fbpx

Want to learn how to write for Netflix? Join Story Expert John Truby for his FREE webinar May 25th

Day
Hour
Minute
Second

IFH 129: 5 Rules to Make Money Selling Indie Films

Right-click here to download the MP3

I feel that one of the reasons I was put on this earth was to help filmmakers and artists make money selling their films and art. There’s no reason why filmmakers shouldn’t be able to make a steady income from their films. You can here my inspiration rant on this topic here: Why Filmmakers are Always So Damn Broke & What They Can Do to Change It

So I came up with these 5 rules on how to make money selling indie films. I outline what I discuss in the podcast below. If you are going to listen to an episode of the IFH Podcast then this one and #88 (Why Filmmakers are Always So Damn Brokeare two episodes you should listen too. Check out the outline below and then listen to the episode. I also go into other areas and core concepts that are not in the list below.

1. Understand the initial cost of creating the factory that will build your product

2. Understand the cost of creating your product vs the return 

  • Keep the budget low enough where you feel you can make a healthy return on investment
  • Joe Swanberg (watch his SXSW talk here)

3. Understand your customer and how to engage with them 

  • Provide Value to your customer
  • Social Media
  • Email List
  • Where does your customer hang out, go there and engage with them

4. Understand how you will be getting your product to the customer

5. Understand revenue streams

  • DVD/Blu-Ray
  • TVOD
  • SVOD
  • Workshops
  • Merch

Now get to listening and make your film!

Alex Ferrari 1:50
Now one of the biggest questions I always get asked, wherever I go, or through social media, or emails or anything like that is how do I make money? Selling movies? How do I make money making movies, and considering the horrible statistics that I think is 90 or 95% of all independent films, do not make money or break even, which is a scary proposition, why anybody would want to get into this business is beyond me, but as a businessman, but when you get bitten by that bug, it's real hard to let go, I got bitten by it almost 20, over 20 years ago, and I still can't get the vaccine for it. So it's, it's something that's in your soul, it's in your heart, and you got to do it. So I'm here to try to help you guys make money with your movies. I've done it in the past, I'm hopefully going to continue to do it in the future. And try to figure out what that secret sauce is? What is the theory? What is the actual practical things that you can do to make a movie and make money with that movie, and then repeat, rinse and repeat, rinse and repeat. So you become a filmmaker, a full time filmmaker, a full time artists making money off of your art? And really that's the dream, isn't it? Wouldn't it be amazing just to be able to just do what you love to do every day and get paid to do it in one way, shape, or form? Absolutely. Now, if you've been listening to the podcast for a long time, for a long time, you guys know that I had a moment of weakness. And I actually left the business a few years ago, to open up a gourmet shop here in Los Angeles. And during that hellish time, I learned a lot. I learned a lot about business, and specifically how to run a business, how to create a product, how to make a profit, and repeat and rinse and repeat. So I wanted to talk today a little bit about the blueprint that I'm laying out for, for making money in the film business making money with movies. So I'm going to just go over it and really look at it from a business perspective. I'm not going to look at it as an artist, I'm going to look at it as a business because as I've said before, I'm quoting Suzanne Lyons here, a good friend of mine, she says that the word there's a word show and there's a word business and the bit in the word business has twice as many letters as the word show. And that is a there's a specific reason for that, guys, you have to understand your business. So very first thing you have to understand is understand the initial cost of creating the factory that will build your product. Well what does that mean? The factory is your infrastructure, what you're going to use the tool so buying gear, building a team, post production infrastructures, how you're going to get your deliverables, how you're going to create and create this factory, this movie making factory of yours and now in today's world. It is So affordable. So, so, so affordable to be able to do it on your own, you can start with an iPhone, you can start with some free software like you can get DaVinci Resolve for free, you can edit on it, you can color grade on it and get your stuff out there it for free, you just have to get a computer. So computers fairly inexpensive today comparatively to the olden days. So you can get a nice powerful computer inexpensively, or rent one or buy one or, or borrow one, whatever it takes, do it. But understand, you have to start building this factory. So you have to start creating an infrastructure, what camera you're going to buy, if you're going to need lights are going to borrow lights are going to rent lights, whatever it is, I'm looking at it as a business person. So I want to own my factory, I don't want to rent my factory as much, I want to be able to have the power to go and do what I want when I want. A lot of people out there don't have that option. But if you can, you could do it at a smaller level DSLR I mean for under two grand, you can get a complete filmmaking package, you know, including post, for under two grand buying a buying a Dell, getting a bunch of gear, I won't go into the details of it. But that's your job to figure out, you've got to help yourself, create that factory, go out there and get information about buying gear, and then start putting a good team around you get good collaborators to help you build your product, and your film is your product. So the next thing you have to understand is the cost of creating your product versus the return that you will get from selling your product. This alone is the most infuriating thing I run into in the film business with dealing with independent filmmakers. A lot of times, not a lot of times I want to say 99.9% of the time. filmmakers producers do not think about this simple business core idea. It's a simple idea. How much is your product going to cost? How much can you expect on return. And the reason why a lot of filmmakers don't get into that is because we're artists. And artists don't think about things like that we, we just want to create art. And that's fine. Okay, if you want to go create art, get a pen, pen and paper, write a script, write a book, get some drawing paper and a pencil, draw something, get a get a guitar start singing a song. Unfortunately, for everyone listening to this podcast, our art form is extremely expensive. Probably one of the most expensive art forms next to maybe architecture that exists in the world today, we need a lot of we need a lot of resources to create our art. So with that, because you've chosen this art form, you have a responsibility to yourself to be able to monetize monetize the art that you create. Now, with that said, if you're an artist, and you just want to create videos and create art, and you want to create films for the artistic expression of it, and not worry about making money, fine, more power to you. There is multiple ways you can do that by your camera, by your editing system, and start making your movies and do it. And don't worry about how much you're going to make God bless you all the way. Well, what I'm talking about in this specific podcast is someone who want to make money to sustain themselves as an artist to make a career for themselves, build a career, build a business of them of making their art and selling their art. And that and that means by I say art, I mean your films, your product, your series, your visual content, whatever it might be. So understanding the cost of your product. So understanding the cost of making your film, versus what you feel you can make as a return on your investment. When I made my short film broken all those years ago, I really didn't have a plan. I kinda was lucky enough to do what I did. But once I understood what I did, what I was going to do, I went full force and what I mean by that for again, if you guys have been listening to this podcast for all you know, I did this little short film about a decade ago now called broken. I made the movie for $8,000. And I was able to generate over $90,000 in revenue and continue to make revenue today with it based on understanding these principles that I'm going to lay out for you today. And I'm not I'm not doing something that has not been done before. I mean if you if you studied Joe Swanberg you know he's a very well known director, and he has done probably about 3035 feature films at this point in the game. And now just released the show on Netflix a series on Netflix. He's very legendarily known for shooting six feature films in one year, I'm going to put in the show notes. By the way, the show notes, of course, are at indie film hustle.com, forward slash 129. in the show notes, I'm gonna put a link to his SXSW talk, it's about an hour long about how what the realities of making a living in the business are, he makes art films, he makes small art films with no stars in it, when he was starting out. Now he makes movies with stars in it, of course. But when he was starting out, he did not have stars, he had friends, but he made his movies for $2,000 $3,000. And then he knew that he would be able to sell those movies and make five or 678 $1,000 sometimes. So when he did that, he's like, Okay, I need to make in order to make so much money a year to support my family, I need to sell six of these at $1,000 each, that's going to give me 48 grand minus what it costs to make, that's going to be enough to keep my roof over my head food on the table, and move on as an artist. And that's what he did, he made six movies in one year, because he already had the output deal, he already had a place where he was going to sell it. So he knew exactly what his return was going to be when he started making his product. Now, a lot of us don't know that with Meg, I have really no idea what kind of return I'm going to make on Meg. But I do understand that I will make some money on Mang. And I will be able to get a healthy return on the money that we've invested in making that movie and you guys will get a front row seat. And as I document that process, moving forward, but understand keep the budget of your film low enough where you can feel you can make a healthy return on your investments. Look at the studios. This Do you think of a major one of the major studios is going to spend $200 million, plus another 100 and $50 million dollars in advertising. So a $350 million nut that they've got to cover? Do you think they're going to do that without having a very clear idea of where they feel they're going to make their money back? Sure. There are the bombs, the absolute bombs, like the Alice in Wonderland remake that just came up through the looking glass. That was a complete bomb, Lone Ranger, another huge bomb miscalculation. But as a general statement, or even movies that they don't think they're gonna make that much movie still make enough money to still make a lot Batman versus Superman. They were expecting over a billion they didn't reach that target. But it's still made seven 800 million, something along those lines, that's a lot of money. And they got to return on their investment. plus all the ancillary revenue streams, which we'll talk about in a minute. But keep that in mind. Guys don't, don't go out and make a million dollar first feature, unless you are with a producer who has an understanding of where they're going to make their money back. Because I guarantee you this guy's if you make a movie for a million bucks, that makes no money. The chances of you getting another million dollar movie is very, very rare. Because making a million dollar movie as a first time director or even as a up and coming director is a rarity in itself, let alone try to do it twice. Now you make a movie for 10 grand, and you sell it for 30 make 30 grand on it. Guess what? You're a successful filmmaker. So then a businessman, an investor would go well, if he made a $10,000 movie, and was able to make 30,000. If I gave him 50,000, could he turn that into 150,000? could even double my money? Could he make it into 100,000 I wonder that's the key to growing your, your career in your business, understand the cost of your product versus the return. Now, the next core concept you have to understand is understand your customer and how to engage with them. In other words, marketing, you have to understand who your customer is, when I'm going to use broken again, my when I started to go out selling, selling broken, I knew who my customer was my customer was other independent filmmakers. And I was going to show them how I made my movie back then there was no not many options for this kind of information. Now there's just I can't even explain how much information there is out there. But back then, it was a desert. I was the only one I knew what my market was. And I went after it. And because I went after it without ever spending money on advertising. By the way, I always did this guerilla style, I was able to generate a good return on my investment because I understood who my customer was, because the customer was me. I understood who I was and understood what I wanted. So I translated that to my customer, which were other independent filmmakers. One idea that you guys have to understand is when marketing to Your core audience, once you understand who your audience is, the first thing you have to do is provide value, provide value to that customer. Don't just shout at them, don't just, hey, hey, look at me, look at my movie, read my movie, do my thing, do that you can't do that, guys, there's too much noise in the world, you cannot compete with the studios who have the money to blast that message out into the world in ways that you will never be able to do. So you have to be more strategic about it, you have to be more low cost about it provide value. So what does that mean provide value? It all depends on what kind of movie you have. You can give inspirational quotes, you can do clips of your movie, you can do educational content, you can do funny content that entertains them for free for free, could you give it away a little bit for free first, then if they like it, trust me, if they enjoy the content, and you provide enough value, they will buy the final product. This is the new way of marketing. And you have to understand that this is the olden days of buying an ad in a newspaper, or in a magazine or buying ads somewhere else is not the way to do it short, Facebook and Google are excellent ways. If you are going to spend money to advertise those two ways are excellent. Why? Because they understand their customers so well, that I can pinpoint exactly who I want to see my ad, or my content sent to it is genius. And we'll do a whole other podcast, we have an entire course in the syndicate, about Facebook ads and the power of Facebook ads on how to just strategically target like a scalpel, just strategically target your audience that you want to see your message. So provide value, use social media, build your audience, build an email list, that you can continuously talk to your audience, you know, where does your customer go to hang out, if wherever they go hang out there and engage with them start building that rapport, you need this audience in order to sell your product. Now, you're going to a lot of you out there saying Alex, I don't have an audience. I don't know how to build an audience, you know, like, Well, you know what, make your first product, make your first film. And then start engaging with that, that little audience, whatever that audience is, that you've already identified, start engaging with them. Once you have your product, that'll start building, you're building your brand, building yourself building a future customer based, remind remember guys, you don't need a lot of people to buy a 999 buy on iTunes, or a 399. Rental, you don't need a lot of people to to make a good amount of money, you know, in the grand scope of things 1000 2000 in the grand scope of the world, that's not a lot of people, you can do it, it is possible, but you have to start doing it little by little and that is the other little thing. On a side note here. This is not one of our core principles, though it should be but understand something consistency. In order to be successful, you have to be consistent. You have to show up every day, every day and start building and building. Look what I've been able to do with indie film, hustle, I started it from nothing I had been out of the game. For three years, no one had even heard of me. And I just showed up and started implementing many of the core concepts that I'm telling you right now. It's a lot of work and it takes time, it's not going to happen overnight, it's going to take time. But if you stay with it, and you continue to do it, I guarantee you it will pay off in one way shape or form. By creating that action. By creating work content, something it will pay off in one way shape or form. I guarantee it, I guarantee it will happen. But it will take time. It could be a year, it could be 10 years. But I guarantee you, you show up every day for work. And you start pushing and pushing and pushing and start building that audience and start creating content and start putting it out there. It will work look at the YouTube generation. Look what these guys have been able to do. These vlogs or some of these vloggers show up every day they haven't daily vlog. That means they shoot their show, and edit it all in the same day. And output and output and upload. That's all they do all the time. And I guarantee you when they first started out, they didn't have anything. They didn't have many, many subscribers or audience, but because they kept showing up every day and kept pushing every day that audience built. So at first when you're on YouTube, you're like, Oh, you know, I'm making, you know, $1 a month $2 a month of ad revenue. Sure, at the beginning, that's the way it works out, it worked out like that, for me, when I started uploading these podcast to YouTube, it wasn't a lot of money, you know, it was just a little money. And then now, because I've been all the time kept putting it up, all of a sudden, there's 150 videos. So now I have all those little, those little pieces of content, generating a cent here, a cent there, and all of a sudden starts adding up. We'll be right back after a word from our sponsor. And now back to the show. So imagine in two, three years, you know what will happen if you continue down this path, keep showing up. So you make one movie, let's say you can make two movies in a year, and you put those out there, and then you start selling those movies? Well, while you're making a new movie, that other movies still generating income for you. So you can continue to make new movies, it's what the studio is done, guys, just, it's a blueprint that the studios have put out, since the beginning of the film industry, you make one movie, then you make another movie, then you make another movie, all of a sudden, you have a library, and that library becomes valuable. And that library is generating revenue streams for you. And I'll get to revenue streams in a minute. So the next core concept that you have to understand is, understand how you're going to get your product to your customer. In other words, distribution, understand your distribution outlets, understand how you're going to get it out there. So you're going to get it out there by you know, renting a space somewhere, put a bunch of chairs up, put a bunch of ads out or or put the word out and get charged five bucks ahead at the door. That's one way that's a way to make money. You've got to think about different distribution outlets, you know, look at Tyler Perry, Tyler Perry, who's built this insane Empire. What he did is he just took his plays on the road, before he started making movies, he took his plays on the road, he literally did what I just said, rented a space, put on a show, but the word out and he collected money and every time he would make more money, and he kept going and going and going and going until he now he has the empire that he has, whether you like his movies or not, whether you like him or not, it doesn't matter. It's about what he's been able to do on a business standpoint, he understood his customer. And then he went after that customer and gave them value and gave him something that they weren't, they weren't getting anywhere else. So he was able to build up an empire based on that simple core idea. So understand your distribution options. And I'm gonna talk about revenue streams in a second, but understand your different distribution options, and also the cost of distribution. So a lot of times people don't think about this, especially when they're making their movies. They forget about post production, obviously, because that's where everyone forgets their money. But after the movies done, they like okay, now I need deliverables. Oh, I need to, I need to Alright, so first of all, you need deliverables? Well, deliverables could be very expensive, guys, depending on what deliverables you need, you need a DCP 800 to 1000 bucks, a DCP digital cinema package, that's what's going to be shown in a theater or at any major festival, you're going to need it 800 to 1000 bucks, great. Now you're going to also need an HD cam s r or hdslr. Tape 1080 p Master, that's going to run you for a feature film about 1200 bucks 1200 14 $100 depending on where you go. Okay, so there's that cost. Now all your audio deliverables. There's a ton ton of different costs involved hard drives, just people forget about the cost of hard drives, backing things up archiving your your material where that's all going to go, all these things are cost. So you have to understand your cost of distribution. And then there's other costs of distribution. Like if you're going to self distribute, well, if you're going to go through someone like a distributor, there's going to be a cost involved with inserting your movie into iTunes into Netflix into any of these. There's a cost involved. It's not a huge cost, but it's a cost upfront cost. Okay? So understand those costs and incorporate them in the cost of creating your product. Okay, understand that cost of creating your product, that's all the whole picture. So put that in the math of when you're like well, it's gonna cost me 10,000 bucks to make my movie is it or is it gonna cost you $15,000 including deliverables, you have to think about this stuff. You know, you have to think about all the way through the entire lifecycle, the entire journey of that film creating that product, you have to understand so for me, when I had my olive oil and gourmet shop, I needed to get the cost of of finding the the olive oil, the cost of it. Creating the bottle, the cost of printing the bottle, the cost of the corks, the, the seal that went on top of it, the manpower, that is to create it, the rent to store it, where I'm going to store all of my inventory, all of these things had to be put together in order to get a really clear return on that bottle. So it might my cost to create that bottle was $3.03 5450. Okay, and I sold it for 20. Okay, does that include my rent? That does include my gas? Does it include all the other insurance and taxes and everything else? Or am I deluding myself. So think about those things, when creating your product, understand the cost of distribution, and you understand the multiple different different options you have in distribution, and how you're going to get that product to that customer, you have to also think outside the box, guys, don't go traditional, don't think you're just going to go to a distributor and the distributor is going to handle everything for you. It doesn't work that way. Okay, it doesn't work that way. And I'm gonna teach you I'm going to give you a really quick, really quick little piece of advice here. If you go with a traditional distributor, which I have in the past, and I've dealt with many of them, they're wonderful, there's, there's many there are wonderful. But on a business standpoint, if a distributor picks up your movie, and they feel that they can make so much money with your movie, they'll put energy towards it, they might even put some resources towards it. If that does not start returning money, right away, they will drop it, they will not focus energy on it. Why? Because they're a business, and they have to keep the lights on, keep their overhead going, I understand and sympathize with traditional distributors, they got to do they got their business, they have to run a business. So filmmakers, because they have art, they have their art and their Lego distributor screwed me, they, they felt that they can make some money, they didn't make the money, they're going to move on, they'll just dump it, they'll throw it up on somewhere, not push it or not give anything. But if they feel like they can make some money with it, oh, boy, they're going to put all their resources and energy and money behind it. But they have to feel like they're gonna make money with it. So that's the really scary thing about going with a distributor, you have to trust that they're going to do what they're gonna say they're going to do and not drop bait and run the second, they feel that they're not going to make money with it. That's why I feel so strongly about self distribution. Now, because and again, at a certain point, you know, if you making a movie, that cost a million bucks, self distribution, as your only option and your only distribution strategy, it's gonna be tough unless you have a huge audience. And you really understand a lot of these core concepts that and you've really built it all out, then yeah, you could do it. There's a guy range 15, the movie range 15,

I'll put a link to in the description, they've made over seven figures, doing self distribution completely, but they have a massive audience and understand that audience very well and speak to that audience very well. But they are literally a bunch of nobodies in the film industry. And I am going to try to get the director and producer on the show I'm working hard to get them on because I want them to tell you their story. It's amazing. And they did go through distributor as well. So that's how I learned about them. So the next core idea, the next core concept that you have to understand is understand revenue streams, revenue streams. And that's something that they don't that most filmmakers don't even understand the concept of revenue streams. What's a revenue stream, exactly that a stream of money coming towards you, the filmmaker you the company that created your product, okay, so multiple revenue streams, unlike a single product, like a bottle of olive oil, once I sell that product, that's the end of that revenue stream, I have to look for different distribution outlets for me to get my product sold out there, as opposed to the arts, because the art can be enjoyed by multiple people, not just so one product, meaning a movie can be seen by millions of different I could sell that one product to millions upon millions upon millions of people. Whereas I want to sell a physical product, I only sell one physical product to one person at a time. So that is the main difference. And really the exciting part about being in the film business and creating art that you can actually sell in this manner in the visual arts or in music. So different revenue streams, DVD and blu ray, still very viable, still a good option. Think about how you can do it. There is a cost involved to create it, even though you might go through Amazon and do CreateSpace where they will just you know, print it up as needed. So there'll be no cost to you, but you'll lose a little bit more money on it. But hey, if you don't have the money to do everything you need to do to create blu rays and DVDs that might be an option for you. tvod transactional video On Demand that your iTunes, that's going to be your Xbox, your PlayStation, all of these places where people will buy or rent your movie your Amazon's before it goes into prime or anything like that. These are places where people can buy and rent your movie for a cost. That's the first window that you have transactional video on demand tvod. Next would be s VOD subscription VOD, that's your Netflix, that's your hulu's. That's your Amazon Prime's those kind of places. Those are where you finish off the run of your movie. Those are different revenue streams. Now, what are some other revenue streams, so you've got obviously theatrical, if you want to be able to put on a show, you can do it at a local church, you could do it at an auditorium at a school, or you can actually rent out spaces, you can go through tug. To get out theatrical and actual movie theaters, you can go directly to those movie theaters. And see if you could do a revenue split, there's multiple different ways to get the movie out there. And this is not a distribution talk. But there's going to be multiple of those coming up, and have some big stuff coming up in regards to the self distribution revenue streams that I'm going to be creating for Meg. So you'll get a lot more detail of that in the future. I'm just kind of going over these revenue streams, so you understand the basic concepts. But what are some other things you can do? Well, what did I do on the broken instead of just creating the movie, because the movie wasn't enough, I created a gorilla film school at three and a half hour tutorial, how I was able to make that that's creating another way to sell that movie. So now all of a sudden, the movie became a secondary thing where everybody really wanted was how I did it. So that was, that became a part of my revenue stream strategy. By creating that extra extra content, it became my cot, my product became more valuable. So you have to think of other ways out to create more value from your product than just the product alone. This is the world we live in today, guys. So what is that? So if you're a, let's say, you're a filmmaker, and you make a movie about a vegan chef, I always use the vegan chef, wouldn't it be cool in the DVD or in video, special downloads or something like that, you put out a bunch of different vegan recipes, you have a chef come in, that maybe maybe somebody that helps you on the movie comes in, you film them out, you create content, you start creating that content, whether you give that content away, or you create it as exclusive downloads or something, all of a sudden you're adding more value to your product. Think about how you can add more value to your product. Okay, how about workshops?

How about creating a workshop? You know, Julie and I have been talking about doing maybe a stand up a stand up comedy workshop, for comedians out there who want to learn how to do stand up, or how to do improv. You know, that's our audience for Meg. So maybe we'll do some of those. Here in Los Angeles or around the country. I don't know. It's an idea. I could do workshops about filmmaking, how I was able to do it, and so on nother way of generating revenue for this product. So I'm using the product as an advertising to get people in the door. It's something that can be done, and it's more guerrilla. And it's a little bit more work. But you know what? It's a way of making revenue. And if you want to put the work in, you can make revenue with it. How about merch, merchandise, t shirts, hats, whatever kind of merchandise your audience wants, that spun off look at I mean, Kung Fury is the king of this go? Look, I'll put that in the show notes. Kung Fury, is that short film that this guy made over in Sweden, and they have the most amazing merge for a short film, they were able to do something with that movie that I've never been able, I've never seen another short film do. It's fascinating how they were able to do it. So think about other ways. You can start creating revenue from your product from that one product. There's multiple ways. Again, look at the studios. Look at the studios. What do they do? Look at Disney. That's the best. They're the best example of that. So they just released Star Wars Rogue One A little while ago. And how much money do you think they've made sure they've made about a billion dollars in the theater? Now it's going to go through all the different distributions between tvod s VOD, blu ray, DVD, blu ray, all that kind of stuff. And then let's not mess around with the merge. They're probably going to make another billion dollars or to unmerge alone. They're really maximizing that product. You know, I know for a fact that frozen made over a billion dollars theatrically, not to mention all the millions and billions of dollars they made on DVD, blu ray, all that kind of good stuff VOD ins and so on. They made also and I know this for a fact. They made a billion dollars on the dresses, the Elsa and Anna dresses. Little girls, just off the dress, talk about understanding how to maximize your profits and maximize your different revenue streams per project per product. So, obviously, we would all love to make a billion dollars off addresses. But understand at a smaller scale, this concept is extremely powerful for you, as a filmmaker, understand revenue streams, understand how to think outside the box about your specific product, your specific film, and how you can generate multiple revenue streams from that product. And I'm going to leave you today with the one thing that I've said multiple times on this podcast, but I will say it again, stop with the lottery ticket mentality, I know a lot of you filmmakers out there will go well, I'm just going to make my movie, I'm going to get into Sundance, and I'm going to make millions of dollars, it doesn't work, stop it, stop it, please. What I've just laid out to you is a blueprint on how you can make money with your movie, you make a movie for 1000 bucks, you sell it for 2000, you've doubled your money, that's a good business, you make the next movie you make for 1000 bucks, and maybe all the stuff that you learned off the first movie, you're able to make three to 4000 bucks on your movie, holy crap. Now your ex, you're a super successful business person. Seriously, like most business people would kill for that kind of return. Mine was not large. But on a percentage base. It's amazing. So now on the next movie, you might been able to generate $5,000 to create that product. And off that $5,000 product, you've now learned or had option opportunities that have come to you purely because you're in action and doing things that you were able to generate $15,000 off that $5,000 investment. And all of a sudden, this is starting to get serious. So maybe the next one you take is 10,000 bucks, and you make 30,000. And all of a sudden, you're like holy crap,

I just made 20 grand, you know, if you done everything, right, you might not have to pay anybody else, you might have crowdfunded, you might have to pay anybody, and you just generated a tremendous amount of money. So the next one you might take is 20,000, you can generate 60,000 with that, or more, and so on, it could be taking this, this little idea I just throw down on you could take you three years, four years, but at the end of the two or three, four years, wouldn't it be amazing that you could generate depending on where you live in your in the country or in the world? You know, wouldn't it be amazing to be able to generate a livable wage, a livable income, by making movies by generating your art by creating videos creating content for the world? Wouldn't that be amazing? It's possible, it's doable, but you have to want to do it, you have to be able to put in the time, the effort, the energy, to learn about what I just laid out, go deeper into each of these concepts, and build yourself a career. Because in today's world, you can do it. There's no doubt in my mind, because I'm doing it. I've done it, I did it 10 years ago, when there was no none of the opportunities that there are today. None of them. Okay, I was able to do it 10 years ago, so for God's sakes, you can do it now. Understand your niche, understand your product, and go after it. Okay, you can do it, you have the ability to do it. And if you understand these concepts that I've just laid out for you in this episode, you will be successful. Okay, show up, do the work. And make some movies guys. We want to see them. There's a lot of people out there that want to see good content that will change their lives, or entertain them or take them out of the crazy world that we're in today. You know, maybe escape for an hour and a half. It's your responsibility to do it as Mongo Wilder says it is your responsibility to create your art and get it out there because you have no idea how will affect another human being or how it could change another human beings life. All right. I hope you enjoyed this episode guys. If you want to get any of the things to talk about in this episode, head over to indie film hustle.com forward slash 129. For the show notes, I will have Kung Fury on there. I will have Joe Swanberg on there and and everything else we talked about in this episode. And guys this week, Sundance starts you know, I'm going to be there flying in later this week. So I'll be there for about four to five days. So I'm going to be doing interviews. We're going to be doing a ton of interviews up there. We're going to be doing some live podcasting, not live but you know recorded and get it up in the same day kind of podcasting home Felipe, we're going to be creating a bunch of content for the, for the for the YouTube channel, I got a bunch of surprises for you. And of course, if you want to come and see me speak over at slam dance, I'm doing a workshop for Blackmagic Design discussing my post production process for creating this is Meg, talking about how I edited on DaVinci Resolve how I color graded it, and how I shot it on a Blackmagic Cinema Camera 2.5. And of course, I'll put a link in description on how I built that rig. That crazy rig that I shot. This is Megan, I'll put that also in the show notes as well. So if you want to come to this free workshop that we're going to be giving over a slam dance. It's on Saturday, January 21, from 230 to 430. At the filmmakers lounge in the treasure mountain in at the top of the hill, get ready, it's a hike if you guys gonna be on Main Street, but it's definitely worth it. I'm going to be joined by Andrew mcphillips, who will discuss his latest movie the doll and how he shot with the Ursa Mini. And of course, I'll be talking about everything I just described. And then afterwards, you can join Blackmagic and myself for a little mixer, little happy hour between five and 7pm at the filmmakers lounge, where you can ask questions, demo gear, and it's just gonna be fun. So if any of the tribe members are at slam dance or Sundance on Saturday, come by, say hi,

I love to talk to you guys. It'd be great, I'm going to be there for a little while. So reach out to me. And by the way, if you guys if you guys are at slam dance or at Sundance during the next, you know, basically from Thursday or from Friday until like mid next week sometime, hit me up on iMessage on Facebook, email me. And if I'm around, we'll see if we can get maybe get a little tribe together for some coffee or some drinks or something like that somewhere on Main Street. Be very, very cool. So many exciting things are afoot at this festival this year. So I cannot wait to share all this cool stuff and new content I'm going to be creating for you guys and hopefully give you an inside look at a lot of stuff going on at Sundance and slam dance this year. So guys also, if you like this episode and really like the podcast, but specifically this episode, share it, send it to your friends, get the word out there you know, share it with people that you really think that needs this information because I want this info to get out there to as many filmmakers as possible. It's super powerful stuff. And if you really understand these concepts, you can make a living you can build a career as a filmmaker, and I wish they would teach you this stuff in film school but they don't. And that's a whole other podcast. So guys, as always keep that hustle going keep that dream alive. And I'll talk to you soon.

YOUTUBE VIDEO

LINKS

SPONSORS

  1. Bulletproof Script Coverage – Get Your Screenplay Read by Hollywood Professionals
  2. AudibleGet a Free Filmmaking or Screenwriting Audiobook
  3. Rev.com – $1.25 Closed Captions for Indie Filmmakers – Rev ($10 Off Your First Order)

IFH 109: Top 10 Film Distribution Rules for Success

When filmmakers go out into the world to try to sell their indie film it can be a bit dangerous. The shark-infested waters that makeup film distribution can be brutal. Since I’m now going down the same dangerous road with my film This is MegI decided to write up a few rules I found useful over the years when it comes to film distribution.

  1. Split Up Your Rights
  2. The Bigger the Deal the Less Control You Have
  3. Cap Your Film Distribution Expenses
  4. The Middle Men – Beware of the Deal
  5. Nothing is Guaranteed
  6. Cost vs Sale or R.O.I.
  7. Film Festivals Help…Sometimes
  8. Beware of Exclusive 5 Year Distribution Contract
  9. Don’t get caught with your pants down in Post Production
  10. E/O Insurance…gotta have it

I go into great detail about the list below in the podcast episode so take a listen. I hope to have the transcript for this episode up by next week. Happy selling.

Right-click here to download the MP3

Alex Ferrari 11:04
So I wanted to put together this episode because I think a lot of people still don't get what film distribution is really like, and what you really need to know. And there are some basic concepts and things that you need to know if you're going to try to sell your feature film or get your feature film distributed. And these are, this is not all of it. But this is the top 10. And if you have a grasp of these 10 concepts, I think you will be successful. And again, I'm going through all of this now with this is Meg, in the coming months going to be dealing with distributors, I've already been contacted by a couple of distributors who are interested in this as mag, but I'm holding off holding off, and I'm in a great position where I'm not in any hurry, I want to get the best deal, or I want to do it myself, whichever is going to give us the most exposure, and where we can make our most of our money back, that would be great. So here are the 10 basic distribution, things that you need to know about if you want to get your film distributed. Rule number one, forget about selling all of your rights to one big monstrous deal. Those don't happen very often. And it is something that you you really shouldn't be doing anyway, unless you get an insane amount of money upfront. In the olden days are what the what the press loves to promote is these amazing huge deals like Birth of a Nation $17 million, which they didn't do very well on, on that return. But you know, $8 million, or $7 million at Sundance or south by or something like that, that's what they like to, to to sell. And that means that they get all the rights for everything with that money. And by the way, whatever upfront money they got on that deal, they will probably never see another dime ever again. So any money that they made was going to be in that upfront deal. It's in general, I'm generalizing here, but generally speaking, that's what I've heard. And that's my experience with working with so many films over the years. So try to sell different, split up the rights, you don't have to sell a distributor, all your rights, negotiate those. So if your distributor is strong in DVD and blu ray sales, then give them DVD and blu ray sales us or if they have a strong distribution arm over in Europe or overseas, give them those rights. You have somebody else that understands television rights, give those rights to them. If you're going to do streaming yourself, keep the streaming rights yourself, don't give them away because believe it or not, you can go directly now to a lot of these streaming outlets. And I'm gonna have another episode in the coming weeks about how you're able to do that directly without going through an aggregator, but we will get into that a little bit later. But split up your rights. You know, the film that I worked on opposite Lydia, when I had Diane bell on the show, she she thought she had the rights for all for the for you know a movie that won Sundance two awards at Sundance, and she sold the rights, the airplane rights, the rights to play on airplanes, and she made I think she told us like 30 $40,000 off those rights, purely because it had won Sundance won a couple of words at Sundance, and she was super excited. I mean, that's huge, you know, for a small film like that, but she kept those rights and she got all of that money. So as opposed to splitting it up with a middleman or a distributor, she kept those rights. So split up those rights piecemeal it and that's a really important deal. Now mind you, if someone shows up and gives you a million or $2 million drop, and your movie costs less than that, by the way, then take it. That's fine. But it all depends on what your goals are with your movie, but generally speaking, splitting up your rights where it's foreign and domestic. And then beyond just foreign and domestic. Within those cable VOD streaming. s VOD, which is description base of video on demand like Netflix and things like that. All that stuff, split all those rights up. That's one, two. The bigger the deal, the less control you have. So the more money you get up front, the less money You're going to get on anything dealing with your movies. So understand that they'll have control over the artwork, how they cut the trailer, how they distribute it, how they get the word out, if they get the word out, sometimes they'll just throw it on a shelf, there's a million things. So understand, the bigger the deal is, the less control you're going to have over anything dealing with your movie. Now, if they're not giving you a lot of money up front, you should have a you should demand and negotiate more control over any other aspects of those of that movie. So if someone shows up with 10 grand, and your movie cost 100 grand and they give you 10 grand up front with promising on the back end, you should maintain a good amount of control over what you're trying to do with the movie. But again, it's on a case by case basis depends on the movie depends on the distributor at all, it all very relative, but these are general general rules that you have to look into. Number three, cap your film distribution expenses. So when you sign a deal with a distributor, they are going to throw in Oh, well you know, you'll get paid back after our expenses. I'm doing air quotes here expenses. Now those expenses can balloon beyond belief, I did a distribution deal with a group of short films of mine called lipstick and bullets with this horrendous distributor, which we we left after after we broke off the deal. Me and my, my aggregator. It was a horrible deal. These guys were just just raping, raping my aggregator because he had to he was the one that was paying for it. And it was read Dick aeolus how much they were charging for like a poster design. They were like charging five or six grand for a poster design, which was absolute Bs, you know, and then if you throw in a trailer trailers will run your 30 or 40 grand in the eyes of a distributor, which it really doesn't cost that much. You know, because I'm a trailer editor, I know what it costs. So these are things that will happen or if they fly out to Cannes or to a market, they're going to charge you for hotels, and travel, and all that kind of stuff. part as part of their package to go out to cannon and sell your movie. So these things you have to be careful of because it can balloon really quickly. If you don't cap your expenses, you'll never see a dime. You know, chances are, and I hate to say this, when working with certain distributors, again, not all distributors, there are some good distributors out there, a 24 gravatars the orchard there's a ton of good, very transparent distributors who really care about the filmmaker. But there are a lot of unscrupulous ones out there who, generally speaking, you'll never see a dime once you sign a deal with them. And I'm going to talk about deals in a second, but kept those expenses so you go look no more than 40 grand, I don't care what happens, no more than 30 grand, I don't care what happens. And whatever that cap is, I guarantee you will hit that gap, it's not going to be like oh, we only spent 15 grand, so you know no BS, they're gonna charge you the top of the top. So just be careful and cap those distribution expenses. Number four, beware of the middleman of aggregators. Because these guys are sometimes extremely helpful, like a producer's rep who connects you to certain people, certain distribution deals, that's great. Certain aggregators say that they're going to guarantee you this or guarantee you that if you're going to guarantee which will lead into my next, my next rule, but I'll get into that in a second. But they'll say all these kinds of things that they guarantee you to get into this and that just be careful of these middlemen, because some of them are really good. But you've got to be careful of how they structure that deal, how much they're going to take, what percentages they're going to take, and so on. And for whatever you do, whatever, whatever kind of distribution you do, if you are going to sign a deal with an aggregator or a middleman, make sure it's not exclusive. Do not sign an exclusive deal because if you sign an aggregation deal with an aggregator that's going to help you go out and get distribution you're locked up for five years and that then you're basically hang comfy handcuffing yourself, and you can't do anything with the movie that you work so hard to make. Because you've signed that deal away. So you basically have no rights no nothing can do a damn thing with it for five years so always signed a non exclusive deal, like indie rights over Linda Linda Nelson over indie rights. She all her deals are non exclusive, specifically for that matter for that reason, because they come from a filmmaking background and so on. And they don't want to screw the filmmaker. But that was one of those little dirty secrets of distributors like Oh, yeah, yeah, yeah, just sign up by the standard five year deal done, you're screwed. Alright, so sign a non non exclusive deal with any aggregators when you're working with them. The next rule, rule number five, nothing is guaranteed. We'll be right back after a word from our sponsor. And now back to the show. I don't care what anyone tells you, nothing is guaranteed, if you hear someone going, oh, we're gonna get you into Netflix, or we're gonna get you into Amazon or we're going to get you 200,000 screens or something like that. Now again, it all depends on who the distributor is. Now, if it's a big huge monsters distributor, or very reputable distributor, if they're saying, Hey, I'm gonna put you in X amount of theaters, that's possible. But if they say, I can guarantee you that I'll get you into Netflix, I can guarantee you that I'll get you into Hulu. There are no guarantees, there is absolutely no guarantees to that. And you should run away the opposite way. I can guarantee you, you know, 10,000 units sold to Walmart, not guaranteed. Not possible. Unless you're working with a huge Warner Brothers Lionsgate, those kind of size distributors, then maybe they go look, we're gonna we're estimating 10,000 units sold, because we're Lionsgate and we're packaging again with 10 other movies that weren't that Walmart's going to buy. And because we already have an output deal with them, it's a minimum 10,000 units sold. That maybe would be the case that makes sense with with a distributor of that size and magnitude. But another local small distributor, you got to be very wary when they start making promises, they just go Hey, we'll do our best we can to get you into these things. This is our projections of what we think the movie can make. That's something a little bit more on the up and up. So keep an eye out for that there are no guarantees in film distribution. Rule number six, return on investment or ROI. If you can make a movie for a budget, let's say you make a movie for $25,000. And you sell that movie for $50,000. Guess what? You are extremely successful filmmaker, if you can go again and make another movie for $50,000 and then sell that movie for $100,000. Guess what? You are an insanely, incredibly successful filmmaker. And if you can make $100,000 movie and sell it for 250 you're a successful filmmaker. These are things that you need to know about when you're dealing with distributors and also dealing with investors. They want to see that you made money even if it's a small amount of money that you made money so whatever you project that you can sell this movie for keep the budget under it that's why I'm always amazed at movies that I'm you know, pitched or act i have access or asked to do post production on on my Hey, what was the budget on this? And they're like, Oh, it was 5 million I go 5 million, you've got no stars in it. How the hell did you get money to make this movie, that movie will never ever, ever, ever make its money back. It just won't. Even if it's if it went Sundance Cannes and South by Southwest with no act and with no no names in it. Very rarely. I don't remember one movie doing that. That's why I'm saying it so bluntly. But it's almost impossible for that money, that movie to make any of its money back and its investors. Now again, a lot of times investors will invest in movies purely for a tax write off, which it is very possible. Now if you can find rich people who want to get a tax write off to help make you movie, God, man, send me send me an email, let me know where they are. Because I want that I want to know those guys as well. Because the best is an investment investor does not care about getting their money back. And I have a friend of mine who just made a movie that had investors that really did not care if they made their money back. It was a passion project. And then it was a write off after that. So they were like, Hey, I just want to make a movie. It's kind of keeps me interested. And I'll write it off. And that was it. It was a tax write off for them. And they made it it was like a $3 million budget with you know, I think it has one or two stars in it. But there's no way they'll make $3 million back, non festival non anything. So it does happen. But you guys have to understand that if you can, it's a business so you have to create a product at a certain price. If you watch Shark Tank, you'll understand this. What's your what's your margin. So if you make a movie for 10 grand, you sell it for 20 you've doubled your money, awesome. If all your money that you've spent to make that movie and market it and get the deliverables and everything else was 10 grand if you sell it for 20 golden, keep that in mind moving forward with your movies. Rule number seven, film festivals help sometimes. Now film festivals are an insanely good marketing tool for your movie and I get it. They give you an audience. They give you credibility. They give you access to reviews, and all all the wonderful things that come along with festivals and of course I created the film festival hacks course with Chris Holland over from festival secrets talking in nauseum About film festivals and how wonderful they are. But they do help. But not all the time. If you have a genre movie, festivals really don't matter. If you have an action movie, festivals really don't matter. No one cares. If you got a drama or an indie or a comedy, or like drama at like this is Megas. festivals are really important. Those laurels really mean something. And the bigger the festival, the more you can leverage that reputation of that festival. That's why a winning, having a lot, just getting accepted into Sundance is something that you can leverage getting into South by getting into Tribeca or Cannes, or slam dance. Or tell you right or any of these these top tier festivals, you can leverage their reputation to help sell your movie. So festivals are crucial for certain genres. Again, horror movies, it's nice, not a big deal. And action movies nice, not a big deal dramas, really helpful. If absolutely imperative actually, unless you've got a big monster star in it, then we're not talking in the film anymore. But even then, if you have a movie, which likes Little Miss Sunshine, had a great cast, but at one Sundance or was sold at Sundance, I don't think it was announced. But it did play at Sundance. And that helped get it sold. Because that, that that leverage of being at Sundance helped that movie get the release it was and it was amazing little movie as well. So again, there are always exceptions to every rule that we're talking about here. But we're talking about general rules for 99% of the rest of us. Now Rule Number eight is beware of the five year contract. And that's a kind of thing that I've already talked about earlier in the episode. But beware of that five year contract, but you do not want to lock yourself up in five years. And I've seen it with so many filmmakers, who they like come to me like yeah, I can't, I can't, I can't do anything with this movie anymore. I'm like, whereas I'm like, Oh, it's locked up, I can't do anything. And then they're just sitting there waiting. And then during that waiting time, they're not making any other movies and not doing anything else, because they can't leverage what they've done to show other people that show that it got released, that it made any money. It's just a complete cluster F. And it really doesn't, doesn't help anyone. So please stay away from those five year contracts unless there's a big huge payday on the front end. Number rule number nine. Rule number nine, don't get caught in post. It is the biggest place where filmmakers fail. And films fail is in post production. They run out of money, they don't know what they're doing and pose and they cannot finish their movie. And if you can't finish your movie, guess what, guys? You ain't gonna distribute it. So I have no a lot of films that have been picked up for nothing by a distributor because they literally have no more money the film has in the filmmakers have no more money. And they've been sitting on a shelf for I don't know, probably a year sometimes. And they come in to look okay, great. We'll come in, we'll pay for all the delivery and that's it, you're done. You've given your movie away, it's completely gone, you'll never see a dime, the only thing that will be helpful is that you might get a poster and get and you can tell people that your movie was finished and distributed. But you have failed as a filmmaker because you have not finished you did not properly set things up for post production. And I'm not even going to get into your deliverables list because that is something else that filmmakers always forget. Especially when it comes into distribution that they need to have deliverables the HD cams the five one mix poster art all this kind of stuff, which I'll go over in another episode actually I'm going to do a full episode about what deliverables you need for for for a distributor generally speaking. And then another thing that is part of those deliverables is E and O insurance that want to make that rule number 10 you know insurance. If you don't got it, Yang gonna get a distribution deal E and O insurance is errors and omissions, insurance. Basically it's malpractice for filmmakers. So in other words, if you're making a movie, and you shoot, let's say a guy chokes on on Reese's Pieces, and it's a suicide by Reese's Pieces, and he chokes horribly and dies by Reese's Pieces. And Reese's Pieces is everywhere. Well, that kind of puts a negative light on Reese's Pieces. So unless you've got the permission of Reese's Pieces, if that movie gets released, and you don't have no insurance, the distributor will be sued. And Reese's Pieces will take them to the bank because they have all the rights to because they did not get permission to get a to use Reese's Pieces in the movie. So you have to have no insurance for those specific reasons. Let's say you're in the bet you're shooting a street scene, someone walks in the background. They look into the camera, and you don't get a release for that person. If that person Sitting in the movie theater one day, and sees themselves, hey, that's me, I didn't give them permission for that lawsuit. That's how it works, guys, you need to have no insurance. Now, you know, insurance can range anywhere from 2500 bucks all the way to 6000 bucks, but it's something that you need to think about. Prior to releasing the movie, a lot of times a distributor will pick up that cost, but you will pay for it out of whatever your your upfront fee is, or any monies that you're going to come back out of. So you've got to make sure that's taken care of when you're going to do a distribution deal. So rule number 10, E and O insurance. And lastly, network like hell, this is a bonus rule network like crazy. It's a really small business guys. And the more I am in this business, the more I realize how small it is, I meet somebody, or I'll have someone on on the show, and I'll start talking to them. And they're like, Oh, you know, that person, oh, you know, that person. It is an insanely small business as big as it is. The film industry is very, very small. And you really got to network as much as humanly possible, because you never know who you're going to meet. And that's why social media is so powerful. And you just have the network man network as much as you can, when you're at a film festival, be connecting with people getting I mean, I know it sounds cliche, but get coffee with these people get lunches, and so on, you never know you just want to network with these people, because you never know down the line where you can help them or they can help you. And that's the key to it's not a one way street, it's not what they can do for you. You always have to lead with what you can do for them. So it is very, very important to always keep that in mind. What can I do for you? How can I help you make your movie or connect you to somebody that I might know or so on and so forth. So always lead with, what can I do for you in this relationship, to start building that relationship with that person and network with those people. So guys, those are the 10 rules plus a bonus rule for film distribution and understanding the basics of film distribution, if you can handle get the earliest grasp what I just said in these last 10 rules, you'll be much better off when you do a distribution deal for your movie. It's it's a jungle out there, guys, it's really rough, you really have to educate yourself as much as humanly possible. That's why I created the indie film syndicate. That's why I do this podcast. That's why I created any film hustle. I want to educate filmmakers from all walks of life with as much information as I can to help them survive and thrive in the film business. So if you want to check out the show notes for this episode, head over to indie film, hustle, calm forward slash 109. And again, if you guys are interested in taking advantage of that 25% off, which by the way is limited time only. It's only going to be around for this week, head over to indie film hustle.com for slash 25 off the number 25 and the word off and check out all the new courses we've been adding to the indie film syndicate. And this show is also sponsored by free film book calm that's free film book calm and go over there to download your free filmmaking audio book from audible. And guys, if you can please please, please leave me a good review on iTunes, head over to filmmaking podcast calm and leave me a great review, an honest review but hopefully a great review because it really helps us out with the rankings iTunes and again, I want to get this podcast out to as many people as humanly possible. So guys, thanks again for making this podcast so popular. And making any film hustle, grow as fast as as it has, and I've got a lot of stuff lined up over the next few months. And definitely a big 2017 man it's gonna be a really big year, and hopefully a very positive year for everybody for everybody in the tribe. So again, thank you so much guys for all your support.

I love you guys. You're the best. Anyway guys, keep that hustle going keep that dream alive and I'll talk to you soon.

YOUTUBE VIDEO

LINKS

SPONSORS

  1. Bulletproof Script Coverage – Get Your Screenplay Read by Hollywood Professionals
  2. AudibleGet a Free Filmmaking or Screenwriting Audiobook
  3. Rev.com – $1.25 Closed Captions for Indie Filmmakers – Rev ($10 Off Your First Order)