Thinking about turning down studio distribution deal...

[Gratwick Films]

I recently finished my first film. A horror film entitled The Perfect House. We crowd funded the project and have gotten pretty lucky with people we've met along the way.

The success of the film and a little luck we've made connections in Hollywood that have us in direct contact with the decision makers of studios like Lionsgate and Universal. If we sell our movie we are most likely looking at a deal of 1-2 million. TOPS.

Which on the surface sounds great, but after all the people along the way get their taste there's not much left and more than likely no more coming no matter how good the film does.

I had planned on the self distribution route before we ever had the contacts so I am definitely not afraid of it. In fact I believe in it more than ever in light of Kevin Smith's speech at Sundance and Open letter at www.theredstatements.com stating his intentions with his new film.

I am thinking of spurning the distributors in favor of a planned VOD release date. Say October 1st and we spend the next 8 months doing screenings and independent film seminars/Q&A promoting the release date. Before we ever shot the film we received a ton of free press on many of the popular horror sites. With a finished project to show it should be even easier to get them on board for promoting our release.

Kevin Smith says he's determined to prove you can market with nothing more than social media, easy to say when you already used the system to create the fan base. I say it can be done by a total unknown making it real for everyone.

My question is this does anyone agree with me? And are you willing to support the cause?

 

[Cracker Funk]

Remember that thread with the crop factors and focal lengths and diagrams? I know how I made you feel, now.

Sorry. Uh, you've scored a point, but then are tempted to give up that point in order for a chance to score two points. Common-logic is to keep the point. I guess this addage is American football's version of the bird-in-the-hand addage.

Gratwick, it sounds like you've made up your mind, so I'm not sure what you're asking advice for.

I watched the trailer. The production value does indeed look really nice. Congrats.

Just one last thing I'd like to mention that I think you should consider. People rent videos for $1 at Redbox. Either that, or they get it from Netflix. Of course it depends on how many DVDs you get per month, but many people are spending just a buck or two, per rental, with Netflix (some people spend much less). Do you really think these same people are going to pay the cost of theater admission to rent a movie? Would they even spend $5? A movie theater is a different experience, and that's the only reason people will pay $10 per movie. Downloading onto their computer? I don't think you'll get very many people to pay more than a buck or two, and most people probably wouldn't even do that.

Also, I think you're seriously downplaying the importance of advertising. Real advertising. The kind that costs money.

Either way, of course I wish you the best. If you go the self-distribution route, I hope it works out for you.

 

[Gratwick Films]

Most VOD for a brand new release goes between 2.99 and 7.99 I think we would be looking at the 3.99 version. Compared to a 15$ movie ticket. LA prices. I think people would see it as substantially cheaper. Red box and Netflix are movies that have been out for a while they don't have any initial releases.

As writer, director, and executive producer on the film I would only see about 140k from a 1 million dollar sale and they would own all rights to the sequels and franchise. So for my 100k after taxes I become a shell for the distribution company to make millions while I lose all say.

People pay 1.99 everyday to watch 24 min reruns on itunes I think they would pay 3.99 for a new release. Its like being able to goto blockbuster and rent the NEWEST movie in theaters with out having to move.

 

[Morris]

You could try and work out a deal where you only sell US theatre distribution rights for obviously less money. Then you could try and sell and distribute all other rights. You would need a good lawyer.

 

[knightly]

People pay 1.99 everyday to watch 24 min reruns on itunes I think they would pay 3.99 for a new release. Its like being able to goto blockbuster and rent the NEWEST movie in theaters with out having to move.

These movies and reruns all have HUGE bank behind advertising... if a tree falls in the woods and know one knows... nobody knows. You'll need to invest money in advertising to make this work. This is the part the studios do REALLY well.

 

[spinner]

Thank you all for your insight. I'll try to respond to as many as possible here.

1. I LOVE the football analogy. However how do you think the guy who made paranormal activity is feeling about the "extra point" right now?

about the same way the guys who made Blair Witch felt...

2. Which pretty much contradicts 1. I completely agree everyone thinks they have the next PA or Blair. One major flaw though. BOTH THOSE MOVIES SUCKED. The production value was garbage it was forced on us by that very same P&A machine. THEY NEEDED IT.

...no, Blair Witch and Paranormal Activity sucked in your opinion. People vote with their dollars and there was something about both films that made them work.

3. Not to be arrogant but this film we made is disgustingly good, the production quality alone is above most multi million dollar straight to dvd movies and the theme and concept are on par with that production value.

...well, that's always a good thing...

4. As far as working on the next one, I have built and surrounded myself with a lot of people willing to do whatever it takes. Enough so that they can focus on closing the deals already in the works for not only a franchise but a spinoff franchise. If done correctly regardless of the success of self distribution we would still be coming back October 10th to begin shooting 3 movies on sound stages.

...that sounds good,too...

5. The timing is essential. In order for Kevin Smith to work people like us have to show it can work. Otherwise he's just one guy doing it off a name he made from studio money. He knows that and I think it would only be a matter of time before he joins our cause to prove his own point.

6. Thank you Maryann for seeing the big picture on what it would mean for ALL OF US.

....and stop. As confident as you are, you are not Kevin Smith. And when I say that, I mean you do not have a bunch of successful films under your belt. Smith can do this because he has a good track record. You have a film that you think is good enough to sell. Don't we all. I'm not saying your film isn't good. I am saying a distribution deal has more money than you do. And its not only about money, how many movie houses do you have that are willing to take in a film from an unknown filmmaker? I know you have a head of steam to DIY your film. So self distribute the film the distributor turns you down for. By the way, I hope you have a good lawyer so that what happened to Blair Witch and PA doesn't happen to you.

As far as publicity and advertising we can do the majority of it online for free. Visit the home page for our movie and look at the press links page. We did all of that without even trying and before the film was even made. Didn't cost us a penny.

...good! Do this anyway...

I truly believe it can be done, and in order for it to either become a viable option for all independent filmmakers or force the studios to give much better deals or back end deals that are on the up and up someone has to tell them to go fly a kite and succeed on their own first.

I believe we can do it and I'm just arrogant enough to be the one to tell them to G.F.Y.

...DUDE!! Have you ever heard of Troy Duffy?? Rent the film "Overnight" and reconsider telling anyone to G.F.Y. If there is one thing you learn from that film is that a lot of it is about relationships. Take the distribution deal after letting your lawyer read the contracts and self distribute your next artsy film and don't piss anyone off. The road to Hollywood is paved with the carcasess of dead filmmakers


-- spinner

 

[Gonzo_Entertainment]

If you want to climb up on the cross of supporting independent distribution more power to you, better you than me. I would have set the carpet on fire from the frictioon of my shoes running across it to sign the contract.

So you have the wow.. several hundred thousand minimum cash on hand it's going to take to fund the marketing for this movie to gross a couple million? Because if you don't have several hundred thousand MINIMUM for a marketing budget you are going to get exactly nowhere.

 

[sonnyboo]

In today's world of distribution, I cannot imagine turning down a $1 million cash advance. That's nearly impossible in the current indie film circuit. That alone should be a no brainer "cash the check" scenario.

If you are turning a profit on your cost versus return, then take the money.

A studio has a P&A budget. Do you? In order to be profitable in a self distribution route, you need to advertise at least 10%-20% of what you hope to make, so that means if you want to make over a million, you'll need an advertising budget of $100,000-$200,000 to spend. Grassroots works great for Kevin Smith... he has a built in audience and over 17 years of a track record and fanatics. Do you?

If you really have offers from Lionsgate and Universal - TAKE THE MONEY. As someone already mentioned, start thinking of the NEXT project, and get this one out to the world with some $$$ in your pocket to boot.

 

[sonnyboo]

3. Not to be arrogant but this film we made is disgustingly good, the production quality alone is above most multi million dollar straight to dvd movies and the theme and concept are on par with that production value.

yikes. Unfortunately, I think the ego is getting in the way of inexperience and half-truths from outdated research on distribution with indie film combined with the usual overzealous "I just finished a feature film and it's the greatest movie ever made" syndrome.

You only average a few hundred views for the trailer on Vimeo, and not ever 2,000 views on YouTube. I point this out because it relates to VOD and self distribution - you can't expect a lot of sales or compare this to RED STATE distribution when you don't have the several MILLION followers that Kevin Smith has cultivated for over 17 years.

As far as publicity and advertising we can do the majority of it online for free. Visit the home page for our movie and look at the press links page. We did all of that without even trying and before the film was even made. Didn't cost us a penny.

You do realize that there is still a sizable market share that isn't online at all? The reason the studios succeed is because they combine the newer internet marketing with the old school traditional advertising. A studio might spend as much as 50% of what is eventually their profits just to market a film. Sometimes more.

We are in direct contact with the people that make the offers and have informal connections to them. Long before an offer is "on the table" you know what your offer is gonna be. Every single distributor that is interested is a household name.

You are guessing that the amount that will be offered is between $1 million and $2 million? Those numbers aren't really being offered to any independent film with no name stars anymore. It isn't profitable.

1. I LOVE the football analogy. However how do you think the guy who made paranormal activity is feeling about the "extra point" right now?

The guy from PARANORMAL ACTIVITY (as well as the 2 from BLAIR WITCH) did receive additional money from the box office returns after a recoup of costs by the studio, and in both cases, they did get into residuals. In the case of Blair Witch, they made tens of millions of dollars beyond the initial advance. So, NO they did not regret the decision to go with a big studio.

 

[Cracker Funk]

The guy from PARANORMAL ACTIVITY (as well as the 2 from BLAIR WITCH) did receive additional money from the box office returns after a recoup of costs by the studio, and in both cases, they did get into residuals. In the case of Blair Witch, they made tens of millions of dollars beyond the initial advance. So, NO they did not regret the decision to go with a big studio.

There's that, plus, I actually have another perspective on this. I think it's fair to say that we all have our pie-in-the-sky fantasies/dreams/goals, right? I'm well-aware that the feature I just made will probably not make any money, but that doesn't stop me from fantasizing that it will be a huge phenomenon, and everybody on planet Earth will see it.

Anyway, because of this fantasy bouncing around the back of my skull, I've envisioned distribution deals. Let's say I'm offered $500,000, and that's the best deal I can get. I take it. But then my movie blows up, and makes $20 mil. at the box office. Obviously, part of me would be thinking I got ripped off. But I think that's a bad way to look at it.

The dude from Paranormal Activity is now a professional producer/director. He's getting paid to do what he loves, and his movies are playing at all of your local multiplexes. That's freaking awesome! If my movie were to blow up, I think it's safe to say that I, too, would get another job from it. That's the whole reason I'm doing this, and I don't think you can put a price-tag on that.

Plus, let's not forget that the distributors are, in fact, the ones taking the risk with their money. Remember Hustle & Flow? It won the audience award and grand jury prize at Sundance, and everybody was talking about it. Director Craig Brewer got $9 mil. for it, and the distributor pushed it hard. It got TONS of advertising on MTV, and a mid-Summer release. It tanked at the box office. $23 mil. Yeah, that's a lot of money, but with advertising and everything else, I'm pretty sure Paramount lost money on what appeared to be a sure deal.

Your movie might be the most awesome thing since bacon, but there's no gaurantee it will profit.

 

[knightly]

...this film we made is disgustingly good, the production quality alone is above most multi million dollar straight to dvd movies and the theme and concept are on par with that production value.

This statement turns me off as a potential audience member... I've heard it before and I'd rather spend my time watching films from people who don't have this kind of ego. You may be right, but you've lost my interest. This thread is marketing... and you need to word what you're saying carefully... it's publically accessible... your potential offer of 2Million may have gone down to 1Million by your willingness to name names and admit your ego and that you'd say GFY to potential studio partners.

Please don't get me wrong, I'm officially on the "better you than me bandwagon" now, so this advice is toward you succeeding at self distro. Turning people off through bad marketing practices isn't a good way to achieve sales... brutally honest, sorry.

The fact that your trailer has such limited views should be a warning frag that you need to increase your visibility in order to achieve your views/sales. Please get the word out there:
1) lose the ego (publically - but let it drive you internally), it'll only turn your audience off of your work.
2) Lose the "the studios suck" attitude, it's a negative and will turn you audience off of your work.
3) Spend tons of time and money getting visibility, you need to let you audience know that you exist.

 

[sonnyboo]

CF makes a great point. I don't mean to step on it, but I have to make sure that these types of misconceptions don't go unnoticed...

Director Craig Brewer got $9 mil. for it

The Corporation that made the film got $9 million for it, not any one individual person. The writer/director/producer/editor may be the sole beneficiary of that corporation, but there are contracts and breakdowns with payouts to investors, deferred pay, and a few hundred other ways that the money pie has to get sliced.

In the case of the BLAIR WITCH PROJECT, the made the film for $60,000 including deferments (original budget was $35,000). They sold the film for $1,000,000 to Artisan at Sundance. They paid back the $60,000 to investors and deferred payouts first, then split the net profits 50/50 with investors.

$940,000 split in half -> $470,000, with 2 producer/directors = $235,000 each then Uncle Sam and the IRS came in and took 43% leaving each director with = $133,950

So when I read about googily eyed filmmakers dreaming of how they are going to spend their "$1 million dollars" from a distribution deal, let's just say that I see the reality of $133,950 (and less if you have more than 2 producers on the film).

And that's not taking into account anyone on the cast or crew you promise "back end points" to. Subtract MORE money.

Welcome to the reality of the "business" half of the "movie business"...

 

[Cracker Funk]

CF makes a great point. I don't mean to step on it, but I have to make sure that these types of misconceptions don't go unnoticed...



The Corporation that made the film got $9 million for it, not any one individual person. The writer/director/producer/editor may be the sole beneficiary of that corporation, but there are contracts and breakdowns with payouts to investors, deferred pay, and a few hundred other ways that the money pie has to get sliced.

In the case of the BLAIR WITCH PROJECT, the made the film for $60,000 including deferments (original budget was $35,000). They sold the film for $1,000,000 to Artisan at Sundance. They paid back the $60,000 to investors and deferred payouts first, then split the net profits 50/50 with investors.

$940,000 split in half -> $470,000, with 2 producer/directors = $235,000 each then Uncle Sam and the IRS came in and took 43% leaving each director with = $133,950

So when I read about googily eyed filmmakers dreaming of how they are going to spend their "$1 million dollars" from a distribution deal, let's just say that I see the reality of $133,950 (and less if you have more than 2 producers on the film).

And that's not taking into account anyone on the cast or crew you promise "back end points" to. Subtract MORE money.

Welcome to the reality of the "business" half of the "movie business"...

Cool, thanks for clearing that up. Of course really all I meant to say is that Paramount spent a lot of money to get the movie and market it, and I don't think they made it back.

Anyway, me, personally, I'm not even thinking about money. It'd be nice to get some, but more than anything, I want a job.

 

[bhikkhu]

without knowing much about the business part of the "movie-business"; imho the key to success (becoming a professional filmmaker, that is) is to get your foot in the door, a deal with a studio might just be what you need. otherwise you might be forever known as the guy who turned a 1 Million $ deal down.

 

[Gonzo_Entertainment]

"you might be forever known as the guy who turned a 1 Million $ deal down."

That's what they'll call him as they see him wandering the streets of his hometown mumbling to himself, and periodically stopping to kick himself in the ass.

 

[bird]

Based on your trailer, I really don't understand what the debate is. I say, take the distribution deal.

 

[Flicker Pictures]

Funny. I worked on THIS FILM back in Massachusetts which featured Monique Parent. Thought she looked familiar...

 

[polfilmblog]

"You wanna hate hate but don't try to disguise it with an intellectual debate. Use your little google window and do some research and youll see I'm not making stuff up. Im the asshole that wants to break down the walls so you have a better chance to succeed when no distributor wants you. "​

I'm not sure you know the definitions of "hate" or "intellectual."

No. You're Superman.

Good luck. Whatever.

 

[sonnyboo]

clarification

Cool, thanks for clearing that up.

CF, I want to make sure you know I wasn't speaking directly about you, as this is how the vast majority of people making an indie film think, and not specific to you. I wasn't coming down on you personally, as I think you have talent. Your post just opened a door to a general discussion point is all.

Back to the topic on hand, I've seen the trailer and it is a very well shot and good acting looking film (from a trailer). I do not see a revolution in horror or a sudden demand in the realm of $1 million - $2 million for a feature film with no bankable international names in the cast or above the line. Because of the 35mm film adapters and DSLR's, there are literally thousands of films that look as good as this being made every year.

What separates this film from the rest?

What has created the demand for a studio to offer huge cash advances for this film?


I ask these questions not to be an ass, but as a consumer who may or may not choose to pay to see this film.

As for the ego, I went through that with my first feature film. My ego exploded hugely, and then the inevitable crashing down occurs too. Better to pop that bubble now and get real and get humble quick. You'll be better for it. Film is not a sport. Since film is categorized as "art", know that it is subjective and there is no such thing as truly "better" or "worse". One man's Citizen Kane is someone else's Dude Where's My Car. Love your work, but once you start down this path of "This is the best film ever made", you'll lose perspective and you won't be able to handle criticism like an adult.

 

[Gonzo_Entertainment]

"no bankable international names in the cast or above the line."

As I am in pre-pre-pre production on my first feature, this will be a huge percentage of my working budget. It's almost everything in distribution.

 

[2001 Productions]

I would have set the carpet on fire from the friction of my shoes running across it to sign the contract.

Oh, man, me too! It'd be a no-brainer for me, but I envy the OP's confidence. What I wouldn't give to have the luxury of such a decision!