Filmmakers frequently ask me, “At what point in the production process should I offer my film to distributors?” Considering that thousands of documentaries are made each year, it is astounding that this is such a recurring question. Filmmakers persevere and some of these films find their way into festivals. Many are offered to broadcast and cable companies and numerous theatrical, home video and educational distributors. It is clear, however, that far too little work is done to pre-sell the films before they are made. Before making any work, filmmakers should talk with potential buyers/distributors to see how their film will be received. The filmmaker must consider distribution, subject matter or content, and funding or recouping costs concurrently.
This article is an overview of distribution possibilities for documentaries. Despite the changes in technology, there are only four general markets for documentary films/videos and a few ancillary income streams: theatrical, home video (and/or video-on-demand), educational video (public performance) and television broadcast/cable and satellite. The ancillary streams are unchanged: publishing, music, fictional adaptation/the sequel/the series/the IMAX version and miscellaneous sales. While none of these markets is mutually exclusive, each market can create problems for the others that could diminish income to the filmmaker or financier. All markets are concerned with making money by getting people into theaters, having them watch television and selling videos and DVDs and other ancillary rights. While “art” and “personal vision” are part of the doc babble, despite the distribution options, winning praise from critics has limited value. Far too many festival films never make their investment back.
Rule #1: Selling your film
If they will not buy a film when it is an idea, how will producing it change its marketability?
or
If the work is not distributable at the idea level, how will producing it make it more distributable?
or
Television/cable buyers buy works that are similar to what they usually air.
Before You Start
Independent filmmakers must make several decisions: Should I sell a movie before I make it? Should I use my own money to make a film I believe in? Am I concerned if other films in production will compete with my project? Do I know what other films are in production? Is there a home video market, an educational market, a broadcast or cable market for my work? Who is going to pay for this work? What revenue can I expect from these markets? What other revenue streams are possible? See Rule #2.
Rule #2: Valuing Work
If they want to buy a film when it is an idea, will they pay for it before, or as you make it?
or
Letters of support are nice, but money and a deal are better.
Who Will Sell Your Film?
Many filmmakers who have the energy and inner strength to make difficult films stumble when they have to start selling their work while it is still a written proposal or a short sample video. They feel that agents, producers’ reps, lawyers and other middle people are needed to “sell” their film at this stage. This is not supported by results. While there are many excellent middle people, the demand for high-quality works is strong enough that filmmakers should be able to navigate the selling or deal-making aspect of their films without giving up a chunk of the income stream. Consultants such as lawyers and other professionals can work for a fixed hourly fee on the deal, but the buyers in the markets are remarkably open to filmmakers. Some production entities and talent agencies are helpful at getting into network doors, but many of the buyers are reachable directly. Raising money is a different matter, and contingent compensation and credit are appropriate for those going out there and doing the work. First-time filmmakers with no track record will likely need to collaborate with established filmmakers to give their project credibility.
Rule #3: Getting in the door
Acquisition executives will cover works from unknowns if the work has a bankable element or strong endorsement—such as a review in the trades or an “A” festival screening— or a strong, clear logline. No one, including agents, reps or lawyers, can sell an unsellable work.
If you have made your film and you are concerned about getting people to look at it, don’t worry. The people who buy films don’t care who made them; all they care about is how their audience will respond to them. While many buyers are not known for reviewing films promptly, they will look at your film if the fit is obvious or it has a buzz. Having some bankable element in your work helps give the film credibility and attract press. It also helps if the fit between your work and the buyer makes sense. Look at successful documentaries that have had studio distribution. They have a number of things in common: rave reviews, prestigious festival awards, sometimes an Oscar or Oscar nomination, a star (or stars) attached as subject or narrator, or perhaps a controversy (such as not getting an Oscar nomination). Examples of these works include Hoop Dreams, Paris is Burning and Roger and Me (controversy, solid reviews, festival endorsements, no Oscar); Woodstock (major music stars, Oscar), Into the Arms of Strangers (funded and distributed by Warners, Oscar, great press); When We Were Kings (famous subject, great reviews, Oscar); Maya Lin and Four Days in September (great reviews, Oscars) and The Endurance: Shackleton’s Legendary Antarctic Expedition (followed up on success of IMAX film, great press, word of mouth). The more that is written about the film, the better it will do.
Rules #4, 5 & 6: Festivals
There are too many festivals.
Every film is a prize-winner.
The best festivals are free or almost free; the more it costs to enter, the less value it usually has.
Understanding Theatrical Distribution
A measure of success of feature and short work is how it performed at the box office. The “Independent Distributor and Producer” Issue of the Hollywood Reporter (August 2002), in its complete listing of theatrical distributors, ordered by gross revenue 83 companies that released one or more feature films theatrically in the US.
Tier One—The Top Ten Companies
Warner Bros. ranks first, grossing $1.243 billion. None of its 26 releases in 2001 were documentaries. The smallest of the top ten companies grossed $398 million. Within this tier, only two documentaries were released in 2001, both by Miramax (in 8th place with $613 million): Calle 54 and My Voyage to Italy, grossing just $31,000. Historically, all of the studios have released documentary features. One could consider 2001 an “off-year.” But having a studio release a film theatrically can help propel revenues to higher levels when it comes to selling the film to television/cable and home video markets.
Tier Two Companies—The Next Ten
This tier, headed by Lion’s Gate ($80.4 million) and ending with First Look ($6.439 million), makes it clear how great the chasm is between the “studios” and all of the other distributors. These smaller companies released two docs in 2001: Startup.Com (which grossed $1.28 million) from Artisan ($12.8 million) and Grateful Dawg, the lone doc release from Sony Pictures Classics ($8.3 mil.), which collected $359,000. The lack of documentary releases by the second tier of companies does not reflect a trend, but, rather, choices made by these companies in selecting titles to distribute from works that were presented to them for financing or distribution.
Tier Three Companies—The Next 20
The companies range in size from Paramount Classics ($5.68 mil) with seven releases (none of them docs) to Jour de Fete Films ($655 thousand) with three fiction films. These small companies did the bulk of the theatrical releasing of documentary features, with 21, including five works that grossed over $500,000: Trembling Before G-D ($619,000)—New Yorker Films; ’NSync Bigger Than Live ($1.55 million)—Really Big Film Corporation, released through IMAX; Down from the Mountain ($310,000)—Cowboy Releasing; and The Endurance: Shackleton’s Legendary Antarctic Expedition ($2.396 million)—also from Cowboy Releasing.
Tier Four Companies—Everyone Else (44 Companies)
The remaining companies grossed from $654,000 to $603 (not a typo). This group released eight documentary features.
I draw the following insights from this data: Only 11 companies that distribute feature films are sizable businesses; these companies grossed over $100 million. A number of these companies have specialty divisions that handle smaller films. This makes the likelihood of profitable theatrical distribution of a work costing over $1 million unlikely. While there are a number of successful releases each year, few docs gross over $2 million from their theatrical release. Funding for expensive works must come from various income streams, including broadcast/cable sales, home video and international sales. While a theatrical release may be the ultimate goal for many filmmakers, in a practical sense getting the film funded by a broadcaster and aired will likely produce the greatest audience. A pre-sale to a broadcaster or funder makes creating a documentary far less financially risky. Few documentaries receive a broad release or make significant revenue in theatrical venues. Broadcasters almost never fund single feature films; they want to produce series or strands of programs such as HBO’s AMERICA UNDERCOVER; PBS’ NOVA, AMERICAN MASTERS, etc.
Agents, Producers Representatives and Distributors
The difference between a distributor and an agent is simple. Distributors sell directly to the customer and should not be charging additional fees to the producer for using middle people. An agent (or rep, or lawyer, etc.) “sells” a project (as an idea, work-in-progress or completed work) to one or more of our four primary markets. Generally, they charge a fee equal to 10 percent or more of the deal (some charge for “expenses”).
A distributor will make copies of the work and place it in theaters, home video stores and educational institutions. They will promote the sale of these works using trade shows, catalogues, salespeople, etc. Many distributors do television sales in the US and internationally. With the exception of a few multi-national entities (for example, Warner Bros.), almost no distributor “sells” to the whole world directly.
Television agents sell works on a global basis to television buyers, and some sell works to distributors for the home video and educational markets. Considering that the bulk of television sales comes from a handful of customers or countries, filmmakers can make deals that structure commissions as a function of the size of the license fee paid, rather than a flat commission.
Television fees for a doc can range from “none” to over $1 million; some television sales/licenses and production deals require that home video rights be given to the broadcaster. All sales are not equal in terms of the effort or expense an agent or distributor might make. Be aware that some producer reps and television agents do not really “market” or “bid” films to find the highest price or “best” deal, but rather work with only a few of the possible distributors and/or buyers for a work.
Before making a deal with an agent or rep, talk to the filmmakers whose works they have sold. Check where the works were placed and the filmmakers’ impressions of the company. When comparing deals, be sure to check what expenses are, and are not, deducted. Consider a gross deal, or at least get approval of costs before they are incurred. Try to work with an agent who distributes films similar to yours. Always ask for copies of the agreements for your film; you might even want to sign them and have the funds paid to you directly, then pay the representative. Do your homework on the television buyers for your works. Don’t offer television buyers films that on a content basis they won’t buy.
Rule #7: Agent Fees
Buyers buy the work, not the hype.
When dealing with agents or reps, try to pay a commission that reflects the amount of effort that is expended and the difficulty of making the deal.
It is not written anywhere that all deals should pay the same commission.
Film Festivals as Marketing Tools
All films are award-winners, and all are shown in film festivals. Since there are so many of both, it is wise to pick and choose where you send your work. A number of festivals and competitions have awards that add to a film’s worth. These festivals include Sundance, Telluride, New York, London, Berlin and Cannes. Awards such as Oscars, Emmys, Peabodys, DuPonts, DGA, WGA, and others that offer industry visibility, or grants or fellowships from such sources as the National Endowment for the Humanities, the Independent Television Service or the MacArthur Foundation, are also useful. Festivals that facilitate reviews in the trade papers or major daily newspapers are the best; these include the aforementioned festivals, as well as New Directors/New Films, Hollywood, Toronto, Sydney, Melbourne, Margaret Mead, Hamptons and Chicago. Paying a large entry fee and not getting reviewed or written about suggests that the given festival might not be helpful for your work or career. If they write about your film, buyers may come, or a job may be offered. It is also helpful to see what kind of industry attendance a festival attracts.
Rules #8,9 & 10: Distribution Deals
There is no such thing as a standard deal.
The largest advance is not always the best deal.
Be sure to read the whole contract and understand the difference between “gross” and “net.” Be sure you understand how your royalty is computed and when you are paid.
Broadcast/Cable and Satellite Distribution
The Hollywood studios use the broadcasters to provide a huge amount of back-end protection to their investments in production. By carefully selling a work to pay, and later open, broadcasters, one can maximize the income feature docs can generate. Many prominent documentary producers find support from these large buyers of “reality” works. They pre-sell on a global basis. Since few films can succeed in the theatrical marketplace, the networks are a key source of funding for documentaries. If you want to release your documentary theatrically, be sure that these rights are included in your deal.
Most broadcasters buy or produce works for their documentary strands, a staple of almost all cable channels and networks. A few run documentaries either as feature films or as one-offs. Be sure that the right buyer within these companies is considering your film.
Some broadcasters ask for all rights to works they finance or license. These could include home video and educational rights. Having a work shown on television, if promoted and written about by critics, will help sell videos and DVDs. However, unless your film is in mass-market locations, it can be difficult for consumers to find your program.
Home Video Distributors
The companies that dominate theatrical distribution have a similar grip on the home video market. This means that most of the other distributors are struggling to get shelf space in the video stores and other mass-market outlets. The smaller home video distributors are “smaller” in the same way that the “smaller” theatrical distributors are smaller: They lack the economic power to get many copies of works into this market. While there are many excellent small distributors of videos, they are not, for the most part, represented in the product mix at many video stores. This is easy to observe; simply visit the large neighborhood chain store.
While this may appear to be discouraging, there are a number of upsides for documentary filmmakers. There is no need to follow mass market price points; one can charge more for works that will not get mass-market release. For example, the street price for The Civil War DVD set is $99. Many DVD and video titles can sell for $29.95 or more in retail outlets. Selling titles directly on the Web makes a great deal of sense for smaller distributors, so the filmmaker can receive a share of the gross list price instead of the wholesale net price, of a work. Large companies tend to promote works for perhaps 90 days. Smaller companies can provide ongoing promotion and marketing.
When checking out home video distributors, try to see if your title in a subject sense is similar to titles they already market. Look at the price points they use to market their titles. Check to see if their market prices are being undercut on sites like Amazon (Are cheap ”used” copies being offered?). Almost all home video distributors sell videos to catalogue companies that service the educational markets, and these videos will compete with the educational market for your film if there is one (visit catalogue companies such as Library Video Company or Facets Media). These deals pay royalties that range from five to 25 percent of gross income. Many companies do net deals and deduct many expenses from sales revenue. Home video distribution business models require high volumes of low-price copies. The discount from the “list” or “retail” price ranges from 20 to 65 percent of the “list” price. Royalties are generally based on what the distributor receives (less allowances for returns). It’s not easy to make a lot of money if the wholesale price of your work is $4.95.
Educational Distributors
Many documentary educational distributors, while selling fewer units than home video distributors, are able to make more revenue for some works that do not have a mass-market home video market by selling videos at educational prices. It is not unusual for works to be marketed at prices ranging from less than $50 to $400 for a single 60-minute work. In reviewing educational distributors’ deals, be sure to understand that their pricing strategies vary a great deal. Some companies such as PBS sell home video and educational copies of the same works concurrently at similar prices. Price points in educational distribution vary, and there is no rule of thumb. Of course, if one feels that the college, school and library market for a specific title is only several hundred or thousand copies, a higher price will obviously generate more revenue for all concerned. Review the educational companies in terms of how they handle sales to individuals (and home video buyers) if your work has a small general market. Few people will pay $350 for a tape, but this price is not out of line for curriculum-specific college or training titles. Be aware that selling tapes via a tag after the work has aired on commercial or public television could undermine the higher educational price points, since teachers watch television.
In looking at deals, try to determine the total market size of your film, the price points the distributor will use, how the distributor will market the work, what share of the income stream you will receive and what other markets the distributor will cover. Look for a good fit for your film. If a company specializes in elementary school films and your work has a library and college market, this company is not likely to economically promote your work. Royalties to producers range from 10 to 30 percent of income.
Some Concluding Thoughts
Creating a documentary film is an extraordinary accomplishment. Creating a work that is meaningful, entertaining and financially successful is almost impossible. While commercial success may not be the goal of some filmmakers, generally we want our films to be seen and appreciated. Considering the difficulty of making these works, far too many filmmakers start the process without looking at how the work will be paid for, marketed and seen. Do not forget that it is OK to ask distributors for advice, marketing ideas and financing before you start your film.
Mitchell Block is executive director of Direct Cinema Limited, a specialized nonprofit educational and home video distributor based in Santa Monica, CA. He co-executive produced Tracy Seretean’s 2000 Academy Award winning documentary Big Mama. For the past 23 years, he has been an adjunct professor at USC’s School of Cinema-Television. He currently teaches in its Peter Stark Program.
©2002 MWB All rights reserved.