Signing on with someone to film my movie, then to distribute my film. What is the normal or fair percentage of the profits that should go to that company?
What is a fair distribution percentage for a film?
- Thread starter Conroy Films
- Start date
That's what a distributor offered me. 50% of all profits to distibute my film. That's awful, right?
What are you contributing? Are you just a script writer? Are you the investor? Director / Producer? That makes all the difference.
Likely it is.
Most people don't know the difference between all sorts of hair-splitting finance terms.
"Less" is a fancy way of saying "minus". (@ssholes).
Sales, Revenue & Income = Same thing, the three words are interchangeable.
Expenses = Film-wise, those are the "Direct costs" to make "A" or "The" film, such as permits and paychecks.
It does NOT include things like the camera, tripod, computer or editing software which can be used for more than a single film.
Sales/Revenue/Income (DVD & VOD sales)
- Direct Costs/Expenses (The costs to make that one film that generated the DVD & VOD sales)
= Gross Profit
So, for you as a filmmaker you spend $20k to make a really cr@ppy horror flik.
Great.
You spend another $10k to promote and advertise your really cr@ppy horror flik.
Your EXPENSES which can be DIRECTLY associated with your really cr@ppy horror flik = $30k.
You didn't spend $20k did you? No. You spent $30k total. Kinda.
With distribution your really cr@ppy horror flik sold $50k in DVDs and VOD.
Great.
$50k Revenue
- $30k Direct Costs
= $20k Profit, right? Kinda.
You have to (or should) allocate a portion of the expense for your camera(s), tripod, lights, bounce boards, sound blankets, external audio recorder, boom pole, mics, audio lines, computer, monitor, NLE and image software, office time for ongoing activities, just all the stuff you use for more than one film - to any single project.
Just a reasonable portion.
Camera will last you five years. Figure how many films you'll make in five years (two? three, maybe?) and allocate 1/2 or 1/3 of the camera expense to your cr@ppy horror film.
Tripod? Probably ten years.
Computer? Maybe five years.
Blah blah blah... this sh!t adds up pretty fast, especially if you want to consider this an occupation rather than a hobby, in which case you should also factor in your mortgage/rent, utilities, auto/home/health insurance, car payment, food, piano lessons for junior, dog food and vet bills, blah blah blah...
These are your "Overhead Costs", the costs that keep a roof OVER your HEAD.
It took you two years to make your cr@ppy horror film, your overhead costs are what it cost you to purchase and maintain your long term investments and their associated expenses over that two year time frame.
If making your cr@ppy horror movie is a avocation let's call it an easy $5k.
If making your cr@ppy horror movie is a vocation let's call it an easy $25k.
$50k Revenue
- $30k Direct Expenses
= $20k Gross Profit
- $5k Overhead Hobby Expenses
= $15k NET Profit, or the profit after ALLLLLLL of your other sh!t has been subtracted from the revenue/income.
Now let's say you had quit your day-job two years ago and this is now much more than a hobby.
It's your new career! (Pfft! Fool.)
$50k Revenue
- $30k Direct Expenses
= $20k Gross Profit
- $25k Overhead Hobby Expenses
= -$5k NET Profit, AKA a $5k NET LOSS
Hmm.... well that sucks.
Well, don't despair. It gets worse.
If YOUUUUUU can have overhead costs the distributor can ALSOOOOOOOO have overhead costs.
And this is where they F***********CK you over!
Your cr@ppy horror film actually generates $50k in DVD and VOD sales/revenue/income.
The distributor's DIRECT EXPENSES are for processing, review, and data storage. Fine. Peanuts.
Let's say that's $2k.
$50k Sales/Revenue/Income
- $2k Direct Costs for the Distributor
= $48k Gross Profit
Great.
But in order to generate that $50k in Sales/Revenue/Income the distributor "had" to spend $80k a year to promote your and fifty other films. Or was it five? Or eighty-five? Or two-hundred-eighty-five?
H3ll, you'll never know.
But I do know they're gonna call dibs on 50% of what's left over of the Gross Profit.
$50k Sales/Revenue/Income
- $2k Direct Costs for the Distributor
= $48k Gross Profit
x 50% Overhead Costs
= $24k NET Profit
That's your $24k.
That's your $24k Sales/Revenue/Income.
From which you will deduct your own Direct Expenses/Costs.
From which you will ALSO deduct your own Overhead Expenses/Costs.
(This is gonna hurt. It's a financial horror story! MUA-HA-HA-HA!!)
$50k Sales/Revenue/Income
- $2k Direct Costs for the Distributor
= $48k Gross Profit
x 50% Overhead Costs
= $24k NET Profit to YOU!!!
$24k Sales/Revenue/Income
- $30k Direct Expenses/Costs
= -$6k Gross Profit/Loss
- $5k Hobby Overhead Expenses/Costs
= -$11 NET Profit/Loss!!
LOLOLOLOL!!!!
Lettuce do it as a full time J. O. B!
$50k Sales/Revenue/Income
- $2k Direct Costs for the Distributor
= $48k Gross Profit
x 50% Overhead Costs
= $24k NET Profit to YOU!!!
$24k Sales/Revenue/Income
- $30k Direct Expenses/Costs
= -$6k Gross Profit/Loss
- $25k Occupation Overhead Expenses/Costs
= -$31k NET Profit/Loss!!
L!
M!
F-ing!
A!
O!
Best O' Luck!
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There no such thing as a or set % from distribution companies - It all depends on what they do.
*Story*
A man once had an invention
The man wanted to get his invention to everyone and make $100,000
The man did not have a way to get his invention out and had no connections
The man found a company that could get his invention to everyone
The man asked what they wanted in return - The Company said "50% of what you make, we will market and put lots of time into this, your invention should make $5,000,000 That's $2.5 million dollars to you."
The man viewed this as he was loosing $2.5 million so he turn it down.
Man still owns 100% of his invention, and is broke.
*Story*
A man once had an invention
The man wanted to get his invention to everyone and make $100,000
The man did not have a way to get his invention out and had no connections
The man found a company that could get his invention to everyone
The man asked what they wanted in return - The Company said "50% of what you make, we will market and put lots of time into this, your invention should make $5,000,000 That's $2.5 million dollars to you."
The man viewed this as he was loosing $2.5 million so he turn it down.
Man still owns 100% of his invention, and is broke.
This is not "likely" - Ive seen people make more money from a 50% then a 90% deal. To the OP, can you please post more info.
Just for schitzzengiggles, lettuce try this @ $100k Sales/Revenue/Income...
$100k Sales/Revenue/Income
- $2k Direct Costs for the Distributor
= $98k Gross Profit
x 50% Overhead Costs
= $49k NET Profit to YOU!!!
$49k Sales/Revenue/Income
- $30k Direct Expenses/Costs
= $19k Gross Profit
- $25k Occupation Overhead Expenses/Costs
= -$6k NET Profit/Loss!!
Goodness.
Looks like a $20k film with $10k promotion and advertising with $25k two years of overhead living expenses would have to generate about $112k in sales just to break even.
$112k Sales/Revenue/Income
- $2k Direct Costs for the Distributor
= $110k Gross Profit
x 50% Overhead Costs
= $55k NET Profit to YOU!!!
$55k Sales/Revenue/Income
- $30k Direct Expenses/Costs
= $25k Gross Profit
- $25k Occupation Overhead Expenses/Costs
= $0k NET Profit
Sales... are kinduva tricky quasi-known-unknown. Juno?
They can kinda sorta be predicted within a guesstimated range according to genre, production value, and promotional effort.
Expenses... are much more... definable. You can command more willful control over your outgo than you can command over the will of others for income.
Here's the deal: A $30k film + $25k overhead is really a $55k film.
Under a 50% distro deal it would have to make just over double that in sales to break even.
Bring your expenses down and smaller sales will also break even.
What have other similar films of similar quality and similar off-screen resources generated in revenue?
It's difficult to bring down overhead costs once they're generated, leaving your two wildest variables costs directly associated with producing the film - and - those of promoting and advertising it.
Spend a little less on the film? Without making it look cheaper?
Spend a little more on production? Will that translate into more sales? Really? Maybe.
Spend a little less on promotion and advertising? Possibly. Probably not a good thing.
Spend a little more on promotion & advertising? Possibly. Just make sure you're paying good attention to HOW that money is being spent. No need to preach to the choir. No need to throw good money after bad.
How much marketing homework have your done on your target audience? That's likely your biggest key.
http://www.the-numbers.com/movies/records/budgets.php
Generally speaking: gotta double your investment just to break even.
However, that does include having already paid your own living expenses, so keep that in mind, as well.
Alternatively, you could make films more frequently, thus reducing your occupational overhead per film.
$100k Sales/Revenue/Income
- $2k Direct Costs for the Distributor
= $98k Gross Profit
x 50% Overhead Costs
= $49k NET Profit to YOU!!!
$49k Sales/Revenue/Income
- $30k Direct Expenses/Costs
= $19k Gross Profit
- $25k Occupation Overhead Expenses/Costs
= -$6k NET Profit/Loss!!
Goodness.
Looks like a $20k film with $10k promotion and advertising with $25k two years of overhead living expenses would have to generate about $112k in sales just to break even.
$112k Sales/Revenue/Income
- $2k Direct Costs for the Distributor
= $110k Gross Profit
x 50% Overhead Costs
= $55k NET Profit to YOU!!!
$55k Sales/Revenue/Income
- $30k Direct Expenses/Costs
= $25k Gross Profit
- $25k Occupation Overhead Expenses/Costs
= $0k NET Profit
Sales... are kinduva tricky quasi-known-unknown. Juno?
They can kinda sorta be predicted within a guesstimated range according to genre, production value, and promotional effort.
Expenses... are much more... definable. You can command more willful control over your outgo than you can command over the will of others for income.
Here's the deal: A $30k film + $25k overhead is really a $55k film.
Under a 50% distro deal it would have to make just over double that in sales to break even.
Bring your expenses down and smaller sales will also break even.
What have other similar films of similar quality and similar off-screen resources generated in revenue?
It's difficult to bring down overhead costs once they're generated, leaving your two wildest variables costs directly associated with producing the film - and - those of promoting and advertising it.
Spend a little less on the film? Without making it look cheaper?
Spend a little more on production? Will that translate into more sales? Really? Maybe.
Spend a little less on promotion and advertising? Possibly. Probably not a good thing.
Spend a little more on promotion & advertising? Possibly. Just make sure you're paying good attention to HOW that money is being spent. No need to preach to the choir. No need to throw good money after bad.
How much marketing homework have your done on your target audience? That's likely your biggest key.
http://www.the-numbers.com/movies/records/budgets.php
Generally speaking: gotta double your investment just to break even.
However, that does include having already paid your own living expenses, so keep that in mind, as well.
Alternatively, you could make films more frequently, thus reducing your occupational overhead per film.
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Thanks. Hard to stomach. Almost minimum wage when I'm done. Probably less.
Why do you say that? Why do you think your film will only make 100K?
If you need help figuring this out let me know, this is your life your talking about and you should be careful who you listen too when it comes to making a deal with a distributor etc...
A credible opinion:
http://independentfilmblog.com/archives/what-if-your-film-doesnt-fit-the-pre-sales-mold/
"... you can finance your film the more traditional way of using private equity. The downside to private equity is the enormous risk involved since most independent films don’t return their investment….so you have to find the right investors who are more keen on supporting your work then looking for ROI. "
Author's credentials: http://independentfilmblog.com/about/
MARKETING!
MARKETING!
MARKETING!
Film production is an art and a technical skill.
Distribution planning is an art and technical skill.
Marketing is an art and technical skill.
Make the car.
Distribute the car.
Market the car.
If all you do is build the car and park it - it's not going to sell very well.
"Film it and they will buy it" is a delusional, fairy tale, self-injurious belief, professionally.
MARKETING!
MARKETING!
MARKETING!
PS, I think I know someone who can get you better than a 50/50 cut.
http://independentfilmblog.com/archives/what-if-your-film-doesnt-fit-the-pre-sales-mold/
"... you can finance your film the more traditional way of using private equity. The downside to private equity is the enormous risk involved since most independent films don’t return their investment….so you have to find the right investors who are more keen on supporting your work then looking for ROI. "
Author's credentials: http://independentfilmblog.com/about/
MARKETING!
MARKETING!
MARKETING!
Film production is an art and a technical skill.
Distribution planning is an art and technical skill.
Marketing is an art and technical skill.
Make the car.
Distribute the car.
Market the car.
If all you do is build the car and park it - it's not going to sell very well.
"Film it and they will buy it" is a delusional, fairy tale, self-injurious belief, professionally.
MARKETING!
MARKETING!
MARKETING!
PS, I think I know someone who can get you better than a 50/50 cut.
Last edited:
Fundamentally, it sounds like they are taking ALL the risk. If they are putting up all the funds to make the film AND all the funds to market and distribute it, I'd say 50% is VERY generous on their part. I'd want more like 85% if I was them.
50% is generous if it's 50% of the GROSS, not just the "profits..."
Just like the Harry Potter expense report shown by Ray above, they can make it seem like there are NO profits from even the most successfull of films. If you accept a percentage, ALWAYS have it be a percentage of gross. They can't skew those numbers as easily.
Just like the Harry Potter expense report shown by Ray above, they can make it seem like there are NO profits from even the most successfull of films. If you accept a percentage, ALWAYS have it be a percentage of gross. They can't skew those numbers as easily.
Oh absolutely, you can cook the books to make any film look like it made nothing.
I put up the money. I'm still hoping it wins Sundance and the distributors are fighting over me.
If I put up the money as producer of the film. I'm sure I can do better than 50/50.
This film game is a crazy little dream.
If I put up the money as producer of the film. I'm sure I can do better than 50/50.
This film game is a crazy little dream.
Oh yeah, if you finance the film the only way they should get 50% is through a serious written commitment to spend a LOT of money (at LEAST equal to your production budget) on marketing.
In general the distributor will pay a set amount up front for the
distribution rights then set a percentage rate. They won't usually
set up a percentage deal from the beginning.
First let me say I am not saying this is the ONLY way. There are
many different possibilities.
Most of us make the movie out of passion. The distributors buy a
movie out of greed. They will buy a movie (and spend money marketing)
they believe will find a paying audience. The two reasons are quite
different. Conway Film HOPES his movie is shown at Sundance and
distributors fight to pay more and more and more. Distributers go to
Sundance to pay as little as possible.
Let's say Conroy Films spends $100,000. Lionsgate loves it and buys
the rights for $400,000 and plans to spend $250,000 on P&A. They
are unlikely to do a 50/50 percentage split from day one. They will
take 100% until payoff plus 30% - then make a percentage deal.
Now the same thing is likely to happen if, say, Echo Bridge pays $50,000
for the rights and plans to spend $100,000 on marketing. They will take
130% before they begin to share with the filmmaker. And they may offer
a 70/30 split until the movie reaches a specific number. Now THAT'S the
deal filmmakers hate and think is unfair. In that case, turn it down. Hard
to do if that's your only offer.
CinemaStar
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CinemaStar Productions is looking for feature-length movies to distribute or put on our upcoming PPV network.