trend because more people are looking at it.
AFT: How early do you want the filmmakers to approach you, so they don’t make these mistakes before they hand you all of this? They’ve spent all their marketing budget.
WHITE: Yeah, that leads on to another great point. A lot of these smaller platforms, you can find who are the influencers. Who are making the decisions on which film becomes a staff pick? Who are the bloggers on the site that are writing reviews on this content? You can find them on Twitter. You can find them on LinkedIn. And you can start building a relationship. Now, you don’t sell them straight away. You just engage. You re-share their content, and then you build that relationship.
People have done that with me and said, hey, my film’s going to be releasing in a month. I’ll say, great. Look I’ll put you in touch with our head of marketing. She’s going to help. We’re going to cover it on a blog. That film’s no better than anything else, but I’ve got that relationship. So I think you start that early. You start building the relationship, and then you ask the questions. You’re going to get a lot better and honest responses.
Look at countries, too. There’s obviously difference in culture and what people like. So really just do your research there on what’s driving clicks.
AFT: Does IndieReign do – sorry, Chris. (laughter) Actually, Chris and I worked on coming up with an idea for this panel mainly because I wanted to know all this stuff from these guys. I have to take him to lunch now. Would you get involved in helping somebody do their poster in a way that is going to make them succeed better on those platforms?
WHITE: We do. We do try to have that real personal touch with what we do, whereas other platforms we power, which are totally not branded by us and you wouldn’t know we built them, they wouldn’t touch it. You’re just seeing them, they’re out working.
One thing on the back of that is make sure you have consistent sizes, you know what formats all these platforms need, and you make sure your film is encoded correctly and it’s from HD down. You want to make sure that you’re sending the right assets, or they won’t list it. Sometimes people forget that, and it’s left for the producer. Oh, I’ve got this copy here, and I need to get this 160-gig file to this guy, and I can only send it by whatever method they accept. You’ve got to make sure that you’ve saved a little bit of money for a bit of encoding, as well.
KENNEALLY: Glen Reynolds, on the point about relationships, if people are beginning to work with you at the very start of a project, and they’re with you there for the life of it, really, when does that relationship end? Or does it evolve into something else?
REYNOLDS: It goes on forever. (laughter) We get calls years out when people have trouble getting royalty checks or statements. We usually have a one-year term on our agreements, just because you got to end it sometime. But I’ve made films with producers that I had started out being their sales agent. It just kind of depends on how it goes, where the film ends up, and how much trouble they get into down the line. I usually get the troubled calls down the line, as opposed to the hey, it’s going great calls.
KENNEALLY: Well, yeah. There are some tough lessons that get learned in the process. People make their first film only so they can have enough money to make the second film. What are the things that you’ve heard people have learned that you could share with this audience here when a distribution arrangement doesn’t go the way it was intended?
REYNOLDS: One important thing I try to tell all my producers is try to become best friends with your distributor, regardless of what they do. Because the minute you start pissing them off, whether it’s justified or not, they stop returning your phone calls. It’s hard to get them on the phone anyway after you make a deal. But taking them to lunch, buying them flowers, whatever you have to do just to keep buttering them up along the way goes a long way.
The filmmakers that come in thinking they’ve got it, that they’re entitled, and their film is the best thing ever, and that everybody should bow down and worship it tend to get lost, because people just don’t respond well to that. I see that so often that it’s definitely something I tell my filmmakers right off the bat.
KENNEALLY: Rob Aft, commitments, relationships, it sounds like we’re talking about getting married here. In a sense, we are. Some marriages wind up in probate court with a divorce. How would a distributor make evaluations? I know a lot of your work – the WIPO book, for example – is really about alerting people to the dangers, to the pitfalls. As much as we’re hearing about all the great things that these folks can do for you, if it’s so easy to get online and represent yourself as an agent or as a consultant, how do you know who’s for real, who’s not? What are the questions a distributor should ask?
AFT: Definitely look at their track records and then ask the distributor. If you’re a producer, ask the distributor for testimonials and some phone numbers and some e-mails of people they’ve worked with in the past. I know on Glen’s site, because I was checking it out for a friend the other day, you’ve got a list of them. You’ve got a list of producers that I assume you’d be happy to give somebody that phone number and say, oh yeah, this person? Yeah, call them up and ask them about how that is, and ask them without revealing any detailed financial information, how did you help this person? What did it cost them? Was it financially a good decision for them to go with you? Do you think that you could have done something better? Everybody could have done something better on everything.
But I like Glen’s advice about being nice. Because there’s a Patrick Swayze movie, Road House, where he gives great advice to his employees, which is be nice until it’s time not to be nice. They ask him, well, how do we know? And he says, I’ll tell you. Because they will never know. The producer’s never going to know when it’s time not to be nice. That’s a job for their lawyer. That’s a job for their accountant or their distribution representative. Glen can tell them, oh yeah, these guys are totally screwing you over. Audit them tomorrow or sue them, because it’s been it might be enough money that it’s worth suing them, or there might be other options. But no, it’s time not to be nice.
KENNEALLY: A basis for a lot of arguments and a lot of court dates is the contract itself, right? That would be a critical piece to really be looking at carefully before you sign.
AFT: Right. Understanding the contract. Unfortunately, misunderstanding contracts is sort of the basis for this whole industry.
KENNEALLY: That’s putting it mildly, right?
AFT: It is. Really, so many people just don’t understand what they’re signing. As a producer, you need to understand every single piece of every single word in an agreement. If you don’t understand it, and your lawyer won’t explain it to you, change lawyers. If it’s not clear in the contract, put an example in. Even then, it won’t be clear when there’s a dispute, because it will be interpreted in different ways. A lot of the disputes out there tend to center around the same things over and over and over. Promises unfulfilled. I thought you were going to do $1 million on my movie. You only did $100,000. I’m going to sue you.
It’s important to know exactly what you’re expecting, what’s been promised, as opposed to what’s been implied. What’s a guarantee as opposed to a promise? What’s a material breach as opposed to just an immaterial breach? If you get to that point, you’ve already lost. If you have to refer to the contract and try to figure out, in minute detail, whether clause 23 on page 60 was violated.
KENNEALLY: That’s when you know not to be nice, when you have to go find the contract.
AFT: Yeah, and there’s almost no good solution at that point. You’re right. It’s like a marriage. You could spend the next three years trying to get out of it, trying to punish the person.
REYNOLDS: Yeah. The contract’s a pre-nup all in favor of the distributor.
AFT: Tends to be, because the distributor understands it, is the other thing. So often the producer doesn’t understand their audit rights, or they don’t understand the cost of delivery schedule. You were talking about delivery. A studio delivery schedule is 12 pages long. I had a producer ask me, I don’t really need to deliver all this, do I? I said, yeah, or they don’t pay you. (laughter) Can we negotiate it? No, it’s a studio. They want everything.
KENNEALLY: We’re going to take questions at the end of the discussion here. David, talk about distributors and how they see that relationship, how they see the contract when they put it down in front of you.
WHITE: Sure. From my experience, we do work with a lot of distributors. Some are great, and some are bad. Some only care about just getting all this content, bundling it together, and shipping it off to platforms as one sort of aggregated package. You’re not going to get sort of individual love for your title. That’s where I think it’s really important that you do become their best friend and that relationship part.
I think if you can find the right distributor, and you can build that connection, and you know they actually believe in your film, it’s not jut another thing for their shelf. That’s probably the most important piece is make sure. Which is sometimes hard, because they’ll tell you that this is it, I’m going to sell it all around the world, and this is the one thing I’m focusing on. Just try to sort of get through all those layers. And I think ask for the proof. Do your research.
KENNEALLY: Right. It’s like someone who tells you, you can trust me. I’m not like the others.
WHITE: Exactly.
KENNEALLY: David, what about white-labeling, sort of pros and cons regarding that?
WHITE: I’m kind of pro white-labeling your content and selling under your own brand. What a lot of filmmakers don’t do is think of the lifetime value of their customer. When you’re across all these platforms, and when you’re through a distributor, you don’t own that customer base. That can be quite hard, because you’ve built up and you’ve done all this promotion, and you’ve done all this work to sell on these platforms, but you don’t have those e-mail addresses. So when it comes to your next film, these guys probably won’t know that you’ve got another film out. I think it’s really important if you can create your own brand as part of that whole mix.
Now, you might not have to spend much time on that, but I think it’s very important that you’re building your brand. Because you’re going to have that window where you’re going to sell to family and friends. This is if you haven’t got a deal. Why not get 100% of revenues through your own platform first and then go out? So really think that through. But I wouldn’t be afraid to have your own tools, have your own branded experience. I think that’s important.
KENNEALLY: A phrase people still talk about in our side of things, in Copyright Clearance Center, is DRM and no DRM. Can you tackle that one? That’s digital rights management, essentially locking down the content or letting it be free.
WHITE: Sure. With our technology, we can offer both. For example, we can sell Disney content, Blockbuster content. But to get through Disney’s catalog, we have to file a (inaudible) document, and it was that big, on how we’re going handle every single device, how many devices (inaudible) this film, what quality can it play on this phone, what DRM protection encryption are you using? It’s just so in depth.
Then you’ve got the indie side, where it’s sort of we don’t really care about DRM. Let the people have the film and do what they want. I think we’re still on that real Hollywood versus Silicon Valley, that open versus closed. I think it’s coming together. I think some form of protection is important, but sometimes we can get so hung up on protecting our film, we don’t just get it out there. When we hold it back, that sometimes is what causes the issues around piracy.
Probably, from a personal level, I’m not a DRM fan, and that I think the customer should – you just give them access. If you worry too much about piracy, it’s all that you’re going to focus on. If you’ve got a film that’s going to be bigger, and it’s going to be across a lot of the big platforms, then I think DRM is a real consideration, and making sure that the platforms you’re on are protecting your content. You’ve just got to make that call internally and how much you – I can’t really answer that.
KENNEALLY: Yeah, it’s hard.
WHITE: It’s film-by-film specific.
KENNEALLY: It’s a philosophical question, almost. I know in the publishing world, Tim O’Reilly has said there’s one thing worse than piracy, and that’s obscurity.
WHITE: Sure. Yeah, exactly.
KENNEALLY: So if your film is popular enough for somebody to want it, that’s probably not a bad thing. Glen Reynolds, I want to take you back to the theatricals, because that’s an important piece of this in terms of helping get all the other players involved. Can you sketch for us what are some dos and don’ts around theatrical release? What should be done, which cities, how much it’s expected to cost?
REYNOLDS: First of all, I don’t think theatricals should be done without some sort of traditional distributor partnering with you in some way. Either they’re taking the reins and doing the theatrical, but if you’re doing it yourself, there seems to be a moving target of how many theaters you have to be in these days to get a certain level of digital distribution out there.
For instance, at the end of last year, if you had a deal with a decent digital aggregator and put your film out in 20 cities, including New York, for a week, then they could get you into the In Theaters Now box on the cable VOD systems and decent placement on iTunes, new and noteworthy section, and places like that. Really, what you’re doing when you do that is you’re mirroring what Magnolia and IFC are all doing. They’re all attacking that space like crazy, because all their DVD values are going down, and they’ve found a lot of value there.
The hard part of that is everybody’s charged into that space, and so the MSOs, Time Warner, etc. have all now raised the criteria for which you need to hit in order to be in that space. Now it’s not just any 20 cities, it’s the top 20 markets. And it’s a full week run. You can’t cheat by just doing a special screening on a Saturday morning in Poughkeepsie. You got to do something really significant to get that space.
That drives the cost of that theatrical quite high. Then is it worth it? Then you’re having to spend $150,000, $200,000 probably at a minimum, if you know what you’re doing, if you have someone that really knows what they’re doing to do that. Can you get that back? It’s debatable.
Short of that, the one city, one theater, couple city theatrical is nice for friends and family, and maybe a little publicity for yourself for the future to say I had a theatrical release. But it’s not going to drive your ancillary rights at all.
KENNEALLY: If you open in New York or Los Angeles, though, you will get reviews.
REYNOLDS: You’ll get reviews. But you’ll make the same amount of money, and probably actually you’ll make less money, than if you release it directly to the DVD or the digital platforms, because all that revenue’s – you’re not going to make, box office, above what you spend., and it’s not going to move the needle at all for your ancillary rights.
KENNEALLY: Right. Again, we keep hearing about sort of managing resources, knowing what’s going to work, placing, if not safe bets, at least well-thought-through bets. You don’t want to just throw some money on the table and see what happens.
Rob Aft, you helped me put this program together, so I’ll give you the last word before we get to some questions from the audience. Of all the lessons that independent distributors learn and weep about later on, is there one that really stands out for you?
AFT: I hear more people saying, God, why did I go with that person?
KENNEALLY: Why did I marry her?
AFT: Yeah. It’s that director, that distributor, that foreign sales agent, that producers’ rep. There’s a lot of regret. But what I try to tell people to do is look at things very clearly when you’re going into them. Do as much research as possible. But then try to stay happy with that decision. Yes, you went with a terrible, terrible distributor, but they were the only ones making you an offer. It was that or nothing. You forget that a year later, when you hate these people. (laughter) But write a letter to yourself, stick it in your safe, a year later, open it up and say, you idiot, that was the only deal available. (laughter)
Also, you made a movie. That’s amazing. I can’t do that. The idea of making a movie sounds horrible to me. (laughter) It’s years of your life and your heart and your soul, and then somebody’s going to take it and treat it like tomatoes they just picked in their garden and took to the farmers’ market. I don’t understand why people do it, but God love them. (laughter) That’s why any of us have jobs.
KENNEALLY: You can ask these people afterwards, Rob, and I’m sure they’ll tell you. I want to thank Rob Aft from Compliance Consulting, Glen Reynolds from Circus Road Films, and David White from IndieReign. Thank you three for the discussion. (applause)