What Filmmakers Need to Know About Distribution Deals

As an independent filmmaker, securing a solid distribution deal is often the key to getting your film seen by audiences and potentially turning a profit. When we were starting out, one of the first ways we secured a distribution deal was by simply attending film festival markets. Visiting distributor stands and kiosks, and talking to them about our work and current projects proved to be incredibly effective. We were very open and honest about being new in the film production space, but we made sure to bring printed pitch decks and materials to leave with them. This approach not only helped us connect with Indie Rights Distribution, which signed our first film, but also led to our meeting with Gravitas Ventures, who picked up the distribution rights for Dark Beacon. Here’s what I learned from that experience and what every filmmaker should know about distribution deals.

Types of Distribution Deals

Understanding the different types of distribution agreements is crucial for negotiating the best deal for your film. Here are the most common types:

All Rights Deals

In an all rights deal, the distributor acquires all rights to the film globally. This means they handle distribution across all territories and platforms. For example, when Indie Rights Distribution signed our first film, they secured the rights to distribute it worldwide, allowing us to focus on creating new projects.

Limited Rights Deals

Limited rights deals involve splitting rights between territories or platforms, such as theatrical versus streaming. This can be beneficial if you want to target specific markets or platforms without relinquishing all control. During our initial discussions at film festivals, we explored limited rights deals to ensure our films reached the right audiences without overextending ourselves.

Self-Distribution

Self-distribution means the filmmaker retains all rights and handles distribution themselves. This approach offers maximum control but requires significant effort and resources. While we eventually partnered with distributors, we considered self-distribution for our documentary project, assessing whether we had the capacity to manage it effectively.

Hybrid Deals

Hybrid deals combine traditional distribution with self-distribution. This allows filmmakers to leverage a distributor's reach while retaining some control over certain aspects. For instance, Gravitas Ventures allowed us to distribute Dark Beacon through their network while we managed specific marketing campaigns.

Key Deal Terms to Understand

Before signing any distribution agreement, it's essential to grasp the key terms involved:

Rights Granted

Clearly define which specific rights are being licensed to the distributor. For example, ensure whether they cover digital, theatrical, or international distribution. We made sure to specify that our distribution rights included both digital and theatrical releases to maximize our film’s exposure.

Term Length

Understand how long the agreement lasts. Most deals range from 5-25 years, with 7-10 years being common for indie films. Our deal with Indie Rights was set for a ten-year period, providing ample time to distribute and monetize our film.

Territory

Determine which geographic regions are covered. Some deals may be global, while others are restricted to certain areas. We initially targeted North America and Europe, aligning with our distribution partners' strengths.

Revenue Splits

Clarify how income will be divided between filmmaker and distributor. Typically, a 50/50 split after expenses are recouped is standard for indie films. Our agreement with Gravitas Ventures followed this model, ensuring a fair distribution of profits.

Minimum Guarantee

Check if there is an upfront payment to the filmmaker. A minimum guarantee can provide financial security. Indie Rights offered a modest upfront fee, which was instrumental in covering our initial production costs.

Marketing Spend

Understand how much the distributor will invest in promoting the film. Effective marketing can significantly impact your film’s success. We negotiated a clause that required Gravitas Ventures to allocate a specific budget for marketing Dark Beacon.

Reporting

Ensure there are clear terms on how often sales reports and payments will be made. Regular reporting helps you track your film’s performance. Our agreement included quarterly reports, allowing us to stay informed about our film’s progress.

Approvals

Determine the level of creative control you retain. It’s important to have input on key decisions to maintain your vision. We retained final approval on marketing materials and distribution strategies, ensuring our film was represented accurately.

Negotiation Tips

Negotiating a distribution deal can be daunting, but these tips can help you secure favorable terms:

Work with an Experienced Entertainment Lawyer

Having legal expertise ensures you understand the intricacies of the deal. We consulted with a lawyer who specialized in entertainment law, which was invaluable in navigating our agreements.

Understand Your Film's Potential Value

Research different markets to assess your film’s value. This knowledge empowers you during negotiations. By attending film festivals and engaging with distributors, we gained insights into our film’s market potential.

Be Willing to Walk Away

Don’t settle for unfavorable terms. If a deal doesn’t meet your needs, be prepared to decline. Our persistence paid off when we connected with Indie Rights after multiple conversations, rather than accepting a less advantageous offer.

Retain Some Rights

Try to keep certain rights, such as for sequels or remakes. This can provide future opportunities. We ensured that we retained sequel rights, which allowed us to expand our film into a successful franchise.

Negotiate Performance Benchmarks

Set specific goals the distributor must achieve. This ensures active promotion of your film. We included performance benchmarks in our contract with Gravitas Ventures, tying additional incentives to their marketing efforts.

Red Flags to Watch Out For

Be cautious of distributors who exhibit these warning signs:

Upfront Fees

Avoid distributors who require you to pay upfront fees. Legitimate distributors typically earn through revenue sharing, not by charging filmmakers.

Lack of References

Distributors who can’t provide references from other filmmakers may not be reliable. Always ask for and check references to gauge their credibility.

Vague Marketing Plans

Distributors should have clear and detailed marketing strategies. If their plans are unclear or non-committal, it’s a red flag.

History of Shelving Films

Research the distributor’s track record. A history of shelving films suggests they may not actively promote or prioritize your project.

Learn From Succesful Distribution Deals

Learning from others can provide valuable insights into successful distribution deals:

• Paranormal Activity (2007): Made for just $15,000, it initially signed a limited theatrical distribution deal with Paramount. After strong audience reactions, Paramount acquired full rights for $350,000, and the film grossed over $190 million worldwide.

• The Blair Witch Project (1999): Made for $60,000, it was acquired by Artisan Entertainment at Sundance for $1.1 million. An innovative viral marketing campaign helped it gross nearly $250 million worldwide.

• Napoleon Dynamite (2004): Made for $400,000, it was acquired by Fox Searchlight at Sundance for $3 million and grossed over $46 million at the box office.

• Little Miss Sunshine (2006): Made for $8 million, it was acquired by Fox Searchlight at Sundance for $10.5 million and grossed over $100 million worldwide.

• Indie Game: The Movie (2012): This self-funded documentary turned down traditional distribution offers and successfully self-distributed through digital platforms, recouping its budget within 48 hours of release.

These examples demonstrate how leveraging festival buzz, negotiating favorable terms, retaining important rights, and sometimes opting for self-distribution can maximize both financial and creative control over your work.

Common Questions and Answers

How long do distribution deals typically last?

Most deals range from 5-25 years, with 7-10 years being common for indie films.

What percentage of revenue can filmmakers expect to receive?

It varies widely, but 50/50 splits after expenses are recouped are typical for indie films.

Is it better to sign with a big distributor or a smaller boutique company?

It depends on your film and goals. Bigger companies have more resources, but your film may get lost in the shuffle. Smaller distributors may give more personal attention.

The Right Distribution Deal is The Foundation For Success

Navigating distribution deals can be challenging, but understanding the types of agreements, key terms, negotiation strategies, and potential red flags can empower you to secure the best possible deal for your film. Our experience at film festival markets taught us the value of being professional, prepared, and persistent. By staying informed and leveraging your network, you can maximize your film’s reach and revenue potential. Remember, the right distribution deal not only gets your film seen but also sets the foundation for future success in your filmmaking journey.