But damnit, some people are making it seem that way...
Variety has an article here about a husband and wife team who made a movie for $100,000 and were surprised at the kind of deal offers they were getting so they turned to Amazon's Unbox to sell their movie direct.
That part is all fine and good except for these paragraphs from the article:
"We knew we didn't have the quality to stand up to a theatrical release," Nelson says. "But we got five offers from DVD distributors." Nelson, however, was shocked by the deal terms, which were typical: No advance without a star or a decent budget. No piece of the backend. The distributor hangs on to its rights for seven to 10 years. And when they sell the DVD on the Internet via Amazon or Netflix, the distrib takes 25% of the gross and subtracts all expenses, including replicating and supplying DVDs and marketing. (Netflix won't take any films without a distributor.)
Nelson was amazed, too, by the distributors' lack of accountability. "They send quarterly reports by country," she says, "But they don't tell you how many units they sold. They don't keep track by film. They don't have systems or bookkeeping capabilities. There's no such thing as making money. What you get upfront is what you are going to see."
Let's dissect every instance of A) lack of salesmanship, B) Ignorance or C) Just bald faced untruth (I'm not going to say they are lying because I don't think their intent is to deceive).
1. "We knew we didn't have the quality to stand up to a theatrical release," Nelson says. "But we got five offers from DVD distributors." --
Now who in their right mind, who has manufactured a product to sell is going to say that out loud in a public forum? That's like Ford saying, "We know the car sucks, but you should buy it anyway for a lot of money."
2. "No advance without a star or a decent budget. No piece of the backend. The distributor hangs on to its rights for seven to 10 years. And when they sell the DVD on the Internet via Amazon or Netflix, the distrib takes 25% of the gross and subtracts all expenses, including replicating and supplying DVDs and marketing." --
Well, if you make a movie without stars then the story must become your star (And you at least have a genre name in Jill Wagner, star of the BLADE TV series, but I don't see that anywhere in your article). It MUST have a specific marketing hook that people will instantly get.
Hanging onto the rights for 7-10 years is typical - no arguement there - because it usually takes that long for a film to go into profit. That's why international rights are extremely important to any filmmaker. (see below)
And you could have negotiated another type of deal -- if your film was worth it. Every deal is different. Every deal is a whole new ball game - the rules are the same but the outcome is up for grabs. How could you not think that a distributor would tally his expenses???
3. "They send quarterly reports by country," she says, "But they don't tell you how many units they sold. They don't keep track by film. They don't have systems or bookkeeping capabilities. There's no such thing as making money. What you get upfront is what you are going to see."
Well the fact is that many, many of these contracts are straight license-deals! The country licensing them pays a fee (in steps) as they release. They don't account for royalties based on DVD sales in another country because the deal isn't structured that way! There ARE those deals for some of the larger territories, but you have to specifically ask for that sort of deal, and with most DVD deals being packages, they aren't going to do a separate deal just for your film - they are going to choose another to license.
In addition, AFMA (also known as the IFTA) keeps track of a lot of numbers for various distributors and producers when they are owed money in a royalty deal. There are options! There is accountability!
Many licensing deals are flat percentages with no expenses tacked on - meaning the distributor takes 35% of the license fee they get for you and you get the remaining 65%. No cost for ads, etc...
The reason I'm steamed about this is because they are saying that they turned to the web because traditional distribution failed them. The facts suggest otherwise. There is no distributor that I know of that will turn down negotiating for a movie they think they can make money on. It all depends on where the threshold is... is the movie marketable?
Take a look at the Amazon web page for the movie.
I think the box for it looks boring. I don't think the opening credits qualify as a trailer for the movie (press the preview button), and certainly don't sell something anyone would want to buy.
I've made movies for $100,000. I've marketed and sold $100,000 movies. I've made half of my budget back on the first day of a market with one sale to an overseas territory (which, five minutes and a phone call later greenlit the sequel !)... and I'm not the only guy who's done this. I'm not special. I don't have a secret...
I just know that if I expect to get top dollar for a movie, I have to make and market a movie that's worth top dollar. I have to come up with a hook and work it. I have to entertain.
I have to sell.
We have a movie coming out in May. I think it's worth it. I know you will too. Fangoria does. You will be entertained. You will look at the screen and ask, "How'd they do that?" If you rented it you'll ask, "Where can I get a copy?"
Yes, you will be able to get it on the web, via download -- but it won't be because we didn't have other options. It won't be because we don't believe in our film. It won't be because we were ignorant of the process and laid blame at the feet of a "cold, cruel industry that doesn't support us."
It will be because that is part of our strategy to get this crazy movie into as many hands (and minds) as possible.