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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Can Independant Filmmakers Survive the Streaming Wars?

It’s no longer a controversial statement that streaming has changed the whole game for independent film distribution.  It hasn’t been controversial for quite a while.  However, it is becoming apparent that not only has streaming changed the game, it might as well have become the game, at least here in the US.  That’s not really a good thing for Indies.  Here’s why.

Streaming has made such a vast library of content available people don’t need to buy movies.

The biggest reason that Subscription Video On Demand streaming has engulfed the entire media landscape is that it’s put a giant library of films at the fingertips of anyone for only around 6-15 bucks a month for most platforms.  It’s putting entire on-demand catalogs that are even more convenient than owning a film on DVD.

It wasn’t so big a threat when there were only a few companies in the space, but once HBO blew the doors open with the launch of HBO NOW the writing was on the wall for those of us paying attention.  We all knew that Disney and Warner would follow.  With Disney+ putting a gigantic pile of legacy content on their platform, it’s going to get harder and harder for independent films to compete.

Physical Media used to be the primary way people could watch films when they felt like it.

It used to be that licensing a film to A TV station was pretty lucrative, and didn’t really affect your physical media sales.  In fact, it often increased them.  People didn’t want to have to wait around for your film to screen if they liked it, so they bought the disk.  Yet SVOD companies license a film, and for the term of the license their subscribers can just watch the film wherever, whenever they want. 

This level of convenience has made it significantly more difficult for filmmakers and distributors to sell content for a transactional fee which has a much higher margin per unit sold.  When Netflix started the game, it was still just one platform, and many people didn’t have the level of internet needed to stream without a significant amount of lag.  This result often ends up that filmmakers and distributors are left with whatever the license fee for each film is, and will see little to no revenue beyond those licenses.

It basically means that not only is streaming taking up a much bigger part of a given film’s revenue mix, it’s also shrinking the pie. 

With so many platforms and so much content, there must be lots of licenses and acquisitions being made though, right?

It depends on how you’re looking at it.  Sure, these platforms are creating massive amounts of content, and acquiring still more.  However, the price they tend to pay for acquisition is lower than you’d think, and some of the terms tend to be a bit unreasonable.  For originals, it’s a long road requiring a strong package that 95% of filmmakers will never reach. 

You might think that many new platforms are going to be looking to make even more original content in order to make sure subscribers keep paying for their content.  There’s some truth to that, but the problem is that there are so few outlets likely to survive the streaming wars that the system of gatekeepers that the streamers were supposed to break may become even fewer than they were before. 

The big problem here is that there are A LOT of these same sorts of platforms seeking the attention of an oversaturated audience and market.  The impact is that there’s a lot less money to go around for indies, and much of the consumer base is just subscribing to a few services, and not buying a lot outside of that.  So unless a filmmaker has a strong engaged audience, they’re not going to be able to compete. 

Essentially, the SVOD wars intensify the problem creators have been facing for several years, and that’s the fact that while anyone can get their film out there, getting anyone to see it is an entirely different matter. ​

It all comes back to audience engagement.

This comes back to one thing. Build and engage with your audience, and create content that speaks to them on a deep level. It needs to evoke an emotion or speak to an experience that no one else can. In order to succeed, we Indies need to defragment our market and find our tiny place in it. We don’t need to be 8 people’s 6/10, we need to be 2 people’s 10/10.

Thanks for reading. This one was more of a think piece than my general practical advice. Let me know what you thought about it in the comments. If you like this and want more, please consider joining my mailing list, you’ll also get a great film business resource pack that includes templates, a free ebook, a whitepaper, and more!

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What does current state of Independent Film Distribution look like in 2020?

2019 was quite a year for most of us, and while we’re entering 2020 with more stable economic footing than we expected, there are definitely some notable industry trends heating up that I thought to weigh in on a bit and let those of you who frequent my tiny corner of the internet know my thoughts on the matter. 

Note from the future: Oof. That stable economic footing did not last.

The SVOD Wars

Anyone who’s been on the internet, watched TV, or stepped out of their house in the last 10 months has probably seen at least about 50 ads for Disney+.  It’s the latest major entry into the Subscription Video on Demand market (SVOD) and it really changed the power dynamics of that particular section of the industry.  Disney is moving a lot of their legacy content onto the platform as with the fall of DVD the vault isn’t as profitable as it once was.  Now that Disney is here, it’s going to shape up the landscape a significant amount.  For more on that, check back in a few weeks for a post elaborating on the state of SVOD and how it changes the whole landscape. 

The fallout from the Distribber Debacle

If you follow Alex Ferrari of Indie Film Hustle as I do, you’ll be well aware of the issues facing Distribber and GoDigital. Through reports from the people they took money and films from, it seems clear that they’ve proven themselves to be every bit as untrustworthy as the sales agents and distributors we’ve all heard about.  So the big question here is if aggregators don’t deliver or screw you, where else can a filmmaker go to get their film out there? Should they use the old path, and go to a film market?

Film Markets

I’ve said it before, and I maintain that I would not have a career had I not gone to the American Film Market.  However, if I were to give advice to anyone starting out today, I don’t know if I’d tell them they should go.  While there were a lot of buyers at AFM last year, none of them seemed to be buying enough to sustain that sort of system.  According to the Hollywood reporter, this year AFM hit “Schlock bottom” and the rich got richer. 

It’s not the right political climate for that to continue, and most of the people reading this probably aren’t studio heads or those making 5-10mm dollar features. ​

For more on Markets, Check out my book!

AVOD Surges

I think it’s very likely that we’ll see a massive surge in the Advertising supported video on demand market over the course of 2020.  That market is poised to explode, especially in the even of an economic downturn.  People are aware of AVOD, but many don’t really watch much of it due to a lack of content.  That’s changing.  Quickly.  TubiTV and PlutoTV’s buyers were some of the only people acquiring catalogs en mass at AFM in November.  Their user base is global, and growing. 

If there is an economic downturn, it’s likely that more people will have less money and more time.  That spells a boom for free entertainment, and the longer people watch the more ad impressions the platform racks up, even if the Cost per impression goes down due to lack of purchase power of the viewer.  If your content is up there, the more you engage with a new user base and the greater the royalties. 

So how do you maximize your profit in this landscape?

BUILD YOUR AUDIENCE!

Everything mentioned above are tactics to make your content available to your audience.  They all share the same problem, the inability to generate an audience or help a new audience discover your work.  So if you do one thing to build your filmmaking career, it should be to grow your audience.  If you have an engaged audience, it can sustain your career more than anything else.  It can make it more likely you’ll get picked up by an SVOD platform, it can help you have leverage with aggregators and sales agents you meet at markets, and if you are looking to grow your audience by having a free AVOD platform they can watch your content through that’s much more selective than something like YouTube can help you to do so.  

So if you want to grow your profits from film distribution, the solution is simple.  Build an audience hungry for your content.  If you want some help with that, the button below will let you join my email list and get a marketing packet that will help you with some additional information, money saving links, and templates. 

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5 Things to expect from the 2019 American Film Market #AFM2019

AFM this year will be interesting.  Here’s the current state from someone who’s been going for 10 years, and has been a Practicing Producer’s rep for 6 years.  Two quick things before we get started.  

First, You should definitely go to AFM at least once.  It’s eye-opening, and if I hadn’t done it I probably wouldn’t have a career.

Second: These opinions are mine alone, and have not been approved, endorsed, or otherwise condoned by the International Film and Television Alliance (IFTA) owner of the American Film Market.  (AFM is also a Registered Trademark of the IFTA.)

And with that, we’re on to the less optimistic (or legal) parts of the current state of AFM and Film Markets.

Film Markets could be in trouble.

All Film markets might be in trouble.  I’ve spoken with many buyers, and they’re pretty much ready to pack up shop.  There’s nowhere near as much money in it as there used to be, and it’s difficult to contuse to turn a profit in this changing landscape.  They’re not going away in the next year or so, but they are likely to recede over time. 

AFM is Becoming much more filmmaker focused in their marketing, which means less involvement from Buyers and Sales agents.

AFM Themselves have been shifting focus to their filmmaker services and somewhat away from their buyer and exhibitor services.  

That's not necessarily a bad thing in general.  It's what I tend to do with content like this, but I go for a very different customer set than AFM has historically. 
​ 
Buyer numbers have been on the decline for a few years, and if they continue to decline it will be difficult to attract the higher-priced exhibitors, and the culture of AFM and all markets is likely to change.  The Image below should help illustrate my point. 

The current system is prone to collapse in a down economy

2008 was Terrible for AFM.  I’ve been expecting a recession to happen at any point since around this time last year.  While the time that I was expecting it to happen seems to have passed, I’m still convinced of an impending recession, but willing to admit I might have missed the timing and the immediacy. 

In any case, when the recession happened in 2008, the market dried up and it still hasn’t fully recovered.  If we were to see another recession, it might spell the nail in the coffin for AFM and potentially the entire market scene.  What would replace it has yet to be seen, as after Distribber’s recent collapse it will be very interesting to see how filmmakers can get their films out there. 

Buyers have been on the decline for a few years. 

I mentioned this above, but total buyer attendance have been on the decline for the past 2 years.  It’s difficult to tell whether the size and number of deals have been increased, but given that the number of tickets sold on the top 100 box office films have remained largely stationary despite the box office revenue going up as well as a few other metrics and the general sentiment of my contacts on the sales agency side I’d be inclined to doubt it. 

Again, if buyers dry up, sales agents won’t keep coming.  When I’ve talked to sales agents about this over drinks, there’s a feeling of extreme pessimism bordering on depression about the current state. 

AVOD and SVOD buyers likely to be the biggest players this year. 

Given that many believe there’s a looking recession, SVOD and AVOD players are going to be even more sought after than they already are. AVOD is free for all, and SVOD doesn’t require extra payment on the consumer end. Given that the economy is a house of cards, many people who are struggling financially are more likely to cut services and stop buying individual rentals. They might even cancel subscriptions, which is likely to lead to a greater viewership of TubiTv, PlutoTV and other similar services.

Thanks so much for reading. If you want more on AFM, Check out Last Week’s blog, my first appearance on IndieFilm Hustle, or my book. Also, if this all seems a little dauting, consider submitting your film via the link below.

6 Things for Filmmakers to Prepare for the 2019 American Film Market #AFM2019

With AFM 2019 right around the corner, it’s time for filmmakers to prepare for the market and do their best to get a traditional distribution deal.  For those of you who don’t know, AFM is still the best place for American Filmmakers to get traditional, non-DIY distribution.  So, with that in mind, here are the major things you need to prepare. 

Also, For legal reasons, I need to say that the following: The American Film Market® AFM® are registered trademarks of the International Film and Television Alliance® (IFTA®) Any and all Opinions expressed in this video are Not Endorsed by the International Film and Television Alliance® or leadership at the American Film Market.

Just in case you'd rather watch than listen, Here's a Youtube Video on this topic!

Leads Lists

You need to know what sales agents and distributors you want to submit your film to. This starts with research and leads lists.  You need to figure out which sales agents tend to work in your genre and budget level, what similar films they’ve helped sell recently, what their current market lineup is, whether they require recognizable names, and who the name of their acquisitions lead and CEO are. 

To make your job easier, I put a free template in my resources packet which you can get by signing up below. 

Join my mailing list and get the FREE AFM Advance contact tracking template. 

Trailers

You need to get their attention, and a trailer is a great way to do it.  I’ve gotten limited theatrical agreements based on an excellent trailer.  See that trailer here.
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If you don’t have a trailer, you can submit without it.  However, it will be much less likely to achieve the desired results. ​

Pitches

There are elements of an indie film pitch.  I tackle the topic in extreme detail in my book, but here’s an overview of what needs to go into that 10-30 second pitch.

• Title of Film

• Stage of development

• Any attachments

• Genre

• Sub-Genre/Audience

• Budget Range

Check out my book on Amazon for the full chapter

Related: What investors need to know about your movie

Key Art

You’ll need a poster, even if it’s a temp poster that’s eye catching and will convince the sales agent they can move units.  It can be a temp poster, but it needs to invoke the spirit of the film and imbue a sense of intrigue for anyone who looks at it. 

Promotional materials

Once you’ve got the key art, you can use it to create promotional materials.  One of those would be a quarter page flyer, another may be a tri-fold brochure.  I’ve included a pages and word document for use at festivals in the resources packet, but it could be modified for AFM.  If I get a few people tweeting at me or commenting the want it on my youtube videos that they’d like that, I might make it. 
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​Screening links

If your film is done, you need screeners. The distributors will need to see it, and they’ll probably want a Vimeo screener. Youtube unlisted or private won’t due, as the compression on Youtube makes it difficult to see all the technical issues with the film.

If you can get it out in advance of the market, all the better. It normally takes a few markets to start seeing money from your film if you don’t get a minimum guarantee. Getting that started would be in the best interest of all involved.

Thanks so much for reading. If you liked this and want more, come back next week for what you should expect from AFM 2019, as well as where the market seems to be heading. OR, if you can’t wait, you could listen to me on Indie Film Hustle Talking about AFM. 

You could also check out my book!

 It’s the first book on Film Markets, used as a supplemental text in at least 10 film schools, and is still the highest selling book on film markets.  Check it out on Amazon Prime, Kindle, Audiobook on Audible, Online at Barnes and Nobles, Your Local Library, and anywhere books are sold. Also, join my email list to get a great indiefilm resource package totally free!

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The SINGLE MOST IMPORTANT Asset for growing your Indiefilm Career RIGHT NOW

Last week I wrote about how distribution has changed over the last several years.  This week, I thought I’d expand on the number one most important thing for independent filmmakers when it comes to building their brand and marketing their movies. What is it?

AUTHENTICITY

Gone are the days when you could simply push out your product with a cool poster and bomb trailer that had nothing to do with the film and expect to make a lot of money.  If you’re going to be a creator, especially one who focuses on selling content to Gen Z millennials like myself you’re going to have to make sure you’re authentic about it. Here’s why

Authenticity makes you more relatable

Most people (especially younger people) have been watching insane amounts of media from a young age.  As such, we’ve learned to tell when someone is full of it.  Most of the time, we can tell when people are playing a character (even if that character is TOO idealized a version of themselves) and when they’re not telling the whole truth.  The rise of youtube and social media has shown us that millennials crave authenticity. If you want to relate to your audience, you’ll need to be authentic. 

Authenticity helps you build stronger relationships with your community and fan base.

Similarly, if you’re not authentic, it’s very difficult to build a relationship with your audience or your community.  It’s not the 80s anymore.  You can’t just blast out music and ads in a pink windbreaker, puffy shirt, big hair, and striped socks and expect people to buy your movie.  Every brand tries to build a relationship with its potential customers using various social media platforms.  However, you can have the advantage, if you’re careful about it. 

Major brands are such a large collection of people it’s not possible for them to maintain an authentic, personal brand.  As such, they generally need to spend a huge amount of money on advertising and sponsorships to keep moving their products. ​

You, on the other hand, need only be authentic and work to speak for your audience in a relatable and non-condescending way. 

Authenticity helps you organically grow your brand reach

Paid growth on social media is expensive.  Authentic, valuable content has more viral reach, and as such it will help you grow your brand, your impressions, and as a result your audience.  If something seems extremely corporate or sponsored or unrelatable, nobody is going to share it. Most filmmakers can’t afford the fees to boost content regularly enough to build their entire brand by it. 

Authenticity correlates to higher reviews

I talked about this at the top of this blog, and in much more detail in this blog. But you can’t just sell your film as something other than it is anymore. If you do, the reviews will suffer. If you made a wonderfully written break in narrative time thriller and then it gets marketed as a heart-racing action film, people are going to be pissed. I would be too, if I was expecting Commando and got Memento.

Thanks so much for reading! If you want to know more, you should join my mailing list for blog digests of blogs just like this one, as well as an awesome film marketing resource pack. That button is right below. I don’t just write about film distribution, I also used to run a US distribution company, and I still represent films to bigger players to myself. If you still need distribution for your film, you should consider submitting it. I rep on commission and there’s no submission fee.

How Did Film Distribution Get So Broken?

It’s no secret that many (if not most) filmmakers think film distribution is broken.  While there are many reasons for it, part of it is due to the rapid change in the amount of money flowing to distributors, and what constituted effective marketing.  What works for marketing films now isn't what worked in the past, and the systems distributors built themselves around have fallen apart.  Here's an elaboration.  

First, some history.

​Independent Film Distribution used to be primarily a game of access.  By controlling the access and becoming a gatekeeper, it was easy to make buckets of cash.  If you had a VHS printer and access to a warehouse facility that could help you ship to major retail outlets you could make literal millions off of a crappy horror film.

In those days it was also significantly harder and significantly more expensive to make a film, as you’d need to buy 16mm or 35mm film, get it duplicated, cut it by hand using a viola, and then reassemble it and have prints made.  This was a very expensive process, so the number of independent films that were made was much smaller than it is today. 

Then DVD came along, and around the same time some of the early films from the silent era that actually had followings entered the public domain.  As such, a good amount of companies started printing those to acquire enough capital to buy libraries and eventually build themselves into major studios.  Sure, DVD widened the gate a bit, but it also expanded the market so everyone was happy. 

Around this time, Non-Linear Editors and surprisingly viable digital and tape cameras were coming into prominence.  As a result, it became much more possible to make an independent film than it was before.  Of course, at that time it was still beyond the reach of most people, and since the average amount of content being made went up, the demand was growing enough that there still wasn’t a massive issue with oversaturation.

A similar expansion was expected with Blu-Ray, but at around the same time, alternative services like iTunes were starting to become viable as broadband internet was becoming commonplace.  As such, the demand for physical media started to dwindle, and as a result, the revenue being made dropped.
​

At the same time, Full HD cameras were now very affordable, and some even rivaled 35mm film.  So the amount of money being made in the industry went down, and more films were being made than ever before. 

Shortly after that, the ability to disintermediate and cut out the gatekeepers came to be.  As such, the market became flooded with often low-quality films that the challenge was no longer getting your film out there, it was now getting your film noticed.  That’s where we are now, and nobody has fully been able to solve that problem yet. ​

Here’s a summary of how we got there, and how the process of distribution has changed.

Access USED to be enough

It used to be that access was all you needed.  Once you had that, you could make an insane amount of money selling other people’s content.
​

Sell it on the box art

The box art being caught was the most important thing.  Stores didn’t let you return movies because you didn’t like them, and other than your own limited circle of friends consumers didn’t have a lot of power to let people know about bad movies, or bad products in general. 

Sell it on the trailer

Even if it was bad, nothing would come of it.  Once you had their money, that was all you needed.  The idea of making your money in the first weekend before bad word of mouth got around was much more viable as people couldn’t just tweet it out or rant about it on Facebook or YouTube.

Let’s contrast that with how things work Now:

Access is easy

Anyone with a few thousand dollars can put their film up on most Transactional platforms on the internet.  You can also put it on Amazon or Vimeo yourself for free.  There are very few in terms of quality controls. 
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the Poster/keyart is still important, but reviews are more important.

Sure, people still get their eyes caught by a poster.  But the reviews matter significantly more in terms of getting them to a purchase decision.  The poster may catch their eye, but the meta score from users on whatever platform you’re watching the film on is important. 

The trailer might still be the deciding factor

Generally, after people see the poster, they’ll read the synopsis, and then they’ll either watch the trailer or read the reviews.  If they watch the trailer, they may have more leniency on reviews.

Also, if the trailer is really good, it can get a bit of viral spread.

If it’s bad, it will become known.

Thanks to social media, if the film is bad it’s not hard to let people know about it. If the film is mismarketed, people will know. As such, authentic marketing to the film is extremely important.

Thanks for reading! If you liked this blog, you’ll probably like the stuff you get on my mailing list. That includes a film marketing & distribution resource packet, as well as monthly digests of blogs just like this one. Or, if you’re researching whether or not you want to self-distribute your independent film, you might want to submit it. I have hybrid models for distribution that help filmmakers build their brands, and get the right amount of visibility for their films so they can rise above the white noise. Check out the buttons below, and see you next week!

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How to Finance your Indie Film/Media Project in 2019

The year is starting to wrap up, so now’s a good time to plan for how to make your career skyrocket in 2019.  If you’re not developing a film, you should be.  But if you read last week’s blog outlining why we’re likely going to be looking at a recession in 2019, and what that means for the film industry then you might be understandably nervous as to how you’re going to get your work done.  So here’s my advice to you.

By the way, this blog is going to heavily build on last week’s blog.  If you haven’t yet, read it by clicking below.  I’m going to reference it a lot in this week’s blog.

Related: Where the Film Industry is Headed in 2019

Angel Investment Money will be Harder to Find but can be Easier to Close.

If I’m right about the impending recession, then it’s likely that investors are going to get skittish.    However, investors will likely need to put their money somewhere.  In an uncertain economy, the film industry becomes comparably less risky, so you might want to talk to your investors about how the risk profile of the investment has become slightly less risky than it was.  However, you’ll need to make sure you have a way to capture attention and get eyeballs on your film. 

It may well be that your investors kind of took a bath when the stock market takes a pretty massive hit.  If that’s the case, and it looks like their portfolio will bounce back then you should have them ask their broker about a portfolio loan.  The blog below will provide much more insight. 

Related: One Simple Trick to Reopen Conversations with Investors

Pre-Sale Money might become more Viable

Given that we discussed last week how SVOD and AVOD platforms are likely to come out of the recession with an increased market share, it’s more likely that they’re going to need to put up their own money to finance content to keep their pipelines full. 

That said, you’re going to need to develop a good package, and you’re going to need more than just a presale to finance your film.

Consider a Pivot to Episodic Content

As discussed in last week’s blog, if a recession hits, the film markets are likely going to be in more trouble than they already are.  Given that the way we generally consume content has shifted from the theater to binge-watching shows on platforms like Hulu and Netflix.  If you have the ability to get enough money together to get an entire season of TV content together you should consider it as an alternative to financing a feature.  That being said, I wouldn’t bother with a pilot.

If you can’t get 10-13 episodes of TV content together, then you should consider a web series.  It’s easier to guarantee distribution, and if you do the web series fest circuit, you can build enough buzz to get a strong series deal out of it.  Something similar happened with Diary of an Awkward Black Girl which turned into HBO’s Insecure.

I’m currently working on a blog post that dives into this in much more detail based on a segment from one of my workshops.  When it’s released, I’ll post it here. 

Tax Incentives may well go Down.

As the economy shrinks, states may feel the need to cut back on spending.  Often, the arts are one of the first places where deep cuts are felt, especially in red states.  So if you’re planning on using a tax incentive to finance your film once the recession hits, you may want to reconsider.  I’ll admit, this one involves a lot more speculation than most of the others. 

Grants may be Tricky.

If you were counting on a grant for your film to get funded, you may be in a rough spot since when people have to tighten their belts, charitable giving tends to go way down.  This isn’t certain though.  Some larger foundations are likely going to be able to weather a few years in a bad economy before taking some big cuts. 

Now Could be a Good Time to make your First Feature

If you can make your first feature for a very small amount of money, now might be a good time. You’re likely going to have the time to kill, and some of your contacts who tend to work on corporate videos may be less busy than they were due to the recession.

If you decide to go this way, I would make sure you make a film that can be profitable on SVOD and AVOD alone, and that you spend time developing and engaging with your following across all platforms. When money is tight, it’s much easier to convince someone to watch your movie on Amazon than it is to convince them to buy it.

If you’ve made a low-budget film, and gotten it reasonably widely known and distributed, then you’ll be in a much better position to get investment when the economy bounces back.

Thank you so much for reading, and I hope you’re having a wonderful holiday. Come back next week for my final part in this 3 part series, the Hot and Not Genres of 2019!​

In the meantime, check out my mailing list!  You’ll get lots of great goodies, including blog digests organized by topic, an AFM Resources Packet, and money saving resources for film markets and festivals.

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Why do distributors and Sales agents ask for Weird assets to sell my Independent Film? (Deliverables 4/4)

Even though the delivery materials in the first 3 parts of this blog seemed pretty thorough, there are still more that may be required to fulfill an international sale.  Generally, these deliverables are only required if requested at a later date, and sometimes they’re created by the sales agents as an additional recoupable expense to be paid before the filmmaker begins taking their cut.  

As with the other three parts of this installment, this list is not meant to be exhaustive.  Every deliverables contract is different, and although this may be thorough, it may still miss an item or two.  More likely though, there would be things on this list you’d never have to worry about. 

1. HDcamSR Masters

And you thought we moved past the need for tapes.  Think again.  Not every television broadcaster in less developed parts of the world has made the switch to HD.  A lot of them still run on tape workflows, so you may be required to provide an HDCamSR Master.  Often, this is something that the distributor will generate through their own sources, and add to your recoupable expenses. 

Note From the Future: This really isn’t common anymore. It’s all generated from the 422 masters.

2. DCP

Generally, this deliverable is only required if the sales agent is going to be hosting market screenings.  If there’s a theatrical run, more may be required.  Generally, the first one is relatively expensive to have done, and the others are simply the cost of a hard drive. 

EDIT FROM THE FUTURE: You probably don’t need this. Market Screenings use different deliverables and if your distributor is doing a theatrical they’ll need to put their own bumper on it. It will be a recoupable expense for theatrical that will come back to them before you get paid.

3. Digibeta Masters

What is this, the 80s?  If you thought that Digibeta lost the format wars to VHS, you’re only half right.  Digibeta is a much higher quality format as compared to VHS, and as such it was used in broadcasting for quite a long time.  In fact, it was even used in the US until all broadcasters made the switch to HD.  I still have some Digibeta tapes laying around my apartment from Film School.  (and I’m only 31, thank you very much.)
​
The reason that some (admittedly thorough) sales agents put this on their as-needed deliverable lists is the same reason they put the HDcanSR on their deliverable lists.  Some broadcasters (Particularly in Eastern Europe) Still use digibeta tapes as their primary workflow. 

NOTE FROM THE FUTURE: Yeah, nobody requires this anymore. In the EXTREMELY rare instance, it does happen, the sales agent or distributor will have it made from your master as a recoupable expense.

4. Clip/Footage/Stills/Bonus Material Licenses

I almost put this in the legal section, but that one was already a bit long.  These are essentially licenses for any bonus materials or stills that may appear in DVD extras.  Similarly, if you licensed any stock footage for the film, you’ll need to prove you have the right to use it. 

5. US Distribution Deliverables

The rest of this list is generally only required for US Distribution.  However, that is not always the case. 

5A. Closed Caption File

There’s a well-defined professional file format for closed caption files.  If you expect to distribute in the US, you’re probably going to need to get one of these. ​ If you don’t have one, distributors will commonly use their vendor and bill it back as a special recoupable expense. This isn’t a bad thing for you to have in general, and it generally costs between 100 and 200 USD per feature.

5B. Copyright Search and Title Reports

This is essentially proof that you have the right to license the film to distributors, and that there aren’t any legal reasons barring you from licensing the film.  Generally, this will be required at least 3-6 months prior to distribution.  Contact the copyright office for more information. 

5C. E&O Insurance Certificate

Generally, E&O Insurance is only required for wide-reaching Domestic Television and Subscription Video on Demand (SVOD) sales.  However, a distributor may require it for other purposes as well.  The exact coverage amount will vary depending on the distributor.  The specifics will include per-instance coverage caps, aggregate coverage caps, and minimum deductibles. 

Often the sales agent/distributor will have a preferred vendor for this and may provide it as a recoupable expense above the existing recoupable expenses.  If they do not provide it as a recoupable expense, there’s a good chance that their vendor gives them a sweetheart deal, and it’s still in your best interest to consider using their vendor. No matter what, you probably want to wait on getting the policy until it’s required just to make sure that you’re getting the right policy.

5D. MPAA Rating

If the Distributor is planning any level of a wide theatrical release, they’ll need a rating certificate from the MPAA.  Often there will be rating caps such as R for any adult-oriented movie, or PG for any family-oriented movie.  The Producer will be expected to bear the cost of acquiring this certificate.  Also, unless you have the official certificate, the film is unrated.  DO NOT attempt to rate the film yourself without going through the MPAA.  If you’re getting a relatively limited theatrical release, your distributor may use the TV rating system which is generally self-regulated. If they go that way, they’ll probably err on the side of caution and up the rating to avoid a fine. A few of the films I’ve released are rated MA where they should be more like TV-14.

Thanks so much for reading!  Hopefully, this 4 part series has been illuminating as to what’s involved in deliverables.  If you’re a film school teacher, feel free to use this information in your classwork.  You can also reach out to me via my contact form and let me know if you’d like something more suited for a handout.  

Also, if even if you’re not a film school teacher you should grab my free film business resource package. It’s got an e-book with exclusive articles to help you grow your filmmaking career. It’s also got templates for investment decks, festival brochures, and more.

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What paperwork do I need to deliver to my Indiefilm Distributor? (Deliverables 3/4)

Distribution deliverables are far more than simply technical requirements.  As we saw last week, there are also substantial marketing materials that you’ll have to provide to the distributor and more that they may have to generate themselves.  This week we’re covering the basics of legal distribution deliverables.

This list is thorough, but not exhaustive.  There may be things required outside of this list for legal, and there may be things on this list that are not required, depending on who you’re dealing with.  Also, I’m not a lawyer, this isn’t legal advice. Check with your attorney to get some advice if anything is unclear.

1. Key Production Agreements

These are essentially legal documents from key cast and crew saying that you have the right to use their work in your film.  Essentially, you’ll have to prove that either you’ve paid out all of the filmmakers, or that they have no claim on the intellectual property of the film. Essentially, you’ll have to prove that whatever work they did was “For Hire” or that you will take on the liability of ensuring that all deserving stakeholders are paid appropriately

Generally, you’ll have to provide agreements proving this for key cast and crew.  Most of the time, those appearing in the main title sequence are a good measure. The preferred form of delivery for this is fully executed contracts or deal memos.   A lot of times you won’t need to deliver these unless it’s asked for.

You’ll also have to provide separate agreements for composers, or any other songs or assets that you’ve licenced.  For the composers, you’ll need to make sure you have the right to use their work in any way you see fit.  This can include trailers, promo spots, DVD extras, and anything else in conjunction with promoting or marketing the film.  This is particularly important and must be treated separately from a standard crew agreement. 

If you used source music, you’ll also have to provide that you have the right to use any and all of that source music under similar terms to the composer’s original music listed above.  there’s slightly more wiggle room on this here, but not a whole lot. 

2. Certificate of Origin

This is a certificate stating where the film was shot, and essentially stating that the film had the right to be shot there.  This is important in all cases, but particularly important in the event that you took tax incentives to finance your film. 

3. Chain of Title Summary

This deserves its own blog, which it will get.  However, in summary, the chain of title outlines the passage of intellectual property between source material, Script, and Production company.  It’s generally a document summarizing all of the associated rights agreements.

4. Rights Agreements

These are essentially documents proving that you have the rights to all the intellectual property used in the film.  These documents can include options, proof of option payments, assignments, licenses, certificates of authorship, written permissions, powers of attorney, and other similar documents. 

Often, if the name of the copyright owner is different from the owner of the picture, you will need to write up a transfer letter as well.  Most of the time you’ll need to generate a chain of title summary for your sales agent to track the rights across multiple documents.

5. Copyright Registration Certificate

This should be fairly self-explanatory, but you’ll need to include the copyright registration of both the picture and the screenplay.  Yes, you do need to copyright your work, a WGA registration will not suffice.  And yes, you need to have copyright certificates for both the screenplay and the film. 

There are other deliverables that can suffice if the copyright is pending, however, those vary by sales agency so I’m not going to go into them here.  Additionally, if you shot your film internationally it’s generally wise to file for a US Copyright as it tends to have the most standing in international courts as not every country has a well-staffed copyright and patent office.

6. Additional Agreements/Statements/Letters

There are a few other documents you may have to provide under certain circumstances. 

6A, If the Film is Not Originally in English

A deliverable you might need would be an English translation if the film is not in English originally.  Most of the time, buyers prefer a film to be in either their native language or in English.  It doesn’t matter if they have to translate the film anyway, they prefer to be translating the film from English. 

6B, If you worked with Children

Another ancillary document would be some degree of documentation that all children were treated legally on set. Most of the time you can find relevant documentation from the Screen Actor’s Guild, even if your shoot was not a signatory. if the film has any children in it. You’ll also need to provide some documentation that you abided by local child labor laws as they pertain to the film industry.

6C, If the film contains nudity or sexual content

In the event that the film contains sexually explicit material, then you’ll need to provide proof of 28 C.F.R. Compliance and record-keeping responsibilities and documentation of those record-keeping responsibilities. 

Similarly, you’ll need to provide additional documentation from any actor appearing nude or partially nude on screen consenting that their nudity was meant to be widely disseminated among the public. 

6D, If it was a union picture

If the film is union, you’ll need to provide all your agreements and proof that you’re in good standing.

6E​, Other Contractual Obligations.  

There may be a whole host of other releases from governmental, technical, and legal entities that prove this film can be distributed, but there’s such variance, it goes far beyond the scope of this blog. 

Thanks for reading!  This one ended up being a bit scary.  Check the other posts for more.  Also, Grab my free Indiefilm Business Resource Package to get a free e-book, templates, and a monthly blog digest to increase your ability to find meaningful distribution, and check the tags below for more information on filmmaking.

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What Deliverables does my Sales Agent Need to sell my Independent Film internationally? (Deliverables 2/4)

Last week, I covered the basics that are required as deliverables for almost every U.S. Distribution or International Sales Contract.  This week, I’m going through the servicing lists.  Most of these servicing requirements are for the internationalization of the film, be they subs or dubs.  Some are more for marketing purposes, but in the end, it’s what the sales agent needs to effectively put together a package and the film to where it needs to go.

Again, this list though expansive may not cover every distribution deliverable from every contract you may encounter, although it should get most of them.  

NOTE FROM THE FUTURE: After running a distribution company, I found these blogs are overly intensive, and really you’re not going to need everything across the 4 blogs. I may do a revised version in the future if I get enough comments, but until then I’ll leave this up for posterity.

1. ​Final Timecoded Continuity Script/Spotting List:

This is different than a script.  This is you watching the final cut of your movie and going through and noting the timecode of every single line of dialogue.  You’ll also have to write down exactly which words are spoken for this spotting list.  This document is generally used for creating subtitles and dubbing scripts. 

You may also be required to provide this for any trailers. ​

2. Final Shooting Script

Even though you will need to have the spotting list, turning over the final version of the shooting script can help provide a backup, in case parts of the spotting list are unclear, or do not translate well. 

3. Music Cue Sheet

A Music Cue Sheet is similar to a spotting list, but instead of being for dialogue, it’s for music.  While you will be required to provide music and effects tracks, the music queue sheet is required in case of edits are made to the film for censorship or time reasons. ​

4. Music & Effects (M&E) Tracks

If the sales agent sells the right to dub the film, they’re going to need the Music and Effects tracks to do it well.  These tracks are essentially all the audio in the film without any dialogue.  Sometimes the tracks on which each type of audio will be placed on are specified, however, that’s beyond the scope of this article. 

5. Final Main Credits

This is a typed list of the opening credits as they appear on the screen.  Generally, these are more for subtitling purposes than straight-up replacement purposes.  Most of the time delivery of this item will be via Word document. 

6. Final End Credits

Similar to the final main credit entry above, this is a list of all credits in the back end of the film.  Again this is something you can deliver to your international sales agent in a simple Word document.  Generally, these are preferred to PDFs in case minor changes or copy-pastes need to be made.

7. Press Kit

This deserves a longer entry than I can give it here, but a press kit is essentially a list of all pressworthy information about the film.  What goes into it is subjective relative to space requirements and how you’re using it.  In this instance, it’s best you talk to your sales agents to clarify what they really need in a physical press kit.  Although generally speaking, you’ll want a review or two from festivals, any festivals you got into, any press coverage you’ve already gotten, some screenshots from the movie, the poster, and maybe a few quotes from the director/producers/lead talent. 

8. Logos

You’ll need to deliver logos to the distributor for the production companies involved in making the film.  If you’re using a producer’s rep, then you’ll need theirs too.  Generally, the distributor will want the Photoshop file, and they’ll probably have other tech specs for you as well. 

9. Bonus Material

If the distributor is planning a DVD release, they may ask for bonus materials.  Things like BTS Footage, deleted scenes, an alternate ending, a blooper reel, cast interviews, and commentary tracks. ​

10. Electronic Press Kit (EPK)

This is an electronic version of the press kit.  It will contain everything listed above, plus more links to reviews, broadcast-quality interviews (if available) and more dynamic and updatable content than a paper press kit can provide. 

Thanks so much for reading!  Check the other posts for more.  Next up is legal, and it’s LONG. Also, Grab my free Indiefilm Business Resource Package to get a free e-book, templates, and a monthly blog digest to increase your ability to find meaningful distribution.

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What do I need to deliver to my Independent Film’s distributor? (1/4)

So there are a lot of questions about what’s involved in Distribution Deliverables for an Independent Film.  So I’ve scoured a few contracts to find a very thorough list of what you might need to provide for a distributor or Sales Agent if they take your film.  Since this list is quite expansive, there may be some stuff on here that most distributors do not ask for, but I figured it best to know what you might have to be able to provide

Given how massive this list ended up being, I’m actually going to break this out into 4 parts.  This part is the basics, the next part will be deliverables used in internationalization and marketing, part 3 will be legal, and the fourth and final part will be some of the stranger and incidental things you might have to provide or be willing to pay for the sales agent to provide.

All of this being said, even though this list is massive, I may have missed something, so definitely talk with your post-house supervisor, lawyer, and editor before submitting these items. 

Let’s Dive right in.

​1. Color Stills and Photographs (50):

These color stills and photographs are generally not meant to be Behind the Scenes photos.  They’re meant to be stills from the movie itself to be used in various forms of promotion. They can also be images of the talent in costume to use in the creation of key art, posters, trailers, and other places where art may show up across platforms.

2. Screeners (50)

While many distributors/Sales Agents have moved to providing internet screeners through services like Vimeo, some still prefer DVDs.  These distributors generally won’t want you to put a watermark of any kind on the film.  I’d be hesitant on this due to piracy concerns, but I’m putting it on here because I found it in a contract. 

NOTE FROM THE FUTURE: This isn’t really done anymore. Distributors just use the master file to create their own screener to send to buyers.

3. Digital Promotional Trailer

Unsurprisingly, the sales agent will want a trailer to help with sales.  It's extremely important in market meetings with buyers.  It’s reasonably likely they’ll need a new trailer cut, but if the trailer you deliver suits their needs, they’re less likely to charge you for that deliverable.

4. Credit/Billing Block

This is just a listing of all credits for the film, to help the distributor keep up with legal obligations and consistent crediting across platforms. Be careful in delivering this, as their distribution agreement probably includes something indemnifying them should issues result from errors in files you delivered to them.

5. Certified Statement with Contractual Obligations.

This statement is just so the distributor knows how underwater you are with investors, and more importantly debtors.  Among other things, the distributor wants to know that they won’t lose the film because the bank took it from you. 

6. Tax Payer Information: W8/W9

The Distributor is paying you, and they have to pay their taxes just like anyone else. 

7. Layered Keyart

Most of the time the distributor will need to make changes to your art, so they’ll need the PSD file. If you don’t deliver that file, they’ll just have one made completely independent of your art.

8. 4k Technical Sample.

If you’re delivering in 4k, The distributor will also need a 4k sample to show buyers in market meetings.  That’s what this is. 

9. 100% QC'd HD ProResHQ or 4444 Master .mov Files: 

If a sales agent is going to sell your movie, then they’ll need a copy of it.  They may ask for a few versions for SD, and they may also ask for a 4k version.  There will be a lot of technical specs you’ll have to match exactly, and you’ll have to undergo a QC Check from a professional lab. By the way, if they ask you for a 422 file, don’t send them a 4444 file. 4444 files are only needed for really specific tasks that your distributor doesn’t need to do. The increased file size will annoy them or their lab.

10. Bluray Market/Festival Screening Masters

These are for screenings the sales agent might want to do for buyers in any of the provided market screening rooms. 

11. Master Audio Files

They are going to need the stems for the film.  Every once in a while, sales agents need to make edits for other markets.  That’s where these come in. ​

12. Copy of Music Score: Digital Files

Sometimes when you cut a film to comply with censorship in other countries, you’ll need to mask some cost by replacing the score.  That’s why they need some original files for the score. 

13. Certificate of Full QC Pass

A QC Check is required for any distribution you would actually want to have.  This generally involves sending the completed film to a lab, and and having every part of the film checked to ensure it’s in broadcast quality.  Generally this sort of check costs around 1500 per time you have to have it checked.  That means, if you fail your QC check, you’ll have to pay to have it done again.  I may do an entire post on the QC check process in the future, if I do, I’ll post it below. ​

​Thanks for reading!  This is the first of several posts covering Deliverables for Distribution.  Check the other posts for more. Also, Grab my free Indiefilm Business Resource Package to get a free e-book, templates, and a monthly blog digest to increase your ability to find meaningful distribution.

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6 Tips to manage your Indiefilm Facebook Page

Your social media presence for your company is extremely important.  Likely, the most important piece of it is your presence on Facebook.  Facebook has the largest user base, and if you know how to use it you can tap into a huge part of your target market.  Here are 5 rules that will help you grow your Facebook presence. ​

Focus on a Page for Your Company, not your projects.

When you set up your Facebook page, it’s better to focus on a page for your production company instead of your film.  This way, when you move on to the next film, you’ll already have the audience you’ve created for your film.  You may have to create a page for individual projects, but you should focus on keeping the audience for your company page engaged.

Also, its getting more and more difficult to run a business through a standard profile. You can try it to increase organic reach, but you may end up hurting yourself more than helping yourself.

Always respond to Messages to your page

If you want to keep your reach up, you need to respond to questions and comments that come to your page via messenger. It can also lead to some really notable business opportunities and sales for you. At least, it has for me.

Don’t try to manage too much at once.

Just having a huge Facebook page won’t do you much good.  You have to use it as a way to engage the audience for your projects.   To do this, you have to regularly post content relevant to your target demographic. Finding or creating high-quality, engaging content is a very time-consuming process.  If you want to try to manage too many pages at once, you’re likely to burn out and not be able to continue regularly posting relevant content.

If you let too long pass between posts, your fan base will start to decay.  Further, when next you post, your posts won’t reach as far because Facebook’s algorithm won’t let them.  It’s much better to focus on managing one or two pages at the same time and helping those pages to grow within the platform.

Share useful content to relevant groups

One good way to grow your brand recognition online is to post valuable content to your page, then share it with groups filled with your target demographic.  I do this all the time.  In fact, there’s a good chance that’s how you found this article.  This content shouldn’t just be sales links for your film, it should be free content that provides some value to the group.  You can post the occasional sales link, but you shouldn’t do so more than once per week. 
​

Related:5 Dos and Don'ts for Selling your Film on Social Media

It’s important that you avoid being too spammy while doing this.  I have a list of 5 groups to share to each of my pages on a daily basis, to help ensure I don’t post to the same group too many times.   It takes some time to set up, but it’s the best way to avoid running afoul of group admins.  That’s not something you want to do. Trust me.  (Sorry if you’re one of the admins I’ve run afoul of, just trooping through this.

Always post videos natively

By this, I mean always upload your videos directly to Facebook, and don’t post a Vimeo or YouTube link.  If Facebook sees that the video is coming from Vimeo or YouTube, it will only get about 20% of the reach.  If, on the other hand, you upload it directly to your page, it will actually get a lot of prioritized placement in the feeds of people who like your content and their friends. 

Don’t put your movie on Facebook, put your trailers there and point to Amazon.

Finally, Facebook video is a great place to post a trailer, but not a great place to post your entire film.  First of all, you won’t be paid for posting your video to Facebook like you would be if you posted to Amazon Video Direct or YouTube.  Second, most people just don’t watch full-length films on Facebook.  They’ll watch videos that are only a few minutes long. 

As such, posting your trailer can be a great way to get extra attention on it, and then you can link off to a place where people can buy it or watch it for free.   Doing this can not only increase the number of people who watch your film, but might even increase your total audience. 

Thanks so much for reading.  If you like this content, you should consider liking my page on Facebook!  Here’s a link.

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Which Investment Was More Profitable, Twitter or Paranormal Activity?

Note from the Web Port: Not all blogs are evergreen. This has nothing to do with Elon Musk, or the state of the platform in 2023. This is an older blog I wrote to illustrate tech breakouts vs. film breakouts. The principle remains, but it’s aged a bit like fine milk. I’m leaving it up as a solid illustration though, since this is basically a 7 part thought experiment. If I were to do it again, I’d compare Skinamarink and Outbrain, Bumble, or DuoLingo. If I get some comments requesting it, I will. Probabably as a video.

BEGIN BLOG PORT

Every tech investor is looking for the next Snapchat, Twitter, or Facebook, and every filmmaker thinks their project will be the next The Blair Witch Project, Paranormal Activity, or Insidious.  While there are lots of reasons this ideology is similar, they are far from the same.   This week, we’re going to take a look at what an early stage investor in each of these projects or companies would have walked away with.

Films have breakouts, tech has Decacorns.   While an interesting word, a Decacorn is easy to describe.  It’s a company worth 10 billion or more pre-exit.   

Defining a breakout film is somewhat more difficult.  There are many ways one could describe a breakout film.  In an article for the American Film Market Industry analyst Stephen Follows and Bruce Nash of The-Numbers.com defined it as a film budgeted between 500k and 3 million dollars that the returns to the producer were more than 10 million dollars.  

Another way to look at it would be any film that returned their investors at least 10 times what they put in (10X)  Perhaps with a minimum return around half a million dollars to avoid a 500 dollar film making 5,000 dollars being considered a breakout. Technically, the two examples of highest ROI films most people think of fall outside this realm.
​
​We’ll be looking at the films people generally think of as winning investments, against the tech companies investors would love to have put some money in early on.

​I’m sure every tech investor reading this is thinking a film investment doesn’t really stand a chance.  In most instances, they’re right.   However, purely as a thought exercise, let’s look at the numbers.  

The seed round for Facebook was 500,000 Dollars, and if you’re an aspiring Venture Capitalist or a big fan of Darren Aronofsky, you know that largely came from Peter Thiel of Founders Fund.  By the time he cashed out, his initial 500k investment netted him around 1 billion dollars.   That’s a return on investment of more than 2,000X!  Not all of the money went to him, but a significant portion did.  That’s according to this CNN article.   

I couldn’t find another similar investment profile for Twitter.  Perhaps because no one made a movie about it.  So we’re going to have to extrapolate a bit, and estimate what a Series A Investor would have gotten from their investment using largely standard practices and math.  

Crunchbase doesn’t have an exact amount that any individual invested, but since it was into a Series A round of 5 million dollars with 11 other investors several of them funds it’s reasonable that a single angel investor could have invested around 250k.   Given that 250k investment was against a valuation of 35 million, that means this investor had owned 0.71% of Twitter.   

Now, just because this nameless investor owned 0.71% of Twitter then, that doesn’t mean it stays at that percentage.   Any time new stock is issued, that share dilutes.   Given the valuations of future rounds, we can assume that the 0.71% of the company diluted to around 0.45% of the company by the time the company exited. Given that the company was evaluated at 14.2 billion dollars when Twitter IPO’s in 2013, the initial investment of 250k was worth 65.3MM.  That means a 261X return

A 250X to 2,000X is a phenomenal possibility, and they're not the only tech companies to have offered such gigantic returns to their early investors.   So how does film stack up?

Let’s look at the Blair Witch Project.   According to this article from movienomics, the Blair Witch Project Sold at Sundance for 1 million USD.  Since the Budget was only 22.5k, the filmmakers made a return of 4340%, or 43X.   From the filmmaker side that’s not bad, but it’s not where the story is.  Artisan, the company that bought the rights to the film, spent another 1 million US in a grassroots marketing campaign, and the film went on to gross 248 Million.   That means they had around a 123X return on their 2 million dollar investment. ​

We’re going to look at this two ways.  From being an investor in the film and an investor in Artisan.  If you happen to be that rich uncle who ponied up the 22.5k, you probably would be entitled to around a 20% stake given that almost all of the crew on the Blair Witch worked for free.   So, you investment would return about around 200k, or nearly 9X. 

What if you were an investor in Artisan?  On an entirely hypothetical and not entirely connected to reality basis, let’s just say you were an angel investor who got their money from inventing a new washing machine.  You sold the invention to a big company and now you’re flush with cash.  You’ve always liked movies so you invest 2 million in Artisan.  In return, they give you 20% of their company.  So, with that 2 million dollar investment, you get a return of about 25x.  That’s a very healthy number. 

Paranormal Activity is such a low budget, the filmmakers almost certainly put it in themselves, however for the purposes of this exercise, we’re going to assume the entire 15k budget was put in by a single investor, and they took a 20% stake since the filmmakers clearly raised much more in soft costs including deferred payments and sweat equity.

Even though the first film in the paranormal activity series made about 89 million in theaters, not all of that went to the filmmakers.   The theaters often keep around 50%, then the exhibitor takes another 30-50% of what’s left, and then the filmmakers and investors get a cut.  Further, the distributors tend to recoup their costs first.   

To simplify this, we’re assuming that around 50% of the costs go straight to the distributor, and that they recouped another 2.5 million on in expenses before they paid the filmmakers.  That’s a low marketing spend, but the campaign Paramount did was very innovative and low cost.

So, if we assume everything above, 89 million gets reduced to a bit shy of 43.5 million once it reaches the Production Company.  The investor is then paid out 8.7 million on their initial 15,000 dollar investment, which means a 579X ROI, roughly twice the ROI from the series A of Twitter!

So films are a better investment than Twitter, right?  No.  No they are not.  Paranormal Activity is the highest ROI film of all time, Twitter isn’t the highest ROI tech company within 10 years on either side of it.   Further, the returns I listed from Twitter are relatively well verified, I had to extrapolate the deal points for Paranormal activity based on different deal memos I’ve seen as a producer’s rep. 

More than likely, the filmmakers put in the 15,000 dollar budget themselves.  Even if they didn’t, given that paramount paid around 350,000 up front for Paranormal Activity, the the filmmakers wouldn’t have seen much more from it than that.  After all, on paper Star Wars Return of the Jedi never broke even. If the filmmakers only got 350,000, then the investors ROI would have been more like 4.5X given that in our scenario,  only owned 20% of the film.

Further, in the real world, both of these projects were largely backed by people who owned the project, and there would have been far more players in the waterfalls. So this is a fun throught experiment more than anything, and mainly proves the point that filmmakers should be focusing on other issues aside from potential ROI when selling their film.

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