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.
