BY ROBERT LABATE
Most independent film producers face a "Catch 22" choice when it comes to distribution of their films. Without meaningful distribution, few people will ever see your film, but to obtain such distribution, you usually will have to give away significant rights.
Don Bluth, the legend behind such animated feature films such as The Secret of N.I.M.H., An American Tail, The Land Before Time, Anastasia and Titan A.E., said it best when he told The New York Times recently: "Unless you’re in the distribution business, you’re not in the movie business."
Even for a producer of Bluth’s talent and experience, the choice between controlling the rights to your film and meaningful distribution is difficult and potentially career-ending. He continued, "I will never draw another character and give the rights to someone else. And I think that pretty much puts me out of the movie business."
In this final discussion of the "Producer’s Role," I want to discuss how you might increase your chances of attracting meaning distribution for your film and what rights your distributor may ask you to give away.
The Distribution Game
The entertainment distribution industry is an amalgam of many different markets and each of these markets has its own set of rules and practices Finding meaningful distribution for independent feature films is very difficult and even films which win audience approval and film festival awards often find no ready distribution. So, what can you do to improve your chances?
To begin with, you should know your distribution market and establish relationships before the beginning of principle photography. If your project is destined for a film festival, select the festival that is best for the subject matter of your film and find out what it takes (both technically and artistically) to be selected. The major festivals maintain comprehensive Web sites and obtaining basic information is easy. There is also a lot of collective wisdom in Chicago-based organizations that promote independent film such as the Independent Feature Project (www.ifp.org) and the Chicago Academy of Visual Arts (www.smsprod.com).
Alternatively, you may want to exhibit your film at a convention such as the annual American Film Market (www.americanfilmmarket.com) which, with 7,000 attendees and 600 films, boasts that it is "the Hollywood gathering for the international motion picture industry." The more important statistic is AFM’s claim that more than $500 million in production and distribution deals are closed annually.
Yet another option is to hire a "producer’s rep" whose task is to find suitable distribution for your project. A producer’s rep will often want 10 percent of the gross you receive from domestic distribution of your film and 15 percent of the gross receipts from international distribution. As with "Finders" it is best to know the track record and background of your producer’s rep before you sign on the dotted line, particularly if the rep asks for significant up-front money.
While many independent films are marketed directly over the Internet, the Web marketplace is still developing and obtaining a significant return is unlikely.
Giving Up Rights
Distribution agreements come in a wide variety of flavors and each has its own quirks, advantages and dangers. Unless you have tremendous leverage, you probably will be required to transfer to your distributor substantial control over the way in which your film is marketed, distributed and sold. You may even be asked to transfer control over the ancillary rights (such as cable, video, spin-offs and sequels). Distribution agreements should only be negotiated with the help of a knowledgeable attorney, but here are some rules of thumb:
Copyright/Grant of Rights–Unless this is a development or co-production agreement, you should not assign even a portion of your copyright to the distributor. Under no circumstances should your distributor be able to sign agreements in your name without your approval, particularly if such agreements concern the exploitation of the film, its characters and ancillary rights.
Duration–Distributors will sometimes ask for a seven year deal with an option for an additional seven years. Unless the circumstances are unusual, a seven year agreement is too long, particularly if the deal proves to be a bad one for you. And a long-term deal means that you’ve effectively lost control of your film.
Creative Control–Your distributor will want to edit the film in order to comply with requirements of particular markets or media, but this should be done only with your approval. This can be a delicate issue for both sides.
Territory–The rights you grant to your distributor should be limited to the geographical territory that that distributor can cover effectively. If you distributor has no track record with foreign distribution, the agreement should be limited to the United States and Canada.
Division of Revenues: Try to obtain an advance against revenues because it is likely to be the only money you see for quite a while and you may need the money to complete post-production or to clear copyrights. Division of net revenues on a 50-50 basis is common, but be careful how the term "Net Revenues" is defined in the agreement and watch out for standard deductions from gross receipts or double billing for costs.
Credit–Credit which is acceptable to you and consistent with industry practice should be written into your distribution agreement. Your distributor also will want its own credit placed on prints of your film.
Accounting and Inspection of Books: Your distribution contract should include a provision requiring the distributor to account to you every six months, whether any revenue is due to you or not. And you should have the right to inspect the distributor’s books and records as they concern your deal.
Any questions?
© 2000 Robert J. Labate. This column is provided as a source of information and is not to be construed as legal advice or opinion. You may contact me through my firm's web-site (www.defrees.com), via email at rjlabate@defrees.com or, via mail, to Robert J. Labate, Defrees & Fiske, 200 South Michigan Ave, Suite 1100, Chicago, Illinois, 60604 (312) 372-4000. All individuals depicted or described are fictional.