CHAPTER #44: FILM FESTIVALS (7/29/2008)
Chapter #44
FILM FESTIVALS
“Enter, Attend…Win”
The success of an independent film is almost totally dependent on how it plays at a film festival. A festival is where no-budget films, from first-timers, get discovered, attract distributors and get sold. (SECRET) Film festivals are everywhere and easy to enter. There are at least 300-600 festivals held yearly which translates to 6-12 festivals/week. And, you must attend --but which ones and why?
WHAT EXACTLY IS A FILM FESTIVAL?
A film festival is a cultural event. Every city likes to think it has culture –you know the opera, the symphony, the ballet, etc. And a city without a film festival is obviously a city without culture.
IMPORTANT POINT: Cultural events don’t make profits. Otherwise they’d be called business ventures. Thus, if your city or town doesn’t have one, don’t think about creating one unless you have plenty of free time and can afford to lose money.
To create a film festival, a theater is rented for a week or a weekend. All theaters are for rent if you pay the owner above his “house nut” (aka: cost to operate his theater/week). This guarantees the theater owner a profit, plus the bonus of a killing from the lucrative candy counter as each film’s screening attracts 200-400 popcorn eaters. Theater owners would love to have a festival at their theater.
Festivals screen one film every two hours or about seven films per day. For a week long festival this translates to fifty films (seven films/day at 12:00, 2:00, 4:00, etc) and for a weekend festival it’s twenty films. Festivals like Toronto, which have four theaters, with multi-screens projecting films simultaneously for ten days, book over 150 films. Sundance books sixty-seventy films.
The format of every festival with fifty films over week always consists of (A) an opening and closing film, (B) three sidebars (i.e. Early Film Noir, New Women Directors, Best of Latin America, etc) comprised of 15-20 films, (C) four-five seminars, (D) a couple of breakfast-with-directors lectures, (E) an over-the-hill actors retrospective of three-four films and (F) 25-30 films from independent filmmakers, like you.
Festivals are looking for you, even more than you are looking for them. Only about 20 of the 300-600 festivals annually are highly selective. Thus, 95% of the film festivals each year are easy to get into, as long as you have 90-minutes of something that is in focus ---but they are not free.
WHAT FESTIVALS COST
Your first cost will be a submission fee. It won’t be much, maybe $50. However, you must also send a tape to screen. This costs another $50. If you’re accepted, you pay an additional $200-$500 acceptance fee. Then, you’ll realize you only have one print and are about to send it to a festival, so you pay the lab $1,500 to strike a second print. Next, is the cost of attending. You pay your own way --airplane ticket, hotel costs, car rentals, etc. And, if you can afford a publicist, you pay to have him attend.--another plane ticket, hotel room, etc. Basically, it costs $2,000-$6,000 to attend a film festival, which doesn’t include posters and festival catalogue ads, making it the largest portion of your $2,000-$10,000 publicity budget.
HOW TO FIND FESTIVALS
You can get a list of festivals from any number of websites, just type “film festival” into your search engine (google, alta vista, excite, etc) and print. Besides the film festival guidebooks (see sidebar), browsing through film magazines (Release Print, The Independent, Moviemaker, Filmmaker, etc.) with their "call for entries" notices in the classified sections will get you numerous names, dates and addresses..
WHICH FESTIVALS ARE BEST
Remember, when you finish making your film, you’ve spent your money. You’re close to broke and feeling pressure to pay back your investors. You won’t want to wait long to attend a festival or two. (SECRET) Only attend festivals that the distributors send their AEs to. And, the ones most commonly attended by AEs are:
1. Sundance (January, 801-328-3456)
2. Slamdance (January, 323-466-1786)
3. Palm Springs (January, 619-322-2930)
4. Berlin (February, 49-30-254-890)
5. Rotterdam (February, 31-10 411-8080)
6. Santa Barbara (March, 805-963-0023)
7. South By Southwest (March, 512-467-7979)
8. LA Independent Film Fest (April, 323-937-9155)
9. Seattle (May, 206-324-9996)
10. Tribeca (May, 212-941-2400)
11. Cannes (May, 33-1-4561-6600)
12. Hong Kong (June, 852-2584-4333)
13. Karlovy Vary (July, 420-224-235412)
14. Edinburgh (August, 44-131-228-4051)
15. Hollywood Film Festival (August, 310-288-1882)
16. Montreal (August, 514-848-3883)
17. Telluride (September, 603-643-1255)
18. Toronto (September, 416-967-7371)
19. Venice (September, 39-41-521-8711)
20. Hamptons (October, 516-324-4600)
21. New York (October, 212-875-5638)
22. Raindance (October, 44-207-287-3833)
23. Tokyo (November, 813-3563-6305)
24. Pu-San (November, 82-51-747-3010)
ENTERING FILM FESTIVALS
Entering is simple. Call, fax or e-mail the festival and request an application. Most entry forms are one page, with a few pages of rules and guidelines, peppered with a little PR about the festival and its history. Fill out and return the entry form (neatly), and include:
A. The completed application form
B. The submission fee
C. VHS viewing copy of your film
D. Your press kit
E. Self-addressed, stamped envelope (if you'd like your materials returned)
F. A cover letter (kiss ass) explaining why it’s an honor to be included.
WHY GO TO FESTIVALS
Film Festivals are vital for three reasons. The first, of course, is to win awards. The second is to start the buzz and hype. The third, and by far the most important reason, which is phrased three different ways is to either (A) be discovered, or (B) get a distributor, or (C) sell your film.
IMPORTANT POINT: Only attend festivals that AEs attend. You’ll be well received at Philadelphia or Virginia festivals. You'll be the big fish in a little pond. But, no AEs attend, so you won't sell your film. And more than likely, you'll never get it into Sundance, Toronto or Telluride, because you’ve given away the "World Premieres", "North American Premiere" and the “USA Premiere” of your film to Philadelphia or Virginia. Sundance, Toronto and Telluride love to announce the number of premieres they had.
(1st) AWARD-WINNING FILMMAKER
Have you ever noticed the phrase, “an award-winning filmmaker” after someone’s name and wondered what award he won. If the award had the prestige, for instance of an Oscar, an Emmy, the Sundance Judges Award, or the Palme d’Or, the person would identify himself as “an Oscar winner” or “an Emmy winner”.
If someone has won an award that truly has merit they’d be glad to announce it. But, if they’ve only received an award, that has little to no merit, then he’ll call himself “an award-winning filmmaker.” When someone announces he’s an “award winning filmmaker” you can assume he’s received a certificate that no one has ever heard of and has little to no merit. I apologize for ruthless honesty. I myself am a multiple “non-meritorious” award-winning filmmaker.
The first award I won was in a science fiction, live action, 35mm category. The festival gave out five awards in this category. I came in second (there were only two films entered)! I’m an award-winning filmmaker. Two weeks later, I entered the Seattle Film Festival. They gave everyone who entered a certificate of accomplishment. It’s an award? I am now a multiple award-winning filmmaker. (SECRET) Everyone who enters a festival becomes an award-winning filmmaker. So what! The key, of course, is to win an award at an elite festival.
(2nd) BUZZ AND HYPE
The second reason to attend festivals is to have your film reviewed and you interviewed. Festival directors try to make a profit. Thus, a week before your screening, the festival director gets the local media to screen and review your film. It is actually in your favor that you are cheap. Reviewers love to say they discovered some “little jewel.”
And, with good reviews, your film will sell out. If it sells out, the reviewers will then want to interview you. People hear about you. People tell their friends. People love to say that they saw a great film before its release. The buzz and hype starts, and you now have clippings to include in your press kit, to further entice distributors.
(3rd) SELLING YOUR FILM
The third, and by far the most important reason to enter a festival, is that it allows you to either (A) sell your film, or (B) be discovered or (C) get a distributor. Here’s how it happens.
When an Acquisition Executive goes to a festival, and sees that the theater has SOLD OUT for your screening, he literally doesn't have to see it. The film makes money! People are paying to see it. Next, he scans the sold out audience in hopes of finding a clearly defined demographics in attendance. Finally, the AE buys a ticket and screens your film, not really to see if he/she likes it, but more to see if the audience likes it. Does the audience laugh when they are supposed to laugh? Cry when they are supposed to cry?
Then, when the rear title crawl appears, if the audience applauds, not with just politeness but with enthusiasm, and exit the theater with “the buzz” ---That “positive word of mouth” that can’t be bought or manufactured. You know it when you hear it. Then the AEs will approach you (you’re the overly dressed neurotic one) in the lobby, as you’re nibbling your fingernails down to the cuticles.
(SECRET) Independent deals aren’t made in Hollywood offices, but at candy counters. (That’s why the trades call it a “popcorn deal”) In the theater lobby, each AE will want to whisk you away in a limousine (get you away from the other AEs he's competing with) to an exclusive restaurant, to wine and dine you, introduce you to a star and talk about distribution deals, P&A campaigns, putting you on the five-star hotel circuit and going to Cannes. Glamour will be everywhere.
Your job, after making your great little film, is to not be seduced by a limo or titillated by the first distributor that gives you an offer. If six AEs attend the screening and love your film, then hold court literally in the lobby, with your attorney-agent, and set up six lunches in the next two days. Do not wait too long.
IMPORTANT POINT: Get an attorney or agent before attending a festival, but if you don’t, attorneys and agents, always in search of new clients, will find you by getting lists of films, one to two months prior, that are in each festival. That’s why Hollywood agents and attorneys attend Sundance –they’re hoping that some yokel pops up with a cheap-but-sellable film and has no idea what to do.
You’re hot, and during the six lunches (don't order too much food, you'll feel sluggish and stupid) over the next two days you negotiate, talk money and deal memo (Chapter 48) points. And, what’s negotiable when you have six offers? Everything!
Let’s look at how different these six offers can be:
1st OFFER: The AE tells you he's from 20th Century Fox’s independent division and loves your film. You appear nonchalant. He asks what your budget was, and you respond knowing you spent $300,000 with “Oh just-under-$1,000,000”. He’ll be taken aback by your understanding of how to talk and play the Hollywood game and may offer you a flat amount --Maybe $2 Million to outright buy your film.
AEs will always ask what your budget was and, if you hadn’t of read this book you would of proudly told them the exact penny. Thus, you start a negotiation by telling the buyer, the AE, exactly how much money you owe. Duh! Always, remember AEs are not dumb. They know what it costs to make a film and can probably guess your budget within 15% of your actual cost. But the AE will always ask because you’re probably naïve enough to proudly tell them the exact penny cost. Thus, you start a negotiation by telling the other party how much in debt you are. Dumb!
Let’s assume the AE asked, you replied properly and now the AE guesstimates you made your film for about $300,000 and he offer $2 Million --Get ready to grab it, if it’s the only offer. But, if there are several other distributors that want to talk with you, then allocate take 48 hours to hear their offers. Let’s listen…
2nd OFFER: He’s from Paramount’s contemporary classics (that’s an oxymoron) division, and starts to play the “What’s your budget" game. Quickly discovering you know how to play, he offers the standard 50-50 Net Deal (Chapter 48) --by giving you enough money ($300,000) to pay off your investors, a large P&A budget ($5,000,000), charge a distribution fee (35%) and split (50-50) profits with you.
Sounds good!? Careful. You better realize that you’ll never see a penny of profit because Hollywood creative bookkeeping (Chapter 48) will ensure there won't be any, but you should be happy that your investors got paid back and that the distributor is going to market you into a celebrity.
3rd OFFER: He tells you he's from Sony, and asks if you've heard of the studio. They love asking is you’ve heard of them. You acknowledge, “Yes”. He’ll ask if you’ve had any other offers that he should beat. You tell him Paramount’s offer of $5 Million P&A and 50% of profits.
The Sony Exec says, “Let’s take a look at Paramount’s offer. They’re charging you $5,000/print. What a rip-off. Prints only cost $1,500 and that’s all we’ll charge you. Next, we’ll only charge a 30% distribution fee, give you 70% of profits and still give you $300,000 to pay off your investors.”
This deal, on the surface, sounds better than Paramount’s, but after studying it you realize that the $300,000 is probably the only dollars you will ever get. You won’t see a penny of profits and you should, once again, be happy that the investors got reimbursed and that your name is marketed.
4th OFFER: This comes from a small distributor trying to beat out a big distributor. You probably won’t know the name of his company but he'll tell you a couple of films he distributed last year that you recognize. Then he’ll caution you about large distributors who make 500-1,000 prints, throw it out there, and if it hits in the first weekend, keep it there. But if it doesn’t hit, they pull it, recoup losses with a quick video/DVD or cable sale and you’ll spend the next six years bitching how they didn’t market your film properly.
The small distributor will tell you his company only distributes three films/year, so they must make every film profitable. He'll spend $500,000 instead of $5 million on P&A, but he'll spend it effectively. He’ll only strike 20 prints, one for each art house in the top 20 markets, but promise to keep your film in each theater for eight weeks and, every day he’ll put a two-column inch ad in every newspaper where the film is playing.
Then after two months, even if no one goes to the 20 theaters, he’ll make a large 3rd Window (Chapter 46) sale to a video/DVD distributor and split 50-50 with you. Plus, if your film performs well when in theaters, like “Blair Witch” or “Crouching Tiger”, he’ll make more prints, take bigger ads and increase the revenues.
With this offer, you’ll get less exposure (small P&A budget), but besides paying off your investors, you'll get a better shot at making profits thanks to the almost guaranteed video/DVD sale.
5th OFFER: This is a hard ass AE. He says, “Gimme your film, I’m gonna screw you”. You jump back, shocked with this approach. But it was honest. It’s difficult to explain to a first-time filmmaker, who doesn’t know the difference between a film and a movie, that all they have is a film that has no value without the P&A money. This distributor will spend P&A money on your film.
He goes on, “I’ll probably lose money during the theatrical window, so I have to keep the other video/DVD and cable revenues for profit. Try to negotiate away any of these and I’ll do creative bookkeeping. Honest!”
He continues, “Now here’s why it’s a good deal for you”. You listen and realize that this is the first distributor offering you a Split-Rights deal. The distributor only wants North America and leaves you all Foreign Rights (Chapter 45). All the other distributors (Offers 1-4) assumed they get World Rights.
This also is a good deal, for once your film plays in North American theaters, the world thinks of it as an American Movie. Then 2-3 months later, you take your film, now a movie, to a foreign market and cash in for $3,000,000-$10,000,000. If your film never becomes an American Movie, and just screens at a festival or two, you’ll be lucky to get $10,000-$20,000 from the foreign market.
6th OFFER: This approach is similar to Offer #5. The distributor says he just wants North American Rights. He’ll make it into a movie. You keep the Foreign Rights and cash in. Plus, he’ll beat Offer #5 by throwing in North American Cable rights.
Although it sounds better, this is almost the same as Offer #5. Because the distributor, who’s giving you North American cable revenues as the alleged bonus, will stipulate in the contract that you can’t exploit the cable window (Chapter 47) until 90-180 days after it is in video/DVD stores. And, after it is in video/DVD stores it loses most of it’s value to the pay-cable networks.
If you can get these six offers in a two-day period, you’re hot. You will be front-page news in Daily Variety, the Hollywood Reporter, the New York Times and the LA Times. The buzz will be loud, it will snowball and you'll have the leverage to make counter offers.
You go back to Distributor #1, with his $2,000,000 world buyout offer and counter with, “I’ll take $5,500,000 for North America Rights only.” You go back to Distributor #2, with his 50-50 Net Deal and a $5 Million P&A budget with a counter offer of $2,000,000 upfront, a $5 Million P&A budget with prints charged at $1,500 each and 50% of the video/DVD or cable window, whichever comes first. You go back to the other distributors with counter offers.
Six lunches. Six offers. You’re a hit. But be ready to start talking deal as soon as your film has had it’s one festival screening -- but don't negotiate yourself or the AEs will swindle you. Film festivals are about fluff and awards but under-the-surface they are about attracting a distributor and negotiating North American rights. And, whatever you do, when talking to distributors at festivals, first get an entertainment attorney (aka: Producer’s Rep), and only allow the distributor to have North American rights, unless they pay you an ungodly amount of money.
Always keep your foreign rights, allow your film to be made into an American movie and then cash in your foreign revenues at a Film Market. Woops! We’re getting ahead of ourselves and I feel that you’re starting to vicariously feel that you can negotiate with distributors. Whoa, Nelly! This chapter was just about film festivals now tet me give you a couple of more chapters starting with film markets (Chapter 45) then going to comprehending windows (Chapter 46) and concluding with understanding the Cable and Video/DVD sales (Chapter 47) before you are ready to negotiate (Chapter 48) with a distributor. Now, on to film markets.
TO DO:
1. Secure a list of film festivals.
2. Determine the major festival dates.
FILM FESTIVALS
“Enter, Attend…Win”
The success of an independent film is almost totally dependent on how it plays at a film festival. A festival is where no-budget films, from first-timers, get discovered, attract distributors and get sold. (SECRET) Film festivals are everywhere and easy to enter. There are at least 300-600 festivals held yearly which translates to 6-12 festivals/week. And, you must attend --but which ones and why?
WHAT EXACTLY IS A FILM FESTIVAL?
A film festival is a cultural event. Every city likes to think it has culture –you know the opera, the symphony, the ballet, etc. And a city without a film festival is obviously a city without culture.
IMPORTANT POINT: Cultural events don’t make profits. Otherwise they’d be called business ventures. Thus, if your city or town doesn’t have one, don’t think about creating one unless you have plenty of free time and can afford to lose money.
To create a film festival, a theater is rented for a week or a weekend. All theaters are for rent if you pay the owner above his “house nut” (aka: cost to operate his theater/week). This guarantees the theater owner a profit, plus the bonus of a killing from the lucrative candy counter as each film’s screening attracts 200-400 popcorn eaters. Theater owners would love to have a festival at their theater.
Festivals screen one film every two hours or about seven films per day. For a week long festival this translates to fifty films (seven films/day at 12:00, 2:00, 4:00, etc) and for a weekend festival it’s twenty films. Festivals like Toronto, which have four theaters, with multi-screens projecting films simultaneously for ten days, book over 150 films. Sundance books sixty-seventy films.
The format of every festival with fifty films over week always consists of (A) an opening and closing film, (B) three sidebars (i.e. Early Film Noir, New Women Directors, Best of Latin America, etc) comprised of 15-20 films, (C) four-five seminars, (D) a couple of breakfast-with-directors lectures, (E) an over-the-hill actors retrospective of three-four films and (F) 25-30 films from independent filmmakers, like you.
Festivals are looking for you, even more than you are looking for them. Only about 20 of the 300-600 festivals annually are highly selective. Thus, 95% of the film festivals each year are easy to get into, as long as you have 90-minutes of something that is in focus ---but they are not free.
WHAT FESTIVALS COST
Your first cost will be a submission fee. It won’t be much, maybe $50. However, you must also send a tape to screen. This costs another $50. If you’re accepted, you pay an additional $200-$500 acceptance fee. Then, you’ll realize you only have one print and are about to send it to a festival, so you pay the lab $1,500 to strike a second print. Next, is the cost of attending. You pay your own way --airplane ticket, hotel costs, car rentals, etc. And, if you can afford a publicist, you pay to have him attend.--another plane ticket, hotel room, etc. Basically, it costs $2,000-$6,000 to attend a film festival, which doesn’t include posters and festival catalogue ads, making it the largest portion of your $2,000-$10,000 publicity budget.
HOW TO FIND FESTIVALS
You can get a list of festivals from any number of websites, just type “film festival” into your search engine (google, alta vista, excite, etc) and print. Besides the film festival guidebooks (see sidebar), browsing through film magazines (Release Print, The Independent, Moviemaker, Filmmaker, etc.) with their "call for entries" notices in the classified sections will get you numerous names, dates and addresses..
WHICH FESTIVALS ARE BEST
Remember, when you finish making your film, you’ve spent your money. You’re close to broke and feeling pressure to pay back your investors. You won’t want to wait long to attend a festival or two. (SECRET) Only attend festivals that the distributors send their AEs to. And, the ones most commonly attended by AEs are:
1. Sundance (January, 801-328-3456)
2. Slamdance (January, 323-466-1786)
3. Palm Springs (January, 619-322-2930)
4. Berlin (February, 49-30-254-890)
5. Rotterdam (February, 31-10 411-8080)
6. Santa Barbara (March, 805-963-0023)
7. South By Southwest (March, 512-467-7979)
8. LA Independent Film Fest (April, 323-937-9155)
9. Seattle (May, 206-324-9996)
10. Tribeca (May, 212-941-2400)
11. Cannes (May, 33-1-4561-6600)
12. Hong Kong (June, 852-2584-4333)
13. Karlovy Vary (July, 420-224-235412)
14. Edinburgh (August, 44-131-228-4051)
15. Hollywood Film Festival (August, 310-288-1882)
16. Montreal (August, 514-848-3883)
17. Telluride (September, 603-643-1255)
18. Toronto (September, 416-967-7371)
19. Venice (September, 39-41-521-8711)
20. Hamptons (October, 516-324-4600)
21. New York (October, 212-875-5638)
22. Raindance (October, 44-207-287-3833)
23. Tokyo (November, 813-3563-6305)
24. Pu-San (November, 82-51-747-3010)
ENTERING FILM FESTIVALS
Entering is simple. Call, fax or e-mail the festival and request an application. Most entry forms are one page, with a few pages of rules and guidelines, peppered with a little PR about the festival and its history. Fill out and return the entry form (neatly), and include:
A. The completed application form
B. The submission fee
C. VHS viewing copy of your film
D. Your press kit
E. Self-addressed, stamped envelope (if you'd like your materials returned)
F. A cover letter (kiss ass) explaining why it’s an honor to be included.
WHY GO TO FESTIVALS
Film Festivals are vital for three reasons. The first, of course, is to win awards. The second is to start the buzz and hype. The third, and by far the most important reason, which is phrased three different ways is to either (A) be discovered, or (B) get a distributor, or (C) sell your film.
IMPORTANT POINT: Only attend festivals that AEs attend. You’ll be well received at Philadelphia or Virginia festivals. You'll be the big fish in a little pond. But, no AEs attend, so you won't sell your film. And more than likely, you'll never get it into Sundance, Toronto or Telluride, because you’ve given away the "World Premieres", "North American Premiere" and the “USA Premiere” of your film to Philadelphia or Virginia. Sundance, Toronto and Telluride love to announce the number of premieres they had.
(1st) AWARD-WINNING FILMMAKER
Have you ever noticed the phrase, “an award-winning filmmaker” after someone’s name and wondered what award he won. If the award had the prestige, for instance of an Oscar, an Emmy, the Sundance Judges Award, or the Palme d’Or, the person would identify himself as “an Oscar winner” or “an Emmy winner”.
If someone has won an award that truly has merit they’d be glad to announce it. But, if they’ve only received an award, that has little to no merit, then he’ll call himself “an award-winning filmmaker.” When someone announces he’s an “award winning filmmaker” you can assume he’s received a certificate that no one has ever heard of and has little to no merit. I apologize for ruthless honesty. I myself am a multiple “non-meritorious” award-winning filmmaker.
The first award I won was in a science fiction, live action, 35mm category. The festival gave out five awards in this category. I came in second (there were only two films entered)! I’m an award-winning filmmaker. Two weeks later, I entered the Seattle Film Festival. They gave everyone who entered a certificate of accomplishment. It’s an award? I am now a multiple award-winning filmmaker. (SECRET) Everyone who enters a festival becomes an award-winning filmmaker. So what! The key, of course, is to win an award at an elite festival.
(2nd) BUZZ AND HYPE
The second reason to attend festivals is to have your film reviewed and you interviewed. Festival directors try to make a profit. Thus, a week before your screening, the festival director gets the local media to screen and review your film. It is actually in your favor that you are cheap. Reviewers love to say they discovered some “little jewel.”
And, with good reviews, your film will sell out. If it sells out, the reviewers will then want to interview you. People hear about you. People tell their friends. People love to say that they saw a great film before its release. The buzz and hype starts, and you now have clippings to include in your press kit, to further entice distributors.
(3rd) SELLING YOUR FILM
The third, and by far the most important reason to enter a festival, is that it allows you to either (A) sell your film, or (B) be discovered or (C) get a distributor. Here’s how it happens.
When an Acquisition Executive goes to a festival, and sees that the theater has SOLD OUT for your screening, he literally doesn't have to see it. The film makes money! People are paying to see it. Next, he scans the sold out audience in hopes of finding a clearly defined demographics in attendance. Finally, the AE buys a ticket and screens your film, not really to see if he/she likes it, but more to see if the audience likes it. Does the audience laugh when they are supposed to laugh? Cry when they are supposed to cry?
Then, when the rear title crawl appears, if the audience applauds, not with just politeness but with enthusiasm, and exit the theater with “the buzz” ---That “positive word of mouth” that can’t be bought or manufactured. You know it when you hear it. Then the AEs will approach you (you’re the overly dressed neurotic one) in the lobby, as you’re nibbling your fingernails down to the cuticles.
(SECRET) Independent deals aren’t made in Hollywood offices, but at candy counters. (That’s why the trades call it a “popcorn deal”) In the theater lobby, each AE will want to whisk you away in a limousine (get you away from the other AEs he's competing with) to an exclusive restaurant, to wine and dine you, introduce you to a star and talk about distribution deals, P&A campaigns, putting you on the five-star hotel circuit and going to Cannes. Glamour will be everywhere.
Your job, after making your great little film, is to not be seduced by a limo or titillated by the first distributor that gives you an offer. If six AEs attend the screening and love your film, then hold court literally in the lobby, with your attorney-agent, and set up six lunches in the next two days. Do not wait too long.
IMPORTANT POINT: Get an attorney or agent before attending a festival, but if you don’t, attorneys and agents, always in search of new clients, will find you by getting lists of films, one to two months prior, that are in each festival. That’s why Hollywood agents and attorneys attend Sundance –they’re hoping that some yokel pops up with a cheap-but-sellable film and has no idea what to do.
You’re hot, and during the six lunches (don't order too much food, you'll feel sluggish and stupid) over the next two days you negotiate, talk money and deal memo (Chapter 48) points. And, what’s negotiable when you have six offers? Everything!
Let’s look at how different these six offers can be:
1st OFFER: The AE tells you he's from 20th Century Fox’s independent division and loves your film. You appear nonchalant. He asks what your budget was, and you respond knowing you spent $300,000 with “Oh just-under-$1,000,000”. He’ll be taken aback by your understanding of how to talk and play the Hollywood game and may offer you a flat amount --Maybe $2 Million to outright buy your film.
AEs will always ask what your budget was and, if you hadn’t of read this book you would of proudly told them the exact penny. Thus, you start a negotiation by telling the buyer, the AE, exactly how much money you owe. Duh! Always, remember AEs are not dumb. They know what it costs to make a film and can probably guess your budget within 15% of your actual cost. But the AE will always ask because you’re probably naïve enough to proudly tell them the exact penny cost. Thus, you start a negotiation by telling the other party how much in debt you are. Dumb!
Let’s assume the AE asked, you replied properly and now the AE guesstimates you made your film for about $300,000 and he offer $2 Million --Get ready to grab it, if it’s the only offer. But, if there are several other distributors that want to talk with you, then allocate take 48 hours to hear their offers. Let’s listen…
2nd OFFER: He’s from Paramount’s contemporary classics (that’s an oxymoron) division, and starts to play the “What’s your budget" game. Quickly discovering you know how to play, he offers the standard 50-50 Net Deal (Chapter 48) --by giving you enough money ($300,000) to pay off your investors, a large P&A budget ($5,000,000), charge a distribution fee (35%) and split (50-50) profits with you.
Sounds good!? Careful. You better realize that you’ll never see a penny of profit because Hollywood creative bookkeeping (Chapter 48) will ensure there won't be any, but you should be happy that your investors got paid back and that the distributor is going to market you into a celebrity.
3rd OFFER: He tells you he's from Sony, and asks if you've heard of the studio. They love asking is you’ve heard of them. You acknowledge, “Yes”. He’ll ask if you’ve had any other offers that he should beat. You tell him Paramount’s offer of $5 Million P&A and 50% of profits.
The Sony Exec says, “Let’s take a look at Paramount’s offer. They’re charging you $5,000/print. What a rip-off. Prints only cost $1,500 and that’s all we’ll charge you. Next, we’ll only charge a 30% distribution fee, give you 70% of profits and still give you $300,000 to pay off your investors.”
This deal, on the surface, sounds better than Paramount’s, but after studying it you realize that the $300,000 is probably the only dollars you will ever get. You won’t see a penny of profits and you should, once again, be happy that the investors got reimbursed and that your name is marketed.
4th OFFER: This comes from a small distributor trying to beat out a big distributor. You probably won’t know the name of his company but he'll tell you a couple of films he distributed last year that you recognize. Then he’ll caution you about large distributors who make 500-1,000 prints, throw it out there, and if it hits in the first weekend, keep it there. But if it doesn’t hit, they pull it, recoup losses with a quick video/DVD or cable sale and you’ll spend the next six years bitching how they didn’t market your film properly.
The small distributor will tell you his company only distributes three films/year, so they must make every film profitable. He'll spend $500,000 instead of $5 million on P&A, but he'll spend it effectively. He’ll only strike 20 prints, one for each art house in the top 20 markets, but promise to keep your film in each theater for eight weeks and, every day he’ll put a two-column inch ad in every newspaper where the film is playing.
Then after two months, even if no one goes to the 20 theaters, he’ll make a large 3rd Window (Chapter 46) sale to a video/DVD distributor and split 50-50 with you. Plus, if your film performs well when in theaters, like “Blair Witch” or “Crouching Tiger”, he’ll make more prints, take bigger ads and increase the revenues.
With this offer, you’ll get less exposure (small P&A budget), but besides paying off your investors, you'll get a better shot at making profits thanks to the almost guaranteed video/DVD sale.
5th OFFER: This is a hard ass AE. He says, “Gimme your film, I’m gonna screw you”. You jump back, shocked with this approach. But it was honest. It’s difficult to explain to a first-time filmmaker, who doesn’t know the difference between a film and a movie, that all they have is a film that has no value without the P&A money. This distributor will spend P&A money on your film.
He goes on, “I’ll probably lose money during the theatrical window, so I have to keep the other video/DVD and cable revenues for profit. Try to negotiate away any of these and I’ll do creative bookkeeping. Honest!”
He continues, “Now here’s why it’s a good deal for you”. You listen and realize that this is the first distributor offering you a Split-Rights deal. The distributor only wants North America and leaves you all Foreign Rights (Chapter 45). All the other distributors (Offers 1-4) assumed they get World Rights.
This also is a good deal, for once your film plays in North American theaters, the world thinks of it as an American Movie. Then 2-3 months later, you take your film, now a movie, to a foreign market and cash in for $3,000,000-$10,000,000. If your film never becomes an American Movie, and just screens at a festival or two, you’ll be lucky to get $10,000-$20,000 from the foreign market.
6th OFFER: This approach is similar to Offer #5. The distributor says he just wants North American Rights. He’ll make it into a movie. You keep the Foreign Rights and cash in. Plus, he’ll beat Offer #5 by throwing in North American Cable rights.
Although it sounds better, this is almost the same as Offer #5. Because the distributor, who’s giving you North American cable revenues as the alleged bonus, will stipulate in the contract that you can’t exploit the cable window (Chapter 47) until 90-180 days after it is in video/DVD stores. And, after it is in video/DVD stores it loses most of it’s value to the pay-cable networks.
If you can get these six offers in a two-day period, you’re hot. You will be front-page news in Daily Variety, the Hollywood Reporter, the New York Times and the LA Times. The buzz will be loud, it will snowball and you'll have the leverage to make counter offers.
You go back to Distributor #1, with his $2,000,000 world buyout offer and counter with, “I’ll take $5,500,000 for North America Rights only.” You go back to Distributor #2, with his 50-50 Net Deal and a $5 Million P&A budget with a counter offer of $2,000,000 upfront, a $5 Million P&A budget with prints charged at $1,500 each and 50% of the video/DVD or cable window, whichever comes first. You go back to the other distributors with counter offers.
Six lunches. Six offers. You’re a hit. But be ready to start talking deal as soon as your film has had it’s one festival screening -- but don't negotiate yourself or the AEs will swindle you. Film festivals are about fluff and awards but under-the-surface they are about attracting a distributor and negotiating North American rights. And, whatever you do, when talking to distributors at festivals, first get an entertainment attorney (aka: Producer’s Rep), and only allow the distributor to have North American rights, unless they pay you an ungodly amount of money.
Always keep your foreign rights, allow your film to be made into an American movie and then cash in your foreign revenues at a Film Market. Woops! We’re getting ahead of ourselves and I feel that you’re starting to vicariously feel that you can negotiate with distributors. Whoa, Nelly! This chapter was just about film festivals now tet me give you a couple of more chapters starting with film markets (Chapter 45) then going to comprehending windows (Chapter 46) and concluding with understanding the Cable and Video/DVD sales (Chapter 47) before you are ready to negotiate (Chapter 48) with a distributor. Now, on to film markets.
TO DO:
1. Secure a list of film festivals.
2. Determine the major festival dates.
posted by Dov S-S Simens at 9:04 AM
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