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IFH 410: Why Most Independent Films NEVER Make Any Money

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I’ve been thinking about doing this podcast for a long time. In the tradition of Why Filmmakers are Always So Damn Broke & What They Can Do to Change It this episode is going to be a cold bucket of water over your head if you are not ready for it. In the insane world, we are all living in today, filmmakers need to break out of the mindset that we are living in the golden age of indie cinema.

The rules have changed dramatically since the 90s and even more so in the last 8 months of the COVID pandemic. The rules aren’t the only thing that has changed but the game has as well. The film distribution infrastructure is broken and has been broken for many decades. It is not set up to help filmmakers make money. It is purely designed to put more money into the pockets of film distributors.

I have written extensively about this in my book Rise of the Filmtrepreneur: How to Turn Your Indie Film into a Moneymaking Business. I want to put together one of my hard truths episodes to help filmmakers better understand the indie film marketplace and how to best position themselves to actually make money.

There is so much talk about new cameras, lenses, rigs, post-production software, and other more interesting aspects of the filmmaking process but when it comes to selling and making money with movies filmmakers rely on old information that is no longer relevant in the current marketplace. I hope this episode empowers you to not only make more movies but to also make money while doing it.

Strap yourself in because for some of you it will be a rough episode to listen to. Be well, stay safe, and keep that hustle going.

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IFH 396: Confessions of an Ex-Distributor Turned Filmmaker with Jeff Deverett

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I’m so excited to bring this episode to the IFH Tribe I can barely contain myself. Today on the show we have ex-distributor turned filmmaker Jeff Deverett. Jeff reached out to me after reading my book Rise of the Filmtrepreneur: How to Turn Your Indie Film into a Moneymaking Business. He wanted to tell me that the book hit the nail on the head and that my film distribution chapter was right on.

I came to find out that he was an ex-distributor and had was on that side of the business for 20 years.  We got to talking and I asked if he would come on the show and spill the beans on:

  • How a bad distribution deal is structured
  • Why the entire film distribution business is systemically designed to screw the filmmaker
  • How a distributor negotiates a deal from his point of view
  • How to follow the money
  • What a filmmaker needs to do NOT to get taken advantage of

After this episode, you will know “where the bodies are buried.”  As Jeff said on the show

“It’s not the film distributors want to screw over filmmakers is it just happens organically.”

We also go into his Filmtrepreneurial business model. He has directed seven feature films, three of which are currently playing on Netflix. He self-distributes all his films. Jeff is a producer, director, writer, and actor known for Full Out 2: You Got This! (2020), ism (2019), The Samuel Project (2018), Kiss & Cry (2017), Full Out (2015), King of the Camp (2008), and My Brother’s Keeper (2004). Jeff’s successful film and TV career began with distribution with New World Entertainment, Astral Communications, Anchor Bay Entertainment, and his own company, Deverett Media Group.

 

We go into:

  • How and why he chooses his niches
  • How he leverages “the niche” in his filmmaking and marketing
  • Why Netflix has one of the fairest distribution deals in the business
  • and much more…

This episode is going to be EPIC. Sit back and get ready to have your mind blown. Enjoy my conversation with Jeff Deverett.


IFH Academy’s Film Distribution: Confidential Course

I’m also announcing the BETA Launch of IFH Academy’s Film Distribution: Confidential Course.

As part of the BETA team you will get:

  • Massive discount for early adopters
  • Be the first to see new lessons as I create them
  • Access to me during the creation of the course
  • Give feedback on the lessons and request new lessons

I want this course to be the most comprehensive course on film distribution anywhere in the world and having you be part of the BETA Team will help me do that.

Alex Ferrari 0:32
Today's guest is Jeff Deverett. And Jeff is an ex distributor who has turned into a filmmaker. Jeff had been in the distribution side of the business for almost 20 years and has been making films as a filmmaker for the past 15 years. He has directed seven feature films, three of which are on Netflix. Currently, he self distributes all his films and only after he switched from The distribution side to the filmmaker side, did he realize what the hell was going on? And how filmmakers have everything stacked against them when walking into a negotiation for a film distribution deal? Now, Jeff reached out to me after reading my book, Rise of the filmtrepreneur, and really want to just talk about the book and the concepts in the book, and congratulated me on the distribution chapter in that book, because it was really right on. So as I was talking to Jeff, I found that he was obviously an ex distributor, and I asked them, would you be interested in coming on the show? And kind of talking about distribution? And how distributors do those kind of tricks that they do, to kind of screw over filmmakers in many ways? And he said, Absolutely, I know where the bodies are buried, I'll be more than happy to share everything. And when I finally recorded this episode, Jeff did not disappoint. He laid out so many golden nuggets on the mindset of a distributor on how how the industry has just been built this way, how the deals are structured, how you follow the money, how you can negotiate certain aspects, what kind of clauses you might need to protect yourself, when to walk away from a distribution deal, when to you know, maybe not get everything you want, but move forward with a distribution deal. It is it was just mind blowing. It was just an insane conversation. And we also talk about how he's using the film intrapreneur method has been using the film entrepreneur method for years in regards to how he is using niche filmmaking, and how he's been able to really build a business around his filmmaking passion. This is an epic conversation. It lasts over two hours long, so I need you to strap in, get ready to take notes. And prepare yourselves to have your mind blown. Without any further ado, please enjoy my conversation with Jeff Deverett. I like to welcome the show, Jeff Deverett. Man, how are you my friend?

Jeff Deverett 7:24
I'm great. Thanks for having me.

Alex Ferrari 7:25
Oh, man, thank you for doing this. I appreciate it. You know, you and I have been talking for a couple weeks now going back and forth on some stuff and and the idea was like we you know what you think it was yesterday? Would you like me to come on your show to talk about all things distribution, because I know where that bought, if I may, quote, I know where the bodies are buried. So I was like, Well, yes, sir. Yeah. Do you want us to blur out your face? You're like, No, No, I'm fine. So um, before we get into it, tell the audience how'd you get into the business?

Jeff Deverett 7:59
Okay, so you're gonna hear from my accent that I'm formally from Canada. I now live in San Diego, California with beautiful San Diego. So, but I lived in Toronto, Canada for most of my life. And my wife and I decided because we want to make a lifestyle change, mostly because of the winters in Canada. As you and I agree, Toronto is a great city. And it's a great film city, by the way, too. But it is nasty in the winter. And we were eat, she's American. So we were able to make that change. So that's why we ended up in the United States. And I'm now a citizen, very proud. And actually, a couple days of july fourth, I take that very seriously. So I celebrate like fourth. Okay, anyways, how to get in the business. So I got what you call the bug, the virus, you know, for lack of I got that virus, which is the filmmaking virus at about 16 years old, I recall. I don't know why I got it. I just, I just got the virus that I needed to be a filmmaker. And so when I was going to college, in an 18 is in in Canada. My dad said, so what do you think you want to do? And I said, I want to be a filmmaker. He said for Really? And I go Yeah, I think I do. Yeah, he goes, do you want to be a producer or director? And I said, I don't know. What's the difference? No, no, he didn't even know this crazy conversation. But this is what literally went on. And he said, Well, if you want to be a producer, I think you should like either go to law school or business school should either get an MBA or to law a law degree because I think there's going to be a lot of business involved. But if you want to be a filmmaker, like a director, go to film school, because you know, it's all artistic. So I said, I think I want to be a producer. And anyways, I went and got an undergrad degree, a business degree in economics and finance. And then I went to law school and got a law degree. And then I went right into like, a practice in Canada. You have to practice law for one year. It's you know, to do it. Because sort of an apprenticeship. And then right after that, I only own companies, I wanted to be in their legal department. So and I ended up at first as a small indie company, but then in a big sort of, you know, quasi studio as big as they are in Canada, a public company, a media company. So when I was being hired into that job, I thought I was being interviewed for the legal department, but they ended up putting me in distribution, and I went into sales. And I said, this is unusual. They said, well, you have the right personality for sales. So and we'd like your background, and we know you can talk business and negotiate contracts. So we're going to put you into the sales department. And I had no clue. I mean, I literally thought I was going into the legal department into business affairs. So I said, Yeah, this is fun. Because I got to go to all the markets, you know, I got to literally travel the world go to all the markets. So my job was to basically acquire indie films, and programming TV, both TV and movies. And to set it up for distribution. Ultimately, I phased into the selling side, as opposed to the acquisition side. And then I started running the domestic sales operations internally in the studio. And then we branched out into lots of different things. As you say, you know, you got to be like your film trippin Earth book, which I read, by the way, and enjoyed. Thank you. So we branched out into lots and lots of different merchandise. And it wasn't just about the programming, it became a full business in terms of how we can monetize lots of other things.

Alex Ferrari 11:39
So how do so what are the two? That's just curious what other products or what other things that you were what other revenue streams are coming in from the films?

Jeff Deverett 11:46
Well, I don't know if you totally reviewed my my bio that I sent you.

Alex Ferrari 11:50
Oh, there was I do remember? Yes. Yes. Please tell the audience. There was this one, there was this one, this one small IP that you guys

Jeff Deverett 11:57
One small little item? And I hopefully we're talking about the same thing, because we didn't talk about it. But so my biggest acquisition by far for the Canadian market? Was this purple dinosaur called Barney Yep. Yeah. So for those of you who remember, Barney, you know, was gigantic, gigantic, you know, children's property. And if for those of you smiling, because you probably your kids were probably hooked on it. Anyways, I met this woman named Cheryl Leach, at one of the conferences in Las Vegas. At that time, Barney, she had just made three videos, Barney was actually blue wasn't purple was a different voice was a different thing. And I had at the time, and I was very, you know, programming for kids. And I meet this school teacher Cheryl Leach. And she tells me that this property and that she's a school teacher, and she knows what kids resonates with them. And I, I brought it back to, and I said, Guys, we should acquire this. I don't know why there's something about it. This woman kind of just is she's connected. She's hooked into what the audience really wants. So we acquired it. And sure enough, Barney, like, within a year, got onto PBS and became like, what it was, she changed the color, you know, and it grew and grew and grew, and it became this fantastic property. Anyways, originally, we just acquired, I just did the routes for, you know, basically the programming, which was television and home video, at the time, and home video was monsterous, with VHS at the time. And then we transitioned to DVD. And we, you know, over the first couple of years, we developed a really good relationship. And she said, You know, we're doing all this other stuff, like we're doing all these, you know, all these licensed brands, like plush dolls, and books, publishing, music, toiletries, clothing, and, you know, like, there's a lot of opportunity for that in Canada, because, you know, a lot of it's not license and I said, Okay, where do I sign up? And we've got everything we got, we became the music publisher, the book publisher. I mean, it was just the biggest was the

Alex Ferrari 13:59
Money just printing money, printing money.

Jeff Deverett 14:02
Plush dolls was the biggest and then we realized that the the show is just a TV commercial, really to sell, to get people interested to sell merchandise. And we did concerts, and we did so much stuff. And it was first of all was a lot of fun. Secondly, I learned so much about Merchandising, and, and until rewrites that type of thing. Um, there was tons and tons of piracy dealt with, of course, everything was being pirated at that time. I mean, you know, you'd make a plush doll A week later, some ripoff doll would appear in Walmart from nine and up from some other distributor and yeah, I mean, it's spent a lot of time dealing with that. But it was it was monstrous Now, the only thing is I didn't own that company. I was working for a public company. They were great guys, and I enjoyed it. But they made a ton of money. And the people like the back then when we started was called the lions group became lyric studios and ultimately hit entertainment, bought it and great, great property. And you know,

Alex Ferrari 15:01
so that is, okay, so the Barney the Barney lady Cheryl. She actually made money with this deal. Oh, she made tons of money. So okay, and we're gonna get into why that deal made money and a lot of others didn't. But you did this during the 90s. And I'm mistaken, right. 90s, early 2000s

Jeff Deverett 15:23
Yep, that was mid mid 90s. And yeah, mid 90s 96 I like property. Yep.

Alex Ferrari 15:28
Okay, so cuz I remember when I was, I was still like, 93 I was working 92 I think 9293 I was still working at a video store. And, and Barney, just so much, Barney. Yeah, it

Jeff Deverett 15:42
might have been 9095. Maybe I started there. 94 Yeah. And it was early on. So yeah,

Alex Ferrari 15:47
it was around there. But I remember we had plush dolls. And like you couldn't keep anything, Barney. And it was it was insane. So can you tell the audience a little bit about what it was like in the 90s with distribution in the sense that, you know, VHS was obviously King. Basically, you could almost put almost anything out on VHS, and you would make money with it. Is that a fair statement?

Jeff Deverett 16:13
Okay, well, let's just finish the Barney thing first. Okay. Barney was that I wouldn't even call that independent filmmaking. It started off as a TV show. But it became an entire, you know, licensing and merchandising business. That's what that is. So in that it's not really independent filmmaking. So let's switch gears. And I'll tell you about the 90s. So I started off primarily in television, because video was just starting. And you know, I mean, you can figure out my age, if you will, I'll tell you, I'm 59 years old. And I started right out of law school at 26. So I've been doing it for a few years. And so VHS had just launched. And basically, you know, we were all like trying to figure out, like, how do we make money with this? You know, because some of the, you know, the big block, like, you know, the big video chains, Atlantic blockbuster and stuff like that. And so we originally were selling there was no sell through it was just rental. So we were selling VHS tapes for about $110 correct. We were selling it to video stores, they would do the rentals and that's how it went out. But and then I remembered the first movie that they attempted to sell ETS No, no, that was no there was one I think was Top Gun. It might have been I thought it was Top Gun.

Alex Ferrari 17:34
It might have been an Indiana Jones or might have been a Top Gun. It was one of those Yeah, it was one of those I remember et was the thing that blew me

Jeff Deverett 17:42
out of the water. Yeah, so and the studios were taken they were going to take a chance with that because that was kind of breaking the mold going and selling directly to consumers through like stores like Walmart as opposed to blockbuster you know, and back then it was $30 you know to buy a VHS tape it wasn't you know $10.12 so that was a whole new business model we were all thinking oh no, there's no way anybody's gonna buy that because they can rent it for you know, 399 or 499 and a blockbuster store and sure enough, you know, took a probably a year to develop that market and that became the business you know, now the rental business was still pretty strong but you know, the sell through business became everything and then of course DVDs came along so we just changing format but the sales process was all still the same. And you know, those were I mean semi I'm going to call it glory years I mean the

Alex Ferrari 18:34
The money was flowing the mean money was flowing like crazy.

Jeff Deverett 18:38
Well people and people were enjoying it like people want it to own you got it you got like a piece of merchandise you got like a nice box you got a you know, item so and you had people were collecting like libraries were developing so and you know, you could watch it over and over again we had special special features was a gigantic element to put on to the you know, all the DVDs and but you said something earlier you said you could sell anything. The truth was you pretty well could sell anything. As long

Alex Ferrari 19:06
as I had to listen. Listen, I I had I had an my film in my mind because I know this because when I was working in the video store in the late 80s, early 90s the stuff that would come in there was the Slimer Rama bowl Rama. There was assault of the killer bimbos, which was literally two three girls flying like that with book popping bubblegum. The exterminator which is obviously a ripoff of the Terminator, and then anything that Roger Corman put out like it's it was insane. You could literally put out and I remember the guy driving up to the front of my mom and pop it was in my shirt about the mom and pop shop that I work that he would drive up with a van It was like so city he would open up the back of the van and he would have just VHS is lined on the walls like you could walk into the van and pick out titles to buy and they were like unit they weren't like the dick studio stuff. It was all the indie stuff. And we would buy a boat like, oh, that that cover looks good, right? Let's put it on the shelf. And that's what we'd rent. And you could, it was just a, it was a gold rush. It was a gold rush and DVD. And I think that's the whole, I think Hollywood basically leaned on that DVD market so much and VHS market, it was their entire business model. Yeah,

Jeff Deverett 20:20
we came the primary revenue source for sure. For many, many years. And, and for good reason, you know, people had fun, like, it was an event to go to a blockbuster store, you know, you go there, and you'd walk around and look at all the different titles. And you never heard of any of this stuff, like you said, but but it was fun to do it. I enjoyed doing that.

Alex Ferrari 20:36
Yeah, it was a lot. It was a it was a different time, it was a different time. So Alright, so you're now in distribution, and you obviously are handing out deals left and right. And you're talking to independent filmmakers, you're talking to content creators. And when you were in the sales side of things, you know, when we spoke earlier, you know, you just like well, Alex, you know, I didn't knowingly try to screw over filmmakers. That was just the way the system is kind of set up. Can you elaborate on that? A little bit? Yeah, for sure. Yeah.

Jeff Deverett 21:08
I mean, here I am. I, you know, I'm 26 I get hired by a big large media company to go into their entertainment department. And, you know, what do I know, I'm, you know, I'm fresh out of law school and new to the whole industry and every like that, and they said, Here's how it works. You know, I'm not taking, you know, like, I'm not trying to make excuses or anything, but like, you got to learn, right? Here's how it works. Here's how the distribution business works. Here's how the deals are done. Here's how. And I was a sponge. I just absorbed it all. And I went with the flow because I was working for them. And this is what you do. And this is how, you know you're learning. Right?

Alex Ferrari 21:43
And by the way, to your defense. That's this just as the system back then and the 80s in the night like that. There was no options. And everybody did business this way. There wasn't like there was no self distribution was no, there was no there's nothing. There's no such thing.

Jeff Deverett 21:58
Yeah. Yeah. So this, this is how it was done. Yeah. So. So I said, Okay, I can do this. I mean, I'm learning and you know, I'm trying my best and being diligent and going with the flow and everything like that. So it wasn't literally until 2004 when I decided to make my first feature film, that I really understood what was going on. So I'm not an evil guy didn't want to screw anybody or give bad deals aren't like that. That was the business. And then when I realized that I'm on going to be on the other side of this equation, right? All of a sudden, the light turned on and said, Hey, wait a second. This kind of doesn't make sense. You know, and for all the people, you know, who are maybe listening who did a deal with me in the early years, I'm sorry, if I gave you this episode, your penance? I didn't know any better Honest to God, I didn't

Alex Ferrari 22:50
know and look and to be and to be fair, to you, Jeff, like again, in that time period, it that's all there was, there was just no, there was just there was no other options. And everybody was given the same deals, which were horrible deals, or many times, because if you didn't like it, you just go like, Don't take it and go somewhere else. But the other person that they'll give you the same deal. So there weren't a lot of options for filmmakers. But there were obviously some makers, some filmmakers, were making money. Obviously, somebody was making money somewhere, because it's not all one and one and done. So was it because they structured deals differently? Maybe they had, how does that work?

Jeff Deverett 23:26
That's exactly it. Here's the thing is the distributors aren't evil. They're just business people, they're business people in a business that's designed to be skewed in their favor. That's all that's all it is. But they're not bad people. Some of them are bad people, but they're not bad people. You know, the deals are bad. That that's the problem. You know, think about like, a film is a major major thing in somebody's life in a filmmakers life. It's it's as big as and I shouldn't compare it to this, but it's almost as big as having a child. You put your heart and soul into this, you put all your financial wherewithal into it. You spend months and years I mean, it's a big big deal. And you know, it can change your life or it could you could go broke, you can make a you know, do well. I mean, it's a big, big deal to make a movie. All right. So if you like that other it's a major asset also. Now think about that biggest asset in most people's lives is if they buy a home. Now think about this. Okay, I was I was thinking about our discussion we're going to have today and I want to compare it to home buying, like when you buy your first home, you're a little naive, your little green around the ears and everything like that, but but you're still smart enough to know that they put a list price up and you can negotiate it. You don't necessarily have to pay the list price. They say this is what we're asking. But you know, make us an offer. And you know, so you it's negotiable. Right? Now when you go to that's buying on the selling side, when you go to sell your House, like, you know, the agent says, Okay, I want a 6% commission and you say, Well, wait a second, why can't we do it at a 4%? commission? You know, it's it's fair game to ask those questions. Because there's a lot of money at stake. And this is your major acid in your life. And you know, like, you get one shot to do it. And hey, like, he had a lowball offer, you say, you know, thanks a lot. But I want you right back at a higher price. This is regular standard operating procedure in real estate for a major asset like a house. Why isn't that the case? With indie films? Why does a filmmaker basically walk into a distributor and they put a deal in front of them, and they kind of think, Oh, this is what I have to live with. And the and and here's the reason is, because they don't know any better, they don't know that they can actually negotiate it, they don't know that they can push it, they don't know, they sort of don't know, the right questions to ask and know where the give the give and take points are. And you know, like, it doesn't hurt to ask, I'm not saying you're necessarily going to get it. But the reason the deals are primarily bad in, in the film business is because one side, one party to the deal doesn't know as much as the other party. ie the filmmaker just does not come armed with enough knowledge and experience as the distributor does. So they're always going to, I'm not gonna use the word bully, but they're going to negotiate a better deal for themselves, because the other party doesn't really know how to negotiate that deal. And that's why that's why a lot of indie filmmakers get screwed not because a distributor they're in business to make money. They're business people, right. And if they can do a better deal for themselves, then you know, fair's fair, that's, that's their business. Now, they know darn well, that the other guy on the other side of the table is really not suited to negotiate that deal. And, by the way, a lot of the lawyers that that in, right, don't make bring in, they also don't know what they're doing. I've seen so many lawyers screw this up, because, you know, they're there. They're a real estate lawyer, or their family law lawyers, something like that, you know, they're not specialists in this area. So it's not like, like, you know, something you talk about in your book, and on some of your podcasts, he's talked about, like the 15 year term, like that is ludicrous, 15 year terms, but if you're a distributor, hey, why not ask for 25 year terms, like, hey, they're long, you can get your distributor, take what you can get, right. But, you know, on the filmmaker side of the piton, like, it's giving a 15 year term without, you know, outs like performance, you know, guarantees and stuff like that. But for a lawyer to not question that. I mean, like, Saturday? Well, the reason they wouldn't is because they don't know, they think okay, maybe you know, these guys have been in business a long time. They're big, legitimate company, maybe that's the standard procedure.

Alex Ferrari 27:51
So that's also, I want to stop you there for a second so that the big distributor, okay, so there's, and again, we're not talking Warner Brothers universal, we're not talking. We're not talking to majors, we're talking, talking, not talking about studios, we're not talking, that's a different conversation. All right. Independent, independent companies, there are a handful out there who have a lot of perceived value based on their name, that they're big, that they're kind of everywhere, that they're releasing movies all the time. And they've positioned themselves in the in the filmmaking space, and the independent filmmaking space, as a, as a player in the end as far as getting films out there. And there's this kind of almost honor associated with being a part of their library, to say, Hey, I got released by these guys. I'm not going to get paid. But I could say that I got released by these guys. And like, what are their business? Does that make sense?

Jeff Deverett 28:51
Hold on, hold on, let me defend them for a second. Let me defend them. First of all, they know what they're doing. I mean, most distributors, they're in the business, they know how to sell, they know where that they know, they know how to do the deals in the international marketplace. That's what they do day in, day out. So you know, and they, a lot of them are good at doing it. Right? The problem is the deal. It's not necessarily okay. There are some times when a distributor will take on your movie and not do anything with it. You know, but that's not there. But they're not interested in that they don't want to waste their own time and money. They generally want to take on stuff that they believe they can do stuff with which we'll get into in a second. Okay. But the problem is the deal that just the deal skewed more in their favor. But like if you you know, the distributor generally wants to do a good job because the, the better the job they do, the more money they make, like the more revenue they can generate, because they're generally working on a percentage, the more money they can make, so they're not in the business to screw filmmakers. That just happens organically because the deals are set up the wrong way. I will do

Alex Ferrari 30:00
a second I can't we just stop there for a second. I just we have to, we have to rewind that I need to, I need to focus on this a little bit. It's not that distributor screw for this. I'm gonna put this on a T shirt. And then I start the film distributors wanted screw filmmakers it just happens organically that should be a T shirt, I want you to put it in my store and sell it. That is brilliant. Can you imagine walking? Can you imagine walking AFM with that shirt? Everybody would say Where can I get one of those? Awesome? Well, nowadays, absolutely. We'll be right back after a word from our sponsor. And now back to the show.

Jeff Deverett 30:47
Okay, but the reason is, is because the filmmaker has not done a good deal for themselves. That's the reason it's not that the distributor did their job, they did a good deal for themselves. The filmmaker just didn't know better.

Alex Ferrari 30:58
It's okay. So So you were saying that they they are in the business to make money? And that's no question. And they are in the business to acquire films that can generate them revenue, no question. But a lot of times, it's you know, there's certain distributors out there that release 40 5060 movies a month, they're obviously not spending marketing money on all those films, they're obviously not spending, they don't have the manpower to, to focus their energy on on per film situations. Like there's like look a 24, which is you know, basically the Sundance of independence and distribution. Like, they pick 1112 movies a year. That's it. And, and neon, another one, like these kind of, you know, vertical, there's a handful these guys that just pick, they're, they're very selective with the kind of films that they pick out and base and they actually give it love and they actually push it and they actually like put the whole company behind it. But some of these shops they're just spitting out movies so off so much as a volume play, which is like acquire as many films as I can, it's and put them all into my library, and then try to sell them off to a streaming platform as a package deal. Were so there they just acquire acquire, acquire acquire for as long as I can keep them on the books, which makes me look better because my library is bigger and I look more attractive to to the new streaming platforms or or cable stations or whatever areas, but that necessarily means that they're going to do anything for them. So the value a lot of times and please correct me if I'm wrong. A lot of times the value is in the number of films that are halfway decent because there's a there's distributions that the distributors that will take anything, anything yeah, anything adjust to fill up their their library and sell sell like 20 crappy horror movies as a package deal to, you know, South Korea, and and they make three grand off that and that in the filmmakers will never make any, any money. So that, but if they try to sell that one film out of that 20 they'll never make it. Does that make sense? Am I wrong? All

Jeff Deverett 33:00
right. You're partially right person, right? I'm going to defend their honor. Okay. But that's fine. Okay, so here's the thing. They Yeah, there are there are companies that do that, and that's their business model. But you're the filmmaker, you own the movie, it's your responsibility to make the right deal for you. It's they're not forcing you into anything. You're walking in their front door, you're saying, hey, let me interview you. Let's see if you're the right fit for this movie. And now let's see if we can make the right deal. The problem is the deals are bad. That's the problem. So I'd like to talk spend a little bit of time talking about that, if you don't mind, please. So these are not evil distributors, because what you just described, the all you have to do is ask all you have to do if you need to know the asset. Like if you don't want to be put in a package with 20 other films for that month, you need to say, Hey, guys, how many films you you know, do you acquire a month or release a month? And, you know, do you package these things? But you got to ask those questions like you would in any business. So fears fear, if you ask the questions. Now, if they lie to you, they're bad people. Okay. But chances are, nobody's asked the question. So they're not even lying. They're not offering that information up there. That, you know, they might be omitting it. But But you didn't ask. So you got to ask the right questions. Alright, let me give you let me tell you what happens is, this is what I I've taken some filmmakers to these kind of meetings. I mean, I generally do it from my own meetings. But this is my favorite kind of distribution meeting. And some of it is me messing around and just having fun. So I go to a distributor. And for those distributors who are listening to this, some of you actually may have been in these meetings with me where I've done this Okay, so the first thing I say is guys, the reason I'm here is because this is a third party independent distributor if I want to if I'm looking for a deal for one of my movies, right, okay. I generally self distribute now, but did you know sometimes you know, there are situations where I'll still do that for foreign or something like that. So, first thing is guys, are you guys good at what you do? The answer is I'm going to paraphrase I get I'm just going to go quickly. You know? Hey, how you doing? Are you guys good at what you do? Jeff? We are the best in the business. Okay, we are the the one thing that you can be sure that it will be consistent with every single Film Company distribution company go to they were all tell you were the best in the business. Sure if they say they're the best, but we are the best, obviously, obviously. Okay, that's wonderful. I want to be dealing with the best. So I'm at the best. That's fantastic. Okay. Now, you've watched my movie, hopefully or the trailer or something like that, at least maybe. Is this a good fit for? You know, Jeff, we wouldn't be talking you wouldn't be sitting there right now if this wasn't the right fit for us. Okay. So you're the best and my movie can fit into your plan into your, you know, offerings. Yeah. Okay. All right. Okay, so we're through that. Let's, let's get to the next thing. Alright. Guys, give me just sort of an idea, an estimate as to what you'll sell, what's the gross revenue? And this is obviously way more detailed conversation because we're talking you know, different windows and television, you know, Home Entertainment, you know, digital, obviously, all this kind of stuff. Just over the next say, year when you release this movie. What give me a ballpark figure. And this is, you know, this is what distribution companies do and projections. Yeah, give me projections. What do you think it'll do? This is always the first answer. Well, Jeff, you know, it's hard to it's hard to say for sure. We it's we don't know for sure. It's

Alex Ferrari 36:34
the marketplace is changing.

Jeff Deverett 36:36
Yeah, the marketplace. Exactly. All that stuff. I say okay, guys. You just told me you're the best at the business. Oh, by the way, the other thing is, like, you've really how long you've been in business? Oh, 1215 years? How many films are released? 500. And how many of you made money with 490? Oh, so you guys really know what you're doing? You really, really know what you're doing? Okay. Give me a forecast. Well, we can't really give you a forecast. Because we're not sure what's going to happen. Why didn't you just say you, you released 500 films and you made money with 490? You must kind of know that you're the best in the business, you must be able to give me a forecast. Otherwise, how would you be in business? And how would you be so successful? Okay, you're right. Here's the forecast. We're gonna do, and I'm just gonna make up a number here. We're gonna do $2 million in sales in the first year after release this and here's how it works. ba ba, ba, ba Ba, it's a ballpark. They always say, you know, what you have, we're actually probably going to do 4 million, but we need to be conservative. Always say that. Yeah. You know, because we were probably going to double what we say but

Alex Ferrari 37:37
at least at least, but let's say we're going to do two, and occasional. And occasionally they'll go and there was another film that we had that was just like yours that did 5 million, but I don't want to get you excited. I don't want to get too hyped up. I

Jeff Deverett 37:48
don't want to get too excited. I don't want to get too excited. Okay. Okay. So I say, okay, so you're pretty confident about that. And you kind of just whispered in my ear that you're going to do 4 million, so 2 million is pretty conservative. Right? Can I like, can we use that as the number? Yep. Okay, now you're gonna and now we're going to just talk about which we can get into details about this later, Alex, but the terms and the conditions, but ultimately, how much of that money am I going to see? Well, you know, Jeff, we're not sure. Okay, till I get, let's get through here that you're the best. Okay, you're between your costs, your fees sub distribution, this that, that it added up? Do you think it's fair to say I'm going to get 50% of that money? Yeah, 50%, you should get a lot more, you should probably get to 60 65%. But let's go with 50 just to be on the safe side, just so we don't set your expectation. Okay, so let's just do some simple math. So you said you're going to do conservatively $2 million in sales, and I'm going to get 50% that would be a million dollars. Correct? Right. Okay. Guys, I have an idea. How about a minimum guarantee? Because you guys, you know, you're really you're the best in the business. You've had all this experience. You've just given me a conservative estimate. What about a minimum guarantee? What about giving me a minimum guarantee? Well, you know, Jeff, we don't do that. We don't give minimum guarantees. I say like, Well, why wouldn't you like you just lowball me and your sales figures. You lowball me and my percentage. You have You're the best in the business and everything and you and you're you've released all these films that are similar, like you must be pretty confident. They said Well, what I mean you know, what would you want? And I said, I got an idea. How about this? You told me 2 million in sales, which is really 4 million. You told me 50% which is really 60% so we're down to a million. I got this like great, crazy idea just just to be super conservative like you guys. Give me half just half of what you think you are going to give me so you are going to return a million dollars to me, give me 500,000 upfront guarantee, which is half Jeff, are you what are your mind half of what We guys, why would I be out of my mind? Aren't you the guys who just told me that it should be a walk in the park slam dunk to do that? I'm looking for half of it. If I was my mind, I'd ask you for all of it. But I just want half of it. Well, you know, we can't do that. And I say, Why can't you do that? Well, what if we don't sell it? If you don't sell it, you know, then then you're not so good. Well, what if our numbers are wrong? Well, you but you do that the best. Your numbers are right. So okay, so that's the game that gets played

Alex Ferrari 40:30
now. Oh, my God, this is I've heard that I've been in those meetings. I've been in those meetings. It's fantastic. I was gonna say, hey, just give me 10% give me 100 grand. They're asked what a puckered either way, it doesn't matter if, if you want to say give me 10 grand, they're asking to puckered.

Jeff Deverett 40:44
Okay, so now Now I'm going to tell you Okay, so that's from the filmmakers point of view, right. So there's a reasonable ask, but you know, it's a little bit irritating for for distributors to go through. But now I'm going to put myself on the distributor side of that equation, okay. And I'm going to tell you what's going through their heads, okay. Their heads are, as that conversation is going on. This is what's going processing through a smart, sophisticated distributor knows the business. They're saying, Do we really need this guy's film? Like, that's number one? Do we need this bullshit? Do we need to talk to this guy? Like, is he wasting our time? We're gonna have 19 other films this month? Do we need to go through this with this guy? Like, how important is this movie? So let's say if it's not important, it's over. At that point, they don't need the hassle. They don't need to negotiate. It's over. But let's say, hey, the guy's got a pretty good movie, we could probably make some serious money off of it. Let's keep this conversation going. So so let's get past that. Okay. So then the second thing they're thinking is okay, the guy's asking some of the right questions, and he's being a bit cocky. And he's, you know, trying to move the needle here and there. But how much does he really no, like, we could put this guy into play, and we'll, we'll screw him royally, like I will. And I gotta tell you how that works afterwards. Okay. Do we really want to put them into play? If we do, we'll take his film. We'll give him we're not giving him half a million dollar guarantee, even though we love the film, and we really gonna make a lot of money with it. You know, we'll be able to I can read in his eyes will lowball this guy. It's a poker game, Alex. That's all it is. It's just a poker game. Sure. I'm going to call the guy's bluff. I'm going to I'm going to call not going to go all in. But so you know, we'll put 200,000 on the table. And he'll bite because he's anxious. And we'll get him back. At the end of the day, it's all going to come you'll

Alex Ferrari 42:30
never see that he'll never see another dime. Other Penny anyway. So what the heck, right? Let's just do that. And we know for sure. And we have a really, as a distributor, I'm like, we know this is already pre sold, we can go to this guy for 50,000. We can go that guy for 150,000 and go to that guy for another 2x. So we'll cover our will cover are not automatically so there's no good. There's no way a distributor is going to put money down unless they have an absolute 99.9% guarantee that they're going to get that money recouped. Is that fair?

Jeff Deverett 42:59
No, that's not fair. I mean, they'll they'll take a little bit of risk, but no, maybe 25% risk. Next up 99.9. Okay, all right.

Alex Ferrari 43:08
And most these days, it has to be a really it these days, they don't generally anyway, because it's just

Jeff Deverett 43:16
if they're if they're in love with your movie, and they think they can hit you know, make some serious money with it, you know, a little bit of it not not a ton. Not a ton. Maybe 20% at the most I don't know, you know, it's hard to pick that number. Everybody's different. Okay, but yeah, but they're not taking 100% risk, obviously, they know already, that they have some output deals that they have some you know, like, like you say preset, you know, revenue stream revenue. Yeah,

Alex Ferrari 43:39
they have relationships that they could call a bob over in Germany and Bob's gonna buy. Pretty cool.

Jeff Deverett 43:45
Yeah, yeah. So after you leave that meeting, they're going to make some phone calls, make sure that they're good to go. And, and then they're going to give you your money. But the other thing they know is that they're in first position on everything. So even if disaster strikes, it's gonna be pretty difficult for them to lose that money, because they've been so conservative with you. And I can do the math with you like,

Alex Ferrari 44:06
so. Can you stop one second, I just want to I want everyone to listen to this really quickly. You said something I want to just focus on for a second, you said that they're not going to take 100% of the risk. But the filmmaker is taking 100% risk signing with them, because they're not in control. Is that a fair statement?

Jeff Deverett 44:25
Oh, that that. Okay. That's the bottom line right there. Here's the thing. Here's how this works. Okay? a filmmaker, if you don't do pre sales, which we'll talk about afterwards, okay. You are by making a movie you're taking 100% risk was the entire budget because you don't know for sure you're gonna make any sales, you assume you are, you assume there's going to be an audience and you assume you're gonna get some revenue. But because you don't have anything pre sold, like, you know, pre negotiated, it's not a sure thing. So it's 100% risk that a filmmaker takes. Alright, we'll talk like I say we'll talk about how to mitigate that risk. I mean, there's obviously tax credits, and there's increased pre sales and revenue, okay? But without any of that stuff, you're taking 100% of the risk. Now you walk in the door of a distributor, and they say, we love this. Or let's say they see what I'm at a film festival, they watch it, and they say, we need this movie. Some of them will say, Hey, you know, let's just buy this movie outright and cover the guy like filmmaker, this happens still. tremely rarely,

Alex Ferrari 45:29
but it does happen.

Jeff Deverett 45:30
Yeah, they say, you know, what, we know darn well, because like everything we went through, we're the best we've experienced, we've done this Saturday, let's, let's pick up this movie. And we're going to need to take some risk, because if we don't, the next person is going to pick up this movie, because it's so good. And, you know, if we take some risk, we can hopefully make a lot of money with it. So they will take some risk, you know, for something that they're in love with, and they really believe in. It's generally not 100% a risk is not as much risk as the filmmaker took for using for indie films. But it could be, it could be more than that. You could make a film for you know, $2 million, they could pay it up for $4 million. And that, you know, that's obviously the anomaly and the filmmakers dream doesn't happen too often. Right. But you know, it could, alright, so that for the most part, they might be taking maximum 50% of the risk, you know, like picking up a $2 million film for for 1 million me, but

Alex Ferrari 46:24
and again, we're talking anomalies. We're talking about outliers.

Jeff Deverett 46:28
Yeah, outliers, I would say on average, you know, it's 10 1010. No,

Alex Ferrari 46:33
like, no 10 films a year 15. a year out of the out of like, you know, I don't know, maybe more than that. But at Sundance, and which is where something like that would happen or at South by or Toronto. That's rare. It's still rare, especially in today's world.

Jeff Deverett 46:47
Yes, it is. It is rare, it's gotten getting more rare. And there's, there's reasons for that, which, which I'd like to talk about also afterwards. So there's believe that's happening. Okay, but Okay, so you're right, so so they're not in the business of taking a lot of risk, unless they're really, really, really in love with the movie. And it's something about is super special, and they think they can make a ton of money with it. And now, it's not even that risky, because they kind of can make those phone calls quickly and say, Hey, or they have output deals, or they have something where they know that they can recoup some of that investment.

Alex Ferrari 47:20
Alright, so you were saying Okay, so now, so let's go back to where you were talking about as far as the deal was concerned. So from the distributors point of view. So now let's say we got the filmmaker on the hook. Okay, we got their film. Let's say that they barely covered the MG. And again, the MG is a rarity anyway, but let's say that they cover the MG. And that that's topped out, there's there's very little bit money, or they make maybe a little bit more money off the MG. How does the distributor in their mindset? Well, let's just ask the question, how are they going to get screwed? How are the filmmaker is going to get screwed in the deal? Like, what are those kind of little things? Now? I

Jeff Deverett 47:57
don't know if I've listened to quite a few of your podcasts. But I haven't heard this one yet. And I don't know if this is gonna be super boring. Do you mind if we little do a little bit of mathematics? Because

Alex Ferrari 48:07
I think everyone listening would like to do some mathematics.

Jeff Deverett 48:11
Explain how the math works. All right. Yeah. Here's our words. So, so let's just use Let's lose them a million dollar film. Let's do let's do a half a million dollar film. Okay. All right, just so we have round numbers, all right. And then of course, you know, we could extrapolate higher, lower or higher, okay, but let's just just so that we can throw some numbers around. All right. Okay, so you make a movie for a half a million dollars, that's your final cost everything in everything. All right. That's what you're on the hook for. Okay. Now, let's say that a, you give it to a distributor, and they go out and they generate a half a million dollars worth of revenue for the movie, okay? Now, that's what we call gross revenue. It's its raw, basic revenue that comes from the the customers that they're dealing with the the original customers, the people, the consumers. Alright, so in the case of, say, a theatrical release a consumer is, you know, a box, a person who goes and buys a ticket at the box office, that's a consumer. So when somebody spends, you know, $12 to go to a movie, or $15 that's considered gross revenue. $15 All right. Now, how much of that flows back to the filmmaker? So here's how the math works. All right. So put all that gross revenue into the so that would be like, let me give you some examples of gross revenue going to like what I just said go into the box office spending $15 on a movie ticket. Okay, going on to a streaming service renting for 499 That's great. That's $5 gross rental. Okay. In on the on the that's that's consumer on the buying a DVD 1099 or whatever. Okay? on the business side would be, you know, selling to a broad broadcast sale, you know, $50,000 or $100,000. For so this is all goes into the gross revenue pool. This is how much money was spent to buy consumers who are consuming that film. In the case of a television station, they're putting it up, obviously, on their station, and there's paying a license fee. Okay, so it's $500,000. So you, so a naive filmmaker will say, Well, I made my film for 500, and people spent 500. So therefore, it should be breakeven. Ah, there's obviously, yeah. Okay, so let's get down to the next level. All right, most of the distribution deals that you're going to do with a third party distributor, do not happen directly. So they'll go even the good, the really good companies will have half their, let's say, I'm going to give them you know, probably more benefit than I should have for their deals, they'll do directly, let's say, say on television, half of this TV licence deals, they'll sell directly to that TV broadcaster, the other half, they'll sell through sub distributors, whether it could be like foreign sales where they don't talk the language, or you have to do by law, you have to deal with a local company like in Italy, or something like that, where they encourage you or France, if you want to do a deal. And again, I'm just making up territories, but there are sales where it's makes more sense, or it's more viable to put it through a local sub distributor or agent. So those people are going to take a part of the pie. Alright, I'll go through the pie in a second. Okay, then, let's say you go through an aggregator which you have to do to go on to Apple TV, let's say or even,

Alex Ferrari 51:42
and distributors still have to pay, just like a filmmaker would have to pay.

Jeff Deverett 51:47
That is correct. There's only so many access points. So so they have to pay that too. So that's like using a third party distributor. So there's going to be a fee there. Okay. So ultimately, what we have to get down to is what we call net revenue, which is let's take all those third party sub distribution aggregator fees and take the end and look at the box office. I mean, I don't do a lot of theatrical I did one year in the theatrical distribution business. And you know, they have these film settlements, obviously, for gigantic studio films are different. But for indie films, the the theater, basically, that theater slash distributor is going to take 50% of the box offices, if you're lucky, if that's all they take, plus, you know, all your costs that are coming up to, but you know, like the film receipts from theatrical distribution, you're only going to see maximum 50% of them, you know, for an indie film, a studio, like I say, has the clout, they'll they'll get better deals. All right. So at the end of the day, basically, that $500,000 is going to get diluted down to about 275,000, you're going to see about 55% of it, on average, because there's going to be 30% distribution fees in sub distributors and 25%, platform fees and aggregator fees, and net, this net that Nick came

Alex Ferrari 53:08
up, but you never even talked about marketing, or or, or delivery costs.

Jeff Deverett 53:13
I'm getting there at a time. One thing, I get all the math figured out. I did this for 20 years. Let's not rush.

Alex Ferrari 53:23
Forgive me, sir. Forgive me continue.

Jeff Deverett 53:25
Okay, so you're that gross revenue that consumers spent like that the initial $500,000 of money that was collected in the sales of your movie will get netted down to about $275,000. All right, which will be what the pool is that you're going to share from alright. And and it could be you know, 300,003 25 like I'm netting it down. 45%. You know, that might be maybe high.

Alex Ferrari 53:55
Might be low. It could be low, actually.

Jeff Deverett 53:57
Oh, it could be low. Okay. I think it's, it's in the ballpark. Okay, so now now the pool is what we call net revenue is 275,000. net receipts. 275,000. All right. So now the distributor is going to take your third party distributor is going to generally take a 30% fee. I mean, you know, you can maybe negotiate a better deal, but let's just go with that. All right. So they're going to go 30% Now, here's, here's the first screw point. All right. This is where you can get royally royally, royally screwed. If you don't make the right deal and make sure the wording is correct. That 30% is that 30% off of the gross revenue that was originally you know, sold, or is it 30% off the net revenue. Now, as basic as that sounds like it should be off the net revenue because the receipts coming back to the distributor are is the 275,000 but they might say no, no No, we're taking 30% off the gross of the 500,000. I mean, that's a gigantic difference, right? It's $150,000, you know, 30% of 50. So that so that that is in a torturous way that sometimes this happens. Okay, it shouldn't. And that that I would say is immoral. Okay, it should off the 275. Right.

Alex Ferrari 55:23
But again, it's not that they mean to screw you. It just happens organically?

Jeff Deverett 55:27
Well, it's a good deal. Of course, of course, you know, and if you don't ask for it, like, you know, if you say, Hey, guys, where's this coming? Where's your feet coming off of, then? You know,

Alex Ferrari 55:39
it's Look, it's as if it will continue after this. It's the same thing if you go buy a car at a car dealership, and don't ask the right questions. If they're gonna, they're gonna charge you, they're gonna charge you for upkeep, they're gonna charge you for a maintenance fees, and like, you know, upgrade packages and all that stuff. Unless you say, ask the right questions. Same thing with the house, like your example, if you don't ask the right things, if you don't get an inspection of the house. And if you don't know the know, to get an inspection on the house, you could be buying a lemon, you could be buy something with a cracked Foundation, and you could lose your entire investment, you need to ask the right questions. It's not just like a realtor, just like a car dealer. They're not going to offer it up. That's unfortunately, business.

Jeff Deverett 56:21
Okay. But hopefully, that's the major, the first the major hurdle is make sure that the distribution fee is coming off the net revenue, not the gross revenue. Now, they might say, hey, some of it has to come off gross, because we did the sale, you know, as opposed to a third part, like, third party fees coming who's covering them and all that kind of stuff. So yeah, I could go into a lot of detail. This is a whole obviously a whole area. Right? Okay. So the next thing is the marketing costs, which, you know, you just asked me about. So let's say, Now, here's the thing about marketing costs. Alex, this is the interesting thing, we're filmmakers, you have to really think about this, okay? You want your distributor to spend money, because you want them to market your film, you actually want to encourage them to spend money so that people, they can create awareness for your film, so that you can actually they can increase the sales, you don't want them to not spend a lot there. Now, but what you do want them to spend is it, you want it to spend it wisely on the right things, and you don't want them to mark it up too much. So here's a perfect example. Okay, if you, you know, they'll they'll want to cut a trailer for you, you make, they're gonna want to cut a trailer, they're gonna charge you, you know, 30 to $40,000 to cut a trailer that you probably could have either cut yourself or negotiated, you know, three to $5,000 to cut the trailer because you know, comfortable. Yeah, but that, you know, fair's fair, you want them to do it for you, they're gonna they're gonna spend a lot more money doing it, because that's what,

Alex Ferrari 57:50
by the way, but their cost is about $3,000 to hire the editor in that area, their in house editor. Look, I've been I was imposed for 25 years. So I know what I did many trailers. I know what the cost of a trailer is from I you know, and I know what high end trailer editors make. Even on the low end trailer editor, there's no way to 30 $40,000 it's

Jeff Deverett 58:10
just not it's just, it could be that they say we hired it out to a, you know, high end trailer company or, you know, they charge 20. And we're taking another 10 for managing it and blah, blah, blah. That's good management. Okay, but but that's how it works. Sure, sure. Okay. But you know, all you got to do to prevent that is say, you know, how much you're spending? Where's the money going? You got it, you got to ask those questions here. It's fair to ask those questions. If you don't, you might not catch any of that stuff. All right. Then there's delivery costs, which are, you know, used to be there was physical delivery, there's mostly digital delivery now, you know, like, so. But there's still there's costs Pete there's processing, there's queue, seeing, there's all this kind of stuff that it's real. These costs are very real. They, but they also can get very marked up. Well, you gotta you got to be paying attention to the costs. All right. Okay. And then there is, you know, stuff that I call miscellaneous and sillery stuff

Alex Ferrari 59:08
there. Forget the poster to the posters, always a nice little place to mark up things as well.

Jeff Deverett 59:12
Yeah, for sure. Okay, then there's, you know, festival fees and, and market fees and all this kind of stuff, which so this is a new thing that has happened in the last say, decade with distributors, I've noticed that they're charging a flat fee. Like, I'm going to take you to Cannes or AFM or something and I'm going to charge you 70 $500 flat. That's your your fee to, you know, be part of my offering at the market place. It's questionable to you know, I mean, look at look, there's no question. It's super expensive to attend these markets. In Defense of the distributors. The booths are ridiculously costly. You got all these people traveling and all this kind of stuff. But, you know, like you say, some people have 20 films, some have 10, whatever, and, you know, they make money that way. That's a very good source of revenue to cut. Their costs and potentially market up also. And again, they're not necessarily evil, it's a business model. That's who they are and what they do. So by the time you're all said and done, and you take away those distribution fees that are coming off of hopefully, the net revenues and not the gross revenues, and the marketing costs are, let's call them 10%, let's call the delivery costs like three and a half percent, the festival fees two and a half percent, blah, blah, blah, you are down to 46%, the net revenue, which is 9% of the gross revenue that was generated, you're down to the $500,000 that was generated for your movie, you're gonna get 45,000, when all said and done, and again, I'd be happy to send you the math and show you how that I mean, I'm looking at a spreadsheet as I'm talking. Sure, you're gonna get $45,000 if the movie generates a $500,000 movie to get generates 500,000, and receipts, gross receipts. Now, if the $500,000 budget generates a million dollars in gross receipts, I can do the numbers a little differently. But in order to break even probably on a $500,000, you have to the gross receipts have to be about 1.1 or 1.2 million to get back the entire 500,000.

Alex Ferrari 1:01:23
We'll be right back after a word from our sponsor. And now back to the show. So and, and my I love the numbers, I think the math is great. I think that you're being very optimistic in your projections in that there's not more costs involved as far as the

Jeff Deverett 1:01:49
revenue, but I'm talking about monitoring your costs. I mean, you look at you can say to a distributor, I want you to spend an extra $20,000, you know, on this market and buy some art, you know, some posters and some billboards and stuff, he's been billboards and all that kind of stuff, they may or may not do it, because that's a risk because they're putting that money up. But if, you know, if you're guaranteeing it, or they believe there's enough revenue or whatever, then they'll do it, but they'll deduct it, they'll charge you a little bit of a premium because you know, there's servicing and there is labor involved in doing all this kind of stuff. So you're right, they can spend a lot more I'm talking about monitoring it like saying, you know, reasonably speaking 10% you know, should should do it. But reasonably speaking,

Alex Ferrari 1:02:30
yeah, yeah. I mean, because I've seen I've seen breakdowns before on on some of these deals, and it just just like, it's it's abusive, it's abusive, it can it can get if you're not looking. It's like anything, man, if you're not watching the babysitter, with your baby. That's correct. Thanks. You know, all of a sudden, the baby's out in the street and get hit by a car. Like it there's, it happens if you're not keeping an eye on it all the time. Alright, so continue, continue,

Jeff Deverett 1:02:56
you got to pay attention. I mean, and, you know, like a lot of filmmakers, number one, don't know how to pay attention because they don't know what to ask. So fair, fair. And number two, it's kind of a pain in the neck to pay attention. Like it's it's a lot of attention. You know, I'm

Alex Ferrari 1:03:12
an artist, I don't want to think about

Jeff Deverett 1:03:14
exactly. You don't want to have to babysit this, like you're hiring a distributor to do a job, you want to trust them, they, you know, they're going to do a good job because they know what they're doing. You just want it to be fair, and honest. That's where you're this whole predatory distributor thing. Alex, you're talking about honesty, that's what you're really talking about, oh,

Alex Ferrari 1:03:32
it's a trust. It's absolute trust. But that's trust in any business deal, that when you sign an agreement with any kind of business across all industries, you're trusting the other person's going to do what they

Jeff Deverett 1:03:44
say. That's correct. Okay. And and and reported properly at the end. Now, this is assuming with the numbers I ran through that they all get reported properly. Oh, yeah. Some holes in the reporting to, obviously, thing so

Alex Ferrari 1:03:58
yeah. So so things can get a little gray in the sense of reporting, so they could, they could say, Oh, we got 500,000. And but we really only report back a little bit. And that's what's predatory. I'm not saying all distributors, and I've always been very clear about that saying, not all distributors are predatory. I just say most,

Jeff Deverett 1:04:16
but not all. But I think example I just gave you was like full reporting. Like, here's what really happened. This is how it all flowed blah, blah, blah. Okay. Yeah. You know, if somebody generated 500 in revenue, and only you know, showed 400 reports, you know, that that's a problem. That's illegal. Yeah. So that's very predatory. But I wasn't going there yet. Yeah, I mean, it happens. There's no question it happens. And you have to, you know, you also have to have recourse clauses in your contract, ie audit, yes, an arbitration. And I've gone down that route before and I found things and I could tell you stories. I don't want to implicate anybody, but it happens.

Alex Ferrari 1:04:56
So in my book, I actually learned my distribution book and residency entrepreneur. The distribution chapter. I used to have this the other day when we when we first start speaking here like Alex, you're you're absolutely right. Where you you get screwed by a distributor, you know that they're doing you try to audit them and they're like, no, then you sue them, you take them to court. And then at the end of this whole experience, they go, Oh are bad. Here's the money. Yeah, I made a mistake, I made a mistake.

Jeff Deverett 1:05:22
Sorry, you have a $50,000 legal fee that ate up your entire extra money that you found

Alex Ferrari 1:05:28
if and they know that and they know that and they know that. So they're like, Okay, well, let's like, let's, let's mitigate our risk here. So like, if we take 50 grand from this filmmaker, it's going to cost them 50 grand to fight us in court for it. So they're probably just gonna just not deal with us at that point, right? It's kind of like the olden days with the old car manufacturers. They're like, Oh, well, you know that one part is killing? How many people are going to die because of that part? And how much are we going to have to pay out and it's like, they didn't care about life. They were looking at it strictly as a business transaction. Like, well, if they kill only 1000 people, if those 1000 people sue us, how much can we have to spend? Oh, we'll have to spend 100 million. Well, how much will it cost to pull the things back off? What's going on? So 200 million? Oh, no. It just leave it out there. Okay. all due respect. You are a bit jaded. Oh, I'm absolutely jaded. Yeah, you're a bit jaded. And for good reason, for good reason. You've made me more jaded.

Jeff Deverett 1:06:23
Yeah. Fair enough. I'm not as jaded even though I deal with this. I'm, you know, in the weeds in the jungle every single day on this kind of stuff. I just feel comfortable knowing what to ask for know what to look for. So some of them in the sausage, but you know how to make a sauce Tell me, at least they're gonna say, Okay, this is where you're gonna get screwed. If you don't like it, don't sign the deal too bad. And you know,

Alex Ferrari 1:06:44
you're coming from it, you're coming from a perspective of knowledge, you're coming from the perspective of of experience, so you understand how the sausage is made? On the other side, the other side of the table. So it's a completely different perspective than 99.9% filmmakers have.

Jeff Deverett 1:07:04
I feel like I have a fair seat at the table. And I get to have a fair discussion. Right now. I don't necessarily, you know, get everything I asked for or, you know, and people say, if you don't like it too bad. That's that's the best we're offering it. But at least I feel like we've had a reasonable, fair discussion. And I have there's nothing that I haven't really thought up

Alex Ferrari 1:07:23
and have. And have you been sitting in those meetings with these distributors? And they just go? Yeah, yeah, we can't we can't work with you.

Jeff Deverett 1:07:29
Yeah, of course, absolutely. No, absent Listen, those, I just did the math, the major thing, the here's the major thing that like I would say, the highest priority in a film distribution agreement that you have to get, it would be what I call a performance clause. Like, you talk about these 15 year deals, I think that's not right. But a 15 year deals, not nuts, if they're performing. So what you really need is you need to say, you know, as long as you guys keep hitting these thresholds, these targets, and you're making this much money and returning it to me, then we can keep going. Or we can do auto renewals, like they know, let's do a three year deal with five auto renewals. Assuming you hit a target every year that we pre negotiate like here, you hit a million dollars this year, you know, 18, you know, 1.8 million next year that added and if you're hitting the targets, you want them? Absolutely, absolutely, that's the major, the major cause you want to put in is performance. Because if it's not working, primarily is not working for both sides. But if you don't put that you can't pull it. And it's an optional, like, I call these performance clauses, there are options that the filmmaker has. So you do this deal, let's say you do, say a three year deal, as opposed to a 15 year deal. And you say, okay, at the end of three years, or the end of two and a half years, if you have this much revenue generated and reported to me, and the check in hand, correct, then we you know, then the deal can automatically renew, if not, I have the option of pulling the D terminating the deal. Because, you know, you might want to get pretty close and you think they're doing good and you know, COVID heads and something changes and you know, you don't want it to automatically terminate. You give yourself an option. It's a reasonable thing to ask for.

Alex Ferrari 1:09:17
Do reasonable distributors generally say okay for that? I mean, why wouldn't a dish like if a distributor says no to that situation, to that op that that ask, shouldn't you just run away? Because obviously, you know,

Jeff Deverett 1:09:31
I'll tell you what, here's the thing. At the end of the day, the film business is a business like everything else. Alright. But let's just Can I just get down to sort of the core basic thing before I go to here when I go, okay, there's two reasons why an indie filmmaker should be an indie filmmaker. There are two reasons All right. Reason number one is because, well, there's actually three reasons one is, as you call it, you get the disease. You just get this the bug. bug is virus that you just need to do this in your life, you're not sure why but it's it's sexy, it's appealing, it's fun, it's a great industry, by the way, it's a lot of fun, enjoyed a lot project based, completely different changing all the time, very interactive, social, all there's so many elements of the film business that make it so attractive, right? So you get the bug, right. But the major reason you want to become an indie filmmaker and put yourself out there, and and kill yourself and put yourself at financial risk and do all this kind of stuff, is because you got a story to tell, like you generally want to tell the world a story, or you know, or case of a documentary send a very strong message that could potentially change the world, or become your legacy and you're making a contribution to the world. And you're doing it in a very fun art form that people can, can absorb and consume across the world. I mean, that's a very compelling reason to be a filmmaker is as it is to be an author, you know, or a musician. I mean, it's an artistic statement of a message. And so that's the main reason you should be a filmmaker. Alright? The second reason is, hopefully, you can make some money, like you can have a good life and making a good living from it. Alright, that's becoming you know, less and less as we know, it's more of a struggle to do that in the in the arts, all the arts, not just, you know, as you know, music, all this kind of stuff. So, but if you're going into the movie business, primarily, and only because you want to tell a story, and you're not worried about the money, then this is a whole different conversation. All right, that's an artistic conversation, and all we are going to talk about is how to best tell your story, at the most cost effective price. But if you're going in, because you actually want to hopefully, at least recoup your budget, or at least maybe make some money and make a living, you know, hopefully become rich, but but at least you know, have enough to make a living, then that's the discussion that I'm having here. All right, this is about, about making a lit becoming a career filmmaker and making a living at become at being a filmmaker, as opposed to just making a film and having your fun. And you know, whether it's a midlife crisis, something like that, and making this artistic statement for the world that you want to do, I'm talking about being a career filmmaker, where you make a living at it. So you have to be very smart. So you have to be in addition to a good artist who makes you know, good quality films, you have to be a savvy business person. Because it's the film business, the film is the art, the business is the business. So, so I'm talking about the whole business side. All right. So assuming that you want to monetize your movies and get your money back, you got to be pre thinking about a lot of this kind of stuff. All right, before you make your movies, as we know, as you talk about it a lot. And you know, you so when you said to me, you know, if a distributor says, Hey, I'm not interested in your movie or something like that, or I'm not going to give you the right deal. Do you walk away? It's a business decision. I mean, most people think that's an artistic decision. It's not artistic, the artistic decisions already been done, you've already made your movie. This is strictly a business decision. Right? Like I said, it's a poker game. Do you think you got a better hand? Do you think you're going to get a better card on the next you want to fold? Do you want to play, make the bed and try to get the next card? I mean, it's a business decision. So here's the thing about the business decision. I mean, you got it. Hopefully, hopefully, you're armed with all the right things in order to make a good decision. That's what I've been talking about. This whole podcast so far, is getting you up to the filmmakers, understanding the tools they need are the elements they have to understand in order to make the good decision. But sometimes it's a business decision is a risky decision, right? Like, show me a business where you make a decision, and it's not 100% Sure thing, there's always going to be an out like anything like, you know, I talk about real estate, like, you buy a house and you say, Hey, I'm buying the house for lifestyle, because I want to live there. But hopefully it's gonna appreciate in value. You don't know that, you know, you go through all the motions say, well, it's good neighborhood and good schools and good this and good that, in their opinion on the cost of living is going up. So therefore, in 10 years, my house will be worth this much. You don't know that for sure. You take a chance with that. You do know that you're buying a house that you can like to live in a that's the artistic there's,

Alex Ferrari 1:14:20
and there's value in there.

Jeff Deverett 1:14:21
Yeah, the emotional side. Absolutely. But the financial side, you taken a bit of a risk. So should you walk from a distribution to you should only walk if you believe that you're, you don't trust the person. It's a trust thing if you don't trust the other guy, walk, but if you believe that you're getting a little bit screwed on the deal. If you if it's still you've asked the right questions, and it's still within the range of reasonable might be the far end range, the very far end range. It might be worth taking that deal because remember, on their side, it's like okay, if the guy doesn't Take the deal. You know what, we got 50 other filmmakers lined up at the door? And do we really need this film is it going to really change our lives? Probably not. Because they're going to let you walk.

Alex Ferrari 1:15:11
So the with the analogy of the house, the big differences of taking a risk of the house is you do have an asset that can be sold regardless, there, that asset will be sold, maybe a little less before then you sold it maybe a little bit more, but you will make money back with a film. It could literally have zero value, like literally lose everything, like nobody will buy it. And there are films that are made like that all the time that are done, spent a million bucks on, and they make very, very little money with because of obvious reasons, artistic reasons, business decisions, and things like that. But I feel that if this is my just my personal opinion, if you let a performance clause out for a distributor, and it's a reasonable performance clause, whatever that performance causes, yes, it's reasonable. Yeah. And they say not we don't do that. That's a red flag to me. Now, mind you, if you have a three year deal, that's different. If it's a three year deal, it's a three year deal. I mean, performance clauses generally going to be a three year deal. It's not going to be a 12 month deal. Generally speaking with a performance Oh, no, no, not necessarily, nonetheless, sometimes. Alright, so Tommy?

Jeff Deverett 1:16:15
Well, first of all, let's just go to your first point. Not all houses appreciate in value. I mean, if you had a house and you know, that you bought in 2004 and tried to sell in 2008, you probably lost a lot of money

Alex Ferrari 1:16:25
a little bit, but there's still value, there's inherent value in the property,

Jeff Deverett 1:16:29
there's an asset value, there's no question. Okay? So if you're going to make a film that has no inherent asset value, maybe you only think twice before you make that film, just like you said, Okay, fair enough. Now, secondly, you're sitting in that meeting, and you got to know what the inherent value of that film is. That's why I say it's a business deal. It shouldn't be emotional, you got to think, okay, they're, they're talking, I believe in my heart of hearts, after all the discussions and negotiations, that they're going to return 80% of my budget to me, so I'm still probably going to be 20%. But is that better than the next deal I can get? Or can I even get another deal, that's where the business decision comes in. And that's where you have to take, be realistic and be a business person, and step up and act, step away from being that emotional filmmaker, and become just a business negotiator, this and that's why a lot of film makers use agents. That's why a lot of people in real estate use agents. I'm not that kind of guy, you see, like, I don't even like to use real estate, and I like to negotiate my own deals. I'm just my personality is like that. But I mean, a lot of people don't want it's emotional. So you don't want to have to go and fight that fight and, and maybe compromise more than you want to. And sometimes you walk away from what seems to be not a great deal, but it might be the only deal you can get. So even though you know, like I say you might lose 20% going into it and end up losing 40% that might be better than walking away from a deal not getting any other deal. But that's a business decision. Fair enough. And it's it's a tough decision. Yeah. All right.

Alex Ferrari 1:18:00
It's all relative. If there are other options, if you have other options, then and you want the deal doesn't make sense to you could walk, but if not, you're right, like if this is it, and you're not gonna be able to self distribute, and you don't have the knowledge or the experience or the movie or any of that stuff to do it. This might be it. And this is where I see that distributors take advantage of filmmakers, because they know that they don't have another option. And the filmmaker would just go well, alright, I just take this take it at least they'll get released. And that's, that's the big, that's the big default.

Jeff Deverett 1:18:34
Why do you say take advantage? I mean, look at it from the distributor point of view, like, you know, the film's good, but it's not great. You know, there's 10 other films that they can get, or that are equally as good. They don't need it. You know, in some ways, they're saying to themselves, hey, we'll do the guy a favor. He's a nice guy killed himself making the film, you know, and we could give this deal to somebody else, but we'll give it to him because he's so eager and anxious. And yeah, as you're going to make his money back, no, but you know, what, he should have done it before we made the film. Because, you know, we're, they're

Alex Ferrari 1:19:05
gonna make but the difference is, though, Jeff, they're gonna make money off that. So yeah, but and they're not going to share it with the filmmaker, that I promise you,

Jeff Deverett 1:19:14
I'm not going to totally screw the filmmaker, but based on their time and effort, and their opportunity cost, this is what it's all about, let's say, like you say, they, they're gonna release 10 films a month. So to get into their slate, like, you got to make sure they got to choose the best 10 that they're gonna make the most amount of money with. And if they're gonna stick this one in, its means that the other one didn't get in. So, so, you know, fair's fair, like they're trying to pick the best mix for their, you know, for their business that they can do. And that's in that scenario. I mean, it depends. It's all its own console relative because it all depends on the scenario that could be that distributed, releasing 50 or 60 movies, or it could be the distributors releasing two or three movies. So it's all relative to it's all good. You know, the thing that You you are dealing with and most of your materials, which is, you know, when you're talking about the predatory film distributor, by the way, which I don't disagree with, it all boils down to one word, but all of business boils down to one world word pretty well all relationships boil down to one word, it's called trust, that's all it is, is trust, really, when you're interviewing a film distributor, or anybody else, even the people on your crew, they're going to make your movies and stuff like that?

Alex Ferrari 1:20:24
Oh, absolutely, you're trusting the DP knows what they're talking about.

Jeff Deverett 1:20:27
That's literally and you're gonna pay them and you but you're trusting that you're going to get what you pay for. And you're trusting in a film distributor that you're going to get the relationship and the honesty that you're hoping for. And, you know, there's a lot of stuff that you can build into a contract to make them accountable, to be trustworthy. And that's what I'm talking about just accountability. Okay. Your once in a while, you're going to come across, you know, a bad apple, that's just the way it is. You know,

Alex Ferrari 1:20:54
but so when you say bad apple, I want to ask you this question, do you believe that there is a systemic problem ingrained in the model? Because there's a lot of kind of like, pump and dump kind of methods here, like, oh, we're gonna get the best deal possible, we really don't truly care about the other filmmaker on the other side of this table, because he's not asking the right questions. And by doing that, you basically, if you know, if you do if you as you're a distributor, you're doing that you've pretty much taken that filmmaker out of the equation for future product. So slow, but as an industry, shouldn't we try? I'm not saying to be Mother Teresa here. But to try to structure deals in a way that is somewhat reasonable, even if the filmmaker is not as wise as you are? Because I mean, there are companies out there that do that I know of them personally, that they kind of like, Look, you're not you're you don't know what's going on. But we're going to structure this deal. So you can make some money off of this. So you can come back to us in three or four years and keep bringing product to us. Is that Do you believe that there's an issue just as a general statement, with the distribution model since chaplains day for God's sake?

Jeff Deverett 1:22:08
Yeah. So here's you're making an assumption that I don't make. Okay. You can't assumption that the film business is production and distribution. And I say those are not one business. Those are two businesses. Correct. production is one business, film distribution is another business. So those two aren't necessarily woven together. So it's not like we get together as an industry because the producers are different than the distributors. So the distributors are going to have their ways and the producers will have their ways. So but you know, you want to talk about systemic problem. I'll tell you the systemic problem. You're gonna love hearing this, because it's true. And you darn well, no, this, this systemic problem is that filmmakers don't ever learn anything about business. They go to film school, and they all they learn about is, is production, camera, and lighting, and all this kind of stuff. Like where's the courses that teach all the stuff we're talking about? You know, why? And by the way, the filmmakers, as you know, they don't even want to talk about it. They're artists. And they're not, they're not business people, they just want to do their art, they want to make their movies and all this kind of stuff. And unfortunately, you don't have the luxury in this business of being the unless you have, like, should get yourself if you want to be the artist, get yourself a producing partner, who just wants to be the business person. You know, I liken it to I don't know, if you've watched, you know, used to watch the show with Silicon Valley.

Alex Ferrari 1:23:31
Oh, I saw that. I just, I just finished the season like, yes, literally last last night,

Jeff Deverett 1:23:34
I watched the last episode. Okay, so silicon is fantastic. You know, Richard is the, he's the Creator. And he surrounds himself with the business people. And you know, that's the way it works. And if you want to move forward, because you can't be everything you can try to be, but you're going to feel compromised. And most filmmakers just want to be the artists, which is fine. They got, they got to bring somebody close to them who can navigate the business side, or they got to navigate the business side. That's the systemic problem is that they're going to take be taken advantage of not only in that component, but maybe other components of their life, too. If they don't educate themselves take charge. Yeah. So I'm not blaming the distributors, I get it. You know, can they be a little less predatory and evil? Yeah, probably, they can probably, they could put

Alex Ferrari 1:24:23
up a ton, they could tone it back a bit, is what you're saying. They could tone it back a bit.

Jeff Deverett 1:24:26
They could put more on the table, they could be more honest. They could they can help people through it. Like I often say to people, you know, like I told you this, Alex, so I take a lot of interns on my SATs, right? Yeah. And I often say you can ask me anything you like and then they start asking me and I say no, no, so hold on a second. You're not asking me the right question guys. Don't ask me you know what lens to use on this you know, shot. That's easy. asked me how you going to do a distribution deal asked me what the rate should be what you present asked me those questions you have like you're sitting here with the You know, like the guy who knows that stuff, spend the time to ask me those questions like, but you know what they're not interested. Which leads me I told you a story the other day and you said you want me to tell? Yes, please tell it. Okay. So this is a perfect example of this whole systemic problem. And you know, for you filmmakers out there listening to this. So I decide I go to a lot of the markets because I self distribute.

So I was going to MIPCOM a couple years ago, which is the big sort of television broadcast market in Cannes, France. That happens twice. Yours is mythtv and MIPCOM. mipymes. Usually in the fall of obviously, this year is all messed up, because a COVID. But okay, so I'm going to MIPCOM and I say, I had done a film a couple years ago with this other guy, and he's a great guy, great filmmaker, director of the movie, blah, blah, blah. And I kept saying, you need to know about distribution, I don't, I'm not saying you need to do it, you need to know about it, you need, you need to just experience it, in order to become sort of a well rounded filmmaker. So at least when it's talked about, you have an awareness, I'm not asking you to switch gears and leave filmmaking and become a distributor, I'm just asking you to be exposed to it so that you can see it. I got this idea. Come with me to Cannes, France, we're going to the south of France, it's going to be a beautiful trip and everything like that. We're going to go to the market. I'm going to walk you through and I'm going to expose you to what really goes on in that side of the business. Well, what filmmaker wouldn't say yes to that. So you know, I mean, we're going to can, right? So we get there. And cannas MIPCOM is is from Monday to Thursday, every year, it's a four day market. So we get there Sunday night, we go to the opening party, all is good. He likes it now, lots of filmmakers running around lots of champagne and finding everything right. The next morning, we walk up to the palay. Some of you may have seen it's where the Cannes Film Festival takes place. The stairs, the whole conference center is decked out in billboards and graphics and everything. It's It's It's It's a heyday. It's a circus. It's amazing, right? And his draw drops, he looks at this, like we walk up to the front stairs of the palay. And he looks at up and he sees all these films and this and that. And it's like, oh my gosh, this is crazy. I had no idea that this actually happens, right? We walk into the Pele and for those of you who've been there, like the first floor, they call it the dungeon. It is just like booth after booth after booth there's no lights there. That's why there's no natural light, you're actually go downstairs. So I wanted to walk them through the entire market. And let them see experienced it literally floor by floor is like seven floors in the main bill, you know, like and, and all over the place. So So we start downstairs, so and you go literally, Alex, there's hundreds and booths on every floor, different countries, different styles of you know, you know, animation and live action and documentary and all this kind of stuff. And it's sort of organized, but it's sort of not. It's primarily usually by country, but, but it's all over the place. Anyways, you walk through and I'm explaining to you, okay, take a look like you know, you think that the movie you made was unique, you're gonna see 50 similar movies. You know, in the next 20 minutes, as you walk by, you know, you're gonna see 100 different styles of this and different languages now anyways, suffice it to say the first day, you know, we get there like 9am, when it opens, and we leave at six. And for the most part on the first day, all I did was we didn't do very few, very few meetings that day, it was primarily orientation, walking through explaining how the whole, you know, market works and showing them different stuff. So it was observation, and it's overwhelming. It's overwhelming, because there's so much product, and so many countries and so many cultures and people and everything. And it's it's like a bee's nest in there. It's just, you know, it's more so back then than it is now. But anyways, like we get we, at the end of the day, we go to have a beer, and I said what do you think he goes, I'm mentally exhausted. Like I there's so there was so much. You know, I saw so much going on. I'm literally I'm mentally exhausted. And I said, this is nothing wait till tomorrow. Anyway. Have a nice dinner. Okay, the next morning we get because the next morning Tuesday was all meetings, like back to I just because I missed Monday for the meetings, I just put everything back to back. And I do half hour meetings. And I did like I don't I had I'm probably 2022 meetings set up all back to back with a you know, one hour break for lunch so that you can take and literally like we're just going one after the other after the other different languages, different cultures, different people. But these are buyers more or less that I've either dealt with before or you know, or other distributors from different countries where I want to sell my stuff to them. You know any of you when you've done enough markets, you get to know some of the people and but you only have half an hour and sometimes it takes 10 minutes just to walk between a meeting so Do you really only have 20 minutes and everybody's always late. So that's five minutes of being lazy of 15 minutes, five minutes of pleasantries, you get down to business, you got 10 minutes to talk about what you really want to talk about if that. So you get into it, and it's like, just one after the other after the other. So at the end of day two, he says to me, Oh, my God, like, I thought I was exhausted yesterday. This is not like, not only am I mentally and physically exhausted, now, you know, the pace at which we did that. But, you know, I got to tell you something, Jeff, like, it's not what I expected. Like, I thought it was gonna be a lot more fun. Like, this is not fun at all. This is not like filmmaking.

Alex Ferrari 1:30:44
We'll be right back after a word from our sponsor. And now back to the show.

Jeff Deverett 1:30:54
Anyways, by day three, this is a four day trip. By day three, we go back to the meeting to the market, and Wednesday, by lunchtime at one o'clock. He says, he says to me, I can't take it anymore. I'm done. I can't do this anymore. I'm done. Not only am I exhausted, but I hate the distribution business. I hate it. I hate the meetings. I hate the people. I hate talking about business. I hate negotiating deals. Everything about it is just not what the film business should be. And I said, this is the film business. This is the business part of the film business. This is it. Welcome to the real world. Welcome to what it's really all about.

Alex Ferrari 1:31:35
Your Morpheus. Basically, you just gave him the red pill.

Jeff Deverett 1:31:39
So I hate to disappoint you. But this is it. This is where when guys like you make movies, this is where they get bought and sold and paid for. Anyways, by the he didn't even make it through the the third day. And he went home a day early from Cannes, France, like who leaves Can I said just go walk around the city enjoy, go to the beach, just enjoy. He said I can't, I'm so turned off by this whole thing. I just want to get away from it. You probably went to nice for the day and whatever and flew home. So anyways, it's interesting that that is that's the business side of the business. And this is where filmmakers like they're just not interested in it. And I totally understand why remember, I came from the business side. So I'm so I'm just so comfortable in that. But it is a big turnoff. And if you if you're an artist, and you just want to make movies, it's a bit of a turnoff to have to deal with all the all the you know, innuendos of doing all these deals and all the details and it's exhausting. And it's it's not fun. It is really fun. And that's why filmmakers you know, rely on distributors to do that part of the business. But without that part there wouldn't be a film business. I mean that that's the business part. You know, I always say to young filmmakers, I always say hey, you know when you go to Universal Studios, so you pull up on Lankershim Boulevard, and everybody's so anxious, and their tongue is hanging out. Let's go to the backlog. Let's see where the movies you know, the tour the background and everything that I say, Do you guys ever stop and look like you pass by as you're driving into literally as you're driving into the parking lot of university students? This is big black building.

Alex Ferrari 1:33:13
Yes.

Jeff Deverett 1:33:15
NBC Universal, I said, Do you guys ever wonder what actually happened? Why there's that big office tower there? You ever wonder what happens in there? Oh, no, we don't pay attention to that. I said, that's, that's the heartbeat of what goes on. Were you going to see, that's where all the business decisions are made. That's where all the money is generated. That's all the distribution, and the finance and all those guys. I mean, I never make it past there. All my meetings are in that building, I never really get, you know, as a treat, you go on the lot. But that's the business. So anyways, I just maybe long, too long a story. No,

Alex Ferrari 1:33:46
no, but you make a very good point. And look, I've had I've had filmmakers fight me on the concept of being a film trip earner on the whole concept of my book, like, I don't want to know about how to create ancillary product lines, I don't want to create a business around my movie, I don't want to do any of that. I just want to be an artist. And I always tell them, I'm like, Look, you don't have to do what I'm talking about. It's not for everybody. But if you're an independent filmmaker, and you rely 110% on the only way you're going to generate revenue is through a distributor that you don't have a relationship with that you're just dating, basically, you're not married, you're dating, to see if they're going to do right by you. If you don't have something to mitigate the risk in in the way things are going your foolish purse, that's just my feeling as an independent filmmaker, as a if you're if you're a filmmaker who wants to kind of go out and you know, go down the studio path. Well, that's a different conversation, a completely different conversation. But as an independent filmmaker trying to sell a movie, you better understand how to make money with your movie. If not, you're not going to survive. Or at least surround yourself with the people or surround yourself.

Jeff Deverett 1:34:56
Yeah, yeah, you don't have to. I know that most filmmakers don't don't enjoy it and don't want to be part of that I get that I totally understand and, you know, not actually makes sense. I mean, you can't be you know, jack of all trades, you want to specialize in one thing. It just understand the landscape. That's all I'm saying. Just so you know what's going on in those conversations in those office towers while you're shooting on your set?

Alex Ferrari 1:35:19
Yeah, I mean, I think everybody if you live in LA, you should definitely go to AFM once in your life, just to walk the halls for a day a day pass.

Jeff Deverett 1:35:26
But, but can I warn everybody about that I want to go. Yes. AFM could be the most depressing thing you ever do in your life. It's true. Yeah. I mean, you need to understand how the FM is how it works, how it you know, operates. Because if you go there, number one, if you go there without a pass, just trying to navigate to getting into it is a difficult thing. And you know that you're going to get charged $300 for a day pass or whatever they charge 270 or maybe get a deal because you're where you can find something but just getting in is is a tricky thing. Because it's a business the it's a market, it cost them a lot of money to rent the Loews hotel and do all that kind of stuff. So, you know, fair's fair, right? But if you don't know how to walk the market properly, I mean, you can't walk in and say, Hey, guys, I'm a filmmaker, and I got a movie, they're not gonna even talk to you. That's, you know, don't waste my time we're selling movies, come back tomorrow, or actually, you know, just don't come at all. keepers who just their job is to keep guys like you out of their booths out of their hotel rooms. So it can be super super depressing if you've done it. And even just standing in the lobby, which they don't even let you do anymore. It used to be the lobby was open everybody now you need a pass to get in there. That can also be depressing because everybody excuse my expression is bullshitting each other and saying oh, I just got this deal. I got this deal but they didn't know we got the odd person got a deal but they're not standing in the library to I'm in the lobby talking about it. They did their you know, out at some fancy restaurant celebrating it or sitting in somebody's booth or something. So

Alex Ferrari 1:37:01
yeah, I've spoken to about the FM ad nauseum on this podcast. So I'll put links to the AFM episodes that really go deep into how to actually work at work that market but I think it is important that they should go to a market. If you're in Europe, absolutely. You should go to the Cannes Film market, or MIPCOM or something like that, just to at least walk it so you understand how things are done. Like I brought filmmakers with me at AFM and they just walk around like, it's like eyes, like they just don't understand. It's like this overwhelming thing.

Jeff Deverett 1:37:33
It's just like I explained to you with MIPCOM. Anyway, assuming everybody knows AFM stands for American film market. I see.

Alex Ferrari 1:37:40
I'm assuming they do. But it will be in the show notes. Now I wanted to touch upon one of the main reasons you reached out to me as you read my book, Rise of the film shoprunner. And was talking to me about niche filmmaking and how you build ancillary product lines and how you all the stuff that I talked about. And it basically, as you turned into a filmmaker once you left the dark side, sorry. Once you left the dark side, and you came over to be a Jedi, or at least a Padawan. At least you came over. You started to I am your father. Exactly. So once you left the distribution side and you came over to be a filmmaker, you brought a lot of that business savvy with you. And you said, Well, if I'm going to be a filmmaker, I'm going to be a successful filmmaker, and you had business ingrained in the system that you were going to build for yourself as a a career filmmaker, as you call it, someone who's actually making a living, being a filmmaker. And in my book, you start talking, you start talking about Yeah, I do that I do that I do that I do that. I'm like, Well, basically, you're kind of like the definition of a film entrepreneur. He's like you said, Absolutely. So I want you to discuss the kinds of films you make. And specifically the power of the niche, which is something I yell and scream from the top of my, my platform. To understand that you have to understand a niche you have to understand an audience and how to build product for that audience or tell a story that's going to work with that audience or reach that audience.

Jeff Deverett 1:39:14
Can you talk a little bit about that? Yes, absolutely. Okay, first of all, if you don't mind having grown up in Canada and being bilingual for the first part of my life and speaking French we use that word the way niches we call it niche.

Alex Ferrari 1:39:29
Yeah, no, but it does. The niches are in the riches are in the niches sounds so much better than niche. So it's nation niche Potato Potato, it's up to you.

Jeff Deverett 1:39:38
It is a French derivation. I hit it you know, it is coming from I come from that that's the word we get anyways, whatever. Okay, so I have decided, as a filmmaker, that for two reasons I I'm going to specialize in family feature films, and primarily within that little like the family market which is like I do defined family now as all audience viewing meaning you can any age can watch it and enjoy it. That to me is what a family film is. So you know, people use different terminology, but it means all audiences can watch it, whether you're, you know, five years old or 80 years old, you can watch it with your grandmother and enjoy it. So within that I primarily focus on sports dramas, because I like inspirational sports stories. And within that I like to do true stories. So

Alex Ferrari 1:40:30
you're like niche of a niche of a niche or a niche of a niche of a niche.

Jeff Deverett 1:40:35
So now there's two reasons I'm a niche of a niche of a niche. One is I very much personally like those kind of stories. Like I love that like my one of my favorite movies is Rudy the

Alex Ferrari 1:40:46
read my mind, I was about to say, Rudy, when you started that sentence, it says, like,

Jeff Deverett 1:40:49
I consider that one of the best movies period, if not sports movies, for sure, but movies. It's, it's based on a true story. It's got so much heart, it's done. So well. The filmmaker captured everything. I really loved that movie. I said, I just like those. I'm a sucker for sports dramas, true stories that are super inspirational about people who just had so much heart and just wanted to follow it don't even have to win or lose. I don't care about whether they win or not. I just I love stories that I've heard of them.

Alex Ferrari 1:41:19
Like, like miracle miracle will be one of those films. Yeah,

Jeff Deverett 1:41:22
yeah, miracle. But you know, yeah, miracles are a little bit different than Rudy. I mean,

Alex Ferrari 1:41:26
a little No, no, Rudy, I'm bawling at the end of Rudy, I'm like, I'm just, I'm just, I'm a mess. I was, you know,

Jeff Deverett 1:41:33
he doesn't even get a chance to it gets one plate. Yeah, okay. So anyways, that's the main reason is because I personally like those kind of movies, I love those kind of stories. That's the main reason I do that. The second main reason very close very close. Second reason is, I know how to sell them. Like, I know there's a market for them. And I believe there always will be a market for them. Because there's families out there who always want to co view and sit down as a family and have family viewing night. So I believe that it's a good bet, that if I didn't believe that, by the way, I wouldn't make those movies because I wouldn't be able to, because if I don't sell them, I can't make more. So I think that that niche, I'm glad I enjoy that niche, because it's also a very marketable niche. And it's still a niche, you still got to find your audience. But you know, for the most part, you can be pretty sure that that families will watch movies together, or you know, their Cove you entertainment, you know, not all the time, obviously. But it's primarily when there's younger kids involved. So that's why I like it. Because when I go to markets, and I speak to my customers and stuff like that, they know that I'm going to deliver quality family films, and they know that's, there's not always a place for them always. But people generally will content as long as human beings, and families exist, they will watch movies together. That's my theory. And so far, it's been proven true. So I chose that niche to summarize for two reasons. I like that niche. I enjoy those kind of movies, and they're marketable. So that works for on both levels.

Alex Ferrari 1:43:10
Now, how do you reach the marketplace? And how do you sell these films?

Jeff Deverett 1:43:16
Okay, so this is an ever changing process. The film business, what did you say to them, the term you use the other day with me, it's, it's like, it's it changes like, weekly now home,

Alex Ferrari 1:43:30
just know when now it's almost literally daily, because of COVID. But it's changing so rapidly, the foundation underneath. I was saying I was saying that Rome is burning, I feel that Rome is burning, and the walls are going to come crumbling down around the whole industry, because there's going to have to be a change. Because just the same way, it wasn't the music industry, the music industry had mp3. And that burned down the walls. I mean, that burned down Rome, in the music industry and the chain of streaming and all that. So I feel that the same thing is happening here. But yes, it's changing rapidly. Okay, so

Jeff Deverett 1:44:01
here's the thing I try not to as a person, like focus on what was I spent tend to focus on what is or what's going to be now you got to focus on what was sometimes you know, historically, so you have a point of reference, but just because it's something happened before, it doesn't mean it has to happen again the same way or is going to happen the same way. So all the stuff like I'm telling it 90% of what I did in my careers is not relevant anymore. I mean, it's relevant in that we hope that people are still going to watch TV and movies and you know, there's going to be entertainment but even that even that I'm going to make a bold statement you know, and maybe this is too bold to people even have the attention span to watch movies anymore. Like for us like going to the theater like my generation, like the I love long form viewing. But look at my kids and and the younger generations. They're more used to short form viewing like they're looking at like Tick Tock What is that? 15 second clips. I mean, and that's like, gigantic, you know, YouTube, like, you know, this is all short form format. And that's so it's could be that generations going forward are not interested in kind of the formats that we were interested in, you know, everybody assumes a movies a movie, everybody loves sitting down and watching a movie. And I'm thinking maybe not, maybe they like 10 minute segments, better, you know, now, episodic stuff or, you know, shorter form stuff, just because it's, it's a different world now, with technology. So even I'm questioned even that, which is interesting, because I still say, Okay, I'm going to make movies, but maybe I'm going to present them episodically as opposed to in one sitting. And, like, so that's one of the things I started exploring.

Alex Ferrari 1:45:51
Oh, it's much more. It's much more lucrative if you have like, you know, a documentaries and a documentary series, but a series based on one of your ideas for a film like like an inspirational sports movie, breaking that up into four episodes, or five or six episode miniseries. That's more valuable in the marketplace nowadays, then, yeah, then I mean, I mean, generally speaking, generally speaking, there's still always gonna I think there'll always be a place for features I think they'll be something like that. But right now series is like, the more content you could purchase as a streaming services, what they want and people love watching miniseries now are seasonal things that keep coming out every season. You know, people accuse me of something like, because I came from the business side of the film, just you know, from the dark side, the dark side, yes, yes. It's not the dark side. This is your, this is your penance, I'm sorry, I have to I have to beat you up.

Jeff Deverett 1:46:52
It's decided that generates the revenue to enable you know, filmmakers to hopefully make their movies. Alright, so I don't think it has to be dark. Here's what I get accused of. I get accused of being too focused on the monetization of the movie. Like I'm talking about monetizing before I'm even making 70. I'm thinking like, why would I bother like, okay, in my career, I've made seven movies. And I made one of them as a personal project, it was a personal passion project where it didn't really matter whether I can monetize or not, I wanted to make it because to me, that was my what I call my legacy film. It was my statement to the world, it was what I wanted. If I had to send a message, it would be that that would be no, it's been the hardest film to sell to. So it's been tricky. But I was happy to make it, it was my most enjoyable movie for sure. The other movies, I basically, I'm looking at audience, and I'm basically saying, okay, what's going to sell, because I want to make money with them. Because I want to be able to make other films afterwards. So, you know, I'm trying to figure out what you know what to make in order to be able to monetize it. And then within that, then I say, okay, you know, there could be 10 choices, okay, what would I enjoy making, but I don't get hung up on a story necessarily. I get hung up on a marketing plan. And I say, like, like, I just finished making the gymnastics movies, you know, and I know that the gymnastics is big and an Olympic year. I mean, I've made two of them. So and I know that there's a big audience for it. And a lot of young girls do gymnastics, I know that there's a market there for it. And I probably wouldn't necessarily, like I'm not in love with the idea of making jeunesses movie unless there's a market for it. So it was a fun movie to make. I enjoyed making it. And I would definitely do other gymnastics movies. But if I discovered that they weren't going to sell, not sure it would do that, you know, then I might want to make a football movie where I think it could sell or a baseball movie or something like that.

Alex Ferrari 1:48:52
There's not a lot of gymnastic movies is a general statement. It's not like a it's not like there's 1000 there's not a lot of competition for that, that

Jeff Deverett 1:49:00
suddenly not as much as you know, as for other football or baseball, but you know, there's also you know, because there's more fan base, obviously. So yeah, it's kind of supply and demand. But so but I don't say hey, like, I'm a gymnast, and I need to make gymnastics movies. I say like, there's a market for it. I found a story I like to do. I think it would be you know, very suitable for that audience and and attractive. And that's a big component of it. And let's make the best movie. We can have fun doing it.

Alex Ferrari 1:49:31
So okay, so then, one thing that I found really interesting, you showed me an example of it is that you did exactly what I talked about in the book, which is how to leverage the niche in marketing. So you're actually so you have obviously a gymnastic film. So you also have a relationship with us gymnastics right?

Jeff Deverett 1:49:51
USA Gymnastics USA. Yeah, I have I mean, I relationships these days. That's tricky. I mean, USA. Gymnastics is a bit of mess.

Alex Ferrari 1:50:01
But you had a cup before this, but you had you were able to tap into that audience, if you will.

Jeff Deverett 1:50:08
Absolutely. Well, I mean, not only through USA Gymnastics, but through, you know, various gymnastics. There's lots of gymnastics organizations. Yeah, I mean, I mean, there's magazines, there's, you know, there's all kinds of groups and state by state and, you know, competitions and stuff like that. So there's lots of ways to tap into, say that marketplace, like, you know, we're dealing let's, let's talk about that. Okay. It's so gymnastics is, you know, a bit of a niche sport relative to other sports. It's, a lot of people do it, but not obviously, as many as do say baseball, or say soccer, soccer is, you know, for both sexes, so. So you can find your ways to market that. And I, I mean, Alex, I think I told you this. I mean, people look at me, and they say, Oh, you've gotten made seven features, and you know what you're doing, and you have fun and everything like that. I say, Yeah, but that's not my day job. My day job is marketing these movies. 90% of what I do is marketing, like finance and marketing these movies, that's what it is, making them as the holiday is the fun part. And I really enjoy that. Marketing is everything. I spend lots and lots of time. And that's the job that's my job is, is figuring out how to market and sell the movie. So. So yes, I definitely look for all the niches. And we could spend hours on this. I mean, I showed you a couple of things. I mean, I didn't really get into the weeds on all the stuff that I do. But I mean, this is that would be this would become a class in marketing, not in

Alex Ferrari 1:51:37
show, of course. And that's it. And that's another discipline that you really do need to understand is branding and marketing as a filmmaker, I mean, even for yourself, you shouldn't understand how to brand yourself as a filmmaker, would you agree?

Jeff Deverett 1:51:49
I would say so. But you know, like, I look at it differently. I like I say, I'm trying to figure out before I make the movie, what I'm going to do, like I do the marketing plan before I do the production plan. Like I want to make sure that what I'm going to make, listen, I believe studios do that, too. I've never worked at a big studio. But I do believe that they all sit down like years before they actually go into production and figure out like, Who's it for? how they're going to market it, you know, what's the look going to be like, and you know, what characters they need and this kind of thing in order to successfully market the movies? And, you know, how's that gonna look what that plan is gonna look like? Because that makes for good business.

Alex Ferrari 1:52:29
Now, you also sold you sell to Netflix a lot as well with your films, correct? I yeah, I tend to try to sell to Netflix. Yep. So what's your experience, like with Netflix?

Jeff Deverett 1:52:42
So Netflix is my experience is really good. I mean, it's interesting, right? Like, they're the, they're the big player in the industry, you control a lot of the eyeballs, as you know. And it's, it's a great place, you know, to connect with audiences, because they have such a big audience. So, I do I deal on the licensing side with Netflix, ie, I'm a third, like an independent filmmaker who sells them a finished film, as opposed to most of what they do now is Netflix branded product where they make it themselves. And they'll hire you know, third party companies like me to sometimes do service production to make their movies, which is a whole other business plan. But they own it. So my movies I make I own and I license them to Netflix, if you know if they like the movie. So I gotta say dealing with Netflix says, and I'm not saying this, because I mean, I think some Netflix executive is going to be listening to this, it's the truth. They have the ability to totally screw filmmakers, because it's Netflix, and they get offered every single movie that's ever made on the planet. Like, what filmmaker is not gonna offer their movie to Netflix, right? Like, that's a dream come true. So they're in the position to basically just dictate any terms they want. And it's like, take it or leave it type of thing. But I gotta say they they are super fair. They have given me a very fair deals, and they then their contract, you know, it's funny when I first got their distribution contract, and I read my own contracts, because I have a legal background and everything I read, and I'm thinking, Oh, this is just gonna be a complete joke, and it's gonna be so lopsided. It wasn't, it was actually a very fair deal. And when I spoke to the lawyer on the Netflix side, you know, she said to me, is there anything you'd like to you know, talk about or negotiate? And I said, is that even on the table? Like, is it even offered your Netflix and I'm some like, small indie producer, like, Why? She said, Well, it's kind of not really because we think our contracts already fair. But you know, if you do have some comments, we'd be willing to hear them. And you know what, it's a super fair deal. Like you want to talk about like, not like these distribution deals you've seen like it is a very, very fair deal that Netflix puts on the table for filmmakers, because I believe that Netflix totally understands that they need to keep going maker's in business in order to keep getting good content, like I believe they're very supportive of the creative process so that they can support filmmakers so that they can continue to have a good stream of very good product. I think that's their philosophy. And I can tell you from literally, like doing business directly with them and getting their contracts and dealing with them. It is not at all like we talked about with the distribution landscape, it's actually a breath of fresh air, it's up Now, obviously, getting to them and and having them express interest in your product. And you get to step standing on very long line behind lots and lots of filmmakers. But once you get there, it's very pleasurable and fair, extremely fair.

Alex Ferrari 1:55:41
Now, that's a good accent. So you have a direct relationship with them. So you've obviously built those relationships over time. So you don't use aggregators. Do you actually use aggregators for other elements of your distribution model?

Jeff Deverett 1:55:53
The only aggregator I uses for is for Apple TV right now. And I'm about to probably not do that anymore. And that's because Apple TV forces you to do that until you've had you have to have a certain number of films. So you have to have I think, the numbers four or five theatrical films, and I'm just getting there. So I'm hopefully going to qualify my next movie, and then I can go direct. So there's criteria. Listen, these companies don't want to deal with hundreds of 1000s of filmmakers that they have aggregators, I understand that. I think that they can get way more of my marketing dollars. And we can work directly and do much better by allowing me to work together because I just don't like the dilution of going through a third party, but I understand why it exists in terms of supporting and managing lots of different vendors. But yeah, for the most part, that's the only aggregator I use, everything else is direct. Like so you can direct on amazon prime, you know, like, not the svod side, but the the transactional side.

Alex Ferrari 1:56:50
And do you do? Do you have any of your films up on a VOD or not yet?

Jeff Deverett 1:56:55
I'm toying with it. So, I mean, I'm toying with YouTube Now. Now. The YouTube model, you know, it's been super disruptive and changed everything. I mean, I've definitely explored to be and Pluto and all the big a VOD platforms. I mean, I've sat in all their presentations. I know exactly how they work. I understand it. And so I'm definitely I'm definitely looking at it. I don't know how much money is there is can be made. You see, this is one of those things where like, you really got to do the math. And you got to do lots of extrapolation, because even with a lot of volume on some, that's a volume game, obviously, you got to be doing, you know, showing, then YouTube and these are volume distribution models. So even one sort of crappy TV deal. That seems like you know, a low lowball offer could be more than a big volume deal on a on an event VOD platform, but it's changing. So I, I'm very open minded, and I'm looking at everything. And I'm paying close attention because it's these models are changing the way people are consuming product changes every day. And you know, you can't, you can't say, Oh, that's how they did it. So they're going to do it that way. I mean, kids, listen, the younger generation kids generation, they don't believe they have to pay for anything. They grew up like thinking everything's free. Like all these apps are free and all these things and, and, you know, it's terrible for songwriters, and filmmakers and everything who don't, you know, people don't appreciate how much goes into that how much time and effort and labor and then people want to consume it for free. Like the art my generation, we never thought about that. Like we were happy to pay for stuff. I mean, that you were happy to pay for an album or CD or something like that, or movie, that new generation, they don't want to pay for anything. So you know, it's kind of come full circle, where with the Avon ads, it's kind of like broadcast TV again, right? You're back at him. But you got to watch the commercials, you know. So

Alex Ferrari 1:59:00
it's just changing so rapidly. It's just changing so, so rapidly, and God knows, you know, we're all being a holodeck in 20 years. Who knows?

Jeff Deverett 1:59:11
Alex, can I just can I there's one thing in your book that I wanted to. It's not necessary. But distribution. There's one thing that and we haven't talked about this, but I do want to say, yeah, this is also math. It's a mathematical equation. So you, I get the fact that making an independent film is like a crazy, crazy, difficult process and super financially risky. I totally get it right. But I learned something in my business affairs, like early on primarily through the legal department, like through my law training, that if you're going to spend your time and effort and like making a movie, I mean, you're gonna spend I did the calculation. I mean, if you do it the way you did, Alex, where you were, you know, cinematographer, director, editor, you know, you put you know your heart and soul into it. Yeah, I did some math on it. I'm gonna say that you spent somewhere between 2020 500 hours on that movie. And you could be even more in your case.

Alex Ferrari 2:00:10
Yeah, like I made my first film my very first film. Yeah, I mean, that's a feature. I'm talking a feature not sorry. Not a short. No, no, no, my first my first feature, my first feature. Yeah, I mean, that's a fair, that's a pretty fair statement. I mean, it depends on it, it could be a little less could be a little bit more. Who knows? I mean, if you're including crowdfunding, including that marketing equally, yeah,

Jeff Deverett 2:00:31
I'm including everything I'm including the idea of saying, Okay, I'm gonna make a movie to actually getting it finished.

Alex Ferrari 2:00:39
We'll be right back after a word from our sponsor. And now back to the show.

Jeff Deverett 2:00:50
I mean, it's, here's how, here's how the math works. I think it's about nine months, kind of like having a baby 910 months, four weeks per month, six days per week, 10 hours per day, that's 20 160 hours. Sorry, I already did the math on it. Sure. Now, now, here's, here's what I wanted to say to you. So you say I'm going to make a 5000 or $10,000 feature film so that, so don't take too much financial risk. And let's say let's say you make the $5,000 feature film, and you put in 20 160 hours,

Alex Ferrari 2:01:23
doesn't make it doesn't make sense, the ROI is not there, or the RFP is not there,

Jeff Deverett 2:01:27
there's no aro t there, because for the same, so let's do the math, let's say you make and you get really lucky, you make four times your budget back, let's say you make $25,000 on a $5,000 film. So that's a success, you have sorry, you've made five times your budget. Sure. So that's a success. I mean, what filmmakers are gonna say, Hey, I just made $20,000, on a film that cost me five, I mean, 25, so I netted $20,000, that's a lot. But when you realize that you put in 2200 hours to make $20,000, it's not good math?

Alex Ferrari 2:02:05
Well, you you, you are making an assumption. So on a on my second film, I did that I shot the film in 36 hours, so I haven't shot in four days. So it was four days, we did about 36 hours of actual production time. But let's say we did the full 40 hours, 45 hours, whatever it is. And then you know, all All in all, when that movie was done on the corner of ego and desire, I might have spent a few 100 hours on it. And for me it let's say even if I spent 500 hours on it, which I don't think I did it, there's the assumption of 2100 hours or 2500 hours, that's on a $5,000 film, if you're spending nine months to make a $5,000 film, you have not done a good job, that does not make sense, when you're making a budget of film of that budget range of 3000 to 15,000, you should be in and out within a couple months. And with in all honesty, shoot it to three months tops, and then you're into the marketing phase of it. But I still generated a good amount of money off of my first film, and off of my second film. And it made sense for me, because I also was building a, I was part of my entire ecosystem of what I do. So I wasn't just making money on my film, I was making money from ancillary products, and other things like that. So the book that you purchased, the, the book that you purchased, Rise of the entrepreneur has multiple mentions, if not a full chapter a case study on on the corner of ego and desire, I was already selling the book before the book, The movie was even released, making money off of that. So I my mindsets a little bit different than yours. And you know, you're, you're always like, you shouldn't make a movie for less than 700,000 or, or, you know, five 700 $900,000. But you're coming from that point of view, I'm coming from a different point of view, where I'm building an entire ecosystem, I'm building a lot of other revenue streams, I mean, not only making money from the exploitation of the film itself, I'm making it from the entire film intrapreneurial ecosystem. And that's why that makes sense for me. And that's what I've tried to teach in the book is for filmmakers to make that ecosystem. So if you do make a five or $10,000 movie, you even if you make four times your money on the movie, it's nothing compared to the 50 or $60,000, you made selling all these other ancillary product lines, and other services and other things like that. And I made the argument in the very first, the very first movie I made, which was an $8,000 short film back in 2005, that I generated over a million dollars with that project. And the reason I did that is because that film, launched my post production, my post production company, and every year I put food on my table for the next 10 to 12 years. And I was making money in and day in day out and I had filmmakers coming in all the time from that film. So it's not only About an addition to that, I also made $100,000 on the short as selling the actual short, and I still make money off that short to this day. So it's all about frame of mind how you're looking at it, I understand your point of view and with your math, you're absolutely right. But from my point of view with my math, it makes sense for me. Does that declar that fair? You know, you're right.

Jeff Deverett 2:05:20
I think that, you know, you're you can't be spending more than two or three months, if you're making a low budget film, absolutely. Your your return on time is not going to be valuable. So yeah, I my business model is different. I like to shoot the million dollar range. And, you know, and I, if, if I haven't made 100, at least 100,000, or more than I feel like it's not worthwhile because of all the time, effort money, of course. Oh,

Alex Ferrari 2:05:45
yeah, absolutely. Absolutely. And your business model makes sense for you. Because you're also every filmmaker has a very unique set of skills. We're all we're all little Liam Neeson from taken, we all have little sets of specific skills that we bring in, you have a plethora of knowledge and tools from the distribution set. So you're very clear on how you're gonna be able to make that money. So you know, you can play at the 700,900 $1,000 budget range, because you also understand niche, niche films and being able to sell it and marketing, you understand all that stuff. So at that budget range, you need to be on a set, you have to be an assassin, you have to be a ninja at that budget range to be able to crack off 100 $200,000 profit on a film like that, and hopefully much more than that. But you have to be really strategic about it, where filmmakers who are starting off in a $15,000 budget film, they don't need to be as strategic. And that's why I always say you start small and you build from there, because you got to kind of learn the craft and learned the business side as well. So that's just again, it's just two different point of views. But both are both are correct, in their own way. Because if I try to if I try to shoehorn my situation, do yours, it doesn't make a whole lot of sense. And vice versa. So it's all about perspective.

Jeff Deverett 2:07:04
Yeah, I just I guess, yeah, the difference is that you just said, you know, don't spend more than two or three months Oh, yeah, I'm saying spend, you know, nine to 10 months and make it like, put your heart and soul into it. But it's a different time.

Alex Ferrari 2:07:17
It's a different time of us. There's also different investment. So you're talking about, let's say nine or 10 months on a movie, and you generate $100,000 off that film, well, that's a year, that's a really decent yearly salary, depending on where you live in the world. Correct. And that makes sense. But if you make, but if you make a $5,000 movie, or a $500,000 movie and break even, or lose money, and you spent the year, that's not, that's not what you can't survive. So you know, it's been, it's all it's all relative. Now, I can talk to you for at least another two hours. But I want to ask you, I want to ask you a few questions, ask all my all my guests, what advice would you give a filmmaker trying to break into the business today?

Jeff Deverett 2:08:03
Again, I'm gonna, I'm going to go back to what I said earlier about what's your intention, if your intention is is artistic, and you just want to be on the art side, I would suggest choose one project that you're really, really passionate about. And if you want to make it independently, go to your circle of people and be honest with them and say, This is something that I really want to do, I believe that it will, you know, resonate, and hopefully find an audience but if it doesn't, you know, consider this helping me achieve my personal goal. And keep it very low budget so that you don't blow anybody's brains out, you know, financially and don't take anybody's money that you can't afford to lose it. So don't put anybody in a financially uncomfortable position. But if you want to be a career filmmaker, then you got to really educate yourself on the business side or, or go try to get go down the studio route to or you know, the the streaming route where you're working on a on for somebody else, you're not really an independent filmmaker anymore. If you're really really passionate about the industry, but that you know, as you know, Alex, those jobs are far and few between, it's an anomaly you get one of those jobs, and you're basically going to, you know, kill yourself for the first five to 10 years and not really do what you want to do in the hopes that you ultimately will do it and you might not do it. So I'm, I like the whole film sharpener thing. I'm an entrepreneur. And you know, the good news about that is you get to call the shots and do what you want to do. The bad news is there's a little bit more risk involved, obviously. But if you're really passionate, then like I say, either make your passion project and be happy that you got something done and you left the world, your mark. And don't worry about the financial side. But if you're going to worry about the financial side, then get educated like really get involved.

Alex Ferrari 2:09:53
Would you agree though, that I find it's riskier to take that job in the studio and only run On those kinds of jobs, because you have given the power to you of your livelihood, to somebody else to another company where I'd rather have a little bit more risk and control my own destiny, in a sense, is that is that fair? I know you but I both have the same kind of mentality when it comes to that, because we're both entrepreneurs.

Jeff Deverett 2:10:16
They're different risks, you know, like, Yeah, exactly. Yeah, like, losing a job is a huge problem in one's life, when you're dependent on a salary, you lose your job. But as an entrepreneur, when you lose your job, you also lose your investment with it. Correct. So you're losing two things, you're losing your livelihood, and you're losing the investment that you put into making a livelihood. That's why in some ways, it's a little riskier as an entrepreneur. But you know, more on like, more upside, there's way more risk and return, obviously.

Alex Ferrari 2:10:46
Now, what is the lesson that took you the longest to learn whether in the film business or in life?

Jeff Deverett 2:10:52
The lesson, the most important lesson I learned, and it probably took, yeah, 15 to 20 years, and the single most important thing is that, that, like I said, before, it's just about trust, like, really businesses is about life is about relationships, you know, I mean, probably the biggest relationship you're gonna have is, you know, with your spouse, if you're gonna get married, and, or have children, that type of thing. But business is all about relationships. And you want to be in business with people who you trust. And so learning two things, one, how to choose somebody to trust is important. And then learning how to actually trust them. And, and people you don't people earn trust, like you don't trust is not something you talk about. And then you give it it's got to be earned both ways. You got to earn somebody's trust, and they got to earn your trust. And trust is such a powerful tool if and when you have it. And if you don't have it, like, there's what people call this gut thing I filmmaker called me last week, and he said, You know, there's just doing this distribution deal, but there's just something wrong with it, I can tell you what's wrong with it before even telling me the deal. You don't trust the people on the other side, you feel like you're gonna get screwed, if this is just a trust thing. That's why it's bothering you. Like, we can talk about all the terms of the deal. And I really like that, but you don't trust that they're going to keep the terms anyways. So my, I guess the lesson is, life's too short, don't get into bed with people you don't trust. I mean, sometimes you have to, you're forced into it, but know who they are, and only give so much trust and and and try to find those people who you really trust. And

Alex Ferrari 2:12:30
Now what is the biggest fear you had to overcome when you made your first film?

Jeff Deverett 2:12:36
You said something I can't remember if it was on your book, or one of your podcasts or something like that. You've probably said it many times. And this, this is also something I learned and is become a super fear of mine. It's not a fear, but you know that it's way, way, way more taxing on you find on life, to lose somebody else's money than it is to lose your own. That that is a fear of losing other people's money. Like I take it so seriously, that winner it might festers, because my investors remember not investing in a movie, they're investing in my ability to make and sell a movie, because they don't know anything about the movie. Like my investors. I mean, you know, I have a nice group of investors are primarily real estate guys. And so they don't know anything about the movie business, but they invest in my truck, they trust that I know what I'm doing. And that's why now, when somebody gives you money based on trust, which I've done to them also in the real estate side, you don't want to lose it. They've trusted you like you'll lose your own money, you feel bad. But you can still sleep at night, you just feel bad sometime you know it has an impact, you lose their money, you feel terrible. You feel like you've betrayed their trust. Right? So that that's probably my greatest fear is losing my investors money more so than Listen, my wife might argue with that. She put us like we're an investor also. And I say yeah, but we're different kind of investor. I'm the lead guy and I everybody's banking on my ability. So there's a lot of pressure when you take other people's money and got to be straight up front with people and you got to say like, there's gigantic risk involved, you're gonna do your best here's the plan. But you know, like every other business investment it might not pan out and and don't invest if you can't afford to lose it.

Alex Ferrari 2:14:23
And three of your favorite films of all time.

Jeff Deverett 2:14:27
Definitely, Rudy is one of them. For sure. Because I love the heart in that movie. Like I said, I primarily like sports dramas, so most of them I mean, yeah, Rudy would be up there. Like I was a big fan of the Star Wars The original Star Wars movies, just how creative they were, at the time and how innovative and and I love the fact that Lucas had to work the streets for years and years and years like just what makes the star the original Star Wars movies so attractive to me is Just how persistent and and and like motivated Lucas was in just believing in himself and, and so passionate, you know there's a good chance those films would never gotten made if not for his persistence and passion and getting like I've never met the guy and I don't know for sure you know what's real and what isn't just I've read, you know, a lot of his materials and listened to him on stuff and so not to MIT the films are, were great at the time. You know, I love watching them now because they're not so great anymore. I mean, it just some of this stuff is so data. But at the time, it was like, I remember going to that first Star Wars movie lining up at the theater. And it was magic, it was total magic. So I would put those up there, too. There's so many other movies that me, I can't necessarily that, you know, it's funny, I should have been prepared for that question. But now I can't really say like, yeah, Rudy definitely is his top top top shelf.

Alex Ferrari 2:15:57
And one of my favorite parts of the whole Star Wars story is, is the whole the deal, how he how he constructed the deal. He's like, yeah, just give me the sequel rights. And and I just want merchandising. And I don't you guys don't want that to you.

Jeff Deverett 2:16:13
He had such belief in himself, and the vision. And you know, then that could it maybe not worked out? Well. But you know what, like, in hindsight, 2020, it's it worked out really well. But you know, there's probably lots of those kind of deals, that didn't work out.

Alex Ferrari 2:16:26
Right. But he was able to build a fairly nice Empire off of that. Not he didn't do that he didn't do that. Now, where can people find you and watch your films and the work you're doing?

Jeff Deverett 2:16:38
You can definitely find some of my films on Netflix, follow and cry, and the new Fallout two is coming out soon. And I have a website, obviously, which is my company's called Deverett media. So it's www.deverettmedia.com. And IMDb, I mean, you know, Google, whatever. But you know, my websites the quickest way. And I'm not one of those guys who hides like, I mean, if you want to, I mean, listen, I don't know how many people are going to call me or whatever, afterwards, but I'm always happy to talk to Phil, make

Alex Ferrari 2:17:11
Careful, careful, careful, careful, Jeff. Fair enough. Careful, but don't put out Don't put your email out there. I'm telling you don't get don't put the phone number out there right now. Trust me. I've had other guests do that. And they're just like, Alex, I had no idea.

Jeff Deverett 2:17:30
Here's the thing, you know, I genuinely I genuinely like to help other filmmakers navigate this process. I obviously don't want to be inundated with millions and millions of calls and projects. But I generally look, if I told you this, you know, I'm thinking of doing this sort of mentoring course, where, and I don't want to go to hundreds of you know, 1000s of filmmakers, I want to go to like, you know, a dozen or so every year and just really hold their hand and mentor them through this process if they really want to try to navigate it. And I think that would be fun and exciting. And I and very fulfilling to do that. To be able to kind of help them avoid this and everybody you learn when you fall, and you get back up. But it's sometimes better if you don't have to, if if I can show you where the bumps in the road is going to be before you have to go over it and and fall. It would be Hey, we'll learn as much No, but at least you'll get past it and get down that road a little quicker.

Alex Ferrari 2:18:29
Fair enough. Jeff, it has been an epic conversation as I knew it would be I am so grateful to you that you came on. And I've been so candid about everything from from the other time in your life, we won't call the dark side the other time in your life. But I hope I hope it It helps filmmakers get a better understanding of the other side of the table, which is something that, you know, I can talk all I want about the other side of the table. But to talk to someone who's been on the other side of the table and go, this is what their thinking was, I think invaluable. So thank you so much for being on the show and dropping the knowledge bombs on the tribe, man. Thank you.

Jeff Deverett 2:19:10
Well, thank you for having me. I really appreciate it and good luck with all your stuff.

Alex Ferrari 2:19:15
I mean, did I tell you or did I tell you this was an insane episode. I cannot thank Jeff enough for coming on the show being so transparent, so raw, about the process and really, really just dropping some insane mega atomic knowledge bombs on the tribe today. Thank you again, Jeff so much. If you want to get links to anything we spoke about in this episode, head over to the show notes at indiefilmhustle.com/396. And again, if you want to become part of the beta launch team for film distribution confidential, the course that predatory film distributors do not want you to take head over to indiefilmhustle.com/letmein. Thank you guys so so, so much. I really do hope that this episode has opened your minds has really planted some seeds and made you think differently about how you can make money with your film. How should you approach it? How you need to understand the business, or at least partner with someone who understands the business but you as a filmmaker needs to understand the basics. Just like you need to understand the basics of camera, the basics of acting, the basics of art department, the basics of sound, just the basics of every part of the filmmaking process. Film distribution is a huge, huge, huge part. If not, it's probably about 50% of the entire filmmaking process. Like we said in the interview. The first half is the fun part, making the movie. The second half can be the fun part. But you also need to have knowledge about that process because without the second part, you will not be able to make another first part without understanding the business. You will not be able to do the show. As ifH Academy instructor Suzanne Lyons says there's the word show and there's the word business and the word business has twice as many letters as the word show. take that to heart, my friends. take that to heart. Thank you for listening, guys. Please share this episode with as many filmmakers as you can. This information needs to get out to as many filmmakers as possible. Thanks again for listening guys, as always, keep that hustle going. Keep that dream alive. Stay safe out there. And I'll talk to you soon.

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IFH 352: The Inside Story About Distribber Downfall, Film Aggregators and a Warning with Joe Dain

Right-click here to download the MP3

Today we are going to BLOW THE LID off this entire Distribber/Film Aggregator mess. Today’s guest is Joe Dain from Terror Films. Joe has been on the frontlines of this Distribber debacle and has been affected in a large way. He had many films placed through Ditribber and has been working diligently to save the films he has placed through Distribber. Joe wrote an amazing guest post speaking the real issue facing filmmakers in the shadow of what has happened with Distribber. (Read Here: A Warning About Film Aggregators & the Future).

During his journeys, he has discovered many interesting bits of information about the going on’s of Distribber in the final months and lays out a few “what ifs” that are extremely interesting.

Be ready for a lively conversation about Go Digital/Distibber, Film Aggregators, Predatory Film distributors, where filmmakers are making money today with their films, what platforms do avoid, and much, much more.

Enjoy!

Alex Ferrari 2:21
So today on the show guys, we have distributor Joe Dain who is going to blow the lid off of this whole distributor debacle. In this episode, which is fairly epic, which comes in at around an hour and 40 hour and 45 minutes. We talk everything about not only how distributor went down, he proposes multiple questions about of what really happened, and how we could follow the money and so on to see what the hell happened with go digital distributor. And we also discussed the much larger looming question of what responsibilities do the actual platforms have for this mess, you know, and what they're going to hopefully do and change things to protect not only themselves from being liable, but also protect independent filmmakers and mid level and larger film distributors who deal with these aggregators all the time, we go into some very, very deep rabbit holes in regards to go digital distributor, film aggregators and the distribution business in general. We also talk about what's making money nowadays, what's not making money nowadays in the distribution space, what things to look out for when dealing with a film distributor and so on. It is a epic, epic episode without question. So without any further ado, please enjoy my conversation with Joe Dain. I'd like to welcome the show Joe Dain man Thank you for coming on brother.

Joe Dain 4:02
Thank you Thank you for having me. Sir.

Alex Ferrari 4:03
You you you've you've made you've made some noise on the protect yourself from the stripper Facebook group recently and and I have a feeling that you might be making more noises in the future after this podcast. Oh,

Joe Dain 4:16
Oh, don't don't don't doubt it for a second my friend, don't doubt it for a second. I mean, listen this this whole as I refer to it in my letter debacle, the letter that you you posted on on our behalf to aggregators and filmmakers. This has been you know, for the for the lack of a more tasteful term such a kick in the balls. But one of the things that I felt that was so important to really address was the fact that this was not about an indie filmmaker service going under because as variety initially launched and said, which was on the the heels of your original announcement, we are dealing with a much bigger problem here and And that is really what I want the dialogue to turn to right. And do I think it's important that everybody's, you know, working very hard to get their, their contact near their content back from go digital and get it replaced. Absolutely. That's the immediate concern. And I understand that why everybody is focused on that. But that's not the dialogue that we should be having. Because to me, as far as I'm concerned, it's jumping out of one frying pan and into another frying pan. And that has to do with the lack of the financial assurances that are not coming down from the platforms who are deeming these companies approved. So no matter who the company is, and listen, there's a lot of good companies, we're primarily now moved over to premiere, right premiere digital, they're one of the monsters in this business, they hold most of the major studio accounts, right. They have been tremendous to us. And in being able to facilitate something that probably Now not all other companies were able to do, which was has been a actual backdoor asset change, right? Because we had so many films live, we've been able to accomplish most certainly with the help of premiere, and because of their influence and their connections, where platforms like VUDU, platforms like iTunes, Xbox, soon to be Google Play, instead of our content having to come down and be re availed, they were able to reach out to the platforms on behalf and do a backdoor content switch so that those assets on the back end were literally just switched over to two from go digital to premiere. So that was that was a huge, huge thing for us, right? Because

Alex Ferrari 6:39
Right? Exactly, exactly. So but before we keep going, please tell people who the hell you are. Because there's a lot of people who just don't know who you are, Joe, I know who you are, and people who have read your letter.

Joe Dain 6:51
I'm so invigorated by by getting this information out there that it's so so up, not about us. But

Alex Ferrari 6:57
Tell us who you are.

Joe Dain 6:58
My name is is Joe Dain and I am the president of worldwide distribution for two labels terror films, LLC, which is our genre brand that quite a few people know about. And then we have a sister company called Global digital releasing, which you know, takes on sort of non genre content. It's a smaller label than terror films, but they are sister companies. And it's the same team that operates them both. And you know, we work where if anybody were to look up the principles of the company, where we're independent filmmakers, we have written, directed, acted, produce, sell, finance, executive produced, cast, edited, I mean, you name it, we've done it, we still do it. My Lead partner, Jim Clark, he works all the time as an actor and huge stuff and, and, and happens to also act as our head of acquisitions. Because he loves it, he loves watching films, he loves connecting with filmmakers. And I'm the I'm the business guy, I'm the guy that deals with the the the placement, the pitching the the I oversee the marketing, we're very, very hands on, we're not a what I like to call a content dump company. And what I mean by that is, if you were to look at some of the other mid level distributors that you could maybe call our competitors, you know, you're talking about, there's some companies that they're dumping 150 plus films a year onto the digital platforms. Now by doing so I understand the business model, it's a business model, I get it, if it works for them, it works for them. But there's no way in hell those companies are dedicating any time or energy to the promotion of marketing of your film. And I think one of the things that makes our model unique, and not every it's not for every filmmaker. But you know, we started out when we when we when we launched the label, officially Tara films, which was the first label we launched, we launched officially as a distributor in the last quarter of 2016. But prior to that time, what happened is we had we had put three micro budget horror films into production with the idea that we were also going to handle our own distribution. And part of the reason that we did that is because we were new to the game as a distributor, but we also want to filmmakers to understand, look, we're risking our own money, risking our own money on our own model on our own distribution. And we don't expect you to just be like, Oh, hey, who are these guys? Let me give them my film, right? Like we didn't want people to feel like you know, we were just a bunch of schmucks out of nowhere saying, hey, trust us, right and right. And so much of what we did in in in and continued to do is mold the model, be flexible about the model to put filmmakers first. And so when we first launched the model in the last quarter 2016 with seven films, one of which was hell house LLC, which turned out to be a monster for us. All those seven films three were our originals. And we started out with a traditional model, right? It was 25%. It was sitting behind a certain amount of marketing dollars that was sitting behind all the recoupable is pretty standard par for the course stuff. As we were into that model. I wasn't thrilled with it because we were not putting money in the filmmakers pockets fast enough. I know that's a crazy thing. For a distributors job, but that

Alex Ferrari 10:02
Shocking.

Joe Dain 10:02
Shocking right? But so much of what we we continue to do is, is try to maneuver around all the things that we hate about the distribution model, right that, that we've had our own bad experiences with. I mean, we're not just a bunch of executives, you know, sitting around taking your films like we're meeting potatoes, guys, we're on the ground, we're raising financing, we're doing all kinds of stuff, to make our own films, our own projects happen. So we get what goes into this. And so this idea that, that you as the filmmaker, you know, get the material created, write it, find the financing, produce it, deliver it to be the last person to see $1 never made any sense to me never made any sense to me whatsoever, also to what we never understood is why, especially today in the digital age, right? Were what 85% of the movies being made at all levels, all levels, from 50,000 to 150 million are going straight to streaming platforms. Okay. That's the world we're in right now. So how is it the most mid level distributors are doing Not a single ounce of online marketing? Why are they in advantage of any kind of online marketing, which by the way, is very expensive to do to be able to reach 10s, if not hundreds of 1000s of people that might be interested in your independent content. So what we came up with about sort of mid 2017 ish, was we came up with what we call a partnership model. So it is a 50 $50, one revenue model. Now what that model really is, is, once you've delivered a film to us properly deliver everything, we're going to polish up and create a great trailer, we're going to polish up and create a great poster, we're going to pay for a PR blast, we're going to and this is all by the way, this is all guaranteed in the in the agreement, this is not just me. Talking about distribution in a minute. This, we guaranteed a minimum placement, we guaranteed paid paid ads on every platform link that goes live, okay, so so we cover all those expenses. So anything that comes up once you've delivered, mine is a couple of caveats. Like all the films doing well, the filmmaker decides they want to put the film in Japan, right, and there's going to be a cost the subtitle cost, right. And in that case, if we mutually agree, we'll find that cost and there'll be Only time will recoup something other than that, when your film The minute your film starts making money, and you get a check, whether that is $100, that is $5,000, that is $10,000 $200,000, it doesn't matter, boom, out the door, get a check immediately what that has done. And honestly, when we first introduced it, we had some of our bigger sales rep partners who who would you know, pitch us content? us right, there was a little bit like, and we said, Look, let's launch the model. The worst case is is that people are going to have an adverse reaction to it. And we'll just keep the other model we want to be flexible here. But it was our sort of attempt of of trying something right. Well, the model blew through the roof. Because I think for especially I should I should prerequisite this season filmmakers who'd been there done that under the traditional model, where they sat behind the distributors, expenses, and then marketing percentage and bad bad blah, blah, blah, and would take them a year if they were lucky to get $1 Mmm, got it. They all guidance, they got it immediately. And the other thing is our term a short five years with a renewable yearlings probably got to be one of the shortest in the biz. At the same time, we're flexible with REITs. So let's say that you want to give us just North America, you want to hold on to your foreign because you want to go try and explore a foreign sales agent and see what you can do. They're great, go do it. If it doesn't work out. Or if there's territories leftover that your sales rep can't do anything with come back assigned to us we'll launch it digitally. which is which is by the way, the focus of our of our labels, it's it's really it's really big on the digital distribution. The same with with hard goods. In our in our term sheet, it says you can keep your hard goods go split them somewhere else. We actually work quite a bit with a company called screen team releasing who does picks up a lot of the hard goods side of it. And we coordinate with them all the time as far as, excuse me, let me get that out of the way. We coordinate with them all the time when they're released. So again, it's one of those things where we're super flexible, because that's the other thing. Why is a filmmaker and I certainly never understood. Why am I giving you all my rights for 1520 years. The hell are you doing with my film for 15 years? What the hell are you doing with my damn film for 15 years. Thing excuse my words not a thing. Not a thing it's nonsense it's absolute nonsense now. We love what we do. We're we're we're we're so invested in what we do that this is why this thing with go digital chaps my balls so bad because it's it's exactly what indie filmmakers are always afraid of which is getting screwed. And it's why I refuse to sit idly by and let everybody make this only about go digital distributor going under because they're not they're not the problem there is an industry problem. Okay. Okay. And ad is this approved? again and let me let me preface that word approved. Okay. aggregators, who go through a series of whatever the technical tests are to garner those aggregation agreements with the platform's directly. But here's the gag. There's, there's not a single requirement on the financial side, nothing out one nothing. And I've confirmed this with with the 800 pound gorilla that is premier if they said no, no, we we keep a we have a fine trust where the royalties go that doesn't intermingle with our, you know, production or end or business accounts. But that's self regulated. Right. And that's great. And I love that and I've seen somebody comment on on the, you know, protect yourself restreamer page, that's also an aggregator said the same thing, and that's fantastic. I don't care. I don't care if you self regulate. I don't I don't. That's not that's not what I'm here to talk about. What I'm here to talk about is that the platform's who deem you approved, and trust you and trust you with our royalties, okay. from not just filmmakers, but for many, many, many, many, many distributors of all levels. You're still with the royalties. Okay, platform. What the hell are you doing to ensure that if this company or companies are mismanaged, or there's fraud, or embezzlement? What are you doing to ensure that we're protected? And filmmakers are protected? And I think for the platforms to take the position? That it's not their responsibility? is nonsense. It most certainly is. Because if you're telling me you won't pay me directly, that I have to choose one of these companies. You tell me I have to? I'm sorry, you better talk to your lawyers, because you're missing something because you are potentially liable. And And listen, by no means am I suggesting that we turn on the platforms, right? I'm not No, don't take this, as I'm saying, oh, let's go File class action lawsuit. I'm not suggesting that. What I am saying is that it's time to hold their feet to the fire, it's time to say you need to get this right.

Alex Ferrari 18:13
So I'll use the analogy of if a plumber like if I'm renting a place, and all of a sudden, I have a problem with my plumbing. And the owner of the of the apartment goes, this is my plumber. This is the only plumber you could use. And the plumber comes in and destroys my house. who's who's responsible? Who's you didn't give me any other options? You know, this is the You're the one that dictated what was going on. So you have to hold some sort of responsibility. Regardless, it's a very similar situation with these platforms. They are they're forcing, not just us independent filmmakers, not just you mid level distributors, but the studio system as well. These studios, most of the big ones, all the big ones go through people like premiere, I think premiere has most of those accounts. They have most Yeah, from as I understand it, they have most of the major studio accounts. Right, right. So you're forcing everybody to go and you said something to me a while ago, which was really interesting was like, you know, let's say tomorrow morning, Disney Warner's and Lionsgate wakes up and just goes you know what, man? I don't think this whole aggregation things really working out for us. I think we're just going to call up all the platforms or we're we're going to do it internally and we're gonna, we're gonna submit to you and we're gonna have a direct relationship with you. Do you think that any Do you think iTunes Amazon, Netflix is going to say no, to Porsche?

Joe Dain 19:36
Not Disney? immediately. There you go. Sure. Whatever you want Paramount Warner Brothers. Of course they are. So these studios certainly have nominally the money but the ability to set up their own in house aggregation. Of course they do. Absolutely. They

Alex Ferrari 19:50
did it with post. I mean, remember when post was Oh, they had to go out to an external post company. Now everything's done internally.

Joe Dain 19:57
Right. So so so this is what keeps growing Give me back to this, this bigger problem and and, you know, for any aggregator. Now I don't care if you're an aggregator that is strictly fee based. Or if you're an aggregator that takes a percentage, okay? Doesn't matter to me. I don't care who recommended you. I don't care how good your reputation is. I don't care about any of that. I don't care if you self regulate. What I care about is the the platforms need to do this the platforms the demand, because and listen all due respect to all the aggregators out there. There was one particular you know, on the because I've been obviously much more active now on your your protect yourself and distributor page. There was one aggregator that that responded to my letter that you posted, that mentioned the idea of, well, we can't be over regulated this put us out of business. Well, here's the joke. They're not regulated at all, there's no such thing that said, almost sounded like to me something a wall street guy or a banker, big banker would say, Oh, we can't have any regulations. We got to be able to do whatever the fuck we want to do. That's bullshit. There's no regulation. Here's the thing. I mean, that's it. I mean, I hate to say it, you over regulated over regulate, there's no regulation as it relates to the financials. No, not a single thing. So there's no such thing as over regulation over being over regulate.

Alex Ferrari 21:18
But with that said, with that said, there are there's a difference between obviously, the aggregators and the film distributors, when you go walk into a deal with a film distributor, there is hundreds, if not 1000s, of film distributors out there that you can choose from, and it's your choice to do business with them how they do business is everything. But the concept that you're talking about is aggregators. There's essentially five, if I'm not mistaken, company's gonna be five or six that are actually approved. Yeah, right, there's five or six are actually approved. And then there's probably a handful of other aggregators out there who are doing this, but there's no regulation whatsoever. And it should, even if they're self regulated, there should be some sort of rules put down by the platforms that say, you need to have fiduciary responsibility, you need to have an escrow account, you need to do this, this this, this should be some sort of, you know, insurance policy, if you go under that there's something I don't know.

Joe Dain 22:14
Right. And, and that and that's, and that's what that's what I keep coming back to is this idea that and let's let's let's take it back a step because one of the things I mentioned in my letters, the only platform doing a right, as far as I'm concerned is amazon prime right now. But prime is think about, right? If you put prime next to iTunes next to VUDU, you know, they're they're very similar as far as the space goes, right? I mean, as far as their, their, their, their, their, their worth their value. These are multi billion dollar companies, right? These are not little mom and pop streaming sites. Okay. Right. They are dominating the digital sphere. So why is it How is it that Amazon figured it out? and iTunes hasn't and VUDU has, none of them else have as far as the direct payment? And look, I have no issue with the idea of having to use a designated delivery service. And in fact, we need that benefit. We don't have time to be dealing with the uploads all the time to all these platforms. It's It's It's It's, it's to us at least it's in its it's cumbersome, right, it's too much. It's a pain. So the idea of having to use a platform delivery service that will handle the coding, the delivery, the metadata, the art, whatever's needed, right. fine with that. Here's your check. Thank you for the service, your lab. I appreciate your lab services. Ah, why the fuck are you collecting my money? Right? And, and and are you even? Are you even prepared to handle that money? Do you have an accounting department? Do you have any kind of oversight? What are you doing if you're receiving 10s of 1000s if not hundreds of 1000s of dollars a quarter of revenue to your bank?

Alex Ferrari 24:00
It's the equivalent it's isn't the equivalent of because I own the post house isn't it equivalent of owning a post house someone coming into you a client coming into you and like we're gonna edit your movie we're gonna finish a movie and we're going to deliver your movie and and then we're going to handle all the money from the sales and we'll just pay you out right i mean it's it's essentially the same thing you mean their their service their service company who have now been given the power to get money and distribute it at their at their leisure or at their the way they want to do it there's no It makes no sense

Joe Dain 24:33
Well until and and here's the thing I'd like to address is that is that what I've heard some chatter about on the pages and also from from the mouths of of glass Ratner Oh, well this was go digital distributor was not a sustainable law. I don't know how they were going to do this and figure this out and blah, blah, blah, blah blah and you there's no money in it and that Alright, let's let's have a reality talk about this. And I actually posted something on on the page the other day, I deleted Did a little math test right? And I was like, let's talk about the math. Now I was privy to the fact that in in 2018, go digital distributor had taken on about 1100 new filmmaker clients. Okay. All right. Now, now let's talk about that. Now let's say the minimum fee was 15 $100. Okay, for one platform one placement, right, which is more but let's say minimum, let's just say it's what people decided one platform and it was 1500. Again, I'm not being exact on the math, but let's say 15 101 platform 1100 filmmakers. Okay, let's go even listen, we got a flat 1000. Okay, that's $1.5 million in revenue comes in. Okay, so let's check that off. Now, they weren't approved aggregation partner for Netflix. Now I can't speak for every single film that was that was sent to them by netflix like we were, which is how we met them, which I addressed in our letter. We were charged $1,000 now to Netflix benefit they did not we did not charge Netflix actually built it into our deal. So Netflix essentially paid go digital directly to to do this. So now let's say if you were an approved aggregator for Netflix, Netflix is sending you deals every time they close a licensing deal. They're sending you a film, okay? What do you think would be a fair average per year from Netflix a monster like NetFlow? How many films you thank you?

Alex Ferrari 26:27
Well, they were they were they were the Don't forget, they were the they were a preferred vendor. So they were one of they were one of two companies that Netflix. So basically, Netflix drove all the all the all the clients to them. So I would say but don't don't say it's not only features, we're talking about shows too.

Joe Dain 26:47
So let's say 500 titles a year. That's on the low side. Sure. $5,000 a pop. sure there's another half a million dollars. Okay. Don't forget, don't forget Hulu. All right, well, let's just say I'm, again, I'm doing broad strokes here. Okay, so we got 100 filmmakers 15 $100, a filmmaker $1.5 million. He got $1,000 per film. For every Netflix film, we're averaging 500 films a year is another half a million. Now let's talk about the accounting because after a certain time, after a certain time frame, you start to pay a $50 fee per quarter for the three accounting processing. Okay, so $200 a year per film. Now, last I heard they had roughly 4000 filmmakers under their umbrella. Okay. Let's knock that down to $3,500 at $200 a year. Okay. There's another $600,000 a year coming in. How now? Now we're at what we're at $2.6 million in a year. And we're being rough on the estimate here. Right. Very rough. Two points. Right. $2.6 million in revenue that's coming in, okay. Between new filmmakers, between the Netflix aggregation deals, and between the accounting fees, all right. How's that not sustainable? How's that not sustainable? If you had 20 people on staff making $75,000 a year, which of course, they were not making that much, maybe a couple of high level execs were but the grunt the grunt people, the tech guys, if you were there for 3550 years, you haven't even taken a dent in that $2.6 million. Right. So operationally, this whole idea that the model was not sustainable. Smells like bullshit to me.

Alex Ferrari 28:42
Oh, but don't forget, they had a whole side business of encoding costs and closed captioning and QC.

Joe Dain 28:51
Let's talk about the closed captioning. with them. They charged five to $6 a minute, they will go to wherever they were using Rev. They just go to rev. It were charging. They were getting charged $1 taken $5 from you. So then they were profiting on top of that, right with that with a pretty huge mark.

Alex Ferrari 29:11
Oh, by the way, I was told I was told by someone who will remain nameless. That was like, Oh, don't use Rev. We've been having problems with red. It's just easier if we do it all ourselves in house. Yeah, of course. They said that. I was like, Really? So.

Joe Dain 29:27
So let's let's go back to the money for a second. Now let's ask ourselves. This company's bringing in a couple of million a year. They didn't have a huge staff. The Office wasn't that big, right? pretty reasonable sized office, very anybody who's ever been there, right? It wasn't like they have like,

Alex Ferrari 29:44
I think they were paying. I think they were paying like 8000 a month or something like that for that if I wasn't remember,

Joe Dain 29:49
Like floors of some massive high route, right? It's a pretty slow operation. Okay. So then I have to ask yourself, Where'd the money go? That's a good question who had access to the money? Who had their fingers in the cookie jar? Now I'm going to I'm going to talk about a couple of hypotheticals right now, and I'm not going to anybody have anything we're gonna have? We're gonna have a hypothetical conversation. Okay.

Alex Ferrari 30:19
We'll be right back after a word from our sponsor. And now back to the show.

Joe Dain 30:31
Let's talk about Nick source. The former CEO, okay. Where's he been in all of this? Has anybody heard a word from him? Has he made a public statement? Has he jumped in on any of the pages? Has he offered anything? No. I wonder why. Ask yourself. I wonder why. I wonder I wonder where he's been. Now, I wonder for all the times that go digital wasn't supplying accounting reports or proper billing statements, or even even invoices for services, which by the way, we never got. I'll explain in a second what we did. I always thought it was strange. The accountants who was there Her name was Jill Johnson. I used to ask Michael source and the former now former head of business affairs,

Alex Ferrari 31:22
Oh, Michael. Michael is no longer there.

Joe Dain 31:25
Now, Michael is officially as I understand it, everybody from from go digital is gone. And that glass Ratner and glass Ratner's technical team, whatever the hell that means is dealing with the content removal and whatever else they can deal with. This is what I heard. Okay. I know for a fact from Michael source, and directly he is no longer with the company, although he is still I guess, assisting in some sort of transitional way. For how long? And I don't know. Yeah. For us, we always questioned, Hey, why are we not getting invoices? Why are we not getting invoices for the placement for all these things. There's always some sort of weird excuse about accounting, they were changing software, they were doing this, they were making changes bla bla bla bla bla bla bla. At one point, they had another accountant there, his name is Michael, I'm not going to give his last name. We got to know Michael, myself in my head of operations, Nick linear. And this guy, Michael was always questioning the way accounting was working. He thought it was very odd that it was that it seems so complex and overcooked. And he was constantly questioning and saying, look, this is this shouldn't be like this. This is it's easier to run this, it's easier to get this accounting department running smooth. Well, guess what? He got fired. When I asked about why he got fired, what I was told is that Jill Johnson got him fired for some reason unknown, and that she apparently went to Nick Saurus. And that he was let go. Now, nobody gave any reason as to why he was let go legitimately. But in looking back, as I look back, if I have to start, you know, reading the the writing on the wall, if you will, Mm hmm. You had, you have now a CEO that has disappeared from the face of the planet, right? He's not addressing this in any way whatsoever. You have an accountant who never provided any kind of statement or legitimate breakdown, you are at the behest of a dashboard that was only as good as the people implementing the actual information as it came in from from from the raw data from the platform's okay. Suddenly, they had no money. Suddenly, everything was gone. Well, how did that happen? If you look at my math example, you you put together the pieces of a completely non existent CEO as far as since this has happened. an accounting department that was always broken, and suddenly there's no money. But when you put the math together, and you consider the fact and let's think about this, you consider the fact that this company is still collecting royalties, right? I don't give a shit. with Seth a glass Ratner says okay, they are still collecting royalties if your film is live under any platform under them. As an automatic sets until the platform's decide they're going to pull their heads out of their asses and stop it. The revenue is still going into go digital distribute bank accounts. Now let's think about that for a second. Let's assume there's 1000s of films still up under their accounts and nonprofits are to save. And let's say that per quarter, let's say what 2000 Films is still under them, and those 2000 films are making $100 per quarter total $100 per quarter. It's nothing That's $200,000 a quarter. Still going into their accounts. Where's the? Where's the money gang? Hey, glass rat in her wisdom money. Yeah, we still know what's going to your good old clients there. Now maybe Hey, Seth, this is to you, baby. Technically, I don't think you work for go digital. You work for me. You work for the filmmakers? Because my guess is is that your highfalutin fees are getting paid off of our backs? Prove me wrong. Tell me otherwise, show me the board of directors write you a personal check for these fees? I don't think so. I don't think so. So I call bullshit. And it's not only incredibly disheartening, let's get into legalities now. Right. So here we have a situation where I just learned from the original one of the one of the one of the original investors go digital media Inc, which actually has nothing to do with go digital or distributor. In fact, they're, they've been in their own ball suit with them. But they were an investor many, many, many, many, many years ago. And they've divested their interest. They're not connected. They're they've got their own heartaches with with this. I know for a fact they've been in a lawsuit with Nick Saurus. Anybody can look up those legal documents, it's all public, you know, access kind of stuff anyway, so I'm not giving anything that anybody can't research on their own. Well, I learned from them this morning, that in fact, now that they have put everything over to an assignee and that assignee is going to start you know, dealing with payouts now what that looks like and what that means. To what extent anybody's going to get paid. I don't know. It's just such a disheartening shit show. But but but but but what I want to get into is this. So there's been a lot of chatter about litigation, there's been a lot of chatter about even trying to force them in into involuntary bankruptcy, right, which was, which was a dialogue I was having very early on with my team and but they're going to pull the trigger on their own bankruptcy soon, maybe we come up with the past. But after talking to my legal team, you know, in going through all the pros and the cons, and the good and the bad, it just didn't really seem like a viable option. Right. Now you have the potential of litigation, right. And there's some chatter about a bunch of people getting together not to sue go digital. Let me get this straight. All you filmmakers listening, there may be everybody an opportunity to get enough people together to go after not just next doors, but the board of directors. And I hate to say that, because I know one of the board of directors, what I think is actually pretty nice, decent guy. But this is not about anything other than business and, and thievery, and, and malicious intent, because as far as I see it, that's what this was. Now, there also poses the question of, if I'm not gonna accuse directly, but if, say Nick Saurus was stealing, if he was stealing, and the Board of Directors knew it. And they did nothing to remove him. Right? Just what ifs. Technically, if he was dealing, right, and if they knew, and did not move to remove him immediately, that makes them complicit. Now, I hate to say it if litigation came up, and it forced them to open the books, and there was an audit, let me tell you, the money Don't lie. You follow the money, you follow the money, you want to know who's been my, if all the money, okay? And then you look at the timing of money that was probably being taken out of those accounts at what the timing was at that money being taken out of accounts, who had access to be able to take the money out of the accounts, who knew money was coming now the accounts and didn't do anything about it or say anything about it? Who kept their head in the sand? I don't know. Again, I'm not saying that any of this happened. I'm saying it's food for thought. It's worth the compensation. Again, you just place it against the mathematical equation I gave you about incoming revenue, versus how the hell are they broke? And the only thing I can attest to and maybe this is me being you know, East Coast Philly guy, right, right. You know,

Alex Ferrari 39:20
I had no I had no idea from the east coast. I had no idea you from the east coast. I thought you were born in Malibu sir.

Joe Dain 39:30
I didn't fall off the turnip truck yesterday Alex okay. So to me I start to look at the bigger picture and I start to put it together and I say this is this looks like this looks like embezzlement this looks like fraud this looks like this looks like somebody was milking the coffers and and and trying to get away with God knows what and here we are. Here we are. And, and and look, because of all of this and whether or not anything will come of this from a legal standpoint whether or not anybody will see any money even a small portion that remains to be seen. And what I would probably tell everybody, and we've actually prepped our own filmmakers, we've said, Look, we're fighting tooth and nail, we're going to do everything we can. But the truth is, we want to prepare you for the possibility that quarter two, and most of quarter three are probably gone, they're probably gone. And we're probably not going to see any of that money. Now, you put aside the hit, that gives a company like ours, right? We're a small company, and full of guys, that's definitely a kick in the balls. But I gotta tell you, I'm less concerned about us. What kills me this makes me nauseous about this give me knots in my stomach, is the fact that this is taking money out of the pockets of hardworking indie filmmakers who have families that got him queued up. For some of them, they leveraged their own, you know, credit cards and bank accounts and everything else to make these films. So for some shitbag, CEO or Board of Directors, to allow money to be stolen out of out of the mouths of hard working individuals, makes me want to throw up and and and to be perfectly honest, I feel bad for none of them. And I can only hope that enough filmmakers get together and form a class action lawsuit and sue the shit out of them. And not that they'll even get anything out of it. But the fact that by by forcing them into litigation, they're all going to have to lawyer up. And they're all going to have to spend 1000s, and 1000s and 1000s and 1000s of dollars to protect themselves from this nonsense, that that gives me some satisfaction that that might happen, right? Because they should not go away quietly into the night and brush this under the rug through a bankruptcy a chapter seven filing or whatever they're going to do, they shouldn't just get to do that, that they shouldn't just get to go home and get a good night's sleep because they hire rather than take care of it.

Alex Ferrari 41:39
Let me let me ask you a question. Is there any potential for criminal investigations by the La da or by the FBI? If the if that goes into their jurisdiction? What do you think?

Joe Dain 41:52
Let me let me get into a couple of things. Now, obviously, I'm not an attorney. So I would always say to anybody to, you know, make sure that you you talk to an actual attorney. But here's what I know. There's a few things. There's potentially copyright infringement. Right? Because the the day, if they're holding on to films, they don't legally own the right to, and they're continuing to collect royalties. That's a copyright infringement. That's a federal law. that's a that's a federal law. So you've got you've got that as a possibility. You've got the possibility one there bankruptcy side. Hey, Seth, I hope you're listening. There's a few interesting things where you can contest as a creditor, okay. It has to be a certain amount, but you can contest that if your royalties and again, we're talking about forget about service fees here, right? We're talking about royalties, we're talking about money that keeps coming in. If you have money come in last four or five, six months, and it's recent, they knew this was going on. You can you can probably contest, having them not be they were you go to the bankruptcy court and you say, look, we need to discharge our credit, are the debt owed to us because this is malicious intent. They knew this was going on. And there's a chance that the bankruptcy court the bankruptcy judge could say to to go digital distributor. Oh, no, no, no, no, no, no, wait a minute, you don't get to wipe this particular debt clean, because they can show just cause and for us, I'll give you an example. And we're talking to our legal teams now. We were provided a prelim, like an early prelim q2 reporting, that was very vague. It was it was well over a month ago was before the ship really hit the fan. It wasn't unusual for us to get that because a lot of times we would ask for something to give us a little view. Right. So now we have something that shows exactly to an extent, what they had had collected for us from a handful of platforms. And I can certainly use that to contest to some degree and say, Oh, no, no, listen, why did they get to charge this off? They just they just collected these. And they're trying to blow this away. Now again, there's another option, there's also the option of people getting together. You know, and I again, I've actually talked to a couple of people privately on I am from your page where enough people get together they get a litigator who necessarily isn't going to take money out out front but sees the bigger picture is going to take a percentage right 20 30% I highly encourage it. If you can get enough people together how he had somebody together and we might join you on that right and, and and take these people in the balls and again, not to say that we'll get anything from it financially okay. But they deserve these people responsible. They deserve to be put through the wringer. They deserve to lose more than a few nights of sleep over this and they deserve to have to go pay exorbitant amount of fees to some attorney to protect their assets from the stuff okay, that might would be the only thing that anybody gets out of it. Now that being said, let's go back to the source of the problem. Why are we here? Why are we here? We're here because the major platforms put us here. Let's make no mistake of that. It's a shitty thing to have to come. It's a shitty thing for any executive at any of these major platforms that might be listening, or paying attention to any of the articles or anything going on. We are here because of them, because of their lack of financial regulation. Not being bestowed upon any of their so called approved aggregators, and I use our own experience. And although we're lucky, we're not doing anything from from a Netflix deal, because that particular deal I reference, you know, was only a two year deal. But this is this is a this isn't this is the 800 pound gorilla in the digital space, who said, Hey, Joe, we're going to build it into your contract that you're going to use go digital, to deliver the film to us and collect and collect the royalties and disperse to you. For us. Okay, right. Yeah. Now, now, let me ask you, and I said again, I said in my letter, would you have questioned that?

Alex Ferrari 46:14
Of course not. Because Netflix is Netflix, if Disney tells me to go do something, and we use this company, I'm going to assume that that company has vetted that comp that that company that they're telling me to go work with, and I'm safe. And that's just a general thing. The liability of the platforms is massive. On so on. This is a massive thing on all the platforms that dealt with go digital, specifically the the big ones that have said, this is the only guy you can use a preferred vendors and that kind of thing. It is on them, because they're the reasons why we're here because they will be paying us directly and just use these guys as service, which is fine. Like I said before, like you said before, I agree with you, man, you need someone to kind of a funnel to do it. Amazon doesn't they figured it out. But but other but the other platforms like hey, you know, Netflix doesn't want to deal with 10,000 filmmakers, I get it, I get it. Hulu doesn't want to deal with 10,000 films, I get it.

Joe Dain 47:09
I'm just again, this is not about them having to deal with the filmmakers. I'm not even suggesting that right. I'm not suggesting that suddenly, you know, iTunes and VUDU and Hulu or any of the major platforms suddenly open up the ability for every single filmmaker and even to some degree mid level distributors have direct access to them. It's impossible. They can't handle it, I get it, I get this. And I, I even had companies tell me I had like Buddha was one of them. That when I was trying to pave a direct relationship, they said we don't have the infrastructure to deal with another direct partner at this time. Okay, fair enough. However, that's not my problem. I'll use one of your approved delivery services all day long. I'll even use some of them to pitch to you if you prefer that, right. I don't even care about that. What I care about is that you're not sending my money to me, after you take your 3040 or 50%, okay, which is a lot of money, these problems are taking a lot of money. And then you're taking the balance of our royalties and sending them to a company that you've deemed approved. And you have set no financial regulations in place to protect us,

Alex Ferrari 48:19
but they're not a but they're not even a financial institution. They know and they're not

Joe Dain 48:24
regulated. It's ridiculous. But but but what I'm saying that was that the platform's could regulate, they could say, Listen, you have to prove to us that you've set up a client, a client royalties escrow account, that does not commingle with your business account, we're going to have to verify once a year that that account is still in good standing. Okay, I'm on top of that, which I mentioned in my letter that the platform's could do very easily, which is to protect content owners, whether it's an individual filmmaker or a mid level or a major studio. And on the back end of the platforms, database, instead of the aggregator being listed as an account holder, you list them as the delivery service on behalf of the content holder, and the content holder should be listed. So that when something like this happens again, and trust me when it's happened again, it's gonna happen again. But when it happens again, now, what happens is that we as the content holders can reach out to the platforms and say, Hey, this is what's going on. And I give an example, Amazon, who, again, they have been so gracious, I've been talking to them via email almost every other day. They're working very aggressively with us, but their big thing was because of their ad direct accounts, right? Anything that we had under under go Digital's ad accounts. And we use them a lot even though we had our own we use them a lot because our dashboard was was not as big as we wanted it to be on the international scope. So we were using them for a long time until our until our own ad account opened up. But here's the problem. Our films even though I can prove that there are Our films and that we we were assigned the copyright to to distribute their under go Digital's ad account. So Amazon just goes, Well, we can't we can't do anything, you have to have them, take them down, and then re deliver to us. Right? That's a problem

Alex Ferrari 50:18
very much.

Joe Dain 50:19
And let me something to go step further. What I'm suggesting is not going to be a huge inconvenience for these major platforms. It's not like I'm saying, guys restructure the whole thing that you're doing. Now listen, me suggesting, Hey, why don't you set up what amazon prime is done? Where where the revenue is going to go directly to the content holder of note, that might be a little more difficult, but in this digital age, really, how difficult Could it really be? How difficult Could it really be for iTunes or VUDU, or Google Play, or any of these major platforms to to stay, you have to use an approved delivery service to deliver but we're going to set up the accounts for the for the royalties? And the role data to come directly to you? How difficult in 2019 with the major platforms? Could it be? What a major platform like Amazon Prime, did it well over a couple of years ago.

Alex Ferrari 51:17
It's not that difficult, because there's so many different amot there's so many different accounts out there so many different, you know, my whole business is online. So I have revenue coming in from 1000s of different companies, and they have 1000s of other other people doing things from affiliate like affiliate affiliate, just let's talk about an affiliate marketing thing. Amazon has the largest affiliate marketing program in the world. And that's we're talking about millions, millions of accounts, where money goes directly into a bank account, every single month, and is tracked every purchase. So there's I agree with you 100%, there's no way that these companies can't do that they don't maybe don't want to put the resources in, maybe they'd like I'd really rather not deal with it. I'd rather be easier to do it this other way. But what this has show us is there is definitely a crack in the in the boat, there's a leak a big one. Oh,

Joe Dain 52:10
absolutely. And this is it. Let's think about this. All of these digital platforms are taking anywhere from 30 to 50% of the royalties, okay, just no small amount of money. If you were to have every single independent filmmaker, and every single mid level distributor, say, we're going to take our content off your platforms, you want to talk about a kick in the balls to the platforms and their revenue streams, because let me tell you, their studio movies, the studio calm, there's a level of it, there's not enough of it, right coming out of the pipeline to support the infrastructure of these digital platforms, these digital platforms are dependent upon the independent contents coming from the independent filmmaker, and from the independent mid level distributors like us, they're dependent upon. So as far as I'm concerned, they they have a huge responsibility to this community, a huge one. And, again, we're not even asking for much I'm not even I'm not even requesting something that is so outrageous, that it can't be accomplished. By probably a few simple changes on the platform side. This is the what I'm asking for is a very reasonable change. And, and some accountability, man some accountability, what you took your money, you took your share platform. So now you're sending my share to, Hey, why don't you send all of it to one of your approved aggregators, and let them Delve it out then if you feel so trustworthy of them.

Alex Ferrari 53:44
I mean, it's honestly, and again, without getting into the details of the back end technical aspects of doing this, you create with and with that was that like you and me are trying to build this, we're talking about massive platforms with massive resources that any one of their guys could go in there and code, what we're talking about within a week or two, until we're a team of them can go in there and do it, you can submit a PayPal link to get paid through PayPal, you can submit your direct deposit stuff in your bank account and get paid every every month and set these things up. This is not like manpower, or woman power person power to to be writing checks and bailing them and those days are gone.

Joe Dain 54:26
And let me tell you this by doing that, right. It doesn't even affect the abrogation business because you still you still need to go to them to place your film to deal with the encoding and the Q C's and all of that stuff. You still need to to pay them those service fees. But then what happens if anything, I would think that the aggregators would actually be on board for this too, because it suddenly eliminates this massive strain from them that matters, which they're barely getting paid anything for in the first place. They're essentially a go between right there go between their, their their third party collection account. That's all they are, right? It's no different in something like vintage or freeway, but at least those major collection accounts, they're bonded and insured and everything else. So it's sort of a joke, it's sort of a joke to, to think that what I'm suggesting is going to hurt anybody's business, if anything, This protects everybody, by by implementing a direct pay source, to still keeping the aggregators in place to deal with delivering, in some cases, even pitches, where the where the platforms are sort of protected from the idea that you're inundated by 1000s of filmmakers wanting to talk to them or, you know, so they get a go between in that sense, right. But they should not be allowed to control their mind. And and this way, it alleviates the accounting responsibility from the aggregators, while at the same time protecting the independent filmmaker and the mid level distributors and distributors of all levels, at the same time relieving some potential liability for the platform's because I gotta tell you, I gotta tell you, I mean, in speaking to my attorney, he was like, this sounds crazy. This sounds like there is liability on their part of their mandating it right. Again, this isn't this isn't, this isn't something where we went out and found people on our own right, we didn't go out and just find Joe Blow got himself an aggregator, we had some of these platforms, they list the companies on their own websites and was approved, where you're gonna tell me there's no, you're gonna tell me these attorneys at these big major platforms see no holes in that, they see no liability,

Alex Ferrari 56:31
if I sign a deal, if I sign a deal, if I sign a deal with Netflix, for $2 million for my movie, and it's spread out over the course of two years off the deal. So every quarter, I get whatever half you know, quarter million dollars, or whatever it is, every month, or every every quarter, and I was told you got to go through go digital, they're the ones are going to do everything and they're going to handle the payments you made to tell me that halfway through, they, they just they go out of business and go through what what's going through that Netflix is not responsible at all for that. Obviously, they are obviously they're liable. And for a small guy like me, or or mid level distributor, like you, we're talking about 10s 1000s, maybe even hundreds of 1000s of dollars. But when you're talking about millions of dollars, on a deal, man, some, you know, people might walk away with $50,000, because they're like, it's not gonna be worth it. But when it's three $4 million, you're owed, I promise you some attorneys are going to get involved.

Joe Dain 57:29
Well, the other problem, too, let's talk about also what's broken about the aggregation side of collecting our funds. So at least people you know, they say all the model is Oh, collect 100% of your revenue. And and let's put aside

Alex Ferrari 57:39
the you know, in profit, in profit faster, don't forget, that was the tagline for distribute in profit faster,

Joe Dain 57:45
right. And let's talk about let's for a second sort of extracting the couple of them that charge a percentage, right, they don't charge you fees, but they take a percentage for the life of the film. So the dashboards that you're given access to right, you know, get access to your dashboard, see her films, performing blah, blah, blah, blah, blah, well, guess what? Those dashboards don't mean shit. Those dashboards are up there. The dashboards are property of the aggregator, not the platform, those dashboards are only as good and as transparent as the data being entered as the raw data comes in from the platforms. So as the raw data comes in for your sales from any any given platform, some accounting person at the individual aggregation company has to then implement that roll data into your individual films dashboard, right now. What if they're not doing that properly? What do they miss something? But did they screw something up to being lazy about it? And unless you demand the right to see your role data from the platform, which by the way, you have a right to ask for filmmakers know this, you have a right to ask an aggregator for the raw data from the platform. And they're going to give you some nonsense about oh, well, we get these big reports. And, and and it's all the films and we can't give that to you because it's got other bullshit. They can extract the raw data, title by title by title, I know it for a fact, don't let them tell you that. If you are dealing with an aggregator and you want to see your raw data, which will show every single sale chargeback everything from the platform, ask for it, they have to give it to you, anybody who doesn't give it to you, or gives you some excuse, I would question the accountability of that particular aggregator Okay, so just know that's fair enough. Now let's talk about distribution and independent distribution and some of the things that that I actually plan on doing when I'm out from underneath that mess, because I'm really working so hard with my team to not only pull our films which are almost completely out from underneath this mess, and get everybody back on track while we're dealing obviously with our new releases sometime next year. I actually plan on putting together a little workshop that is about the pros and cons of indie distribution and the pros and cons. distributor versus versus aggregator, there are some differences kind of one in the same in their own right. And there are certain things to to to not be afraid of. First of all, don't be afraid to ask questions. Don't be afraid to ask questions about what the distributor is going to do. Let's let's talk about distributors. Right now. I'm not aggregators.

Alex Ferrari 1:00:21
We'll be right back after a word from our sponsor. And now back to the show.

Joe Dain 1:00:33
If a distributor if your is distributors interested in your film, and let's talk about North America, just for right now. And they're yammering at you about how great your film is going to do how much money your film is going to make, if they're giving you estimates. Now some of them do I know some of them, I've been on the other side of this phone calls as a filmmaker. Here's what you do, once they've dazzled you with how much money your films gonna make. Say, that's great. That's wonderful. Do me a favor, you advance me 25% of those estimates. Now what's gonna happen is you're gonna hear crickets on the other end of that call, okay? Let's say distributors offering you a legitimate minimum guarantee where they're paying you some sort of actual advance, then they're not putting their money where their mouth is, what they're doing is they're blowing a lot of wonderful sunshine up your ass because they know you want to hear it. They know you want to hear how great your film is, and how much money they're going to make you right? Guess what? They don't know shit. They don't know shit. Because if we all had a crystal ball, we all knew how films were going to perform there never be a failed film, there'd never be a film that fell on its face, never not once, because we'd have the magical crystal ball, but we don't have it right. So the difference too, between a distributor foreign sales rep, let's talk about that. Now, foreign sales reps will in fact have the ability to give you estimates highs and lows, but those estimates are based on their experience taking similar films to the market, having them to various territories. So they're coming from a very knowledgeable place of understanding the market, understanding what's being sold, that's similar your film, but even then all all foreign sales reps, the best ones in the biz, they'll they'll be the little tiny, you know, thing at the bottom of those estimates of those highs or lows. They don't guarantee you that they're going to hit any of those, even the lows, right? They don't guarantee it. But it's a guideline. And it's a it's a reasonable guideline. North America, North American distributors have no way of knowing what your film is going to make. Period. End of story. So unless somebody is offering you a nice fat check on the front side, they are talking out of their ass.

Alex Ferrari 1:02:34
And would you would you agree that in today's world that most distributors, you being a distributor yourself? You really have no idea how they're gonna perform on these platforms? Because one one year, one year, you know, like iTunes, I don't know. I love to ask you a question. iTunes at one point was a good revenue stream for civa. There was a lot of T VOD, a lot of rentals, a loving, but nowadays, it's more s VOD, and a VOD. And that could change next year. Who knows?

Joe Dain 1:02:59
And I'm glad you said that, because that's exactly the case. And the truth is, is that a lot of filmmakers like their film on iTunes, because it's kind of a prestige type platform,

Alex Ferrari 1:03:08
but it's a vanity. It's a vanity platform. It's a vanity.

Joe Dain 1:03:10
vanity platform. Absolutely, Alex Absolutely. And they are not really the big revenue generators. We already saw that Amazon Prime was the big guy. Now, however, let's probe is that in the last couple years, Amazon Prime changed their rev share model a couple of times. Right. And not not to the the habit of us. Sure, I think at some point, and if you remember, for a short period of time, they had this Amazon stars bonus program, right. And I don't know if you're familiar with that. We were lucky that we had that I think the last time we saw saw anything was back at the end of 2017. We had four films, what they would do is that they would evaluate films, and by the end of the month, if your film fell into whatever their algorithms were, as far as performance went, and they always practically match what you made. So we had a we had an up we had a thing in the last third and fourth quarter 2017, we had four films where they had performed so well, that we ended up getting a 40 plus $1,000 bonus check for those films.

Alex Ferrari 1:04:12
Can you imagine

Joe Dain 1:04:13
now, somewhere along the line, somebody in Amazon was like, What the hell are we doing, we must be sending so much money out that they they they've pretty much killed that. As far as I can tell. We haven't seen anything since then. And we most certainly had film since that timeframe performed very well, that did not get a benefit of an Amazon star as long as they went into somebody's pocket.

Alex Ferrari 1:04:37
But the bottom line, but the bottom line is what you're trying to say is that these are the things in before in the olden days, let's say the 90s or even early 2000s. There was they were more stable ways of making money and they weren't changing so rapidly. So like you could you could justify the DVD market. You could justify cable deals you could there was that but now things change. So wrap Basically, that what was good in 2017 doesn't make any sense today. So there's no way to broadcast

Joe Dain 1:05:06
any of the platforms I don't think have been able to keep up with the ever changing ingestion of, of content from the consumer. But then to go back to this, so so Amazon was the big performer and they're still very solid, at least for us. I can say you're pretty, pretty solid. But that one is on their heels from our side from our perspective,

Alex Ferrari 1:05:25
and I guess the market can I guess?

Joe Dain 1:05:27
Yeah, to be. Yes. Yes, Ruby TV, man, I gotta tell you, and it goes to show you the ever changing landscape of things because look, what happened years ago, with things like TiVo people got on the kick, and I don't want to watch commercials, I want to fast forward through commercials, no commercials, right, right. Now you got all the streaming sites and the subscription sites. Well, now we're at a point to where it's like, how many streaming sites can people afford?

Alex Ferrari 1:05:53
And there's five and there's five new major ones coming next year.

Joe Dain 1:05:57
It's insane. So what happened now is something like tubi TV, it's owned by ad rise got super smart. And they started creating the A VOD platform. And if you look at to be just if you compare it from just a couple of years ago today, they're getting incredible content. They're getting big movies, they're getting TV shows are getting all kinds.

Alex Ferrari 1:06:13
Everything is being tossed on. Everything is being tossed on. People

Joe Dain 1:06:19
are tuning in, because there's no subscription, there's no signup. There's nothing required. And so what they do is they go, Hey, I don't mind watching the commercials, because the great thing about to be also is they don't edit the content. There's no editing, it's not like it's not like going on to a big ledger,

Alex Ferrari 1:06:39
like watching Scarface edited yourself but yourself. Yeah,

Joe Dain 1:06:44
they don't do that. And I think that that's also been a big part of their success as far as I can tell. So I gotta tell you, we put TO BE TV from a promotional standpoint all the time, all the time, we push the hell out of that platform. And also do they're expanding around the world it was that they were limited to to North America. But now they have an app that's starting to open them up to countries all over the world. So I think they're going to become a real contender. I also think that you look at something like Voodoo is division. Voodoo has a division called movies on us. Same thing, where you're not paying, it's a virtual base, Avon Avon, I'm gonna I gotta tell you, Avon is something for everybody be paying very close attention to because it is it is really becoming the next I think big thing, which is funny because it was what was people were phasing out years ago, which was I don't want to watch commercials is now having a comeback, because people are going, I can't afford to have 10 different streaming sites, subscriptions, right. So So it's this really interesting thing. We're one of the things that we do as an indie company is we're always trying to pay attention to the landscape of these things is what's changing the platforms? What are the new platforms coming up? And I think that the thing that we do that I don't think enough independent distributors do is that we, of course, we play with the majors, of course, we put the films in the big platforms, of course we do, because we want to take advantage of our marketing ability to reach their their fan base and their consumer base. But at the same time, we pay very close attention to the up and coming platforms. I'll give you a couple of examples. We started doing business with iflix, several years ago, there there there are companies were like pan, Pan Asia. It's It's It's mobile stuff. And when we first started with them, we were seeing quarterly reports, coupon docs, couple 100 bucks, cut to almost two years later, we started to see quarterly reports 20 $30,000 a quarter, because the platform had just started to really take wind and really build. We work with companies like seed and spark, we take a look at all kinds of new companies coming up. Because here's what I always say to people. Nobody saw Netflix coming. Nobody knew they were going to be what they became I remember when they were the little dv. Yeah, right. That the Hollywood videos, the blockbusters, the studio's laughed at them when they got into streaming, ah, this is crazy little company right now, right. And so for us, our job is to pay attention to all of this, who are the new platforms, who's coming up over the horizon? What have they done to sort of build up an infrastructure to build up an audience base? What's the rev share model, if it's not transactional, if it's based on ours viewed, right, and we're placing chances with these companies all the time. Some of them work out some of them don't. There's been companies we've done business with that fell on their face just because they couldn't build the consumer base. But we wouldn't be we would not be doing our job if we were not paying attention to these platforms at all levels, because you never know you just don't know what's going to catch when what's going to catch fire. And so it's very important for everybody, but you know, coming back to the independent filmmaker, here would be my suggestion, be perfectly honest. the downfall of aggregation is a few things. One, there's no financial assurances or guarantees to in most, most Cases of not all cases, maybe one or two, they don't promote, they don't market, they don't even offer, like an ala carte sort of marketing package, right?

Alex Ferrari 1:10:08
Because they don't know it's so hard to market, you really have to understand it.

Joe Dain 1:10:13
Right. So what I would say to any filmmaker out there listening, open up your own aivd account on amazon prime, okay? do that directly, then all the money that you would have paid to an aggregator to place for you and do nothing else and collect your money. Open up your ad accounts. And then go hire a small marketing company, go hire a digital marketing company spend that 15 $100 on hiring a hibu, or some other kind of company that specializes or small PR firm, I'm going to give an example. There's a great PR firm called Oktober coast PR, very reasonable to help you get reviews help you get your film out there, get the press out there drop the trailer to do the things that you don't necessarily have to now we're talking about smart money spent right now you're talking about, you've placed it on Amazon Prime, which it can be a combination of accessible to Prime members and transactional where you have access to potentially millions of millions of consumers and put all your time and your energy into promoting that on that platform. And instead of spending this what I feel is good money after bad, you know, for often exorbitant fees, put that towards your marketing because what happens with most independent filmmakers is they they, they sort of drop their wad on the on the placement fees. And they have they don't have any money left for marketing. And they're not savvy themselves in most cases and how to manage something like Facebook ads like that. And I'll tell you for us I gotta tell you love or hate Facebook on a personal level, their their marketing division, the ability to do paid, targeted, marketed boosted ads

Alex Ferrari 1:11:58
are most most powerful marketing machine, Eric,

Joe Dain 1:12:02
it's been a powerful tool. And that's because we figured out how to maneuver to we deal with their algorithms, we deal with the things that we had to go through with what they said was okay or not okay to booze to promote, blah, blah, blah, blah, blah. So we're always managing sort of their ever changing infrastructure as far as what's okay, but I gotta tell you, phenomenal, phenomenal tool, and something where you can do a $50 boost a $75, boosts $100, boost, a $500, boost $1,000 boost, you can put in the age range, the demographic you can get as as down to the cities, then you can build in your hashtags, the likes things that will all help that film, films promo end up in streams of potentially 1000s and 1000s of potential customers. Right? So it's it's it's it's, it's, it's amazing to me that I don't see enough indie distributors even using that tool,

Alex Ferrari 1:12:50
what I find what I find fascinating, I've said this multiple times on the show, and I and I constantly say it, when you're going to launch a movie, if you're going to focus your energies and marketing muscle, don't spread it out over five or six platforms, focusing on one platform at a time, Amazon arguably is the best place to put your movie right away. Because everyone generally has in North America, at least, generally everyone has access to Amazon, Amazon Prime, or something along those lines. I forgot what the number was for Amazon Prime. But I think it's like 110 million people use in the US in the US have amazon prime. And growing every day they generate I think $53 billion, or something ridiculous off a prime or whatever that number is 10 billion, whatever. So Amazon is no slack by any stretch, if you focus it all completely on Amazon, and you know, iTunes, whatever. That's it's a it's a vanity platform, I wouldn't I wouldn't worry about it. And then the smaller ones that people are like, I want to be on Xbox, I want to be on PlayStation. I want to be on Fandango, those platforms are so minuscule. Yeah, compared to Amazon, it's insane. or Google Play for that matter.

Joe Dain 1:14:08
And what you're saying is where I'm going, if you if you as an independent filmmaker, if you place your film just on Amazon, which you can do directly, at almost no cost, right? And let's say that your film passes the content restriction, quality control that they do because there are films We've had a few it's you know, everything's getting more PC these days where, you know, some films become what's called 18 and up so they won't allow you to place it on prime you only get you only get access to Amazon Instant Video, right? So it's, it's transactional. But that depends if you have pre, you know, intense content. I mean, for us as a horror film company, especially terpenes label, we've made a couple of films that sort of, you know, it's

Alex Ferrari 1:14:53
What would you recommend, but would you recommend and, you know, for Vimeo, that's something like Vimeo pro or Vimeo plus or something

Joe Dain 1:14:59
like that. Because I was going to go though it's it's it's in tune with your the other platforms we're talking about. So if you put everything on, if you put your film on the Amazon Prime and promote that, and you hire a little PR team or a little marketing guy, or a little digital marketing company that really helped get traction, and that film starts to make money, right starts to bring in the money. Well, now that you're seeing money, come in, take some of that money. And now go hire a aggregation company. If you want to be on Google, or Xbox, and you want to expand a little bit right? Then Okay, I get it, right. But but but at least hedge your bets on one of the biggest platforms on the planet. Because if your movies gonna find an audience and start to make money, Amazon Prime's probably one of your best bets. So why not give them the shot first. And, and, and direct money into marketing efforts on that platform, because even if you're not an Amazon Prime member, anybody can go on Amazon, and then pay a transactional fee to rent your film to so you don't even have to, it's not just about tapping into Amazon Prime subscribers, where you're stuck with just the rev share model, right? You also have the ability to point people there just for transactional buy, right? And you can you can list your transactional feed to rent your film at $1.99, if you want to, right, so, so there's so many, there's so many advantages for filmmakers to avoid, you know, spending too much money and having somebody else control their content, and, and more importantly, control their revenue. Right. And again, I'm not not here to undermine aggregation services, I'm really not we need them. We all need them. It's its

Alex Ferrari 1:16:44
origin or district or distributors, good distributors like yourself, like you're saying, like, what you're telling was basically a self distribution model. But yeah, but you know, when you are able to partner with someone that can bring value. And that's I think the biggest thing is, if you're going to partner with a distributor, they have to provide value to you meaning revenue, exposure, marketing muscle, being able to get you in a deeper into deeper markets, like an Amazon where, you know, if you do it yourself, you get to markets, if you go through a company, you might be able to get into many more markets in the world.

Joe Dain 1:17:18
There's so many different. For example, for us right now, I mean, we our dashboard is open to about 60 plus English speaking countries in the Amazon Prime world, right straight. So. And the advantage to something like that is, is when you talk about, you know, a company that supports the film's like, you can probably turn to any one of our filmmakers that and I would I would even pointed the filmmakers have been with us for you know, several years now. Because of our interesting what was the way the model works because we have skin in the game. And because we pay for a trailer and we pay for a poster and we pay for the marketing and we pay for the publicist, and we pay for the platform placement. And we absorb all of that you don't sit behind any of that. What it does is it actually I hate to use this term, but it really does force our hand to do what we say we're going to do No, no in our contract. But but it does sort of put us in a position where we don't do what we say we're going to do if we don't continue to market your films, we don't make any fucking money, we're going to close our doors we're going to go under because we have skin in the game, we've spent 1000s of dollars for every film just for its initial launch, that the filmmaker doesn't sit behind. And so the benefit for a lot of our filmmakers, and anybody following our social media pages, I think specifically our Facebook page for terror films, we're always doing new promotions, there's going to be a new promotion dropping soon, we just did a 21 film placement with Roku, right, that's, that's that bet we're gonna and most of them are library titles, only couple of new titles that that's going to go out, we're going to promote the hell out of that. We're about to do a big content deal with a streaming site called horrify. And we're going to promote that we're always coming back to our films this entire month, this entire month, we're doing something called the ABCs of horror. So every single day, we're promoting several films in alphabetical order from our library, we do a paid boosted ad on every single one of those, most of these films are our, you know, library titles, they're not the new titles, the new titles, you know, but but my point is we keep coming back to them, we're always promoting. And part of that is also because what we've learned, and this has been from trial and error, of course, is that there's never there's never a bad time to find an audience in the digital sphere,

Alex Ferrari 1:19:21
right? It's always a new, there's always someone new, there's always somebody new,

Joe Dain 1:19:24
what's an opportunity where the audience in the consumer can find you. The other thing that we also do is that we're very active on social media with replying to customers. So when somebody drops something on our pages and says, Oh, I really love this movie. We not only thank them, we encourage them to leave a review on the platform because the more good positive reviews they get placed on the actual platforms automatically within the in the in the infrastructure of the platforms, raises those films up in a sort of an automatic promotion within the algorithms of the platform itself to consumers who may not have known about that. may not have seen a promotional release or a trailer or any of the press that we did, and go, Oh, what's this film that that Amazon is promoting or that lou is promoting, or that whoever is promoting, and that's because we're encouraging those positive reviews. Because the more positive more four and five star reviews you get, it's just going to raise to that. So that sums up the heat. And we've had a situation to where we've had some films banned, they first out of the gate, Alex, and they start making money right away. We have other films a four or five quarters in before they start to get traction. This is why we never stopped promoting. That's why we never saw coming back to the films. So again, you know, I think we're independent filmmakers. You know, it's it's you need to ask around, not just about aggregators about distributors. But more importantly, this is an educational process. Well, I hope to have happened from this just mess with go digital distributor is that we get some change to happen. And filmmakers understand that aggregation to one extent from the delivery side is a necessary evil. But the collection of the royalties, and the way that it happens needs to change. And this is affecting everybody. It's affecting everybody. And again, you know, what's difficult about what's happening with go digital distributor is that although they were a top aggregator for Netflix and a handful, the other platforms, they didn't have enough big accounts, right. So so when I think about the noise that could be made is that if we ever find ourselves in a situation where one of the big ones, one of the ones that handles studio accounts, ever ends up in this place, and change hasn't happened by then. I bet you're so it's gonna happen then. And my hope is, wait for that, my hope is that we don't have to, to get to that place. My hope is to make enough noise now. And listen, here's the thing, I'm going to piss a few people off. And I already have. And and I'm not I'm not here to give a shit about that. I'm not here to worry about the platform's feelings and aggregators feelings. I'm here for the independent filmmaker, I'm here to say that something needs to change. I'm here to say these platforms are accountable. And they need to make some very simple basic changes on the financial side that will protect everybody protect everybody. And it's not a big ask. It's not even a big request. It's not even like being unreasonable. Right, right. Even like, I'm seeing something so absurd that they're like, Oh, god, he's crazy. He's out of his fucking mind. That's not No, no, I'm asking for some fiduciary responsibility. As it relates to our royalties.

Alex Ferrari 1:22:34
It was it was a similar it was it was it was a guy, it was a system that was set up originally, when this whole it was we're still very much in the wild wild west of this time period of the streaming time where we're in the wild wild west still. And when they first started coming up on these platforms, like iTunes, I think is the one that really got the ball rolling with the aggregators, because apples, apple, and they wanted to make sure, and then all the other platforms kind of piggybacked on that. It was a flawed system. At the very beginning, they didn't look at the long game, they didn't look at the volume that there was going to be coming in, in the in the years to come. It was a flawed system when they started and as a flawed system now, and that is, that is an example of so many things that we happen in our entire world, where whether it's, you know, burning gas all the time, every single day, as opposed to go to an electrical car, or whatever those you know, whatever those those long term effects are, we're now feeling it here in our in our industry, and there were small enough of a boat, because if you're a big carrier, it takes forever to turn. We're an industry that's small enough that we can make quick, quick reactions to this. And in the end, we're talking about a handful of companies. And we're talking about like, you're not asking for anything that's unreasonable. You know, it's not like you're asking someone, I need a, I need a personal check. delivered by somebody personally, to me at my house every 15 days, like I'm not

Joe Dain 1:24:04
I'm not even asking that the platform's give everybody direct access to them. Right. All I'm saying, all I'm suggesting is that day, pays that up an infrastructure. They set up an accounting infrastructure that allows the revenue to come directly to the content holder. And whether that's an individual filmmaker, or whether that is that is a distributor. And the story, I'll use your guys, I'll use your or use your platform delivery services all day long,

Alex Ferrari 1:24:35
but because it's, but it's justice, and just stop it right there. It's like, it's like saying, you need to use this post house. That's fine, because it's a service and that should end our relationship should end there because it's not like it's like if I go to a post house for a color grading session, and it's not like after you're done, you deliver me the master. We're done. That's the end of

Joe Dain 1:24:57
the service. You do the source. And then other than me needing you to fix something because we're embedded data is off, or at some point I decide I want to take the film down. Again, it's a service. You're not my banker, you're not a financial institution, you're not a collection account. Why are you collecting my money exempt? Why? Why forms and this has to change and until enough filmmakers, aggregators and distributors make noise, we're not going to see change. Be the guy who starts the noise, and I, and I continue not to go, I'm not going to go quietly into the night on this, I'm just not going to be. Last time you hear from me,

Alex Ferrari 1:25:42
obviously, I am as well not going to go quietly. Like I said earlier in my my broadcast, and like, I didn't sign up to be the poster boy for this damn thing. But hey, I'm here. And I'll do it. Because it's right, it's the right thing to do. And, and you know what, when you have a platform, or when you have knowledge, it's your responsibility to use it for the betterment of the community that you are serving. And that's the way I look at it. There's a lot of platforms out there, and a lot of people in my space, who haven't said a goddamn thing about this, right. And a few of them jumped on after I said something, but I was the first one, I was the first one through the wall. And there was a reason because like, I couldn't sit around, and you are arguably one of the first distributors to really come up publicly and call everybody out on their stuff, you know, really heavily, you know, put it out there. So I applaud you for for coming on the show. And in speaking your truth, sir. And, and helping filmmakers.

Joe Dain 1:26:40
I thank you, thank you for having me. Thank you for posting the letter. You know, because like I said, I, you know, when I saw what was coming out, and I saw how thin it was, as far as the the facts and the bigger picture, and what the what the core issue is, is why I felt like I can't, I just can't sit by and let everybody keep guessing. And more importantly, I couldn't let everybody Yeah, I couldn't stand by and let everybody continue to make this about, oh, this is a filmmaker, independent filmmaker service issue only, you know, it's not it's not and that that's the story everybody needs to be talking about. And I really hope that we see something really great from from indie wire, who've I've spoken to and given some information to and, and I'm hoping that the story continues to get traction, because, again, this has to end up at the doorsteps of the platforms. And I will say I'm sort of a final note, I have been actually sending these emails, these links. And then when this podcast is alive and available, I'm gonna send it to the to the platforms directly and say, Listen up, pay attention, pay attention, this needs to come your way. And you need to talk internally. And we'll see what happens. We'll see what happens. But so I really want this to level off. And I want people to take a deep breath. And I want people to ultimately know that there is a light at the end of the tunnel. But we have to stick together as an independent community. Yes. And we have to keep raising hell. And we need to ask the questions, and we need to not be afraid to piss people off, including the platforms and demand some change. Amen. Brother, preach, baby preach.

Alex Ferrari 1:28:19
And now I am going to ask I am going to ask you a few questions. I asked all of my guests. What advice would you give a filmmaker trying to break into the business today?

Joe Dain 1:28:31
Ah, God, I mean, I'll try and keep it simple. Um, one of the big conversations that we have on a pretty regular basis, and I'm going to really keep this about about horror films, specifically, but but it really kind of lends itself to any independent film. We're a very interesting time where spending more does not mean anything, right? So this idea that you need to spend millions of dollars on your film, and you've got to try and get new movie stars, it doesn't matter anymore, guys, it doesn't matter anymore. There was a time in this industry where if you had a certain level of name, you were guaranteed some pretty solid foreign sales, you were guaranteed maybe even some sort of limited theatrical, those days are gone, because there's a really kind of non existent and look, all you have to do is pay attention to the major platforms. How many movies do you see every day? big movies, big stars, they don't go to the theaters. They don't even get TV play. They're going straight to the platforms, okay? There's a reason for that. And that's because consumers have changed the way people want to go see films, the way they want to ingest their content has changed. And when it comes to horror films, specifically, listen, here's the number one rule. I get scary, man. Make it scary. Don't worry about that. Don't worry about your you know, I got to have big effects and I can have all this the bells and the whistles, make a very good story and make it scary. And if it's an indie drama, make it compelling. If it's a comedy make it funny, right. These are some very basic rules and keep and keep your budget As small as you possibly can, because at the end of the day, if you can save some money to put into marketing, especially if you're self distributing through one of these services, you know, then you give yourself an opportunity, right? Maybe you can give yourself a little for wall, maybe you do yourself a little event theatrical through tug. Whatever it is, maybe you swing the bats in and submit your film to AMC independency. If they give you a handful of theaters, right? You know, there's so many ways to cut this and be smart about it. And be smarter about your investment. And I'm not saying don't make the movie you want to make it listen to at the core of things. As a filmmaker, you got to make the movie that you feel good about that you can stand behind. But do your homework and pay attention. Because sometimes sometimes, just because you got money to make a movie doesn't mean you should make that movie. And I think about that.

Alex Ferrari 1:30:43
We'll be right back after a word from our sponsor. And now back to the show. I always tell people, if someone gave me a half a million dollars today, I would make five to 10 movies. I would make I would make five to 10 movies. I mean, I'm being honest, you diversify that portfolio, you have a much instead of swinging once you swing five to 10 times, chances are something's you're gonna get, you're gonna get a much better hit out of that. But that's just me.

Joe Dain 1:31:20
No, no, I agree with that. I agree with that.

Alex Ferrari 1:31:23
Now, what is the lesson that took you the longest to learn whether in the film business or in life?

Joe Dain 1:31:29
Oh, wow. In the film business, it took me a while to learn that nobody knows shit. And that is the absolute truth

Alex Ferrari 1:31:39
As William go as William Goldman so perfectly said nobody knows nothing.

Joe Dain 1:31:43
I don't care who you are on the food chain. And what part of the industry you're in, you don't know a goddamn thing you don't know who's going to you don't know whose movie is going to be success. You don't know what scripts gonna work. You don't know anything. You don't know anything. What we're all doing at the highest levels all the way up to the major studio execs and the biggest producers and directors in town is we are taking educated guesses. That's what we're doing. Okay, that's all doing. Now some of those educated guesses are more informed, and based on more experience than others. But at the end of the day, that's all they are. Because if again, if we had a crystal ball, we knew, do you think there'd be another studio that spent $150 million on the movie and another 100 million dollars on PNA. And the film still fell on its face? They would have made that movie if they knew that was gonna happen? No, of course not. They hedge their bets, right. And that's all we're doing in this industry. So although vetting is important, and getting feedback is important, and getting advice is important. Take it all in and then and then divest, we, you know, get rid of what doesn't matter and stick to what feels good to you. Because at the end of the day, you got to go with your gut and you got to go your instincts. And you got to try and make them educated. But that's all they are. They're just guesses. Nobody knows anything, nobody knows anything. And that took me years to really understand, including for myself, I mean, I don't mean honestly, for myself to be able to know that my biggest advantage is knowing what I don't know. And and portly, not being afraid to ask questions, not being afraid to ask for help, not being afraid to ask for for for for advice. And and even as as as I think, as savvy as I can be in many aspects of this business, which took a lot of years and a lot of learning curves, and it certainly was a lot of mistakes. There's still times that I don't get it right. Or sometimes I have to ask for for somebody's input or colleagues input or for an opinion and there's no shame in that. In fact, I think there's empowerment in that I think when you are you are smart enough to know that you don't know at all and that you don't have all the answers. Help. There's power that don't feel weak and that don't feel like you're you you you're you're you're somehow inferior because you have to ask for help or ask for an opinion or ask for something

Alex Ferrari 1:34:03
We all have to ask for help. We all have to ask for opinion. If you're humble enough and and just understand that you know nothing and that your your cup is never full. You will always be it will always be filled up. It's like that Zen Master says is like your cup is full. Why are you coming to me? I can't fill it. You've already know everything. Why should you talk to me? You should always have that empty, empty cup feeling.

Joe Dain 1:34:26
Yeah, and I think the problem though, is you could probably attest to this. I mean, this is a business built on he goes right No, stop

Alex Ferrari 1:34:31
No, stop it No, stop it stop.

Joe Dain 1:34:34
Let me go further. Most of the egos are fragile, right.

Alex Ferrari 1:34:37
Oh, so stop it. I don't believe you. I believe you

Joe Dain 1:34:40
When you are dealing with that. It's really it's really a tough. Sometimes it's very tough to get out of your own way. Even sometimes the most intelligent people have a hard time getting out of their own way until until the industry you know kicks them in their head and that's the other thing too is important to know about this business. It doesn't give a shit about you. Oh doesn't care and and even having Hey, let's say you have a hit movie or hit series matter, right? You're hot for that minute. Now when that movie is gone, and that series is off the air, now it's time to prove that it wasn't a fluke. Now you actually have to work harder to show this business that you didn't just get lucky, right? And that you can continue that success. And now you think you worked hard to get to the first hit, try getting to the second hit. Alright, it's even that much harder, right? And I think that that's really important for everybody to know. And I don't care again, I don't care who you are, you can be an indie filmmaker, you can be the president of Warner Brothers. You don't know everything. You know,

Alex Ferrari 1:35:36
I look, there's certain there's certain directors that you and I grew up with, that were the biggest, most powerful, most amazing artists and now they're not financed. They're not making movies today in the studio system, because they're just not so it doesn't matter. All of everybody has that look like I will always use that example a Spielberg couldn't get Lincoln, you know, financed, you know, he had to go, you barely got his movie finance. Even even better example, Schindler's List. He paid for himself, because nobody would give him money for it. And that was Spielberg, you know,

Joe Dain 1:36:12
nd let's talk just for real quick second about someone like Megan Ellison and Anna poor, right, who is such an advocate of of cultivating arthouse filmmakers. But let's face it, she made some big bets on some not great choices, that now she's her company's restructuring. They're rethinking everything they're doing. And and I'm not saying that as a negative because I have such love and respect for a company like that, that that did. It did it took so many chances independent filmmakers and essentially independent filmmakers, but give them like a $40 million budget right?

Alex Ferrari 1:36:52
As again, scary sometimes scary sometimes.

Joe Dain 1:36:55
But she's her company paid for that. Right her company paid for that, that, that those decisions and I use as an example here, somebody you know, billionaire family, didn't know it all. Took some took some took some pretty hefty bets and got kicked in the face a couple of times more than a couple of times on the financial side. So even she's learning and restructuring and redoing so again, it just goes back to what I keep saying is that nobody knows anything. We're all we're all taking guesses and swinging the bats.

Alex Ferrari 1:37:23
Now three of your favorite films of all time?

Joe Dain 1:37:27
Oh, three of my favorite films of all time, I would say that Goodfellas is definitely up there is probably

Alex Ferrari 1:37:33
I am. I am looking forward to the 100 and $50 million epic Irishman that's going yeah. Which is going straight to streaming on Netflix. Actually no. theatrical, it will go theatrical just

Joe Dain 1:37:46
Rather given it like a 24. Day, theatrical before it hit streaming.

Alex Ferrari 1:37:53
So let's see. Let's see. Let's see. Is it Yeah,

Joe Dain 1:37:55
But it goes to show you though it goes back to the to our earlier conversation it goes to show you the level films going to this is Martin Scorsese.

Alex Ferrari 1:38:03
This is Marty Scorsese with Robert De Niro, Joe Pesci and Al Paccino

Joe Dain 1:38:07
Star in the industry. And they all signed up for a movie that's predominantly going straight to streaming, the most important, because that's just where the businesses that that that's who's supporting. I mean, look, Martin Scorsese with that cast couldn't get a studio to write the check. That's the truth. I mean, let's talk about why he went to Netflix. It wasn't because he was like, Yeah, I want to be on Netflix, I want to go straight to streaming it was because nobody was going to write that check. No, the studio wasn't gonna write that because Robert De Niro wasn't playing a superhero, right? Like, let's just let's just call it what it is. Right? That's the truth. That's the truth. Um, I would say that the usual suspects is another movie good for me. I'm a big, big, big, big, big fan of and I'm actually going to go on a little bit of a limb here and say there was an independent film called Elizabeth blue. That That really was a beautiful film that was that was written and directed by actually my husband. And it was based on our true experience and got a lot of got a lot of love, and actually got our unknown actress on the variety Dark Horse lists for the Oscars, which was pretty, we put that out in 2017. And so I only say that because it's not something I say often or lightly. But it was a film that was so beautiful and near and dear to my heart. That it really touched me so but anyway,

Alex Ferrari 1:39:27
Yeah, that's awesome.And where can people find you and your company what you do.

Joe Dain 1:39:34
So you can go to our websites are probably the easiest, which is terrorfilms.net, or globaldigitalreleasing.com. Where you can see our library, you can see a little bit about us, you can see a little bit about our model. And it's pretty straightforward or any of our social media pages, which are pretty straightforward terror films or global digital releasing. And, you know, we're we're super transparent company and and you know, I have these conversations all the time with filmmakers that are that are when films come our way that we're interested in whether it's through a sales rep or a film festival or an individual filmmaker. You know, the biggest part of the conversation I have on a regular basis is I say, first of all, give them a very honest landscape, about, you know, releasing about what it's going to look like, what it's going to be what we're going to do at but what what I always say before I hang up on that, because I say, listen, even if you loved everything I said, even if you've gotten recommended by three or four people that are with us to come to our company, I encourage you to talk to any distributor expressing an interest in your film, talk to all of them, ask them all the questions, look at their libraries, look at what they're doing. More importantly, look at their long form, because a lot of times to what I always what I think a lot of pride in is what we tell filmmakers that we do, and about our model, it's in our agreements, actually, in the long form, word for word and black and white. If somebody is telling you a bunch of nonsense and giving you a song and a dance and all this wonderful stuff, that's great. If it ain't no long form, it doesn't mean shit. Because it doesn't mean they have to do it, they don't have to do it, they don't have a legal responsibility whatsoever to do anything that they told you on a phone call. So that is a big thing that I pride ourselves in is the transparency of being a company comprised of independent filmmakers who have been through this nonsense, or going through this nonsense now with go digital distributor, we're right there with you. And we're fighting hard, and we're giving people education and giving people tools. And I think that we're all going to come out on the other side of this, it's going to be rough, it's going to be a rough probably few months for everybody. But the dust will settle and we will be on the other side of this and and and and we will be a better ideally a better community for it. I do believe that. And that's I think that's our biggest goal here with with the go digital distributor debacle is how do we how do we become a better community of independent filmmakers and independent distributors? And how do we how do we maybe make some change? That's for the better for everybody?

Alex Ferrari 1:41:59
Joe man, it has been an absolute pleasure having you on the show. And thank you again for being so raw and honest and transparent about you know, sounding the the alarm on that just go digital distributor, but also on the much larger problem that needs to be fixed it for us to move forward as a community and as a business. So thank you, brother, for for doing that. I really appreciate it.

Joe Dain 1:42:22
Thank you for having me, buddy.

Alex Ferrari 1:42:25
Again, I really want to thank Joe for being so straightforward. So honest, so raw, so transparent, about what's going on with this whole distributor, film aggregator thing that is happening to our industry and to our to a lot of filmmakers, I was affecting a lot of filmmakers. And now he's coming forward and really, really putting out there some very interesting theories about what could have possibly happened, just what ifs, if you will, of what could have happened to it. The math does not seem to make any sense. So we'll see what happens as things continue to move forward. Now if you haven't heard already, I did do a Facebook update. Facebook live update earlier this morning. And I will put that video in the links or links to that video in the show notes at indiefilmhustle.com/352 as well as links to contact Joe Terra films, and also links to the prior podcasts and videos that we've put out there discussing this go digital distributor debacle. Now I am continually talking about this on the show and bringing new elements into the show because it is an ever growing story. And it is affecting 1000s and 1000s of filmmakers and their This is a moment in time where we really need to see what happened, how we can protect ourselves in the future and so on. So I do have other episodes coming up next week that are not relative to the whole go digital distributor thing but I do want to keep an eye on this and also want to keep a focus a spotlight on this topic because it is so so important, especially going into AFM in November. And by the way, I will be at AFM this year the American Film market I will be there a bunch this year. So if you want to reach out to me, you want to grab a cup of coffee or anything like that, just I am me, email me, we'll set something up, I'll be at the lows, walking around doing things, taking meetings and so on. So love to hang out with the tribe. If there's a whole bunch of you, maybe we'll do a little you know, meet up somewhere one of the local bars or coffee joints or something like that. So please let me know reach out to me. I want to talk and help as many filmmakers as I possibly can. while I'm there so thanks again guys for listening. Also, guys, if you have any questions at all about the make your movie Bootcamp, please just email me at boot camp. At indie film, hustle calm, I really do want to make this an insane, insane time pack as much information as I can for you in this amazing two day intensive that I hold in Burbank, we will have some special guests come in some industry heavy hitters, they're going to be dropping major knowledge bombs on you guys, as well. And there might be a few other surprises in there as well, because I do like I said in my last podcast earlier this week, or actually yesterday, which is, I do believe that the future of independent filmmaking is going to be the film entrepreneurial model, the entrepreneurial filmmaker, that is what's going to survive beyond all this other craziness that's going on, though those those basic pillars of being a filmtrepreneur will be, in my opinion, the future of what what filmmakers how they can survive in this ever changing landscape called independent filmmaking, and the film business in general. And if you want to preorder my book, which is going to come out November 7, it's called Rise of the filmtrepreneur, how to turn your independent film into a money making business. Just go over to filmbizbookcom, that's filmbizbook.com preorder it, we are going to be selling it on paperback, you can preorder the ebook, the ebook version as well. And I will be I'm going to do my best to get the audio book out sooner rather than later. So thank you again, so so much for all the support guys, if you have any questions, you have any stories, or any of that kind of stuff, please email me message me hit me up on Facebook, Twitter, wherever I do, check all that stuff. So thanks again for listening guys. I hope this episode was a value to you. As always keep that also going keep that dream alive and I'll talk to you soon.