Where Does the Revenue Come from in Indie Film?

Oh where, oh where does the revenue come from in indie film? Unless you have a film in the marketplace, it's hard to know exactly where the revenue comes from. There are so many avenues to think about - domestic and foreign sales in theatrical, television/cable, Video-on-Demand (VOD), DVD, and nontheatrical/educational.

What I have found through the sales of my own titles is that most of the revenue from an independent film is generated from VOD. This means I have seen most of the sales of my films through On Demand via cable and digital distribution online through sites like iTunes, Amazon, Vudu, Netflix, and Hulu.

Theatrical releases for independent films are very hard to justify. They're costly and time-consuming and more often than not - a bust. It's very hard to fill theaters in cities where you have no friends or family to rally people to see your film on the big screen. When was the last time you went to see a random indie flick at your local theater? If you're like me, it takes publicity for me to even know about the film (and strong publicity usually takes time and money to generate) or a colleague/friend to push me to go. So unless you have a very niche audience to which you can market and have the time and money to build a strong grassroots campaign, doing a theatrical usually doesn't make sense for a small indie film.

So what's the solution to seeing your film on the big screen? Film festivals. Use film festivals as your theatrical release. Lean on the festivals to help you fill the theater and use the publicity from the screenings to build buzz that can help you sell the film once it hits the VOD platforms. And some festivals do pay screening fees so you can even earn some revenue from your screenings. Or you can use the festival circuit to travel the world, meet your audience, gather their email addresses, and get help building a fan base.

What about DVD? Unfortunately, DVD deals are mainly dead at this point unless you have a genre flick or a very popular indie film that Redbox cares about. In that case, you can strike a DVD deal. In other cases, a DVD manufacturer will either ask for a piece of your VOD or you will need to figure out how to create and sell DVDs on your own. We sell our film The Diary of Preston Plummer through Amazon's CreateSpace. It's not a huge moneymaker but every sale helps so it's worth doing.

Television sales of indie films are hard to come by these days. The networks have gotten to the point of only considering films with big-name actors. If you are lucky to break through this prerequisite (it's definitely possible - I've done it) and snag one, good for you! The sale of a small indie film to a TV network probably won't make a significant dent in your budget - unless your budget was teeny-tiny - but television sales certainly help with visibility of your film, which can help translate to more VOD revenue.

Foreign sales. Oy. Just oy. First, foreign buyers love to see big-name actors in the films they buy. And foreign countries don't have strong streaming solutions yet so most of the sales are for television, which means there are less markets in which to sell. To reach foreign buyers, you usually have to go through foreign sales agents because they have all the relationships to the buyers and these agents will have high expenses and take about 20% to 25% of your revenue from your foreign sales. There's definitely revenue to be had in the foreign market but the question is how to get most of it coming back to the filmmakers instead of it just lining the pockets of the foreign sales agents. It's a conundrum and trust me, I'm working on figuring out a solution.

Nontheatrical avenues like airlines and museums are viable arenas for sales but not every film will make sense for these buyers. Definitely go after them because again, every sale helps!

And, one of the biggest lessons I have learned is to forego all-rights deals, unless the distributor is paying off the debt, deferrals and investors. All-rights deals allow distributors to steal from Peter to pay Paul. For example, let's say your DVD sales tanked and you actually owe money in expenses for making the DVDs. The distributor will take revenue from your VOD sales and apply it towards their losses in the DVD deal. If you had sold the rights separately then you would have received all of your VOD revenue and the DVD distributor would have been in the red that quarter (something you don't want but it's even worse if your hard-earned revenue is sucked up by losses in another market).

Additionally, all-rights deals often come with a high sales fee, like 20%, and their expense caps are typically high with no oversight on how much they're spending on fulfilling each deal. It can cost $1500 to deliver to iTunes alone and the distributor may be tacking on additional fees to process the sale. How do you really know?

The best thing you can do is hold on to as many rights as you can and sell them individually. How do you do this? Hire a sales agent who has successfully sold the rights to their titles individually and agrees that selling the rights to your title separately is the best strategy for your film.

The money trail in indie film can be hard to follow. That's why there's a big push right now for more transparency from filmmakers about the kinds of deals they're getting. And filmmakers are speaking out. You can see case studies in the books by the Film Collaborative here. They offer free copies online.

Transparency will only increase our chances of successfully budgeting and paying off our films. Knowledge is power!

Sell Your Film on Your Web Site

Tons of us filmmakers sell our films on our Web sites (see ours at www.notsinceyoumovie.com or www.wonderentertainment.com or www.leslieiwerks.com). It's the best revenue source for the filmmakers as most of the money goes direct to the filmmakers when a DVD is purchased from their sites. We don't have to share the proceeds with other Web sites like Amazon, which is great!

One issue we have experienced though is that once our films hit Amazon and iTunes and Netflix, our personal sales dwindle to a trickle. Don't get me wrong, we love to see our films on these sites as it provides the film with greater exposure and sales. But it hurts to see the sales from our Web site flatline.

In the end, this is a good problem to have as it means your film is available to the world and gaining an audience. And you can do marketing campaigns to drive buyers to your Web site so all is not lost!

Paranormal Activity

As an indie filmmaker, I can't ignore the fact that one of our own, director Oren Peli, has created a film, Paranormal Activity, from practically no resources at all and it has blown records upon records in sales. Nice! Congrats Oren Peli! You are living the indie filmmaker dream right now. 

There are thousands of Oren Pelis out there and Oren struck gold! All it takes is a really good idea that is executed well and hits with an extremely wide audience. Sound easy? Sure! Is it? Hell no -- which is why the indie world is in the crapper at the moment. 

No one knows what is going to hit like PA has. So unfortunately it is a gamble that every filmmaker must make each time he or she starts a new project. And those gambles have been taken a lot by filmmakers, which has led to billions of dollars of investment dollars going down the tubes.  

Oren Peli, whatever you were thinking when you came up with the idea for PA obviously was smart thinking! It's the perfect indie film business model. Make something for dirt cheap that can go on and make high profits. 

As a rule, micro-budget films don't tend to do big business. Paranormal and Blair Witch were anomalies that many filmmakers have continued to try to emulate. Each year, Sundance is loaded with dark or quirky features that were made for less than $100k that tend to get good critical acclaim but they don't seem to do huge business at the box office. 

Smaller films that have a chance of bursting out of the indie distro hell seem to be those that tap into primal fear and laughter or are super charming/quirky/unique that a wide audience is drawn to its uniqueness yet relatability (being relatable is key). And many of these that achieve some success are not micro-budget (in the six figures or less). They are low budgets (seven figures). 

But how awful to think that terrific dramas could be forsaken because they are bad business. The question should be: how can we make them good business. What key ingredient is missing? Or do all the micro-budget films need to be only horror in order to do well? 

Producer Reps

Producer Reps are very important people. They help you sell your films. Here is a list of a few producer reps who tend to be very indie friendly -- a great place to start when you begin your search for a rep. (Note: William Morris and Endeavor are merging so their contact information should be changing in the near future. And contact names can change.) Good luck!

Cinetic Media

John Sloss

T 212-627-9898

F 212-627-9498

www.cineticmedia.com

Circus Road Films

Zac Reeder/Glen Reynolds

T 818-991-0110

F 818-230-0609

www.circusroadfilms.com

Creative Artists Agency (CAA)

Brian Kavanaugh-Jones/Roeg Sutherland

T 424-288-2000

F 424-288-2900

Jonathan Dana

T 310-273-0194

Jeff Dowd

T 310-572-1500

F 310-572-1501

www.jeffdowd.com

Echo Lake Productions

Amotz Zakai

T 310-789-4790

F 310-789-4791

www.echolakeproductions.com

Eastgate Pictures

Rona Wallace

T 212-751-6234

Emerging Pictures 

Ira Deutchman

T 212-245-6767

www.emergingpictures.com

Endeavor Talent Agency

Graham Taylor

T 310-248-2000

The Film Sales Company

Andrew Herwitz

T 212-481-5020

F 212-481-5021

www.filmsalescorp.com

Lantern Lane Entertainment Ltd.

David Garber

T 818-222-2309

F 818-224-4028

www.lanternlane.com

Required Viewing

Steven Raphael

T 212-206-0118

Submarine

Josh Braun 

T 212-625-1410

www.submarine.com

Traction Media

Asher Goldstein

T 310-385-0770

F 310-385-0771

United Talent Agency (UTA)

David Flynn

T 310-288-3863

F 310-247-1111

William Morris Agency

Jerome Duboz

T 310-859-4000

F 310-859-4462

The Imaginarium of Doctor Parnassus to Be Sold Early...Hmm

So the Hollywood Reporter features an article today about how the filmmakers and U.S. producer rep Cinetic Media have decided to try to sell the much-anticipated Terry Gilliam film The Imaginarium of Doctor Parnassus prior to its premiere at the Cannes Film Festival. Hmmm. Very interesting. 

The Imaginarium of Doctor Parnassus is the last film Heath Ledger was working on prior to his untimely death. A group of well known actors, Jude Law, Colin Farrell and Johnny Depp, took his place in the film that is now being released, a year after Ledger's passing.

With such name power and buzz prior to the Cannes premiere, one would think the film would have a chance for a strong sale after (or during) a festival premiere. In fact, that has largely been the model for selling independent films in the past. Capture a slot at a major film festival, build the anticipation, fill the theater with acquisitions execs, and let the offers roll in. 

Well, that model of releasing at a top festival and creating a bidding war has all but vanquished due to buyers taking less risk on indie fare. There have been too many losses on the films purchased in this fashion and buyers are still licking their wounds and a number have never healed from them. 

So has Cinetic Media started a new, more profitable trend on how to sell independent films or perhaps a new trend on how to sell problematic films? Could it be that Cinetic feels Imaginarium will have a mixed or controversial or even a poor reaction so they would rather err on the side of caution and have acquisition execs make their decision on the sale during calmer, buyer-only screenings before critics and finicky Cannes audiences have a chance to weigh in? Terry Gilliam's films are known to be brilliant, yet tough. 

Or perhaps the film is remarkable and they feel the acquisitions execs will pony up more cash prior to the anticipated premiere so they can use Cannes to launch the film?

My gut says the film is not an easy sell, despite the early buzz and starpower and Gilliam's fanbase, and Cinetic is using this strategy to create a wonderment about the title. Even embarking on an out-of-the-box sales strategy gets the rumor mill going, resulting in, you got it, publicity! It's all very intriguing. I will be watching to see how it fares and I look forward to actually seeing the film!

Here is a link to the Imaginarium of Doctor Parnassus blog and a teaser trailer:

More Indie Film Distribution Resources

Here is a link to the list of distributors who work with the Film Forum in New York City. 

Mark Litwak, an entertainment lawyer who specializes in independent film, wrote an informative article titled Distribution and the Indie Filmmaker. 

Check out Film Specific. Stacey Parks has created a really great community filled with excellent resources for film distribution. 

Educate yourself on the film market attendees. Here is a list of the 2008 American Film Market attendees. These companies are selling product and one of them could be yours. 

Another excellent resource for producers, sales reps and distributors is the Web site www.cinando.com (a division of the Marche du Film - or the Cannes Film Market). You can search its database and learn about international producers, sales reps and buyers (includes North America). 

When Your Indie Film Is Described as "Too Commercial"

Have you ever made a film that you were really proud of, created absolutely independently, and even garnered excellent reviews from test audiences but were still shut out of the festival circuit with the explanation that it's "too commercial"? Well, you're not alone. 

Whether we want to admit it or not, there is a certain kind of film that the festival circuit likes to program, and if you ain't got it, they won't program it. I won't say that I agree or disagree with their philosophies -- it just is and you need to learn how to survive outside the festival circuit should you be shut out of it. 

It's very well known that premiering at a larger festival and garnering positive reviews lays a strong foundation for the release of your film. But what do you do when you have that "bastardly commercial" film that they don't like... 

You embrace the fact that your film is "too commercial" and you try to sell it into the more commercial avenues. Funny enough, I have one of those films and when I told our sales agent about our plight of being shut out of the festival circuit, he laughed and said, festivals program films I can't sell. I can sell your film. I was very relieved to hear this and thought, you know what?, I'd rather have a sellable film than one that plays a festival and can't find a buyer to save its life. That's making lemonade out of lemons. 

As an indie filmmaker, you are brought up to believe that the film festivals are your only way of gaining exposure for your work. But that isn't true. You may have made the film outside of the Hollywood system but that doesn't mean your film is a natural fit for the festival circuit. There is a misconception that because you made it indie, the festival circuit is the only means of promoting it.  

When taking your film to market, absolutely apply to the big festivals because you never know and a premiere at one of them will definitely help your sales agent have an easier job of promoting your film. But if you are shut out, don't despair. It may not be an indication that your film is bad (I won't deny that it could be); it may just mean that your film is meant for another means of exposure. 

You have the power to get your film out to the world in many different ways. Get creative. Know your audience and reach out to them directly. Social media is your friend when you need to reach out: Facebook, MySpace, Twitter, YouTube, etc. If you have a lot to say, start a blog or a vlog. Do a podcast. Create a Web site. Just don't let the film festival rejections get you down. Instead, resolve yourself to prove them wrong! 

Film Trailers

A film trailer is an absolutely necessary part of your sales arsenal for your film. You will use your trailer to entice distributors to buy your film and audiences to buy tickets to see your film. 

There are three kinds of trailers you should be familiar with: teaser, theatrical trailer and sales trailer. A teaser is approx. a 30 second spot that "teases" the audience with  your story. Teasers may be released even while the film is being edited to whet the appetite of the audience.

Here is a teaser trailer for The Dark Knight:

A theatrical trailer is about 2  to 2 1/2 mins and it's typically the trailer used to hook audiences. Theatrical trailers show before films at the movie theater or on TV or the Internet. Thus they need to be for all audiences (no nudity or swearing or extreme violence, etc.). 

Here are two theatrical trailers for The Dark Knight:

OR 

Sales trailers, on the other hand, are usually for buyers of the film. They tend to be longer (almost 3 mins or more) and contain the goodies from your film that you wouldn't find in the theatrical trailer, i.e. nudity, blood, scenes of high production value that give away too much of the story, etc. Buyers want to see what your film has to offer in one short clip.  

I don't have a version of the sales trailer to show you from The Dark Knight. That trailer would be used by sales agents at film markets like the ones at Berlin or Cannes or Los Angeles (American Film Market or AFM). Just imagine a longer clip with more of the scenes that really give away all of the major selling points, like the incredible VFX, etc. 

Many independent films have a hard time affording an experienced trailer editor. I understand that predicament but I would suggest that you do your best to try to find someone with trailer cutting experience. 

A trailer editor will have been trained in how to "sell" a film. That knowledge and experience can directly result in sales of your movie. I have heard countless stories of distributors buying movies based on solely seeing the trailer. Now that's an effective sales tool.