Chapter 25

Independent Filmmaking

 

 

INTRODUCTION

When I started this chapter, I had no idea just how incredibly vast the topic was going to be or how overwhelming it would be to encapsulate enough of the key elements and cram them all into one single chapter. So I decided to divide the material into the following two chapters — this one, which covers more of the basics and business end of independent filmmaking, and the next (Chapter 26), which primarily focuses on low-budget filmmaking. Although each section of these two chapters could be an entire book in itself, what you’re getting is an overview of the independent and low-budget fields as well as several resources, so you can continue to gather more information as needed.

Another big challenge relating to these chapters is that this segment of the industry has been changing by leaps and bounds of late. Although I hate to get too specific about current trends that will further evolve before the next edition of this book comes out, many of the changes are worth mentioning, as the entire landscape of independent filmmaking has been affected.

Most significantly has been the effect of the worldwide recession we’ve been experiencing. Although the collective “they” have always believed this to be a recession-proof industry, the poor economy has certainly taken its toll on the way the business of show business is being done. The major studios have been scaling down, cutting costs and eliminating jobs. Everyone is holding the line on expenses. There’s reduced attendance at film festivals, presales have drastically decreased, there are now fewer bankable sales agents, fewer deals are being made and there’s less money to go around. Where there were once about a dozen banks that offered film loans, there are now only a handful (maybe four), and they, along with sales agents, bond companies and distributors are being more cautious and selective than ever before. The hedge funds and private equity streams that had once helped finance so many films have been shutting down, creating the necessity for deal-making to become more creative and funding to be sought from more diverse sources.

On the other hand, though our industry may not be recession-proof, we are recession-resistant. Box office receipts continue to escalate, and there will always be people (who aren’t particularly industry-savvy) who want to invest in films, because it’s fun, sexy, a chance to meet actors, hang out on movie sets and attend premieres. Also, along with the economy, the business end of things will eventually improve. I predict, however, that certain shifts in the way we’re currently doing business will lead to a more prudent way of financing, producing and selling films in the future, which means that in order to succeed in a leaner, meaner market, your movie, short or documentary has got to be strong enough to stand out among the intense competition. Scripts have to be commercial and better written, projects better packaged and films better made to succeed in today’s risk-averse market and beyond — the outcome of which will surely be fewer and (hopefully) better films.

By definition, an independent film (or “indie” for short) is a film that’s not produced by a major studio, even if it’s produced and/or released by a subsidiary (also known as a specialty or art house division) of a major studio such as Sony Pictures classics and Disney’s Miramax. And the range of projects that fall into this category is enormous.

We tend to think of indies as less-commercial, lowerbudgeted and more “arty.” Unlike movies produced by major studios that can’t afford to take many risks and pump out high-profile pictures and blockbuster franchises such as Pirates of the Caribbean and Spiderman, indies are generally smaller films, often featuring lesser-known actors and/or first-time directors, producers, cinematographers, etc. — many of whom are extraordinarily talented and just need that first break.

 

SPECIALTY DIVISIONS

To some, an independent picture can only have one context, and that’s of a $7–$30 million film (give or take five or ten million) released (and often produced) by a specialty division like Universal’s Focus Features or Fox Searchlight Films or by one of the several standalone indie companies such as the Weinstein Company, Summit, Overture or Lions Gate.

After a decade in which specialty divisions dominated the market, the tide has turned. To start with, the cost to make and market a specialty release is more than twice what it was when most of these divisions were launched in the late 1990s and early 2000s. And there’s more competition with big studio films than in past years — especially with what’s referred to as tentpoles (mega-budgeted movies expected to be blockbusters and “hold up” the studio financially — like the Iron Man or Batman franchises). Although the major studios can still afford the millions it takes to market and advertise these big films, the current global economic crisis has forced them to make serious cuts in other areas, like in their specialty divisions. Companies like Warner Independent and Picturehouse have been axed, and others, like New Line Cinema, have been reduced to mere shadows of their former selves.

The indie world has been rattled by the disappearance of these specialty divisions, the tight credit market, higher-priced financing and the struggling economy. It’s now more of a challenge to produce a film for a price, and filmmakers are competing for the attention of fewer (and more cautious) buyers.

In a June 23, 2008, Los Angeles Times article by Patrick Goldstein, Mark Gill, CEO of the independent production company called the Film Department, is quoted as saying,

“Of the 5,000 films submitted to Sundance each year — generally with budgets under $10 million — maybe 100 of them got a U. S. theatrical release three years ago. And it used to be that 20 of those would make money. Now maybe five do. That’s one-tenth of 1 percent.”

And in another interview Mark Gill gave for a November 25, 2008, piece on FastCompany.com, he pointed out that only 603 of the 5,000 indie movies made last year reached theatres. And he estimated that just 50 of those — 8.3 percent — made a profit.

The upshot of this current downturn is that the specialty films being made have to be better to survive, and the companies acquiring these movies have to be exceptionally savvy when it comes to selling them. Another trend I see is that indie producers are pursuing a more diversified slate in order to compete with commercial, mainstream studio pictures. I have a feeling, however, that if the big corporation-owned studios are forced to continue cutting costs, then there’s hope for a new surge of more affordable independent pictures.

 

SO YOU’RE GOING TO MAKE A FILM

For Starters

Understand that being creative and having a good story is not enough. You need a plan! Before you even start, you’ll want to make sure there’s a market for your film and know how much it’s realistically going to cost, where it’s going to be filmed, how the film’s going to be funded, marketed and sold. Do your research on entertainment attorneys, sales agents, bankers and distribution companies, the type of agreements and deals they generally offer and the fees they charge. Talk to others who have been down this road before, take related classes or seminars and read everything you can get your hands on. This market is way too competitive, and there’s way too much money at stake for you not to walk into this knowing exactly what to expect and what’s expected of you.

Here are a few of the things that should be at the top of your to-do list:

• Make sure your script is totally complete (the correct format, the right number of pages, etc.) and in great shape — meaning it needs to be a real page-turner. Let others read it, have coverage done if possible, get feedback, make all necessary fixes and know that it’s ready to be sent out.

• Make sure you have the rights to this project (see more about rights later in the chapter).

• Have a distribution strategy in mind. Do you see your film as a theatrical, straight-to-DVD, cable or Internet/mobile release? Make sure you understand the differences between these strategies and the ramifications of each.

• Create a budget for what you think your development costs are likely to be — that is, expenses you’ll have to assume on your own if your financing hasn’t yet been secured. (You might have to explain to your investors that they won’t just be investing in the making of the movie — that just like it is with an attorney, there will be some additional reimbursable expenses involved. In this instance, the expenses are all part of getting the film off the ground.) Consider things such as the cost of:

• An option on the script

• Writers’ fees if the script needs to be written or polished

• Having a schedule and budget done

• Legal fees

• Filing fees for establishing your new production entity

• Fundraising expenses

• Traveling and entertainment expenses

• Publicity and marketing (for creating an early awareness of the project, assembling a promo reel, etc.)

• Preliminary location scouting

• General overhead expenses

You’re going to want to make sure you can cover these costs before you make any commitments.

• Start thinking about the price range for your movie, and whether it’s an amount you think you’ll realistically be able to raise and/or borrow. Your budget won’t just depend on the financing you can raise — other considerations will be:

• The scope of the story (is it a broad action piece with plenty of stunts and effects or a talky relationship-driven story?)

• How many and what kind of locations are involved

• The genre

• If it has any special requirements like shooting in

• water, extreme weather, etc.

• Whether it’s a period piece

• The size of the cast l The development costs (as mentioned previously) and any upfront fees that may apply

• The caliber of the talent you’d like to attach

• You might also want to do some research, because there are those with differing theories and complex formulas who profess to know just how much an independent film should cost in order to recoup a good ROI (return on investment). Check out films by their platform, genre, budget and cast, and then compare them against their ROI. How much did these films make based on what they cost? When it comes to theatrical releases, a specialty division movie might be made for anywhere from $7 million to $40 million — just short of what a major studio would spend. Other producers are more comfortable with the smaller $1 to $5 million range, while others prefer making $7 to $8 million pictures. And then still others believe that $13 to $15 million is the magic number for a film that can afford a name actor, some significant production value and still offer its investors a good profit. Whatever it is you decide, make sure that it’s well thought out, because everything you do from here on out will depend on how much it’s going to cost to make your film.

• Start researching possible shooting locations and the various state and international incentive programs being offered. Also find out what the infrastructure is like in each of these places, the disposition of local crews as well as crew rates and hotel room rates and availabilities for each area. Start your search by logging onto the AFCI (Association of Film Commissioners International)’s website (www.afci.org)to obtain contact information for film commission offices and their websites.

• Assemble a list of the talent you’d like to attach to your project, and start talking to production designers, cinematographers, line producers, casting directors and/or actors’ reps (agents, managers, business partners, friends of friends — anyone who can get your project in front of specific actors). If you can’t get commitments, the next best thing is to get letters of interest from them. The more key attachments you can package and the higher-profile the attachments, the easier it’s going to be to sell your project. As for the cast, do some research and find out who’s big (or at least well-known) in foreign territories, because having an actor or two whose films do well overseas will be another significant selling point.

• Once you’ve established certain assumptions (such as budget range, distribution platform, locations, lead actors and other talent), you’ll need a tentative schedule and a budget. If you can’t do your own schedule and budget, then have someone do them for you. Keep in mind, though, that the going rate for schedules and budgets can be a bit pricey. So consider a UPM, line producer or production accountant who might do it for a lower rate in exchange for working on the film if it goes.

• Once the budget is complete, you’ll have to decide whether this is a doable number. If not, then script changes may be in order to adjust the number of locations, size or salary of cast members, number of effects shots, etc.

• If you’re making a film, no matter what the budget, you’re going to need to consult with an entertainment attorney on a variety of issues — even if you do much of the work yourself. Ask for recommendations, and find a lawyer you trust. If you can’t afford an attorney, there are legal services you can access for free. In California, for example, there’s a nonprofit organization called California Lawyers for the Arts (www.alawyersforthearts.org).

Some filmmakers are using consultants these days who will work with you to customize an entire strategy for your film. They’ll help you with financing options, business plans, film festival strategies, developing the right approach to distribution, marketing and sales — the whole enchilada. There are entertainment attorneys, producer’s reps and sales agents who offer many of these same services — so start doing your homework and ask for recommendations. Then start setting up some meetings. In addition to a good entertainment attorney, at a certain point you’ll most likely need the services of a producers rep and/or sales agent, but find out exactly what they each offer and recommend. Figure out what you can afford or the percentage of your film’s profits you’re willing to give up in exchange for their services. Determine what you can and should do on your own. Absorb as much advice as you can collect, get a feeling for which individuals you’d feel most comfortable working with, start formulating a plan and figure out what makes the most sense for you and your project.

 

Rights

If you didn’t write the script you’d like to produce, or if you plan on writing a screenplay (or having one written) based on a book, play, article or a true-life story, you’ll need to secure the rights to the material — or at least an option to start with.

If you’re the writer, you’re going to want to protect your rights and your screenplay from piracy. Although you can’t protect a title or concept, by law, you do have the right to protect the expression of that concept — your script.

Practices vary by country, but in the United States, you can protect your screenplay in two ways — by registering it with the U.S. Library of Congress, and, for $45, you’ll obtain a lifetime copyright on the property. And you can register it with the Writers Guild of America for $20, online, by going to www.wga.org. The registration is for a period of five years — renewable for another five years after that. A copyright holds greater protections, but something has to be said for the over 60,000 pieces of material the Writers Guild registers each year.

The Writers Guild will register a synopsis or treatment. The Library of Congress will accept only a completed screenplay, and this is what they require:

• A completed application Form PA, which you can download from www.copyright.gov/forms/formpai.pdf

• A copy of the unpublished script you’re registering will not be returned)

• A check or money order for $45 made out to: Register of Copyrights

• A cover letter containing all the pertinent details such as date, title, writer’s information, etc.

• Before you send your package, make copies of every thing for your files, and send everything in one large envelope to: Library of Congress, Copyright Office, 101 Independence Avenue, S.E., Washington,D.C. 20559-6000

Your copyright registration will be effective on the day that the Copyright Office receives your fully completed application, payment and the copy of your script. Remember that your claim to this copyright will then become a matter of public record.

As a producer, expect that your distributors will require a Chain of Title report, evidencing that all rights have been secured before they agree to distribute your film. “Chain of title” refers to the succession of title of ownership of copyright back to the original owner. If the screenplay started with a treatment, then the treatment is the first element in the chain. And while the treatment might have been written by one person, another screenwriter (or possibly several) could have been responsible for the finished product. Thus, to insure that a producer can secure distribution, the appropriate rights must be secured from each party involved along the chain.

If you’re a producer and/or director looking to secure the rights to someone else’s screenplay, book, play, article or true story, you’re probably going to want to start by asking if an option (to purchase the rights) is available. If so, you’ll negotiate a mutually agreed-upon price. If you need time to shop and/or develop the project, and it belongs to someone you know well, and you both agree, you can option the property for the outrageous sum of $1 — as long as some money changes hands. I don’t suggest taking options for less than a year and would extend that to 18 months to two years if possible. If you already have the funding in place and know you’re going to be making this film, then you’ll want to negotiate to own the rights in perpetuity (forever) — worldwide rights if possible. The agreement will include the cost of the rights (worldwide rights preferred) and specify that they may be purchased any time prior to the expiration of the option period, but not later than the commencement of principal photography.

All legal documents should be prepared (or at least approved) by an entertainment attorney. Once prepared, they will have to be sent to the other party’s attorney, publisher or agent for approval. It’s important! Even if you do it all yourself — negotiate and prepare the agreements to secure options and/or rights of any kind — consult with an entertainment attorney to make sure that you’re protecting yourself and covering all your bases.

 

Completion Bonds

Major studios are in a position to assume deficit financing — overruns on their pictures — but independents rarely have the luxury of that safety net. That’s why lenders, investors and sales agents require that an independent production has secured a completion bond before committing to a project.

As noted in Chapter 7, a completion bond insures that a picture will be finished on time and on budget and delivered to distributors as contracted. Make sure you talk to a completion bond rep as soon as possible to find out what’s required for your picture to qualify, how they would work with you throughout the process (from pre-production through distribution) and what their fees are. In this current economic climate, bond companies too, are being vigilant, and among other things, will want to see your financing plan before committing to your picture. Also, if you plan on applying for a bank loan, the bank will want to make sure that you’ve secured a completion bond and will expect the bond company’s assurance that the picture can be made.

A couple of the well-known and long-established bond companies you might want to check out are: International Film Guarantors (www.ifgbonds.com) and Film Finances, Inc. (www.ffi-web.com).

 

FROM FINANCING TO DISTRIBUTION

A Business Plan

Handing someone a script and hoping he’ll love it enough to write you a big, fat check to cover all the costs of making your movie is a fantasy we all have, but it isn’t terribly realistic. Chances are that what you’ll be handing to potential investors, bankers, bond company reps and sales agents is a business plan — a well-thought-out, well-researched strategy on how you envision funding, casting, producing, marketing and selling your film.

Although all are similar, business plans can vary. There are no hard and fast rules governing the exact contents or the precise number of pages one should be. I’ve seen rather short business plans and others that are quite long. The key is to create one that’s professional-looking and easy to read — containing all the pertinent information without being overly wordy and cumbersome. You can do one yourself or hire someone to do one for you.

The following are all components of a business plan, and except for the objective and executive summary, I’ve never seen a precise order for the other sections.

• The objective of the business plan: an overall goal

• An executive summary: a preview of what’s included in the business plan

• A synopsis or treatment of the project

• A copy of the agreement evidencing proof of screen-play rights

• Current and future industry trends

• The market for the film: potential companies that will buy or presell the film

• Comparable box office performances for this genre/budget

• The creative team: lead cast, director, writer and producers (along with letters of intent or interest). For those not yet set, include a list of your four to six top candidates. Add resumes for those who are set.

• Proposed production details, including shooting locations and significant production values

• A copy of the budget

• A cash flow chart: a schedule that divides the total amount of the budget by how much cash will be needed to operate the production during any given week from the beginning of pre-production through delivery.

• Your funding strategy

• Distribution and marketing strategies

• Revenue projections

• A timeline and action plan: a timeline of dates, events, money and jobs that follow the sequential order you will use to research, develop, produce, market and sell your project.

• A list of key crew positions that have been set (such as production designer, director of photography, costume designer and editor) with resumes. For those not set, include a list of four candidates for each position

• Copies of all option and acquisition agreements

• A financial statement

• An investment proposal for investors outlining the terms and conditions of the investment

• Early press coverage (if any exists)

• Any artwork already done on the project, such as the poster

Consider preparing each segment of your business plan as a complete section, so you can rearrange the order and assemble just the sections needed depending on who you’re presenting the plan to. It’s like rearranging and accentuating certain aspects of your resume to fit the specific job you’re applying for. Also, when attending a meeting that calls for you to present your business plan, don’t just submit it electronically. Leave a hard copy behind as well. For your banker, you might want to leave a hard copy and a flash drive.

To learn more about the specifics of business plans, I suggest a terrific book called Filmmakers and Financing: Business Plans for Independents, by Louise Levison (Focal Press). There a couple of websites worth checking out as well: www.movieplan.net and www.filmproposals.com.

 

Financing Models

Films are financed in a variety of different ways, and you’ll need to formulate a plan to fund your project.

Putting a funding package together could be quite daunting during an economic downturn. I keep hearing about risk-averse lenders and investors, and that in general, there’s less money to go around these days. But then I read a New York Times article on January 25, 2009, by Brooks Barnes, entitled “Suddenly, Hollywood Seems a Conservative Investment.” Barnes pointed out that just a few years ago, films would have been a riskier investment than the stock market or real estate. But that’s no longer the case. So the pendulum has slowly and cautiously started swinging in the other direction.

What it really comes down to, though, are two things. First and foremost, what has always made a difference is a great project. Bad economy or not, a terrific script and a marketable package will always win out. The second factor is you — especially in this market where equity financing is so vital. It’s you the investors are doing business with, and it’s you they’re relying on to bring in a return on their money. So if you’re professional, credible, likable and can pitch a project/package like a pro, you’re well ahead of the competition.

The three most common forms of financing include:

• Loan-based financing — these are loans structured by banks and finance companies that will discount monies you’re projected to receive from presales (when a buyer licenses or prebuys movie distribution rights for a territory before the film has been produced), unsold territories and various country and state incentive programs offering rebates and transferable tax credits. Some also provide gap financing (an unsecured loan against future sales of the movie) and bridge loans (once all the paperwork is in place, it’s the release of funds in advance of full financing).

• Tax-based financing — this includes international tax incentives from various countries and localities as well as U.S. federal and state tax incentive programs.

• Equity financing — these are your individual investors, from your Uncle Henry who has an extra $10,000 to play with to a private equity fund (made up of a pool of investors).

As a note of caution: before you accept an investment, do some homework on your investor. Because just as important as it is for you to check out anyone else (attorney, banker, sales agent, etc.) you’re going to be doing business with, you’re also going to want to feel comfortable about the validity of your investors. You can ask your attorney or banker to help with this. Some producers hire private detectives, who, for approximately $25, will take the time you probably don’t have to research public records in order to determine the financial stability of a potential investor. Do your homework, and assume that they’re probably going to know you’re checking them out. And at the same time, they may be checking up on you. You’ll feel better about entering into this relationship, and knowing that you have all your ducks in a row will give your investors more confidence in you and in the profitability of your film.

Most projects are funded from a combination of sources. Although at one time an entire picture could be financed through presales alone, that percentage of funding has dried up considerably. Private equity funding is more essential than ever, foreign sales are still key and U.S. state and international incentive programs are now an essential piece of the puzzle. Some producers raise money through product placement and brand-integrated advertising; others are able to take advantage of Section 181 of the American Jobs Creation Act of 2004, allowing investors to write off their investments up to $15 million (see more on Section 181 in Chapter 5). I’ve heard of several co-production deals and equity funds investing in an entire slate of films — both strategies meant to spread the risk. And then there are times when a major studio or distributor will come on board to finance all or a portion of a picture.

Documentaries are often the recipients of corporate and network funding, grants and fiscal sponsorship programs that allow producers to accept grants and donations under another’s nonprofit umbrella. There are U.S. states that offer funding opportunities (through their incentive programs) to productions that meet certain criteria and are shot within their jurisdiction. And keep your eyes open for competitions — like the one I recently heard about offering a $150,000 production grant to a first-time filmmaker.

One investment firm I read about attracts investors by offering them behind-the-scenes perks and invitations to film festivals. (I told you Hollywood was fun and sexy.) So basically, funding comes from a myriad of sources, and there will always be creative financial types who will come up with new models.

There’s a terrific (and incredibly thorough) article on different types of film financing written by veteran entertainment lawyer, Mark Litwak, at www.marklitwak.com/articles/general/financing.html. It includes information on loans, investor financing, borrowing against presales and distributor-supplied financing. I find the section on investor financing particularly valuable as it relates to SEC (U.S. Securities and Exchange Commission) regulations and the fact that filmmakers can avoid the expense of registering with the SEC if they qualify for one or more statutory exemptions. It explains the need for a private placement memorandum (PPM), which is a document that clarifies the details of an investment to a potential investor, and the guidelines pertaining to how many investors you’re allowed to have. If you’re going after individual investors for your film, you’ll want to read this. And for your own protection (even if you have an attorney), you’ll want to bone up on SEC requirements yourself, because ultimately, it’s your responsibility.

Mark Litwak also functions as a producer’s rep, assisting filmmakers in the marketing and distribution of their films. Check out his website at www.marklitwak.com.

 

Bank Loan

Banks don’t invest in movies, but if all the pieces fit together just so, they will loan money against other funds projected to come in on the film — like presales, rebates, tax credits and unsold territories. If you’re considering a bank loan, talk to an entertainment banker early on in the process to find out what’s required and what their going rates and terms are. A good (and hopefully, longstanding) relationship with a banker is a valuable asset to any filmmaker.

A few things you should know about bank loans include the following:

• Few banks finance unbonded projects.

• Some banks may also want you to have a sales agent lined up.

• Bank loans now usually take up to eight weeks to close.

• The length of these loans generally run 18–24 months.

• The bank will condition its loan on all of the equity investments being in place.

• Bank loans represent the last money in and the first money out. (Once the movie has been released, they recoup their loan from gross receipts before the investors see a penny.)

• Be prepared for some pretty intense scrutiny.

About Sales Agents

It’s the sales agent’s job to sell (actually, to license) your film to distributors throughout the world, and they hang their shingles and make many of their deals at film markets such as Sundance, Cannes, MIFED (The International Film and Multimedia Market) and AFM (American Film Market). (Unlike film festivals that promote films to a niche marketplace, film markets are trade events that promote films to distributors.)

Sales agents will discover and acquire films that have been entered in various film festivals (especially those that receive favorable press), but given the right project (and the right sales agent), you can sometimes enter into a relationship with one before your film is even made. And if involved early enough, the right sales agent can help you provide estimates for the bank, evaluate budgets — sometimes even bring funding to the table.

You can find a list of sales agents on the IFTA (Independent Film & Television Alliance) website at www.iftaonline.org/aboutIFTA/Default.aspx. Make a list of the ones who handle the type of films you’re making. You can also meet sales reps at the various film markets, but — if and when you do — don’t hand them a script or take up too much of their time. They’re busy working, so make the introductions brief and get their business cards. Then follow up with phone calls and possibly meetings after the market. Ask around and get recommendations. Find someone with a good reputation, someone the banks like dealing with, someone with solid distributor relationships and — most importantly — someone who’s a good fit for your film.

Be aware that it’s a buyers market, and sales agents are being very judicious about the films they’re choosing to represent. They’ll consider your cast, the genre of the film and its salability. They’ll evaluate your financing plan, the bond company you’re using (just as the bank, they won’t take a film that isn’t bonded) and your deals — wanting to see that you’re planning to put as much money as possible on the screen. They’ll want to see a final script and any attachments you might have — primarily actors whose names will help sell the picture. And if you don’t have any firm commitments from actors, letters of interest are the next best thing. They’re also going to want to know who else is on board so far (producers, director, production designer, cinematographers, etc.). Present potential sales agents with a one-or two-page overview of what you’ve lined up to that point.

Sales agents will take a commission (generally 15 to 25 percent) on the sales they make, recoup certain expenses (primarily for marketing) and pay you the rest. Under this type of arrangement, unless your film is a big hit from the start, it may take quite a while until you see any money. So think about the possibility of handling much or a portion of the marketing on your own.

Also, before going into business with a sales agent, get a list of the delivery requirements you’ll be obligated to submit, and make sure you can deliver them all in a timely manner. Delivery requirements will, among other things, include film, digital and audio elements, a copy of the score, publicity and advertising materials, production credits, a final continuity script, all legal and contractual documents, rights agreements and copyright registration, certificates of origin (authenticating where the film was manufactured) and an E&O (Errors & Omissions) insurance certificate. (See Chapter 30 for more on delivery requirements.)

 

Producer’s Reps

The difference between a sales agent and a producer’s rep is a bit confusing, because on the surface, their jobs appear to be quite similar. Some will tell you that there is no difference, but that’s not entirely true — even though their responsibilities do overlap at times. I can equate these positions to an actor’s agent vs. his manager. The agent is the primary deal-maker, and the manager is involved with the entirety of the actor’s career and his choice of roles. A sales agent is going to expect you to have your package together, but a good producer’s rep may see merit in a project before it’s packaged and decide to take you on (and then help you with the packaging part). This would be especially beneficial to filmmakers with little or no track record.

Producer’s reps, more the manager — publicist types, will generally come onboard earlier on in the process. He or she will help you with your sales strategy, advise you as to which festivals to enter, get involved with publicity and the setting up of screenings. A producer’s rep can line up sales agents, evaluate offers from distributors and even negotiate deals. Keep in mind that some entertainment attorneys, in addition to handling all the legal aspects associated with your film, also act as producers’ reps. A rep’s fee will depend on the exact services needed and provided.

Whether you use the services of a sales agent, producer’s rep and/or consultant, make sure you meet with them first, understand exactly which services they each provide and what they expect you to provide. Evaluate their experience, contacts and reputation and what they bring to the table. Also, know going in, what your costs are likely to be. If possible, once you have an idea of who you want on your team, discuss your choices with your entertainment attorney before making any major commitments.

 

Distribution

Stacey Parks, author of The Insider’s Guide to Independent Film Distribution (Focal Press) defines distribution as “the process by which a film reaches the marketplace and is made available to its target audience. Practically speaking, distribution means selling your film to theatrical distributors, broadcast networks, DVD companies and new media outlets.” Some distributors specialize in domestic sales, which encompasses the United States and Canada; others strictly cover foreign territories.

Your attorney, sales agent and/or producer’s rep will evaluate all potential distribution agreements to make sure you’re getting the best deal possible. They’ll review the distributor’s standard recoupable expenses (such as taxes, residuals, conversion/transmission costs, collection costs, advertising and publicity fees, re-editing costs, print duplication, foreign version costs, transportation and shipping costs and insurance) and how the film will be distributed and marketed (also known as P&A or prints and advertising).

Once a deal is finalized, the distributor is responsible for making sure that prints are struck and delivered on time (sometimes shipped, sometimes relayed digitally) as well as the creation of posters, newspaper and magazine advertisements, television commercials, trailers and other types of ads. If it’s a foreign-language film, the distributor will also be responsible for securing dubbing or subtitling for the movie.

There are several different platforms on which to distribute now. Who would have ever thought just a few years ago that certain films would be made for Internet exhibition only, or that films, or video on demand (VOD), streamed right into your home, would be commonplace? Or that a film released on DVD and/or aired on cable TV would be released theatrically the same day (this is called a Day-and-Date)? Do your research and find out the pros and cons of distributing on each platform. Seminars are a good resource as well. For example, I recently attended a film financing conference where a veteran sales agent on one of the panels mentioned that movies released directly to DVD have a more difficult time finding international distribution.

Something else I took away from that same panel is the benefit of retaining a collections agency if your film is being sold internationally. The agency will look after the interests of the producers, attorneys, guilds, talent, investors and sales agent by staying on top of the buyers and making sure that all monies/profits are dispersed properly and when due. And twice a year, they send out a detailed report of all sales and payments made. Fintage House is one such agency.

Some filmmakers are doing their own marketing and self-distributing on DVD and by offering downloads to rent or own. Some start out that way, but positive press, good word of mouth and just the right exposure often leads to offers for both domestic and international distribution deals.

I used Stacey Parks’s definition of a distributor earlier, but for much, much more information on all matters relating to film distribution, I strongly suggest her book (The Insider’s Guide to Independent Film Distribution, Focal Press).

 

Acquisition Executives

These individuals can be found at major studios, specialty divisions such as Sony classics and independent companies such as Miramax and Lions Gate. They’re responsible for acquiring outside properties for release and distribution — projects that may have already been developed, partially packaged, partially or fully financed and may or may not have been completed. Screenplays, rough cuts and finished films are submitted to their department for review. Acquisitions executives also regularly track independent projects and attend film festivals searching for product they feel the studio can successfully sell. Once they acquire the rights to a property, they will often make changes (i.e., editing, music, reshoots) prior to its release.

Your attorney and/or producer’s rep will advise you as to whether your project might be better suited to take directly to one of these companies opposed to going the sales agent/distributor route. If so, they should be in a position to use their relationships with these acquisition types to get them to screenings and to get them interested.

Before approaching potential buyers (sales agents, acquisition execs and/or distributors):

• Know what’s selling

• Research their libraries — know what they’re looking for

• Know the format they prefer

• Be able to present an impressive press kit, trailer and behind-the-scenes photos

• Make sure your press kit includes good reviews, awards won — anything that says you’ve got a winner

• You might want to consider a Reader’s Digest—style condensed version of your press kit for those who just want the highlights — genre, short synopsis, length, talent, format and rights available

• Make DVDs to send out (or present) for consideration

• Don’t be so fast to commit to the first buyer who shows an interest in your film. Research all options. Ask for references. Consult your attorney

 

SOME ADDITIONAL RESOURCES

• Be sure to look up entertainment lawyer Mark Litwak’s website, www.marklitwak.com, where you’ll find incredibly helpful books such as: Risky Business, Financing and Distributing Independent Films, Contracts for the Film and Television Industry and Dealmaking for the Film and Television Industry (all published by Silman-James Press).

• IndieGoGo: www.IndieGoGo.com. This site offers opportunities for funding, promotion and self-distribution. Designed for independent filmmakers to raise money and awareness, find cast and crew and gain credibility through the help of their number one resource, the fans. The site professes to act as a vehicle in which to target a niche audience for your film and to provide information on how to manage an audience-building and fundraising effort online.

• Google Groups: groups.google.com/group/filmproposals-forums?hl=en. These groups represent investors seeking projects and projects seeking investors.

• The Independent Film & Television Alliance (IFTA): www.ifta-online.org/AboutIFTA/Default.aspx. In addition to being a source to locate sales reps (as mentioned earlier), the IFTA is a trade association of independent producers and distributors of motion picture and tele vision programming worldwide. Formerly known as the American Film Marketing Association, this non-profit organization was established in 1980 by a group of independents whose main goal was to expand the independent film business by creating world-class trade show, the American Film Market (AFM).

• Indie-Pictures: www.indie-pictures.com. Indie-Pictures distributes films directly to the DVD market (possibly leading to theatrical releases). Their business model however is somewhat untraditional, as they partner with the filmmaker — sharing decisions, costs and profits.

• WAMclips: www.WAMclips.com. WAMclips gives filmmakers the opportunity for self-distribution by posting their films (shorts or features) online and having people either pay to watch a film or, for an additional fee, download and burn a DVD copy for themselves. WAMclips does not assume any of the filmmakers’ rights, works on a nonexclusive basis and shares the revenue with the filmmaker.

• The Pocket Lawyer for Filmmakers, by Thomas Crowell (Focal Press).

• Clearance & Copyright: Everything the Independent Filmmaker Needs to Know, by Michael C. Donaldson (Silman-James Press).

Thanks to my friend Daniel Wheatcroft for going through this chapter with me and making it better.