INDEPENDENT FILMMAKING
- under construction -
SUPPLY & DEMAND:
There is a huge over supply of independent movies. Over 4,000 movies are released every year and no way that physical stores can stock all of those titles, and no way that distributors will handle all of those. 20 years ago it was a much smaller number of releases and back then an independent film could generate perhaps 1.5 million dollars in revenue. But ever since high quality digital cameras (beginning with the Canon XL-1) have been cheaply available to consumers, the prices paid by distributors for indie movies has been in a decline.
File sharing isn't helping the forces of supply & demand much either. Sure there are some people that illegally download media that they wouldn't otherwise buy, but one insider I spoke to says that perhaps about 20% of would be sales are lost to file sharing and that is a significant loss. The younger generation is only getting more and more computer savvy.
Nowadays a movie must be made as cheaply as possible or it is doomed to fail to see a profit. With no stars in your film realistically you're probably not going to make more than about $10,000 in gross profit in the USA. With a couple of B-listers you might make as much as $50,000 to $100,000 gross profit. To make a movie this cheap you need a script that doesn't require such huge expenses, otherwise don't shoot it. Crazy car chases? Forget about it. Are you pulling permits in Los Angeles? Renting expensive locations? Don't do it. Additionally you need to be able to do as much of the work yourself as possible (Ex- DP, Director, Editor, Sound mixer, DVD authorer, etc) because hiring people will cost too much. It helps if you can join forces with someone who can pick up the slack, do what you can't do, and who has the (free) equipment that you don't have. In order to make it work you will probably need to shoot one weekend at a time only when you're ready. This will enable you to build your own sets, produce it yourself, hire less people, etc.
Overall making a movie is a high risk investment. Don't kid yourself: The Blair Witch Project's are far and few between.
SALES AGENTS & DISTRIBUTORS:
A sales agent may be right for one movie and totally wrong for another. Are you ready to give away 25% of your profits in addition to being billed for fees (or give away 30% with no fees)? Well think again and try to sell your movie yourself. There are distributors that look at unsolicited movies. If you can sign a consignment deal with a distributor then do your own manufacturing and bypass all of the legal expenses, risks, gathering and preparing of deliverables, and other complexities of signing with a sales agent. I believe many sales agents / distributors out there are nothing less than con artists, that fully intend to rip you off or at least just make an easy buck off you. I've heard stories about a few. Do a google search of the company name in quotes and you will learn a thing or two about some of these distributors in filmmaking forums.
Beware of "DUMMY CONTRACTS" that sales agents, distributors or sales agent companies try to get you to sign, hoping that you don't use an attorney (or knowledgeable attorney) to review their contract. I had a sales agent company wanting a whopping 50% of profits in addition to recouping fees! That means that after the retailer and distributor pocket perhaps $7.50 on a $15 DVD, I would earn only $3.75 (and only after the distributor recouped their expenses). I've also seen 15 year contracts, and other train wreck contracts. DO NOT EVEN BOTHER negotiating with these thieves! Interestingly they may insist on confidential arbitration (in the event of contract disputes) so that other filmmakers don't find out about these companies' illicit behavior. These companies, usually smaller ones, are predators who don't have much clout with distributors anyway.
Foreign deals are made in the form of cash buyouts per territory. Do not sign a deal whereby a foreign distributor pays you a percentage of sales because they never do pay you or they short change you. Taking them to court in a foreign country (when they don't pay) would be a nightmare. Every filmmaker I've ever spoken to has gotten shafted on percentage deals with companies in foreign countries. Even when sold on a buyout basis there are pitfalls: I also heard a story about a foreign distributor illegally selling a movie outside of the territory it was licensed to sell to. It just never ends with foreign distributors. They can't be trusted, and the court system is a failure and they know it.
The vast majority of filmmakers who sign with foreign sales agents to solicit their movie to foreign territories never see a dime of profit anyway. Yes money is made but these sales agents rack up so many expenses in the form of travel expenses, film market fees, etc that the sales revenue generated never out paces the expenses. The sales agent just winds up pocketing all of the money as repayment for expenses. So while it may be difficult, sell your film to foreign territories on your own and hope for the best. Later, if your film does well in the USA, that will be an attractive selling point to foreign buyers.
Buy the Hollywood Distribution Directory for a list of distributors, both foreign and domestic. Understand that this book lists both "distributors" and "sales agents" under the category of "distribution", even though they are not alike. When soliciting your film, tell the prospective distributor if you are only looking for a "distributor" - not a "sales agent".
I spoke to one filmmaker who signed a worldwide distribution deal with an independent distributor. This person told me that in the end about 100% of their US film sales were from Internet sales (NOT physical stores), and 90% of their UK sales were from Internet sales. So they basically pissed away about an extra 30% of their profits hoping that the distributor would get their DVD into stores, but the distributor essentially failed. This is consistent with the results I've heard from others too. Understand that in 2001 a survey determined that 94% of US Internet CD sales by independent artists were via Amazon.com. Roughly the remaining 3% were via CDBaby.com and 3% via the artist's home page. There's no reason to assume that DVD sales aren't similar. This 94% number is a staggering one. While other retailers like DeepDiscount DVD and DVD Planet have probably cut into these percentages since 2001, I doubt Amazon has lost much of it's market share of indie product as of 2008. Understand that Amazon will open an account with ANYONE via their Advantage program. You can also sell your DVD via Ccnow.com and pocket about 90% of your DVD sell price.
CONCLUSION: The point of signing with a DVD sales agent or distributor is for them to get your product into PHYSICAL STORES - not merely sell your DVD's on Internet, which ANYONE can do very effectively! If your sales agent ultimately ONLY gets your DVD's sold on the Internet then you've made a 30% mistake (after costs) that has additionally cost you attorney fees to set up the sales agent deal!!!!! So you have to make an HONEST assessment of your product. Sure a sales agent is going to promise you the world because they want 25% of your Internet sales, but are stores like Best Buy, Wal-Mart, and Blockbuster really going to want to stock your indie DVD? Shelf space is limited and these stores look for stars and an expensive advertising budget before they consider stocking a title. And even then they often only start out putting a new title in just a fraction of their stores. There's 852 Best Buy stores, but typically indie product is only "tested" in perhaps 25 stores to start.
TIPS ON MAKING:
Don't shoot on film. Shoot on HD instead. There's too much money to be lost making independent movies, and shooting on film will only put you an extra $200,000 even further in the hole.
Have backup actors cast for all key roles. About 1 out of 10 actors will flake out, move, not be available, turn into pre-Madonnas, etc.
UNDER CONSTRUCTION
I highly recommend this book. Make sure and read it BEFORE you shoot though!