What you CAN and CAN’T negotiate in an Indiefilm Distribution Deal

A HUGE part of my job as a producer’s rep has been to negotiate with sales agents and distributors on a filmmaker’s behalf.  While I happen to think my contracts are exceptionally fair, most filmmakers tend to do some level of negotiation.  However, others can overplay their hands and lose interest.  I’ve checked up on some of the ones that did, and they didn’t make it anywhere.  So, no matter who you intend to negotiate with here’s a list of what tends to be possible to negotiate.  

One thing to keep in mind is your position as a filmmaker.  Distributors tend to have more power in this negotiation.  Filmmakers do still have power, as you own your film, but it’s important to keep in mind that in many circumstances, they’ll have significantly more options than you will. 

It’s also important to note that these contracts are only as good as the people and companies you’re dealing with.  So vetting them is important.  The link below has more information on that.  

Related: How to vet your sales agent distributor.

There are of course exceptions to these rules, but you knowing the general rules will help. Those exceptions are directly tied to the quality and marketability of your film.  

What you CAN negotiate

These are things you CAN negotiate, within reason.

Exclusions

Distribution deals are all about rights transfers and sales.   In general, you can negotiate a few exclusions to keep back and sell yourself.  It’s important to note that you shouldn’t try for too many of these though, as the distributor needs to be able to recoup what they put into your film.  Here are some of the common ones

• Crowdfunding fulfillment

• Website sales

• Tertiary regions the film was shot in.  

In general, all rights are given exclusively, but crowdfunding fulfillment might need to be carved out so you can fulfill your obligations to your backers.  I’ve never had trouble with this one.  

Generally, it’s wise to retain the right to sell your film transactionally through your own website using a platform like Vimeo OnDemand or Vimeo OTT.  Distributors tend not to utilize these platforms, so they generally won’t have an issue with it so long as they get advisement on release timing AND it’s only available on said platform transactionally.  That is to say, people must pay to purchase or rent the film.

If the film was shot in a very minor territory like the Caribbean, Paraguay, parts of Africa, or maybe parts of the Philippines, it might be possible for you to retain those territories and sell the film yourself.  Be careful with how many of those you do.  

Marketing Oversight (Home Territory)

Pretty much no matter what territory you’re from, you have some pretty meaningful ability to negotiate additional marketing oversight.  This is not an unlimited right, however, and it’s common that final say will remain with the sales agent or distributor.  It’s important to do your diligence on how they’ve used that oversight in the past.  

Term (To an extent)

If a Distributor or sales agent brings you an agreement with a 25-year term and no MG, walk away.  If a Distributor tries to get a 12-15 year term, try to get them down to 10.  That’s the industry standard for what we work on. 

Exit Conditions (to Some Extent)

You need to make sure that you have aa route out if things go sideways.  In general, you need a bankruptcy exit, and I would push for an option to exit on acquisition of the distributor, or if a key person leaves.  

What you CAN’T GENERALLY negotiate
(but should probably look out for)

Here’s what you generally can’t negotiate.  There are exceptions to how much you can negotiate this, but no matter what these are things you need to fully understand.  

The Payment Waterfall

I wrote about the waterfall fairly extensively in the related blog linked below.  The biggest issue is that most distributors start taking their commissions BEFORE they recoup their expenses.  I understand how and why they do it, but it’s generally not the best.  

The biggest negotiation you MIGHT be able to get is what’s known as a producer’s corridor, which effectively helps you get a small amount of money from the first sale.  Generally you’ll be placed (essentially) in line with the distributor or sales agent, which means it will take significantly longer for them to recoup their expenses.  That said, any way you slice those numbers, you still get paid more.  

Related: Indiefilm Distribution Payment Waterfalls 101

Related: The Problem with the Film Distribution Payments  

Recoupable Expenses

Recoupable expenses are money a distributor or sales agent invest into the marketing of your film.  They generally have to get this back before paying you.  The exception above is notable.  Generally, there is little ability to negotiate this but you should make sure you get the right to audit at least once per year.

Related: What is a Recoupable Expense in Indiefilm Distribution

Payment Schedule

The payment schedule is how often you receive Both a report and a check.  In general, they start out quarterly and move to semi-annually over 2 years.  There are exceptions, some of my buyers report monthly.  However, in general, after 2 years most of the revenue has been made, and the reports will continue to get smaller and smaller. 

DON’T EVEN BRING THESE ONES UP

These are issues you just can’t bring up.  The distributor might walk away if you do.  

Their Commission

Don’t bring up the sales agent’s commission.  You probably don’t have the negotiating power to alter it beyond the corridor I mentioned above.

EXCLUSIVITY

I wrote a whole blog about this linked below, but the basics of it are that we’re essentially dealing with the rights to infinitely replicate media broken up by territory and media right type.  The addition of exclusivity is the only way to limit the supply, which is the only reason the rights to the content have any value at all.  

DIRECT ACCESS TO THEIR CONTACTS.  

These contacts are generally very expensive to acquire, and the entire business model of the sales agent or distributor relies on maintaining good relationships with them. No distributor is ever going to give this to you. They’ll get very annoyed about you even asking.   

Thanks so much for reading!  If you think that this all sounds like a bit much, and would rather have help negotiating, check out Guerrilla Rep Media’s services which include producer’s representation.   your film using the button below. If you need more convincing, join my email list for free educational and news digests and resources on the entertainment business which include an investment deck template, a contact tracking template to help you keep track of the distributors you’re talking to, and a whole lot more.  

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7 Things I Learned as CEO of a US Film Distributor

If you’re reading this, you might already know that I founded and lead a company called Mutiny Pictures.  That company has since sold to Bayview Entertainment. Given I’ve been a producer’s rep for quite a while, I thought I was prepared to step up to leading a team to take films to market directly, I found that while I was up to the task there was still quite a lot of personal growth involved for myself and every level of the team. This is to be expected out of any new venture.  Here are some of the biggest things that I personally learned throughout running a US Distribution company.  

(Almost) Nobody pays on time.

Filmmakers often complain about Sales agents and Distributors not paying on time.  While it goes without saying that there are a lot of shady, dishonest sales agents and distributors out there, I was surprised exactly how few reputable companies did not pay on time.  Given that when it comes to film distribution and international sales all stakeholders are part of the same waterfall or pay chain, if one stakeholder is paid late that eventually means that the filmmaker is paid late. We can’t pay you money we don’t have.   

So if you’re a filmmaker reading this, you should know that just because your sales agent is late on their reports doesn’t mean they’re not being honest with you.  It also doesn’t mean that they’re the reason you’re being paid late.  It’s entirely possible that possible their vendor, supplier, or other provider hasn’t paid them yet. 

That said, they should still communicate with you about when this is happening, and if they’re paying late you should still be tracking it as much as you can.  

Analytics and Reporting really, REALLY suck at every level of the distribution.

Given I do other forms of online and affiliate marketing and used to run marketing for a tech startup, I was utterly flabbergasted by the utter disgrace that is analytics around digital film marketing.  In most industries related to digital marketing, the insights are nearly immediate.  However, If you deal with a servicer or aggregator, they often won’t give you any level of real-time insight.  The best most do is once a week, which is nearly meaningly when it comes to agile marketing practices.  

I did find a workaround for my clients, so I’ll share it here.  If you’re a filmmaker and want better insights, sign up for the Amazon affiliate program and use those links to your film to market it. This is less about the few extra cents you get from pushing your work and more about real-time sales insights.  It can cause some issues around online postings and social media algorithms though, so it’s not a perfect system.  I’d love better suggestions in the comments if anyone has any.

Insurance and legal paperwork are way more of the job than you realize.

This wasn’t exactly a surprise.  At its core, film distribution and international sales are businesses based almost entirely around tracking rights and trading signatures on paper.  is entirely about buying and selling intangible rights restricted by non-physical attributes like territory, right types, region, and other highly specific terms of art.  It’s easy to mess this up, so it only makes sense to have solid insurance coverage.  What I didn’t expect was how many hours in my standard week were around litigious paperwork around insurance, compliance, reporting, and proposals, as opposed to growing the business. 

Additionally, you as a filmmaker will need to provide a lot of insurance paperwork.  

You have to pitch earlier than you think.

If you want to have a film on all major TVOD platforms, you generally need to have them pitched/placed 5-6 months ahead of the date.  You can do it in 3 months on a rush job.  This was surprising given I submitted my first book for publishing less than 3 days before it was available on Amazon.  If you sell to an SVOD outlet, they normally require delivery at least 3-6 months in advance as well, and they’ll either pay over the course of the license or a set period after the license begins.  

Payouts take longer than you think.

Reporting is one thing, payment is another.  Most platforms only pay quarterly, and they pay 30 days after the end of the quarter.  There has recently been an additional 90-day delay that was initially for COVID, but that seems to be less of an issue than it used to be.  Additionally, they won’t pay for partial quarters, meaning if you launched in February, you won’t get any data from a lot of platforms until August or even November. If there’s a service involved, you might get an additional 30-day delay.  

This makes it really hard to run a business, and the only thing you can really do is use a different aggregator or servicer.  You can supplement this with direct vendor payments from streamers and physical media outlets, but those are only getting more difficult to place.  There are very few companies that are occupying the servicer or aggregator space in the market, and unfortunately, the ones with the greatest physical reach tend to also have the worst reporting timelines.  

There’s a great amount of room for an aggregator with fast recording and greater ability for brick-and-mortar physical releases.  However, given the rapid decline of physical media, there might not be time for such a company to access that window before it closes forever.  

The industry still operates on a tentpole model.  

The sad truth of the matter is that on the ultra-low budget scale, only about 2 or 3 in 10 movies make money.  If your sales agency or distributor is made up of really good curators, you might be able to get that to 4 or even 5 out of 10.  If you’re hitting that high, most industry people will be amazed.   If you’re running a distribution company, this means you either need to be exceptionally picky and run a very lean company, or you need to take everything you can and see what sticks.  I’ve written another piece on this going into more detail. 

Producers get in their own way a lot.

I said earlier that it’s no secret that there are a lot of shady sales agents and distributors out there.  That said, not all filmmakers are saints either.  Some filmmakers are a complete joy to work with, but others will second guess everything you do and think that the only film that you should ever focus on is theirs.  

I had a filmmaker say precisely that to my face.  We got tons of press for this person, but nobody wanted to watch it and the film tanked.  When this filmmaker wasn’t getting the returns they expected they started taking up a ton of time in angry calls and emails.  This reduced A LOT of my available time to actually get their film out there, which further impacted the returns and became a vicious cycle.  

Marketing a movie is best when it’s a partnership between the filmmakers and the distributor.  In general, you should discuss when you’re making any level of announcement with your distributor so that it can make the biggest possible splash.  It’s generally unwise to drop assets like posets and trailers without talking to your distributor, as you may ruin potential exclusive press drops.  Worse, if you put your film up in various territories through self-distribution channels, it could cost you thousands or tens of thousands of dollars in lost revenue.  Even if you can take a film down, most buyers won’t want it if it’s already been placed on any platforms in their region. I could go on about this for a while, so I’m going to leave it for another blog.  

This is a collaborative process, so they’re definitely give and take, but keep in mind there’s probably a reason you didn’t self-distribute and instead decided to work with your distributor.

In the end, this is a relationship business.  If your distributor likes you, they’re more likely to go the extra mile for you.  That’s a reality of human nature. If you want your distributor to like you, you might want to grab my free IndieFilm business resource package as it’s got lots of goodies to help make marketing your movie easier for all involved.  The resource pack got templates for contacting distributors, and tracking that contact so you don’t bug them, an e-book on the film business, and a whitepaper on the metrics of the film industry.  Plus, you’ll get monthly content digests to help you better understand the industry in a manageable way and occasion updates on new releases, courses, workshops, and announcements from Guerrilla Rep Media.  Check it out below.

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Filmmakers Glossary of Film Business Terminology.

A colleague of mine asked me if I had a glossary on film financing terms in the same way I wrote one for film distribution (which you can check out here.)  Since I didn’t have one, I thought I’d write one.  After I wrote it, it was too long for a single post, so now it’s two.  This one is on general terms, next week we’ll talk about film investment terms. As part of the website port, I’m re-titling the first part to a general film business glossary of terms, to lower confusion on sharing it. It’s got the same terms and the same URL, just a different title.

Capital

While many types exist, it most commonly refers to money.  

Financing

Financing is the act of providing funds to grow or create a business or particular part of a business.  Financing is more commonly used when referring to for-profit enterprises, although it can be used in both for profit and non-profit enterprises. 

Funding

Funding is money provided to a business or non-profit for a particular purpose.  While both for-profit and non-profit organizations can use the term, it’s more commonly used in non-profit media that the term financing is. 

Revenue

Money that comes into an organization from providing shrives or selling/licensing goods.  Money from Distribution is revenue, whereas money from investors is financing, and donors tend to provide funding more than financing, although both terms could apply.

Equity

A percentage ownership in a company, project, or asset.  While it’s generally best to make sure all equity investors are paid back, so long as you’ve acted truthfully and fulfilled all your obligations it’s generally not something that you will forfeit your house over.  Stocks are the most common form of equity, although films tend not to be able to issue stocks for complicated regulatory reasons and the fact that films are generally considered a high-risk investment.

Donation

Money that is given in support of an organization, project, or cause without the expectation of repayment or an ownership stake in the organization.  Perks or gifts may be an obligation of the arrangement. 

Debt

A loan that must be paid back. Generally with interest.

Deferral

A payment put off to the future.  Deferrals generally have a trigger as to when the payment will be due.

“Soft Money"

In General, this refers to money you don’t have to pay back, or sometimes money paid back by design.  In the world of independent film, it’s most commonly used for donations and deferrals, tax incentives, and occasionally product placement. It can have other meanings depending on the context though.

Investor

Someone who has provided funding to your company, generally in the form of liquid capital (or money.)

Stakeholder

Someone with a significant stake in the outcome of an organization or project.  These can be investors, distributors, recognizable name talent, or high-level crew. 

Donor

Someone who has donated to your cause, project, or organization. 

Patron

Similar to donors, and can refer to high-level donors or financial backers on the website Patreon.  For examples of patrons, see below. you can be a patron for me and support the creation of content just like this by clicking below.

Non-Profit Organizations (NPO)

An organization dedicated to providing a good or service to a particular cause without the intent to profit from their actions, in the same way, a small business or corporation would. This designation often comes with significant tax benefits in the United States.

501c3

The most common type of non-profit entity file is to take advantage of non-profit tax exempt status in the US.

Non-Government Organization (NGO)

Similar to a non-profit, generally larger in scope.  Also, something of an antiquated term. 

Foundation

An organization providing funding to causes, organizations and projects without a promise of repayment or ownership.  Generally, these organizations will only provide funding to non profit organizations. Exceptions exist. 

Grantor

An organization that funds other organizations and projects in the form of grants.  Generally, these organizations are also foundations, but not necessarily.

Fiscal Sponsorship

A process through which a for-profit organization can fundraise with the same tax-exempt status as a 501c3.  In broad strokes, an accredited 501c3 takes in money on behalf of a for-profit company and then pays that money out less a fee.  Not all 501c3 organizations can act as a fiscal sponsor. 

Investment

Capital that has been or will be contributed to an organization in exchange for an equity stake, although it can also be structured as debt or promissory note.

Investment Deck (Often simply “Deck”)

A document providing a snapshot of the business of your project.  I recommend a 12-slide version, which can be found outlined in this blog or made from a template in the resources section of my site, linked below.

Related: Free Film Business Resource Package

Look Book

A creative snapshot of your project with a bit of business in it as well. NOT THE SAME AS A DECK.  There isn’t as much structure to this.  Check out the blog on that one below. 

Related: How to make a look book

Audience Analysis

One of 3 generally expected ways to project revenue for a film.  This one is based around understanding the spending power of your audience and creating a market share analysis based on that. I don’t yet have a blog on this one, but I will be dropping two videos about it later this month on my youtube channel.  Subscribe so you don’t miss them.

Competitive Analysis

One of 3 ways to project revenue for an independent film.  This method involves taking 20 films of a similar genre, attachments, and Intellectual property status and doing a lot of math to get the estimates you need. 

Sales Agency Estimates

One of 3 ways to project revenue for an independent film.  These are high and low estimates given to you by a sales agent.  They are often inflated.

Related: How to project Revenue for your Independent Film

Calendar Year

12 months beginning January 1 and ending December 31.  What we generally think of as, you know, a year. 

Fiscal year

The year observed by businesses. While each organization can specify its fiscal year, the term generally means October 1 to September 30 as that’s what many government organizations and large banks use.  Many educational institutions tie their fiscal year to the school year, and most small businesses have their fiscal year match the calendar year as it’s easier to keep up with on limited staff.

Film Distribution

The act of making a film available to the end user in a given territory or platform. 

International Sales

The act of selling a film to distributors around the world. 

Related: What's the difference between a sales agent and distributor?

Bonus! Some common general use Acronyms

YOY

Year over Year.  Commonly used in metrics for tracking marketing engagement or financial performance on a year-to-year basis.

YTD

Year to Date.  Commonly used in conjunction with Year over year metrics or to measure other things like revenue or profit/loss metrics.

MTD

Month to Date. Commonly used when comparing monthly revenue to measure sales performance. Due to the standard reporting cycles for distributors, you probably won’t see this much unless you self-distribute.

OOO

Out of Office.  It generally means the person can’t currently be reached. 

EOD

End of Day. Refers to the close of business that day, and generally means 5 PM on that particular day for whatever the time zone of the person using the term is working in.  

Thanks for reading this!  ​Please share it with your friends. If you want more content on film financing, packaging, marketing, distribution, entrepreneurialism, and all facets of the film industry, sign up for my mailing list! Not only will you get monthly content digests segmented by topic, but you’ll get a package of other resources to take you film from script to screen. Those resources include a free ebook, whitepaper, investment deck template, and more!

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How to Raise Development Funds for your Feature Film.

Pretty much every filmmaker wants to find money to make their movie.  Unfortunately, many don’t quite realize that in order to raise the kind of money you need to make anything above a micro-budget movie, you’ll generally need a lot already in place.  It’s something of a catch-22.  Investors need name talent to market the film, and distribution to make it available.  Distributors need name talent and a tested team to give any meaningful commitments, and name taken need to know they’ll be paid.  There are ways around all of this, but generally, they require money upfront.  This blog is about how you raise it.

​Unfortunately, there isn’t a magic bullet on any level of film funding.  The best I can do is offer you tools and tactics to use to increase your chances of success.  You will probably need more than one of these tools to get the job done.
​

Don't want to read? Check out the video on this topic below

​Crowdfunding

Let’s get this one out of the way fast.  Crowdfunding CAN be great for filmmakers not only as a way to raise partial funding, but also to engage yourself with your audience and provide market validation for both investors and distributors/sales agents.  That said, it’s not without its drawbacks.  Using crowdfunding as an early-stage race tool can cause your donors to question whether or not you’ll be able to get the whole film done.  If you can’t, it can lead to problems.  (Extra special shoutout to my patrons here, since we’re talking about crowdfunding.)

Friends and Family

I know, I know.  This is the oldest piece of advice in the book.  But, there’s a reason it’s still around.  Your friends and family are (hopefully) among the people who are most likely to back and support you in this endeavor.  If they’re like mine were when I was starting out, while they may be willing to help and actively want you to succeed, they’ll still need some proof it’s possible.  However, the proof they’re like to need will probably be something easier to get than an investor would need. These 

Equity

But Ben, didn’t you just say that you need more in place to get an investor?  Yes and no.  In order to raise a large round, you’ll need a lot in place, but if you’re only focusing on a smaller round you can get by with less.  It is important to properly structure this investment though.  You’ll either need to offer a more substantial stake in the company for the bigger risk taken for investing earlier, or you’ll need to do some other investment vehicle like Convertible debt.

Even at this stage, if you want to raise money from investors you’re going to need to create an independent film investment deck. You can learn more about it in this blog, or you can grab a template for free in my film business resource package in the button below.

Grants

Grants are great in that they don’t require you to pay back the money so long as you only use it for its intended purpose.  They’re not so great in that they generally take a long time to be approved for the money, and you’re generally facing significant competition particularly for development stage grants. 

Soft Costs and Deferrals

This essentially means calling in every favor you have to make sure that you have the best chance possible to succeed in developing a package for your film.  This isn’t going to carry you the whole way though.  Most people who do this for a living don’t work purely on a deferral or commission basis.  I’m including myself in this, although I do defer a large portion of my fees and take on as much as I can on commission. 

That said, while the higher-level connectors, Producers, Executive Producers, and the like are generally unwilling to work on a purely deferral or commission basis, the friends you need to make a great crowdfunding video, concept trailer, or something similar might not be.  Getting their buy-in might help you make it to the next level.
​

Skin in the Game

Finally, we come down to the ever-present fallback of funding the development round yourself.  This is generally the fasted way to complete the round, but it has the obvious drawback of needing deep enough pockets to just shell out and pay the money you need to get it done. 

I know all of this is really hard to grasp, and quite frankly it’s a lot.  While I do consult on this sort of stuff, I’m not cheap. (with good reason.) I try to make a lot of information available through my site, but there are times that you just kind of need someone to answer your questions and re-orient you.  As such, I’ve decided to start a special mentorship group. 

This special training group gets you access to additional content, an exclusive discussion group, and most importantly weekly group video calls where I’ll answer your questions personally, and occasionally bring on people who would also be of benefit to the group’s needs.  Click the button below to go to a form and express interest in this group.  Spots are limited.

Also, don’t forget about the Free indiefilm business resource package to get your free Investment deck template, e-book, white-paper, and more. .

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What Screenplays are Studios ACTUALLY Buying?

If you’re a screenwriter, you have two options.  Produce it yourself, or option your work to a producer.  In order to option your work, you need to understand who is going to buy your movie.  Unfortunately, there’s more bad and incomplete information than there is good information out there.  Recently, a client of mine forwarded an email he got back from a contact in Hollywood who worked as a script doctor.  This email epitomized that bad information, so I thought I’d redact any contact information and publish it for others to learn from as well.  (I did check with my client first, and he was good with it.)

Here’s what the script doctor said Hollywood wanted.  Their responses in title, mine in the paragraphs following.

1. Contained Thriller or Horror: ideally one location about 5-8 actors (no A-listers needed). This is most scripts being bought or sold these days.

These are great if you’re producing the film yourself and looking to do it as cheaply as possible.  Films like this can be shot on the cheap, so it's significantly easier to produce them. Given that horror or thriller movies are less execution or name-talent dependent they have a greater chance to sell on the strength of the genre alone. Given that, such producers are more interested in them.  Unfortunately, these are the vast majority of the films made every year that find some degree of place in the market which has resulted in a massive glut in the market and each film makes next to nothing. 

I know this because I've repped several of them.  Most times the script doctors don’t actually know how the producers or production company end up getting paid, as the writers (and ESPECIALLY "Script Doctors”) are paid up-front

More than 20,000 films are made in the US every year, at most 10% of those get distribution to any meaningful degree.  Thrillers and horror films are the only projects that have a chance at getting into that to 10% without IP or Talent, but in the end you still end up competing with 2,000 other films, most of which have better assets and positioning than you do.  This is why I'm increasingly advocating other paths forward.

In general, the only way this is advantageous is if you produce it yourself.  We're doing family films because that's what most every buyer wants right now, and there's an easier pipeline to follow that has a better chance of success if it gets done.  ​

2. Something with an existing IP. A novel, a graphic novel/comic book, a short story, a short film... anything that already has a fan base or following ideally.

This is why I’m currently helping a client option the rights to some books, as it's the most reliable path to success even if its slightly longer path it is a better chance at success.  If you want to get a film made first to make that part easier, it is a viable path.  However, if you want to raise a larger amount of money so your film has a better chance at finding a bigger distributor and bigger audience, then you’ll need some level of recognizable IP.  I heard Brett Ratner say in an interview at AFM several years back that if he was just starting out what he’d do is read voraciously and find the newest up-and-coming IPs.  To option and use to build an audience.  The alternative is to generate your own IP, but that in itself is a very long road fraught with danger, as this video from Lindsay Ellis illustrates very well. 

RELATED VIDEO: HOW TO GET YOUR BOOK PUBLISHED IN 10 YEARS OR LESS!

Also: HA! He thinks expanded short films sell.  That hasn't really been true for more than a decade since the amount of ready-to-sell feature films being made has ballooned, in fact, it's almost like features are the new shorts in terms of distribution revenue.  But that's a topic for another day.

3. A specific character piece for an actor looking to stretch themselves. If you’ve got a character-driven piece and can get an A-list actor attached because it is something they haven’t done before, you’re good to go.

I heard this a lot in film school, but the real-world applications are limited.  That is to say, while there is a kernel of truth in this concept, when it comes down to the implementation it's really more a platitude or truism at this point.  There’s a strong case to be made that casting against type has its merit.  The issue is that in general, the only way you can make it work is if you have a direct path to the name talent you want to talk to, and even then you have to get lucky and catch them at the right time. There are reasons I know this that I can’t publicly say…

4. Anything that will do well overseas. With China eating up all of our movies, they need scripts that are, fun, fast, action-packed and translate well and easily (aka not a lot of dialogue).

Again, something of a platitude or truism.  Of course, you have to think about overseas, which is one big reason that comedies and dramas are complete no gos. The books below go into that in more detail than I can in a blog. (yes, there are affiliate fees, but it's only pennies and I picked the books custom for this blog.)

That’s the basics right now. Of course, the caveat is if you write a brilliant script, it doesn’t matter what genre it is, but in reality, your chances of having it made, sold, and even optioned are very difficult roads ahead.

And here's the crux of the disagreement with this script doctor.  The brilliant script isn't so much as a way of breaking through any of the other things you need to be listed above, it's more a prerequisite to succeeding with any of them.  We all hear stories of films making it through the studio system, but these are the exceptions, not the rules.  

If selling your script doesn’t seem worth it, you’ll need to produce it yourself. You’ll probably need money to do that. If you want to raise money, you’ll need a myriad of documents, starting with an investment deck. My Free indiefilm resource pack has you covered with a template for that, as well as a free e-book, whitepaper, and a bunch of other templates too. Snag it for free in the button below. Thanks for reading, and if you liked it, please share it with someone who needs to know about selling their script.

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The 4 Types of Media Entrepreneurship

Traditionally, when we think of entrepreneurs we think of Steve Jobs starting Apple in a Garage, or Jeff Bezos Traveling across the country to raise funds while writing his business plan in the back seat of the car while his wife drove.  However, there’s more to entrepreneurship than that.  Entrepreneurs find new and novel solutions to problems by building organizations despite a huge amount of risk and uncertainty.

Since this month is Entrepreneurship Month on both this blog and the blog I run over at ProductionNext, I thought I’d start out the month with a little of an expansion of Film Entrepreneurship in general.  In this post, I’ll adapt a rather notable post by Steve Blank from a decade ago to the current landscape media entrepreneurs face, as well as where you’ll most likely find those entrepreneurs.

In his post, Steve outlines that there are 4 types of entrepreneurial organizations which are generally accepted as follows small businesses, scalable startups, large companies, and social entrepreneurs.  You can (and maybe should) read Steve’s post before reading this one.  (it’s short)

If you still don’t agree that filmmakers are entrepreneurs, I recommend you read more of my writing on that topic, in particular this blog and this blog.  While I could expand these into how other film industry stakeholders like sales agents, distributors, press, critics, or YouTubers, in the interest of keeping the scope completely addressable I’ll be working with a more traditional indie film archetype. 

Small Business Entrepreneurship Exemplified by Truly Indie Filmmakers.

According to Banks, these are the entrepreneurs who run a small businesses like a bodega or mom-and-pop shops.  They have no intention of nationwide franchises, but they still do what they can to make a living for themselves and their family.  This is where the vast majority of filmmakers are.  They’re the people wanting to do what they love and find a way to get paid for it.

The owner of the bodega must figure out who buys what from them, and the way they stay afloat is through personalized service that creates a deep connection with their customers.  Convenience also plays a factor.  They can’t compete on price alone with the huge multinational chains down the street, so they need to make sure that they offer something that the mega-chain down the road doesn’t. 

In this day and age, the job is similar for indie filmmakers.  We can’t compete with the major studios, but those studios don’t target a small niche, they target everyone who has 12 dollars.  As a result, they miss a lot of people which leaves a hole open for clever filmmakers to establish an audience, keep them engaged, and build a business for themselves. ​

Scalable Startup Entrepreneurship: Best Exemplified by Indie Filmmakers on the Traditional Studio Path.

Scalable startup Entrepreneurs are people like Steve Jobs, Mark Zuckerberg, Bill Gates, or Jeff Bezos.  They start a company from (next to) nothing, and then look to do more than address an existing need, they want to disrupt the entire system by creating a need and then filling it.  In doing so, they become mega-wealthy and change the world. 

Those starting a scalable startup are faced with an incredibly high degree of uncertainty, as well as a long road to profitability.  In general, they need significant outside funding in order to succeed.  Most of the time, they must invent something that can be patented that demonstrates a novel solution to a widespread problem with a working prototype in order to raise significant funding from institutional investors.  After that, they’ll need to take on an experienced team and specialized advisors in or If they have a track record in their industry, it helps significantly.

For filmmakers, these scalable entrepreneurs are those who have already made a successful project or two and are scaling up to make something bigger.  They’ll need to have proven themselves by getting validation either in the form of a huge engaged audience, a hugely successful film, or a Tier 1 festival win just to get their foot in the door.  Once their foot is in the door, they can then seek to raise money using their previous work or a concept trailer to raise the funds to make a much bigger movie.  In order to successfully raise those funds, they’ll need a strong package of people with specialized skills and followings of their own. ​​

Large Company Entrepreneurship: Best Exemplified by Digital Divisions of major studios & networks. 

Large company entrepreneurs are people within large organizations seeking to either create new projects that solve a need that has not yet been addressed by the company that they’re working for.  Sometimes this is achieved by creating a new division, other times it's a new product from an existing research and development division.  

A couple of examples of this would be when Intuit started what would become Quickbooks, as well as many other similar projects like Quickbooks pay, expense tracking, and what would become the among many others.  For the Film Industry, I’d say the most notable recent example would be Disney+, although the digital divisions of every major network would also qualify.  Adult Swim starts new experimental projects like this on a regular basis. 

The challenges faced by large company entrepreneurs outside the film industry are as you would expect.  With a large company comes bureaucracy, bureaucracy tends to move slowly, so adapting to change can be extremely difficult.  Funding also becomes highly political, so it can be difficult to keep projects afloat.
​
For film companies, this is extremely similar.  Much of the top brass don’t want to give up the cash cows they’ve build for risky divisions that will burn through cash and not necessarily make more of it.  Also, at least until recently many of the digital divisions were considered a career downgrade from the more traditional media divisions.  We’ll see if it remains true.

Social Entrepreneurship: best Exemplified by Documentary Filmmakers.

Social entrepreneurs who care more about the benefit of the work than the bottom line.  They don’t just want to change the world, they want to save it.  Think of Tesla, OSIGroup (Makers of the Impossible Burger) or Jinko Solar.  Similarly but on a smaller scale, there’s BiosUrns (makers of a biodegradable clay urn that grows a tree from your ashes.)

Success on this front is hindered due to the perception that it’s not much of a money maker.  It can be harder to find investors as well since you’re specifically saying profit isn’t your primary concern.  Most successful companies started with one idea that they could refine and execute before moving to other ideas that complement the same customer base.  They also are very conscientious about stating that their product does more than they provide whatever it is you bought.  There are other intangible benefits associated with the purpose that customers may consider weighing in their purchase decision.

For film, this is best exemplified by documentaries, but more recently diverse media has also been put into the spotlight in as a similar cause for social change. Documentaries are different when it comes to funding, but when they’re well done there is an addressable audience that’s hard to ignore and easy to convert.  Some movies do tree-planting campaigns with ticket sales as an additional incentive to convert, and most community screenings also benefit a non-profit organization.

Thanks so much for reading!  Let me know what you think of this in the comments, and PLEASE share It helps more than you’d think.

Also, if you would like to know more about the business of film and media, one of the best ways to do so is by joining my mailing list click the button below. It’s got a free monthly digest of educational content, a free e-book, a whitepaper, and some templates to help you raise money and market your film.

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22 Indiefilm Distribution Definitions Filmmakers NEED to know

If you’re going to read and understand your distribution agreement, then there’s some terminology you have to grasp first.  So with that in mind, here’s a breakdown of some key terminology you ABSOLUTELY need to know if you’re going to get traditional distribution for your film.

This is one of those blogs I should probably start out by saying that I’m not a lawyer.  Always talk to a lawyer when looking at a film or media distribution contract.  With that out of the way, I’d recommend we get started. 

1. License

At its core, a license for an independent film or media project is the right to exploit the content for financial gain.  Every other piece of a license agreement is clarifying the limitations of that license. 

2. Licensor

A licensor is a person or entity that is licensing a piece of media to another entity to either distribute or sub-distribute its content.  In general, this is the filmmaker when the filmmaker is dealing with a sales agent or producer’s rep, or the sales agent or producer’s rep when they’re dealing with distributors. 

3. Licensee

The License is the entity that is acquiring the content to distribute it and exploit it for financial gain.  In the instance of filmmakers and sales agents, it would be the sales agent, in the instance of sales agents and distributors, it would be the distributor. 

4.  Producer’s Representative (Producer’s Rep)

An agent who acts on behalf of a filmmaker or film to get the best possible sales and distribution deals. 

Related: What does a Producer’s Rep Actually do, anyway?

5.   Sales Agent

A Company that licenses films from sales agents or Producer’s Reps in order to sub-license the film to territorial distributors around the world.

6. Distributor

A company that directly exploits a film in a given territory on agreed upon media right types.

Related: What’s the difference between a sales agent and distributor

7. ​MG (Minimum Guarantee)

This is a huge one.  It’s the amount of money you get up front from a sales agent, or a sales agent receives from a distributor.  The biggest difference between this and a license fee is that at least in theory an MG has the potential to receive more in residual payments beyond the additional payment.  In practice, this is less common. 

8. License Fee

A license fee is a set amount of money paid by a distributor to exploit media in a defined territory and set of media rights.  Unlike a minimum guarantee, a License fee is the total amount of payment the licensor will receive over the course of the license, regardless of the financial success the film goes on to achieve.  License fees can be paid in one lump sum, or over the course of the license. 

9. ​Revenue Share

​Revenue share is the other most common way films can receive payment.  Revenue share essentially means that the licensee will split the revenue with the licensor according to an agreed-upon commission generally after they recoup their expenses. 

10. ​Producer’s Corridor

A producer’s corridor is an alternate payment waterfall of money a filmmaker is paid prior to the licensee recouping their expenses.  This generally means that the producer is paid from dollar one. 

11. Term

Term is the length of time a contract is in place.  For most independent film sales agency contracts, the term is generally 5-7 years. 

12. ​Region

The instances that generally apply to traditional distribution in the modern-day region refer to a set of territories in which a film can be distributed in. While they vary slightly from sales agency to sales agency, they are generally English Speaking, Europe, Latin America, Asia/Far East, and others.

13. ​Territory

When it comes to film distribution and international sales. territories are areas within a region that add greater specificity to where a sales agent can parse rights.  Latin America is both a region and a territory.

14. Media Rights

The sorts of media that a distributor has to exploit in a given territory or set of territories. 

Related: Indiefilm Media Right types

15. Benelux

A territory consisting of Belgium, the Netherlands, and Luxembourg. 

16. Four-Wall

The act of renting theaters in order to screen your film in them.  It generally involves a not insignificant upfront fee, and as a result, all money returns to the licensor. 

17. Community Screening

An alternative to a theatrical run for films with a strong niche or cause.  See below for more information. 

Related: How Community Screenings can replace a Theatrical Run

Related: 9 Essential Elements of Independent Film Community Screening Package

18. Payment Waterfall

When it comes to independent film distribution agreements, a payment waterfall is contractual representation How many flows from stakeholder to stakeholder?  If there is a producer’s corridor or some other non-standard modifications of a license agreement, there may be more than one waterfall in said contract. 

Related: IndieFilm Distribution Payment Waterfalls 101

19. Collection Account

​​A collection account is an account that a sales agent pays into which pays out all other stakeholders according to a pre-defined set of parameters.

20. ​Reports

In the context of independent film distribution and international sales agreements, a report is a statement made monthly, quarterly, bi-annually, or annually that states all incomes and expenses for a film.  Generally, this is accompanied by a check one is due.

21. Payment Threshold

When it comes to film and media distribution, a payment threshold is a minimum payment owed by a licensee in order to issue a payment to a licensee.  This payment amount is generally dependent on what payment method is being utilized.  For instance, the minimum is for a wire transfer is generally higher than a check which in turn is generally higher than for a direct deposit. 

22. Recoupable Expense

A recoupable expense is an investment made into marketing or distribution-related expenses by a licensee.  This investment will need to be paid back before the licensee pays the licensor, with the notable exception of the producer’s corridor.  Generally, these investments will fall into one of 3 categories of capped, uncapped, and uncovered expenses.   For more information, please check out the blog below. 

Related: What are recoupable expenses?

BONUS! - Expense Cap

An expense cap is a cap on the total amount of expenses that a licensee is able to take out before paying the licensor. There are exceptions, see the related link above for more information.

Thank you so much for reading the glossary! I hope it’s Helpful. If this is all intimidating and you need a little help, consider hiring a professional to assist you in the process.  So you could consider checking out Guerrilla Rep Media’s services. These blogs Blogs are largely a public service and marketing tool for me, most of my business is from representing and consulting with filmmakers just like you.  You can learn more and submit your film via the link below.  Or, if you're not ready for that, but want to support more content like this, join my email list to stay up to date on new offerings and get an awesome film business resource package while you’re there.

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The 6 Steps to Negotiating an Indiefilm Distribution Deal

Much of my job as a producer’s rep is negotiating deals on behalf of filmmakers.  However, now that I’m doing more direct distribution, I’m realizing there are several things about this process that most filmmakers don’t understand.  As I tend to write a blog whenever I run into a question enough that I feel my time is better spent writing my full answer instead of explaining it again, here’s a top-level guide on the process of negotiating an independent film distribution deal.

Submission

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Generally, the first stage of the independent distribution process is submitting the film to the distributor.  There are a few ways this can happen.  Some distributors have forms on their website (mine is here) Others will reach out to films their interested in directly.  Some will have emails you can send your submissions to.  There are a few things to keep in mind here, but in the interest of brevity, just check out the blog I’ve linked to below.  There’s a lot of useful information in that blog, but I will say that YES, THE DISTRIBUTOR NEEDS A SCREENER IF THEY’RE ASKING FOR ONE.

Related: What you NEED to know BEFORE submitting to film distributors

Initial Talk​

Generally, the next step is for the distributor to watch the film.  I have a 20-minute rule, and that’s pretty common.  Generally, if I make it through the entire film, I’ll make an offer.  If I don’t, I won’t ever make an offer.  If I’m requesting a call, I’m normally doing so to size up the filmmaker and see if they’re going to be a problem to work with. 

This is not an uncommon move for distributors that actually talk to filmmakers and sales agents.  Generally, we want to discuss the film as well as size up the filmmaker before we send them a template contract. 

Template Contract

Generally, when we send over the template contract, it will be watermarked and a PDF so that the filmmaker can understand our general terms.  This also won’t have any identifying information for the film on there.  We’ll also attach it. Few appendices to the contract can change more quickly than the contract itself.  My deliverables contract is pretty comprehensive as of right now, but honestly, I think I’ll pare it down soon as I haven’t had to use much of what’s in there yet. 

Red-Lining

The next major step in the process of the distribution deal is going through and inserting modifications and comments using the relevant function on your preferred word processor.  Most of the time they’ll send it in MSWord, but you can open Word with pretty much any word processor and this is unlikely to be too affected by the formatting changes that happen as a result of putting the document into pages or open office.  That said, version errors around tracking changes do happen, and if you find yourself in that situation comment on everything.

What you should go through and do is make sure track changes are turned on, and then comment on anything you have a question about and cross out anything that simply won’t work for you.

NOTE FROM THE FUTURE: Since someone commented on this at a workshop, I’m aware that Redlining has another historical context in the US, but it is the common parlance for this form of contract markup as well. I’m in favor of negotiating distribution deals, and not in favor of racist housing policies.

Counter-Offers

Generally, distributors and sales agents will review your changes, accept the ones they can, reject the ones they can’t, and offer compromises on others.  While there are some exceptions to this framework, after the first round of negotiations, it’s often a take-it-or-leave-it arrangement.  If it’s good enough, sign it and you’re in business.  If not, walk away.

Quality control

Most sales agents and distributors will have you send the film to a lab to make sure the film passes stringent technical standards. If you have technically adept editor friends, you’ll want them to do a pass first, as each time you go through QC it will cost you between 800 & 1500 bucks. You will need to use their lab, but it’s best for everyone if it passes the first time.

​If you need help negotiating with sales agents or just need distribution in general, that’s what I do for a living. Check out my services using the button below.  If you want more content like this, sign up for my email list so you can get content digests by topic in your inbox once a month, plus some great film business and film marketing resources including templates, ebooks, and money-saving resources.

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What Every Investor Needs to Know about Your Independent Film

They say that most people know whether or not they would get into bed with someone in the first conversation.  Admit it, you didn’t realize I was talking about investors giving you money right there, did you?  Jokes aside, there are a few key things your investor is going to need to know about your project in order to give you any serious consideration.

But before we get started, let me clarify that this is not the entire conversation.  This Is the conversation that will get you to the point you can send over documents for much deeper consideration.  Also, any one of these key points can disqualify an investor or a distributor.  That doesn’t necessarily mean it’s bad, it just means it’s not for them

Related blogs: How to Write a Look Book, Deck, & Business Plan (series)

Stage of development

There’s more than one time you’ll need to raise money.  As such, it’s good to clarify where you are with it upfront.

Related: The 4 Stages of indiefilm Financing (and where to find the money)

Genre

Your film is hugely important.  Generally, you’ll want to only list one genre as it denotes the style and feel of your film, and maybe 2-3 sub genres as those will inform both your setting, your audience, and general themes.  An example would be Goodland is a Slow-Burn Crime Thriller. 

Related: Why Genre is VITAL to Indiefilm Marketing & Distribution

Related: How Distributors Think of Genre & Sub Genre

Attachments

Investors will want to know who you have on board.  This can be distributors, recognizable name talent, tested directors, or anything else that may be marketable.  A couple of examples  would be Black Gold: America is Still the place stars Mike Colter (AKA Marvel’s Luke Cage.) It could also be The Cutlass has Wild Eye Releasing attached for Domestic distribution, and Leomark Studios handling international Sales. 

Related: Why your film still needs recognizable name talent. 

Budget

If you’re talking to an investor, you should say your total budget.  If you’re talking publicly to a distributor, you should give a range.  An example would be Goodland is a SAG Ultra-Low Budget Small town Crime thriller if you’re talking to anyone other than an investor.  If you’re talking to an investor, you’d say Made Up Movie Name is budgeted at 17 million dollars and we already have Governator McActionFace attached to star in it.  That’s why we need the extra 10 million beyond the 7 we already raised.

Logline

Your logline isn’t a 20 page treatment.  It’s a punchy sentence describing your project.  Everything up to this point is something you should be able to get out in about 10-15 seconds.

An example would be Goodland is a Completed SAG-AFTRA Ultra Low Budget Crime Thriller set in rural Kansas.  When a mysterious photographer shows up in town the same day the body of a drifter turns up dead in a cornfield, the local sheriff (played by Cinnamon Schultz of Winter’s Bone) must piece together the conspiracy before it’s too late. 

Financial Mix

The big reason your investor needs to know this is to make a better risk assessment.  It will also inform how much you’re asking them for.  You should never expect investors to cover your whole budget. 

An example of this would be something like Of our 4 million dollar budget, we’re raising 2.5mm in equity.  The rest is being covered by an MG-backed Presale from our sales agent, tax incentives from that place we’re shooting are being monetized by huge state businesses. ​

(Author's) note: Since it came up in the comments, I thought I'd clarify that the 4 million dollar example above is taken from a different film as the one I mentioned in the logline example.

Read more: The 9 ways to finance an independent film

Related: What’s the difference between an LOI & a Presale?

Target Demographic/Expected Audience

​Your Investor is going to want to understand how they get you’re going to get their money back to them, which means that you need to know who will buy your movie.  Think of this as placing a target, so you know where to shoot the arrow in the next step.  An example would be: After a few test screenings, we’ve realized that the target audience for The Cutlass is women aged 30-49.  Or, Based on ratings data gathered from similar films on IMDb Pro, we expect that that Made-up-action-movie starring Governator McActionFace will appeal primarily to Non-college educated White Men aged 30-55.  Especially those in Texas. 

Related: How do I figure out who to sell my movie to?

Marketing Plan.

Finally, they’ll need to know how you plan to reach that audience.  If figuring out your audience is placing the target, Marketing is shooting the arrow.  

As an Example: The Cutlass will be available across all standard TVOD platforms, Amazon Prime, and SVOD platforms.  We’ll utilize an aggressive PR and Awareness campaign to reach our core demographic, and get seeded in Amazon Prime’s Algorithm, and we will consider additional artwork to appeal to our new demographic.

Another example, Made-Up-Action Movie will utilize Governator McActionFace’s star power to raise awareness on the standard talk-show circuit prior to the US Release, while seeding early adopters with press and advance screenings in Texas, Montana, parts of Colorado, and Arizona.  Our theatrical run will focus primarily on screens in smaller secondary and rural markets. 

Thanks so much for reading!  If you liked this blog, and want more like it, share it on your social media. ​

Blogging might look like my full-time job, but it’s not, I also distribute and consult on movies. Some of which I listed above. If you’d like yours to be next, click the relevant button below. If you want to stay up to date about classes, events, and other filmmaker focus content, as well as get a resource packet with lots of valuable templates and other exclusive resources, join my mailing list with the button below.

What is a Recoupable Expense in Independent Film Distribution?

Filmmakers Ask me about Recoupable Expenses all the time.  A lot of filmmakers think that recoupable expenses mean money they have to pay.  Except in some VERY limited circumstances, that’s not the case.

A recoupable expense is simply an expense that a distributor or sales agent fronts to your film.  Another way of looking at this is that your distributor is your last investor, as they’re putting in a zero-interest loan in the form of paying for fees and services necessary to take the film to market. Most of the time, the distributor will need to get that money back before they start paying the filmmaker.  Distributors and sales agents have businesses to run and generally put money into anywhere between 24 and 60 films every year.  Without the ability to recoup what we put in, distributors would not be able to continue to invest in new films.

Before we really get into what each type of recoupable expense is.  There are generally 2 or 3 types.  Capped, uncapped, and Uncovered Expenses.  Here’s what they mean.

Capped Expenses

These are expenses that fall into a cap that cannot be exceeded by the distributor.  It’s normally a total cap that encompasses all expenses listed in an appendix.  If the expense is listed as capped, it is generally a total cap, not an individual cap.  A lot of filmmakers ask for individual caps but most distributors won’t do that. We did at Mutiny for the sake of transparency, but probably caused more problems than it solved due to confusion around the expense system.

Generally, there’s a reserve for capped expenses that often just ends up being the total amount of the expense cap.  This should be too bad as most of the capped expenses will be spent getting the film ready to take to market. 

Examples of Capped Expenses

This is not meant to be a complete list, but it is some of the most common examples. (I did take these from my Appendix B, but I added a few.)

Key Art Generation
DVD Art Generation
DVD Menu Generation
Trailer Generation
Aggregation fees
M.O.D. Listing Fees
ISBN listing fees
Publicity fees (generally Cross Collateralized with other clients at the same stage.)
Social Media Advertising
Market Fees. 
Minimum Guarantee (If Any)

These are all parts of bringing a film to market that are largely unavoidable.  Personally, I don’t spend the money if I don’t need to.  Like, if the film has a phenomenal trailer and key art, I don’t make new key art or cut a new trailer.  As a result, I don’t charge for those expenses.  This decision is solely at the discretion of the distributor, generally speaking.   Also, this is very much the rarity. 

Market fees will often be on the recoupable expenses (They’re not on mine, but that’s another story.) However, if they are there they should definitely be cross collateralized.  No single film should bear the total cost of market fees for a slate. 

Uncapped Expenses

Uncapped expenses are exactly what they sound like they are. That said, they’re not necessarily as scary as they sound like they are, providing that you’re not dealing with a predatory sales agent or distributor. Expenses a distributor covers but are not subject to caps.  These expenses are generally things that you’d often want to go higher, as it means more sales are being made.  Look at the examples below. 

Examples of Uncapped Expenses.

Again, this is not a complete list. 

Physical Media Replication.
DCP Generation.
Errors and Omissions Insurance (as needed)
Any expense outlined in As Needed deliverables. 
4-Walled Theaters (Upon Mutual Agreement in Writing)

In order to replicate more DVDs & Blu-Rays, a distributor must be selling them.  You want them to do that.  In order to generate more DCPs the Distributor must be booking theaters, which is generally a good thing.  Errors and Omissions insurance is generally only required for large PayTV or SVOD deals (like Netflix, Hulu, Starz, Showtime, and HBO) or broadcast deals.  As such, if you need E&O you probably got a big SVOD or Broadcast deal. ​​

Related: Indiefilm Media Right Types

Regarding needed Deliverables, there are some deliverables that a re only needed in very limited circumstances like Beta Tapes, and others.  There are reasons for each of them, but they get added beyond the cap as they’re difficult to anticipate.   Here’s the relevant section of a series I wrote on distribution deliverables.  

Related: Distribution Deliverables 4/4 - As Needed Deliverables. 

Uncovered Expenses​

Uncovered expenses is generally anything not listed in the appendix, although some expenses may not be covered like the 4-Walled Theaters listed above.  These are expenses that the filmmaker may be invoiced for.  They are rare, and the filmmaker SHOULD have advance notice of them.

​Some exceptions

For a long time I thought the term “Recoupable expense” was self-explanatory, but given all the questions I’ve gotten about it, I thought I would make sure it was said completely plain. As stated right at the top, most of the time, the filmmaker is not liable for unrecouped expenses. There are two primary exceptions. The first is the uncovered expenses above, where filmmakers will be invoiced immediately. This is rare, and generally VERY transparent. If it’s not, that’s another issue.

The other exception is generally if the filmmaker tries to take the film back prior to the close of the full term of the contract while expenses remain to be recouped. That's also normally spelled out in a contract. 

Thanks for Reading! As you can see, writing blogs and creating content is not my only (or even my primary job.) I also represent movies for sales and distribution. If you’d like me to consider yours, use the services button below. If you want to continue to reap the benefits of this free knowledge, grab my free indiefilm business resource package! some free resources, join my mailing list. You’ll get free blog digests that are like a topical e-book in your inbox every month, as well as templates to help you prep for festivals and investors or track your contact with sales agents, an actual e-book, and a whitepaper. That one is the lowest button

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The Problem with the IndieFilm Distribution Payment System

A lot of filmmakers I’ve worked with don’t know enough about distribution to really make a career making creative content.  This shouldn’t be a surprise, as it’s something film schools tend not to teach.  That being said, there’s a part of the equation most people just don’t talk about, and WHY it takes so long for filmmakers to get paid?  This blog addresses that.

As an aside, this is laid out from a financial perspective in the blog below.  However, we will also be tracking how much of the money goes away throughout this blog.  This will admittedly be very much oversimplified, but we’re going to be tracking it as a single dollar for ease of understanding. 

Related: Indiefilm Waterfalls 101

How long it takes for the platform to pay the aggregator

I talk about this in workshops quite frequently, but each different stakeholder takes a while to pay the next person in the pay chain.  Most of the time, this starts with the platform and aggregator relationship.  In general, this is the first section in the chain. 

Normally, the platform will take 30%-35%. This should include credit card processing fees.  So if the consumer gave 1 dollar, then we’re down to 65-70 cents. 

While exceptions exist, the platform most often pays the aggregator on a monthly basis.  After that, the aggregator will need to pay the distributor.  If you’re self-distributing, that distributor is you, but not all aggregators will deal with you in the fashion you’d prefer, for more information, read the blog below.
​

RELATED: What platforms should I release on?

How long it takes for the aggregator to pay the distributor

Once the aggregator is paid, the money will flow to the distributor.  As I stated, this may be you.  Depending on what aggregator the distributor is using, payments will be either monthly or quarterly.  Sometimes the aggregators that pay quarterly have lower overheads, so it might make sense to wait.  That said, I think the most current data you can get is necessary to make smart marketing decisions.
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If you still don’t know the difference between a sales agent and a distributor, check the link below. Most aggregators operate on more of a flat fee model, so we’ll assume that the money is passed through.  If you worked with an aggregator, you end up with about .70 cents for every dollar the consumer spent, but you also probably had to put the aggregation fees in yourself, so you’ll probably need to sell around 2100 copies (assuming they sell for 2.99 each) to break even.  You’ll also get insights within 2 to 4 months.

Related: What’s the difference between a sales agent and a distributor?

How long it takes for the Distributor to pay the Sales Agent

Most distributors don’t deal with filmmakers directly.  They’ll either deal with a Producer’s Rep or a Sales Agent.  Generally, Distributors pay quarterly to start and sometimes will move more towards bi-annually after a few years.  This can be arduous, but it’s very difficult to negotiate.

Generally, the distributor will take 30-40%.  (As of publishing this, I take 25% for direct US Distribution.) So of the 65-70 cents, we had after the platform.  That means that after the distributor takes their cut, there are between .39 and .49 cents left to the filmmaker.  (or around .52 cents if you work with me)

Also, even though I am a distributor, I work directly with filmmakers. So you’d keep .52 cents on the dollar, and be paid around 4-5 months after the initial sale is made.  (I time my reports to work with my aggregator to minimize wait times.  Plus, I cover aggregation and the majority of marketing and publicity fees.
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Related: What does a producer’s rep do anyway?

How long it takes for the Sales agent to pay the production company

Finally, the sales agent pays the Producer’s Rep and production company. This is also generally on a quarterly or Bi-Annual basis, although there’s more room for variation here. After that, the filmmaker uses the money to pay back debts, then investors, then whoever else is left to pay back from the production.   

The Sales Agent normally takes between 20% and 30%, but they sell territories across the globe. A Producer’s Rep will normally take 10% of the money paid to the filmmaker, and will normally be paid in line with the sales agent.

So, following the chain we talked about before, by the time the sales agent pays the filmmaker, we’re looking at between .27 and .39 cents on the dollar without a producer’s rep, or between .24 cents and .35 cents with one. That’s not a great representation of what a good producer’s rep will do for you though.  (including the potential to get you paid immediately from the first sale) I’ve painted these deals in the most simple possible light to help you understand, but there are lots of single-line items that can screw you if you’re not careful.  So, while the producer’s rep may take a small piece of the pie, (.03 to .04 cents on the total dollar) they can help you make the whole pie a fair amount bigger.

Thanks so much for reading! If you have any questions for me, you might want to check out my mailing list. I send out monthly blog digests including ones JUST LIKE THIS, plus you get lots of great resources like templates, links to money-saving resources, and a whole lot more!   Or, if you’ve got a completed project and you’re looking for distribution, submit it using the link below. You can also learn more about services for early-stage projects using the other link. I’ll review it and reach out soon.

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When and Where to use Each Indiefilm Investment Document

There are 3 different documents you would need to approach an investor about your independent film. I’ve written guides on this blog to show you how to write each and every one of them. Those three documents are a Look Book (Guide linked here.) a Deck (Guide Linked Here) and a business plan. (Part 1/7 here) But while I’ve Written about HOW to create all of these documents, I’ve held back WHY you write them, WHO needs them, and WHEN to use them. So this blog will tell you WHO needs WHAT document WHEN and HOW they’re going to use it.

As with some other blogs, I’ll be using the term stakeholder to refer to anyone you may share documents with, be they an investor, studio head, sales agent, Producer of Marketing and Distribution (PMD) or Distributor.

What are these documents and WHY do you share them?

So first, let’s start with what each document is, just in case you haven’t read the other blogs (which you still should)

A Look book for an independent film is an introductory document, that’s very pretty and engaging and gives an idea of the creative vision of the film.  The purpose is to get potential stakeholders interested enough in the project to request either a meeting or a deck.  The goal in showing them this document is to get them to start to see the film in their head and get them to become interested in the project on an emotional level.

Related: Check out this blog for what goes into a lookbook

A Deck is a snapshot of the business side of your film.  The goal is to send them something that they can review quickly to get an idea of how this project will go to market and how it will make money so that they get an idea of how they’ll get their money back.

Related: The 12 Slides you need in your indie film investment Deck

A business plan is a detailed 18-24 page document broken into 7 sections that will give potential investors not only an idea of your investment but of the industry as a whole.  In a sense, it’s equal parts education and persuasion, especially for investors new to the film industry.  The goal is to give the prospective stakeholder a deeper understanding of the film and media industry, and a very thorough understanding of your project and the potential for investing in it. 

Related: How to Write an Indiefilm Business Plan (1/7 - Executive Summary)

WHO needs these documents and HOW they’ll use it

Different stakeholders need these documents at different times.

Look Books should be sent to any potential stakeholder, including investors, studio heads, sales agents, distributors, producer’s reps, Executive Producers, and more.  It’s a creative document that gives a good idea of the product at the early stage.  It helps people gauge interest in your project

Decks are primarily used by Investors, Executive Producers, PMDs, and potentially Sales Agents.  Distributors and Studio Heads are less likely to need a deck since they know the business better than you do. At least most of the time.

Business plans are primarily needed by angel investors new to the film industry and Angel Investment Syndicates to use as the backbone for the Private Placement Memorandum (PPM) The First and last sections of the business plan (The Executive Summary and Pro-Forma Financial Statements) may be more widely used, often at the same general place as the deck, or only shortly after.

WHEN do they need these documents?

Look books come early on.  It’s generally the first thing they’ll ask for when considering your project.

Decks come shortly after the lookbook.  Sometimes in an initial meeting, or sometimes directly after that first meeting. 

Looking at a business plan is generally very deep in the process of talking to a potential stakeholder, it’s almost always after at least 2-3 meetings and a thorough review of the deck.

If this was useful, you should definitely grab my free film business resource packet. It’s got templates for some of these documents, a free e-book, a whitepaper that will help you write these documents, as well as monthly blog digests segmented by topics about the film business so you can sound informed when you talk to investors. Click the button below to grab it right now.

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How to Make LookBook for an Independent Film

I’ve written previously about what goes into an indie film deck, but as I get more and more submissions from filmmakers, I’m realizing that most of them don’t fully understand the difference between a lookbook and a deck.  So, I thought I would outline what goes into a lookbook, and then I’ll come back in a future post to outline when you need a lookbook when you need a deck, and when you need a business plan.

What goes in a lookbook is less rigid than what goes in a deck.  It’s also designed to be a more creatively oriented document than a deck.  But in general, these are the pieces of information you’ll need in your lookbook.  I’ve grouped them into 4 general sections to give you a bit more of a guideline.

You’ll often see the term stakeholder.  I use this to mean anyone who might hold a stake in the outcome of your project, be they investors, distributors, or even other high-level crew. ​

Basic Project Information

This section is to give a general outline of the project and includes the following pieces of information.

• Title

• Logline

• Synopsis

• Character Descriptions

• Filmmaker/Team bios

The title should be self-explanatory, but if you have a fancy font treatment or temp poster, this would be a good place to use it.

The logline should be 1 or 2 sentences at most.  It should tell what your story is about in an engaging way to make people want to see the movie.  You probably want to include the genre here as well,

The synopsis in the lookbook should be 5-8 sentences, and cover the majority of the film’s story.  This isn’t script coverage or a treatment. It’s a taste to get your potential investors or other stakeholders to want more. 

Character descriptions should be short, but more interesting than basic demographics. Give them an heir of mystery, but enough of an idea that the reader can picture them in their head.  Try something like this.  Matt (white, male, early 20s) is a bit of a rebel and a pizza delivery boy.  He’s a bit messy, but nowhere near as bad as his apartment.  He’s more handsome than his unkempt appearance lets on,  If he cleaned up he’d never have to sleep alone.  But one day he delivers pizza to the wrong house and gets thrust into time-traveling international intrigue.

Even that’s a little long, but I wasn’t actually basing it on a movie, so tying it into the film itself was trickier than I thought it would be.  That would be alright for a protagonist, but too long for anyone else. 

Filmmaker and Team bios should be short, bullet points are good, list achievements and awards to put a practical emphasis on what they bring to the table DO NOT pad your bio out to 5000 words of not a lot of information.  Schooling doesn’t matter a lot unless you went to UCLA, USC, NYU or an Ivy League school. ​

Creative Swatches

These are general creative things to give a give the prospective stakeholder an idea of the creative feel of the film.  They can include the following, although not all are necessary.

• Inspiration

• Creatively Similar Films

• Images Denoting the General Feel of the Film

• Color Palette

The inspiration would be a little bit of information on what gave you the vision for this film.  It shouldn’t be long, but it definitely shouldn’t be something along the lines of “I’ m the most vissionnarry film in the WORLD.  U WILL C MAI NAME IN LAIGHTS!” (Misspellings intentional) Check your ego here, but talk about the creative vision you had that inspired you to make the film.  Try to keep it to 3-4 sentences.

Creatively similar films are films that have the same feel as your film.  You’re less restricted by budget level and year created here than you would be in a comp analysis, that said, don’t put the Avengers or other effects-heavy films here if you’re making an ultra-low budget piece.  I’d say pick 5, and use the posters. 

Images denoting the general feel of the film are just a collection of images that will give potential stakeholders an idea of the feel of the film.  These can be reference images from other films, pieces of art, or anything that conveys the artistic vision in your head.  This is not a widely distributed document, so the copyright situation gets a bit fuzzy regarding what you an use.  That said, the stricter legal definition is probably that you can’t use without permission.  #NotALawyer

The color palette would be what general color palette of the project.  This is one you could leave out, but if there’s a very well-defined color feel of the film like say, Minority Report, then showing the colors you’ll be using isn’t a terrible call,  Also,, it's generally best to just let this pallet exist on the background of the document on your look book.  ​

Technical/ Practical swatches

This section is a good indicator of what you already have, as well as some more technical information about the film in general.  It should include the following.

• Locations You’d like to shoot at

• Cities You’d Like to shoot in

• Equipment you plan on using

Photos are great here, if you use cities or states include the tax incentives for them,  The equipment should only be used if it’s the higher end like an Arri or Red.  If you’re getting it at a fantastic cost, you should mention that here as well. People tend not to care about the equipment you’re using, but if you’re going to put it in any pitch document, this is the one.

Light Business Information

The lookbook is primarily a creative document, but since most of the potential stakeholders you’re going to be showing it to are business people, you should include the basics. When they want more, send them a deck.

Here’s what you should include

• Ideal Cast list & Photos

• Ideal Director List

• Ideal Distributors

These are important to assess the viability of the project from a distribution standpoint. It can also affect different ways to finance your film. If your director is attached, don’t include that. If you have an LOI from a distributor, don’t mention potential distributors. Unless your film is under 50k, don’t say you won’t seek name talent for a supporting role. You should consider it if it’s even remotely viable.

If this was useful to you but you need more, you should snag my FREE indiefilm resource package.  I’ve got lots of great templates you get when you join, and you also get a monthly blog digest segmented by topic to make sure you’re informed when you start talking to investors.  Click below to get it.

The 4 REALISTIC Ways to Sell a TV Series

Given that I work heavily in marketing and distribution, I get a lot of people submitting pilots to me.  While I’m looking to move my business in more of an episodic direction, unfortunately a pilot doesn’t do me much good.  Generally, when I tell this to filmmakers, they get surprised.  So, like any question I get a lot I thought I’d write a blog about it.  Here are the 4 ways to make a TV show.

1. Make a Pilot. (Or actually, don't)

I’m listing this one first because I think it’s one of the worst ways you can Go about making a TV Series.  Most filmmakers assume that if they make their own pilot, they’ll be able to pitch it to networks and then get it picked up.  Unfortunately, that’s not generally the way pilots work.  Most pilots that compete for TV shows are commissioned directly by networks and already have people on the inside rooting for them.

Apart from that, only about 1 in 10 (at the absolute most) pilots get made into a first season, and I think the last statistic I saw was something like 1 in 7 TV series make it past the first season.  That means for every series that makes it to season 2, at least 69 pilots are created.  Also: THOSE NUMBERS ARE ONLY NETWORK COMMISSIONED PILOTS.  It doesn’t factor for idle filmmakers who try to make their first episode on their own.  Those really aren’t good odds.   

In fact, I’d be willing to say that this option is probably the least likely of the 4 paths I’m laying out to get your series made.  Assuming that you’re not being requested to make the pilot by a major network. 

2. Make a Sizzle Reel

If you want to do more of the institutional route, then you’re much better off making a popping sizzle reel and approaching an agent who can take it to get you to the commissioned pilot stage.   I know that sounds like an additional step to the long road I outlined above, but it’s actually going to give you a greater chance at success since you’ll be working with people on the inside instead or shouting at the outside of the gate pleading to be let in.

If you don’t have access to an agent, I wouldn’t recommend going this route either.  I’d recommend you go with one of the two listed below. 

This option is probably the 2nd most risky in terms of getting your full season financed and made. 

3. Build an Audience with a webseries.

If you want to go a less institutional way to get your TV series made, you should consider making a webseries that’s very much in the vein of your planned TV Series, but perhaps on a smaller scale and definitely with shorter episodes.  Once you’ve made the webseries, your goal is to market the absolute crap out of your series and get at least a million views on the content.  Ideally on at least most of the episodes.  If you can pull that off, you’ll often have people coming to talk to you instead of the other way around. 

I’ll admit I first heard about this concept from another distribution company that I had on an old podcast.  However, I’ve talked to several of their former clients since and I no longer feel like linking to them is appropriate. 

I think this is the second safest way to get your TV Series made.  Plus, if you go this route you have a piece of content you can use to build your production company’s brand and even get some level of monetization. 

4. Shoot the entire series, then get someone to sell it.

Yeah, I know what I just said. I’m saying get to work and make anywhere between 8 and 13 full-length episodes for a first season. If you’re doing 44 minute episodes that’s 9 and a half hours of completed content. (or a bit over 4 hours if you’re doing 22-minute content.) That’s a lot to shoot, and it’s a big upfront investment for a filmmaker to make.

That being said, once this is done you’ll be able to sell your content quite easily, and you’ll have no trouble finding a sales agent who can take your content to television markets like NATPE, MIPTV, or MIPCOM. If fact, I’m looking to branch more into that market in a couple of ways. (Link Below)

This is generally the safest way to get your series made (If you can pull together the money to make it happen.) In fact, I’d say you’re more likely to have a positive return on investment taking this path than you are in a standard feature film.

Thanks so much for reading! Since I alluded to it a few times, I’ve included a link for you to submit your content below. Next to that, you’ll find a link to book an introductory call with me.

Finally, If you like this content, you should really grab my film business Resource Package.  You’ll get an ebook, a white paper, templates for an investment deck, promotional materials, distributor contact tracking, plus monthly content digests to help you grow your knowledge base on a manageable schedule.

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When should you Contact a Sales Agent/Producer’s Rep about your Film?

Seeing as how a majority of my business still comes from representing filmmakers to sales agents and distributors, it’s unsurprising that a question I get at my events and in my inbox quite often is when is the best time to approach a producer’s rep, sales agent, or distributor.  Well, as with many things I tend to blog about, there’s a short, true, and mostly unhelpful answer to that question. There’s also a longer, more nuanced, and more correct answer.  This blog attempts to answer both in under 800 words.

The Short Answer: As soon as you realistically can

Marketing a film on a budget isn’t something you can do overnight.  It takes a while to build a social media presence, as well as to build up a base to market your film to.  It’s not something that can be done efficiently overnight, so you’ll want to get some marketing support on your project as soon as possible.  That’s why you hire either a producer’s rep or a Producer of Marketing and Distribution (PMD). 

The Long(er) Answer: When you can afford them, and they’re willing to come on your project.

Most people tend to approach Producer’s Reps and PMDs only when their film is completed, or even after the initial festival run of the film.  This can shut a surprising amount of doors for you. I had one client who submitted to Sundance and was rejected outright.  The next year, after I connected him to US Distribution, the distributor talked to a programmer at Sundance who said that they would have accepted the film and programmed had it been brought to his attention. Unfortunately, they’d given premier status to another, smaller festival so it was too late.

PMDs and Distributors often have connections to help get you past the initial round of screening at major festivals, which can be all you need to actually get into the festival.  99 films out of every 100 submitted to Sundance don’t get in.  90 out of 100 of those are declined by extremely low-paid (or unpaid) staffers who look for any possible reason to decline so that the submission queue is more manageable for the actual festival programmers.  If you have the right rep, PMD, or distributors they can help you bypass that first layer of screening, giving you a huge leg up. ​

How much will this cost you?

Producer’s reps tend to get a bad rap for charging up front.  If all they’re doing is brokering your film to sales agents, and they’re taking a commission, then they really shouldn’t need to.  I don’t.  However, if I’m writing a business plan, deck, pro formas, or developing a financing, festival, marketing, or distribution strategy, I do charge upfront. We all have bills to pay, and just as you should always pay all other members of your crew, you should pay your producers too. My services are packaged based on need, more information on my services page.
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Generally, it’s wise to allot some money for marketing as soon as you create the initial budget for your film.  You should do this even if you plan on raising it at a later date, say after completion of principal photography. It may be wise to keep this budget separate given a distributor will most often foot some of the bill and sometimes it can bump you into a higher guild tier.

Related: The 4 Stages of Film Financing

If you’re raising money for prints and advertising, then you should allocate some of that money to a Producer of Marketing and Distribution (PMD) or Producer’s Rep to help you execute your marketing plans efficiently. 

Essentially, if you’re looking for a rep to do anything other than broker a completed film, you had best expect them to charge you some money upfront.  Unless the Sales agent pays you a minimum guarantee, it’s unlikely that the film or the filmmaker will get paid anything for about a year after the initial signing.  You can’t expect a Service provider to wait even longer than that to make any money, especially when there’s a significant amount of work involved in the creation and execution of the work you’re asking them to do. 

If you want more resources to help you distribute your film, you should grab my free film business resource pack. It’s got an e-book, a whitepaper, a deck template, a film festival promotional brochure template, and a whole bunch of money and time-saving resources. Also, if you need a producer’s rep, check out my services page.

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How to Write an Independent Film Business Plan - 7/7 Pro-Forma Financial Statements

In the final part of my 7-part series on writing a business plan for independent film and media, I’ll be going over all of the financial statements you’ll need in your business plan.  This is a section that you’ll want to write before you write the financial text section of your plan, as it will have a great impact on that section and potentially other sections of the plan.  Each document should take up only a single page.

Topsheet Budget

If you’re reading this, hopefully, you already know what a topsheet budget is.  In case you don’t, It’s the summary budget of your entire film that should take up no more than a page.  Unlike the rest of these documents which should be made by an executive producer, the top sheet budget is best made by a line producer or UPM.  It’s important to note, that you can’t just make a topsheet budget, it comes as a byproduct of making a detail budget for your film.  It’s not something that should be effectively created for it’s own sake. 
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Revenue Topsheet

This page is a summary of all the money that will come into your project, and how it will go out and come back to the production company and the investor, loosely organized by what comes in domestically vs internationally, and what media right types bring in what money.

This is not something that all people writing business plans for films include, however, I feel that it’s an important document that gives an angel investor a simplified snapshot of the entire revenue picture before diving into some of the more gory details. 

Waterfall to Company (Expected Income Breakdown)

Louise Levison says you only need an expected income breakdown.  When I create proformas, I tend to include how the overall revenue table that outlines where the money will be divided among the major stakeholders. This includes the distribution platforms, distributors, sales agents, producer’s reps, banks, and investors.  It’s likely that if this is your first film, you won’t have all of those stakeholders, but it’s important to include the stakeholders you do have.
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Additionally, I use this outline what cuts are standard for each of those stakeholders, and what remains from each right type to go to the production company and the investor. 

Internal Company Waterfall/Capitalization Table

This is another document that not everyone includes, but due to my time in the tech industry, I find something like it is essential.  The term capitalization table (or Cap Table for short) is taken from the tech industry and outlines who owns what part of a company.

This document goes further than a standard cap table, in that not only does it outline the major owners of the company, it also shows where the money goes once it comes back to the production company, and how it’s divided between debt, investors, producers, actors, and other people within your production company who made the film. 

This document should calculate the investor’s expected Return on Investment (ROI) as well as how much is likely to go to producers and anyone else who has received profit participation.  If you have more than one set of people on the crew receiving profit participation, then you may want to lump it into a cast/crew equity pool. 

CashFlow Statement/Breakeven Analysis

This is a yearly/quarterly estimate of how the money will go out and come back in.  Generally, your entire budget will go out before any money comes back in.  If you’re using staged investments, you’ll want to outline when additional rounds of funding are likely to come into the company. Part of this is keeping track of the cash flow as you spend the money and as it goes back to investors. 

I’ll generally make an assumption that it will take a year from investment to complete the film.  After that, money will start coming back in about 3-4 quarters, and trickle in from each source according to however you think the film will be windowed.  That’s actually the optimistic version timeline. By the end of 5-7 years after the initial investment, you’ll likely just want to end the cash flow statement since it’s unlikely your film will be producing that much revenue. Films are not evergreen.

Research/Sources

This is as it sounds.  it’s all the resources for your comparative analysis that you used to make revenue projections, as well as any other sources you may have referenced in your plan.  If you did a comparative analysis, you’ll want to include the details on the films you chose as well as where you got the data, as reporting is inconsistent across major platforms like IMDb pro, The-Numbers, Box Office Mojo, and Rentrack.  I also have a useful whitepaper and some useful links in the resource pack.
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Thanks so much for reading this blog.  Thanks even more if you read all 7 parts!  If you’re a film school teacher and would like to use this in a course, feel free to email me using the link below to get a free print-ready version of this series, or anything else you may want to reverence.

Making your pro-forma financial statements requires a lot of research. My resource package has a whitepaper and collection of links that will help speed that process up a bit, as well as other templates and related content. Grab it for free with the button below.

If you need a guiding hand through the process, I’ve written. few dozen plans. Check out my services page if this is just. a bit too daunting to do on your own.

Lastly, if you want to review any of the other sections of this 7 part series, here’s a guild for you below. 

Executive Summary
The Company
The Projects
Marketing
Risk Statement/SWOT Analysis
Financials Section (Text)
Pro-Foma Financial Statements. (This Section)

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How to Write an Independent Film Business Plan - 6/7 Financial Methodolgy

In part 6 of my 7-part series on independent film business planning, we’re going to go over the text portion of the financial section of the business plan.  This is where you explain the methodology you used in your financial projections, the general plan for taking in the money, and then an overview of what you’re going to present in the final section, the pro-forma financial statements.  

It’s pretty common to send this section out as a standalone document, or perhaps paired with the deck or executive summary. That said, the reason it’s at the back of the business plan is to force your potential investor to flip around through the plan and better acquaint themselves with your prospectus and project. That, and this is relatively standard practice across multiple industries.

​Investment Plan

This subsection is devoted to how you intend to raise your funding.  As a hint, the answer SHOULD NOT be that you intend on raising your funding entirely from equity investors.   You’ll want to outline where you intend to raise each part of your money from, as well as how that money will be raised. 
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Some questions to ask yourself here are as follows, how much are you planning on raising in tax incentives?  How much are you planning on raising in product placement?  Do you have any pre-sales from a distributor or sales agency?  Are you planning on any other forms of backed debt?  Did you have a successful crowdfunding campaign?  How much are you looking for in equity investment?  And how much do you intend to raise in unbacked debt?

For more detail on this, you should check out one of my most popular articles.

Related: The 9 ways to finance an independent film.

You’ll also want to figure out if you’re staging the investment.  By this, I mean are you planning on raising money for development first?  Do you plan a separate raise for completion or marketing funds?  There can be some pretty big advantages to raising funding for your film across multiple rounds. 

For more information on this, I encourage you to check out my blog on the 4 stages of independent film investment.​

Related: The 4 stages of independent film investment.

You absolutely must to make sure they understand your offer.  Some questions you’ll need to answer are: What’s the amount you’re raising in equity and what percentage ownership in your project are you offering for that funding?  What’s your minimum buy-in?  Who are the other stakeholders? 
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Additionally, you’ll want to highlight the potential revenue for your film and give them their estimated Return on Investment (ROI).  This will have to be done after your pro-forma financial statements.  You’ll also want to outline when you expect them to break even.

Financial Assumptions

This section is primarily about outlining the assumptions you used while making your pro-forma financial statements.  You’ll want to outline the criteria you used when creating a comparative analysis, as well as what assumptions you made while creating your cash flow sheet, and waterfall to your company/expected income breakdown.

For more detail on financial projections, please check out this blog below.

Related: The two main types of financial projections

Pro Forma Financial Statements

Finally, you’ll want to outline your Pro-Forma financial statements.  For reference, these are the following documents. 

Topsheet Budget: A snapshot of how the money will be spent on your film. You can only get this by doing a full detail budget. If you try to make a top sheet from scratch, you’ll end up creating more problems than you solve.

Revenue Topsheet: An overview of money to the company and to the investor.

Waterfall to Company/Expected Income breakdown: An outline of how much money your film will make based on your comparative analysis, and from what sources.  Generally, when I make a waterfall like this, I’ll also deduct the fees from various other stakeholders including platforms, distributors, sales agents, and producer’s reps (if applicable.)

Internal company waterfall (capitalization table). This sheet is something that not everyone does, but it essentially outlines where the money will go once it gets to your company.  I feel this is necessary if you’re using a more complicated financial mix that incorporates debt and tax incentives. 

Cashflow Sheet/ Breakeven analysis: This document is an overview of how money will flow through the company and subsequently come back in.  you’ll want to highlight when they can expect to recoup their investment.

Research/Sources: This is self-explanatory, it’s the research you used in the other sections of the plan, particularly the films you used in the comparative analysis.

Thanks so much for reading! I’ll be back next week with the final installment going into much more detail on the pro forma financial statements. 

The reason I was able to write this blog series is that I’ve written a few dozen independent film business plans. If you need help with yours, you should check out my services page.

If you need more help researching for your business plan, check out the indiefilm Business Resource Pack. As mentioned above, it’s got a whitepaper to help you with your research, as well as lots of other helpful links and resources to aid in the creation of all the documentation you’ll need to talk to your investors. Plus, you’ll get a monthly blog digest full of helpful content so that you can be as knowledgeable as possible when you speak to your investor contacts.

Finally, if you want to check out the other sections of this 7 part blog series, I’ve included a table of contents below.
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Executive Summary
The Company
The Projects
Marketing
Risk Statement/SWOT Analysis
Financial Section (Text/Methodology) - This Post
Pro-Foma Financial Statements.

Check the tags below for related conent!

How To Write a Business Plan for an Independent Film - 3/7 Project(s)

Next up in my 7 part series on writing a business plan for independent film, we’ll be taking a deeper look at the project(s) section of the plan.  The projects section of the plan is the most creative section, as it talks about the creative work that you’re seeking to finance.  That being said, it breaks those creative elements into their basic business points.  This section should be no more than a page if you have one project, and no more than 2 pages if you’re looking at a slate.

GENRE

Genre is a huge part of marketing any film.  It essentially categorizes your film into what interest groups you’ll be marketing.  This subsection should focus on the genre of your film, as well as who you expect the film to appeal to. 
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For more information on the concept of Genre in Film as it pertains to distribution, check out this blog.

RELATED: WHY GENRE IS VITAL TO INDIEFILM MARKETING & DISTRIBUTION

PLOT SYNOPSIS

This is as it sounds.  It’s a one-paragraph synopsis of your film.  When you’re writing it, keep in mind that you’re not telling your story, so much as selling it.  Make it exciting.  Make it something that the person reading the plan simply will not be able to ignore. 

BUDGET ​

This one should also be self-explanatory, list the total budget of your film.  It would make sense to break it into the following categories.  Above the Line, Development, Pre-Production, Principle photography, post-production, and producer’s contribution to marketing and distribution.
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The last part is to acknowledge that while the distributor will be contributing a large amount to the marketing and distribution costs of the film, it will not be the sole contribution, and you as the filmmaker will likely have to contribute some amount of time and/or money to make sure your film is sold well.​

RATING

This section talks about your expected rating.  Say what you expect to get, what themes you think will cause the film to get that rating, and how that will help you sell the film to the primary demographic listed above.

MARKETABLE ATTACHMENTS

Did you get Tom Cruise for your movie?  What about Joseph Gordon Levitt?  Or maybe Brian De Palma came on to direct.  If you have anyone like this (or even someone with far less impressive credits) make sure you list that you’ve got them.  If you’re in talks with their people, list it here too.

Related: 5 Reasons you Still need Name Talent in your film

INTELLECTUAL PROPERTY STATUS

Finally, you’ll need to list the intellectual property status of your film.  By this, I simply mean is the concept original? Is it based on anything? Did you acquire the rights to whatever it’s based on?  If you optioned rights, when does the option expire? If you optioned rights, who is the original owner of the rights?

Writing a business plan that can actually raise funding is a lot more than just using a template. If you want a leg up you should check out my free resource pack which includes a deck template, a free e-book, digests of relevant industry-related content, delivered to your inbox once a month, and notifications of special events and other announcements tailored to the needs of the filmmakers I work with.

You should know that I’ve written a few dozen business plans for filmmakers, some of which have raised significant funding.  If you want to talk about it check out our services page.

Thanks so much for reading!  You can find the other completed sections of this 7-part series below.
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Executive Summary
The Company
The Projects (This Post)
Marketing
Risk Statement/SWOT Analysis
Financials Section (Text)
Pro-Foma Financial Statements.

Check the tags below for related content

5 Rules for Finding Film Investors

One of the most common questions I get is where to find investors for a feature film.  Inherent in that question is simply where to find investors.  While I may not have a specific answer for you regarding exactly where to find them, I do have a set of rules for figuring out where you might be able to find them in your local community.  This is meant to be applicable outside of the major hubs in the US, and as such it’s not going to have to be more of a framework than a simple answer.

Would you rather watch or listen than Read?  Here's the same topic on my YouTube Channel.

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1. ​Go where the money is.

Think about where people in your community who have money congregate.  In San Francisco, the money comes from tech.  In Colorado, the money came from oil, gas, and tourism, but has recently grown to include legal recreational marijuana.  In many communities, some of the most affluent are the doctors and medical professionals.  In most communities, the local lawyers tend to have money, but you’ll have to make sure you come prepared.  Figure out what industries drive your local economy and then extrapolate from that who might have enough spare income to invest in your project. 

If you know what these people do, then you can start to figure out where they go when it’s after working hours.  If you know where they go after hours, you can go get a drink and start to work your way to making a new friend in this investor. 

All that being said, Be careful not to solicit too early, as that can actually be illegal.  #NotALawyer.​

2. Figure out a place where you can find something in common

Any investment as inherently risky and a-typical as the film industry relies heavily on your relationship with your investor.  As such, finding something you have in common is a great way to start the relationship right. 

RELATED: 7 Reasons Courting an Investor is Like Dating

As an example of what I mean, I’ve met investors while singing karaoke at Gay bars in San Francisco.  I’ve met others at industry events, and I’ve even met a few by going to some famous silicon valley hot spots where investors and Venture Capitalists are known to congregate.  If you know where all the doctors go to drink after work, and if there’s a regular activity at one of the bars that can facilitate meeting them, it might not be a bad idea to go and try to establish some connections in that community.  This segues us nicely to…

3. ​Understand that moneyed people tend to have their own community

Generally, wealthy individuals know other wealthy individuals.  If you develop a relationship with someone within that community, it means that even if that investor you ended up establishing a relationship with won’t invest, they may talk to a friend about it who might. 

The reverse of this notion is also true.  If you get a bad reputation in the Wealthy community then you’re likely to find it very hard to raise funds for your next film.

4. Understand that most people with money will have other investment options.

As stated above, film investment is highly volatile and inherently risky.  If these investors took on every potential project that comes asking for their money, they would not be rich for very long.  As such, you’re going to have lots of competition when it comes to raising funds for your film.  This competition will not only come from other films, but also from stocks and bonds, other startups and small businesses, and even the notion that if they’re going to spend 100k they never get back, why not just buy a new Mercedes?

5. Find a not entirely monetary way to close the deal.

So to bring the last point home, you have to find other reasons that aren’t solely based on return on investment to get people to consider investing in your independent film. This can be the tax incentives, the moral argument to support culture, the fact that investing in a film is an inherently interesting thing to do, or a few other potential things. The blog below explores this in much more detail than I have the time or the word count to do here today.

Related: Why Don't Rich Tech People Invest in Film Part 5: Diversification and Soft Incentives

If you still need help financing your film, you should check out my free indiefilm business resource package. It’s got lots of tools and templates to to help you talk to distributors and investors, as well as a free-ebook so you can know what you need to know to wow them when you do. Additionally, you’ll get a monthly content digest to help you stay up to date on the ins and outs of the film industry, as well as be the first to know about new offerings and releases from Guerrilla Rep Media. Get it for free below.

The 7 Essential Elements of A Strong Indie Film Package

Most filmmakers want to know more about how to raise money for their projects.  It’s a complicated question with lots of moving parts.  However, one crucial component to building a project that you can get financed is building a cohesive package that will help get the film financed.  So with that in mind, here are the 7 essential elements of a good film package.    ​

1.Director

As we all know, the director is the driving force behind the film.  As such, a good director that can carry the film through to completion is an essential element to a good film package.  Depending on the budget range, you may need a director with an established track record in feature films.  If you don’t have this, then you probably can’t get money from presales, although this may be less of a hard and fast rule than I once thought it was.
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Related:What's the Difference between an LOI and a Presale?

Even if you have a first-time director, you’ll need to find some way of proving to potential investors that they’ll be able to get the job done, and helm the film so that it comes in on time and on budget

2. Name Talent

I know that some filmmakers don’t think that recognizable name talent adds anything to a feature film.  While from a creative perspective, there may be some truth to that, packaging and finance is all about business.  From a marketing and distribution perspective, films with recognizable names will take you much further than films without them.  I’ve covered this in more detail in another blog, linked below.
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Related: Why your Film Needs Name Talent

Recognizable name talent generally won’t come for free.  You may need a pay-or-play agreement, which is where item 7 on this list comes in handy. ​
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3. An Executive Producer

If you’re raising money, you should consider engaging an experienced executive producer.  They’ll be able to help connect you to money, and some of them will help you develop your business plan so that you’re ready to take on the money when it comes time to.  A good executive producer will also be able to greatly assist in the packaging process, and help you generate a financial mix.
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Related: The 9 Ways to finance an Independent Film.

I do a lot of this sort of work for my clients.  If you’ve got an early-stage project you’d like to talk about getting some help with building your package and/or your business plan I’d be happy to help you to do so.  Just click the clarity link below to set up a free strategy session, or the image on the right to submit your project.

4. Sales Agent/Distributor

If you want to get your investors their money back, then you’re going to need to make sure that you have someone to help you distribute your independent film.  The best way to prove access to distribution is to get a Letter of Intent from a sales agent.  The blog below can help you do that. 
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Related: 5 Rules for Getting an LOI From a Sales Agent

5. Deck/Business Plan

If you’re going to seek investors unfamiliar with the film industry, you’re going to need a document illustrating how they get their money back   This can be done with either a 12-slide deck, or a 20-page business plan.  I’ve linked to some of my favorite books on business planning for films below. 

6. Pro-Forma Financial Statements

Pro forma financial statements are essentially documents like your cash flow statement, breakeven analysis, top sheet budget, Capitalization Table, and Revenue Distribution charts that help you include in the latter half of the financial section of a business plan.  

There’s a lot more information on these in the book Filmmakers and Financing by Louise Levinson.  I’m also considering writing a blog series about writing a business plan for independent film.  If you’d like to see that, comment it below. ​

7. Some Money already in place

Yes, I know I said that you need a package to raise money, but often in order to have a package you need to have some percentage of the budget already locked in.  Generally, 10% is enough to attach a known director and known talent.  If you’re looking for a larger Sales Agent then you’ll also need to have some level of cash in hand.

This is essentially a development round raise.  For more information on the development round raises, check out this blog!

Thanks for reading, for more content like this in a monthly digest, as well as a FREE Film Market Resources Package, check out the link below and join my mailing list.​

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