“It’s no trick to make a lot of money, if what you want to do is make a lot of money.” 

-Citizen Kane

***

IT seems like since the 2008-2009 dismantling of a bunch of high-profile independent distributors (THINKfilm, Warner Independent, etc.) there’s been a lot of talk (and a modest amount of action) about how “broken” the film industry (read: distribution) is. Furthermore, the changes in film—and let’s face it, all content—distribution over the past few years has lead to some very real, undeniable changes: the rise of (ahem) hybrid sales agents/distribution consultants, split-rights distribution deals, DIY releases and the obstinate growth of digital-only deals with, admittedly, a terrifyingly low-income average for most films released in this manner.

Despite all of this, I feel like there’s an elephant in the room that few people are acknowledging in private and fewer still in public: film outside of the “business” of distribution/marketing/etc. namely, independent production and private financing is significantly more “broken” than film distribution.

How is it that we can count 50,000+ feature films getting produced every year, an astronomical increase in supply over the past 20 years, and blame the market for not supporting this meteoric growth? How is it that experts can be so woefully ignorant of the reality that audience attention is a zero-sum game and there aren’t any more – and may even be fewer than ever before – people watching independent films today than any other time in the past 50 years – marking flat or declining demand? How is it that an entire industry can ignore this re-jiggering of supply and demand and still assume there’s a potential for – if not feel entitled to – a fiscally healthy industry and market?

Denial is a powerful thing and some truths are hard to swallow. The fact is, there’s very little that’s legitimately broken about film distribution, or the business in general. There are significant inefficiencies, sure, and single films make massive mistakes or brilliant strategic plays resulting in highly unusual income (for worse or better, respectively) – but that doesn’t change the fact that, by enlarge, most of the 50,000+ films produced each year financially fail because they’re just not what audiences want to see. I’m hard pressed to put it so gently, as my first instinct was to go one step further and say that the vast majority of films produced each year simply aren’t good enough for a large number of people to waste their money – or even time – on. And if you don’t think the necessary quality of what most people will spend 90+ minutes on is fairly high, check out this must-read “long term view” by Netflix – because there’s a really good reason they’ve been licensing so few independent films since Q4 2012, and it’s not exactly a secret.

Granted, I tend to take somewhat of a pessimistic look when I take a populist approach to the state of filmmaking. But most days I don’t shout “doom and gloom” but rather whisper it – because just as was the case in pre-digital aggregator times, abject failure isn’t a market condition but rather wholly preventable – the truth which remains true, the truth which isn’t warped in the fun-house mirror of outspoken producers, gurus and other bullshit artists is that filmmakers are more empowered today to make a living via content creation than ever before–but if they want sustainability, the content better be DAMN GOOD. There isn’t a simple answer as to how filmmakers can avoid failure once they’re actually distributing their films (regardless of whether it’s being distributed DIY/themselves or with distribution partners) but there is a simple guideline as to how a filmmaker can make relative success significantly more likely: make films you know people want to see, not the films you want to make.

And this suggestion can be easily misunderstood, I know. To be clear: no, I’m not suggesting independent filmmakers try to make four-quadrant films – in fact, that’s almost precisely what I’m arguing against, as independent filmmakers are best served making films that only cater to a relatively small — but easily identifiable — audience. To put it another way: creating a piece of art (a film) for the sake of expression (because there’s a story you want to tell) and without serious consideration for the potential audience (and what stories they actually want to consume) – the current “default” of almost all independent filmmakers – is a terrible business strategy — and no amount of post-completion distribution planning can save the investment behind a film that, from an investment perspective, never should have been made in the first place.

When comparing the “old” and “new” landscape of distribution, the most clear-cut delineation between the two is that it’s now recognized as crazy (and/or stupid) to plan a release of your film on the gamble of being accepted to a top-tier film festival and selling the film for a large advance/mg. And that’s still true. But there’s another “old” and “new” that we should recognize, a reality that threatens that which is held sacred – art/expression/originality and, some would say, “voice” – and here it is: if you want/need to plan for a film to be financially sustainable (read: to make back it’s budget) you need to make a movie that can sell – which is to say making a film that you know, before having actually made it, that people want to see it once you execute it.

As both a consultant/rep  and hobbyist, I work with (and help make, respectively) more than a few microbudget features that are, to be perfectly blunt, clearly not developed with audiences in mind but rather are made because filmmakers just want to make them. There’s a place for these films and I’m hardly suggesting people stop making them. What I AM suggesting is that filmmakers stop expecting – and planning for – returns that would indicate any sort of sustainability making films for the sake of art and self-expression rather than for audiences. What I AM suggesting is that filmmakers think very carefully before audaciously (and I don’t use the word lightly) seek outside investment for films that can (and will) be made because the filmmakers have a story to share rather than being made because they’re well thought-out investments.

What I AM suggesting is that filmmakers, other content creators and all of us in the business of distributing content ask an important question: when and why did we start thinking that the fiscal sustainability of making-then-selling art – for profit – is something the film industry is entitled to?

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I’ve seen horrors… horrors that you’ve seen.

– Apocalypse Now

***

WITH Sundance deep in our rearview, Berlin having just recently wrapped and SXSW around the corner, I feel like now is the opportune time to commit to (digital) paper an overview of the digital video distribution landscape – if nothing else, as a time-saver from having to explain the following to prospective clients—at least for the time being.

Q1 2013 is nearing its end and it’s safe to say that the digital marketplace is not only well-established but, so long as your taking a populist view of independent and specialty film & video, the primary marketplace for distribution. With that preface, I’d like to touch on a few broad ‘observations’ the industry has made (and widely reported on, blogged about, etc.) – and then reveal some realities about them.

1.) Packaged media is not only declining slower than most ‘experts’ suggested it would, but rather alive and well.

Strange as it seems, DVDs and Blu-Rays are still selling: around the holidays, around release dates, and in both foreign and domestic markets.

2.) The SVOD market is heating up.

Amazon Video is finally alive and kicking Redbox Instant is quickly expanding and Verizon and Liberty Media/Virgin Entertainment are still likely to bow SVOD services and, most importantly, Netflix is healthy as ever. Furthermore, these competitors have been shown to historically outbid each other for exclusivity (think ‘Mad Men’ on Netflix, ‘Community’ on Hulu, ‘Downton Abbey’ on AmazonVideo, ‘Seinfeld’ on Crackle).

3.) The EST (Electronic sell-through—which is really digital VOD) continues to offer a great transactional outlet for independent content creators of all shapes and sizes.

In short – little has really changed here. The runaway success of this area of the market in the past few years, though, means rising above the noise is tougher than ever.

***

Sadly, there’s much more than meets the eye here. The very fact that the film/video market tends ignore increasing supply, lackluster demand and an increasingly crowded marketplace shows in the reality if not the “news” that covers a few spotlights — In short, one might do well to remove those rose-colored glasses.

Packaged Media –

The rub, unfortunately, is that most sales continue to be in two areas – studio hits (think tentpole properties like ‘Marvel Comics’ films and ‘The Hunger Games’) and niche areas like Children’s entertainment, Fitness, Urban, etc. In short – make no mistake: DVD and Blu-Ray are alive and well, but not as in a way that concerns you, the independent filmmaker.

This is especially true for many documentaries (particularly socially-conscious docs) which could potentially leverage their value in both the educational and non-theatrical markets. Packaged media sales offer a stable, often legal alternative while embargoing (or even eliminating) this medium as part of your distribution strategy could be a positive move in ensuring public screenings and well-funded educational institutions pay an appropriate rate for the public dissemination of your film(s).

SVOD-

Theoretically, increased competition means bidding for the best, exclusive content. In practice, though, this bidding happens primarily for top-tier television series and/or historical content with a loyal, ‘cult’ following. There hasn’t yet been a move towards locking up exclusive rights for individual films, nor has viewing of this type of content increased – in fact, more than ever SVOD services are being used for repurposed Television content and, moving forward, most of these services have shown a proclivity towards creating original serial content (‘BattleGround’ for Hulu, ‘House of Cards’ for Netflix, Various pilots for AmazonVideo) rather than focus on films.

EST/Digital VOD-

The most tried-and-true outlet for selling indie content is still iTunes, dominating digital VOD sales. Since they don’t require any sort of exclusivity, though, there are actually multiple options/storefronts you can use for digital fulfillment – iTunes, Amazon VOD, VH(X), (ETC.). Like the above, though, there’s a rub: with flexibility, and with a proven track-record as a content destination, it’s harder than ever to rise above the noise. The film industry seems to have a problem ignoring the main tenant of capitalism  and with ~50k movies being produced each year and the number of audience members either holding steady or declining (due to other distractions) it’s easy to see why there’s a broken system.

Every year DIY digital sales platforms pop up with the promise they’re going to “fix the broken system” by allowing filmmaker to sell direct to audiences but the fail to recognize (or acknowledge) that lack of sales access hasn’t been a barrier for years. What remains the barrier is lack of interest.

Finding meaning in the mess-

So, I’d be remiss if I didn’t acknowledge that the above is pretty depressing. It shouldn’t be, though—it’s just reality. And if you position yourself correctly, it isn’t depressing at all—and understanding the landscape can be empowering so long as you plan accordingly.

There are a few things worth mentioning about all of the above: If people want to see your film, none of the scary issues challenging the above outlets should be worrisome. Case in point:

Packaged media is just a method of watching a film. Period. It doesn’t matter if this is no longer a healthy market, other than taking note so you don’t do something foolish like order a 1,000 DVDs of your mid-tier premiered festival drama thinking that nationwide brick-and-mortar retailers will place them on shelves and people will buy them based on the art and description. It’s not going to happen, period, unless you have a well-known film or a niche piece of content.

SVOD services will license your content for a pretty penny – if there’s interest. SVOD works pretty much like broadcast: in short, if you can prove to them – usually by notability via a theatrical run or critical acclaim, sometimes by metrics of success/interest like sales figures and fans, respectively – that people find the content worthwhile, they have every reason to make an offer to license your film, the dollar amount being based on what you can “prove” it’s worth to their users. Just try putting yourself in their shoes and you can see that this isn’t rocket science

EST/Digital VOD finds itself in a difficult position. There isn’t an upside (for filmmakers and other video content creators) to the increased volume of content and increased competition, except that maybe some people that were on the fence about purchasing content this way will be less reluctant to do so. Other than that, though, the state of EST/Digital VOD outlets underscores the larger issue worth pounding into the head of every filmmaker/producer/content creator: If people want to see your content, they’ll buy it, dammit. Think of it like this: iTunes is your new CreateSpace. People won’t buy things they stumble across, but you can make it easier for them to buy it by signing up—now you just have to motivate them to do so.

The takeaway, then, is quite simple: If financial success is the key measure of whether or not your film is “successful” you can more or less assure that there are a few key elements to giving yourself a strong shot at that kind of success: Make a great film and from soup-to-nuts (i.e. from development to 1yr.+ after distribution begins) make sure people know about it. Engage, engage, engage. Promote. Market. Promote. Market.

Both creating and promoting great content require hard work and know-how, and I’m not about to try telling you how to do either. What I can say is this: Once you do, the other key to success is managing your rights carefully and distributing strategically, both of which take knowing the landscape to do – so don’t screw up the long game.

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“I have just one final question.” He paused, shifting on his feet a bit before finally getting to it: “Why did you bring a lawyer into it?”

***

THE above was part of a conversation in vetting me for taking on the position of Director of Distribution at Alexander Street Press – a job that, among other duties, would eventually have me licensing the rights to four dozen documentaries on behalf of Filmakers Library, a boutique educational distributor Alexander Street Press had purchased a few years earlier.

“I didn’t bring a lawyer into it,” I began, “I would never do—nor recommend—doing so in a case like this. My clients brought in their attorney under their own volition.” I made it clear this was my final answer, and his nod of understanding made it clear it was a sufficient response not requiring further explanation.

I had been targeted for this gig after negotiating the sale of the non-theatrical & educational rights of one of my past clients (THE MINUTEMEN) to Filmakers Library. The question, I suspected, was because a huge part of my job would be bringing in new acquisitions – and a lot of them. High volume licensing means moving quickly and efficiently and, as a rarely-violated rule of thumb, that means doing so without letting either party get too bogged down by legal counsel.

I mention the above because, even if it’s not a conversation that most acquisitions professionals have had, the crux of it is something that informs a great deal of the decisions they have to make – and how they think: If content holders aren’t easy to work with, they better have content which is incredibly valuable . If they aren’t easy to work with and their content isn’t incredibly valuable to us, they better find another distributor to work with.

In a world where content is abundant and audience attention is scarce, where 50,000 feature films are created every year (credit to Brian Newman for his analysis on that issue) and at most, a few hundred get “proper” distribution deals (a number as dubious as the distinction of what a “proper” distribution deal looks like–but that’s another issue entirely) the key to distributors being able to scale up and distribute lots of content lies in working quickly—with both the platforms they distribute to (iTunes, Amazon VOD, Netflix, Crackle, LOVEFiLM et. al.) as well as the intellectual property holders they license content from (you: the filmmakers, producers, series showrunners, etc.).

So why is bringing a lawyer into the mix problematic for most films seeking distribution either through licensing deals or even distribution facilitators that require contracts? There are a few big reasons, which I’ll try to touch on:

1.) Tailoring contract language ties hands.

This is the most important reason bringing a lawyer into a deal can really screw things up for a filmmaker seeking distribution. Contract language is a touchy subject with lawyers—a result of their training, where it’s banged into their heads how different “x may do y” is from “x can do y.” This isn’t a problem in the abstract, but can be deal-breaker for distributors—particularly large volume distributors. Why? Well, the biggest reason is that most licensing agreements have some ambiguity built into them on purpose – as distribution businesses grow and expand, they’re afforded new opportunities—whether it’s through innovating new ways to distribute content (i.e. selling a branded subscription service, a second-screen integration with a film or series, etc.) or simply previously untapped markets (for example, CRACKLE recently tried cutting up a film into 10 parts and selling it as an ad-supported web series) and every single film they have to wipe “off the table” as available to be opened up into new opportunities is a.) a lost opportunity for filmmaker and distributor to both make money and b.) a logistical hiccup which causes them time and (by extension) money—the latter issue leads us to #2…

2.) Tailoring contract language costs you leverage.

Generally speaking, negotiations are exercises in give-and-take. Once both parties are in agreement on general terms (a step I’d usually advocate to be completed before a contract changes hands) every change to the contract is the filmmaker essentially saying to the distributor “I want X.” Since you’ve reached general terms, though, that “X” is almost always a language change – generally the genesis of which is for protecting the filmmaker’s interest by adding clarity or specific restrictions to the contract (more on this later).

Regardless of what you’re asking for, given the fact that you’re asking for “X,” a distributor is emboldened and is all the more likely ask for “Y.” Unlike a filmmaker/attorney team, however, a distributor has language default to what they’re already comfortable with—so their “Y” can be anything from a royalty split being moved more in their favor to a longer initial term. In short, by messing with language changes you’re costing distributors money (as well as yourself, as lawyers aren’t free) and they may (and often will) respond by either making you pay for it somehow or – and this leads us to our next point – leaving the negotiating table entirely.

3.) “Business relationships are based on trust. Lawyers are trained to think paranoid and protect clients.” The two are, in fact, mutually exclusive.

A long-distance friend who works in content production and distribution once offered the above as a concise explanation (paraphrased) as to why lawyers can screw up distribution deals for filmmakers. Reading/modifying language in a contract is the big reason most content-creators would want a lawyer in the first place – you can come to general terms with a distributor, but unless you trust them to answers questions about or requests for clarity on the contract clauses accurately and/or to make changes that reflect the intent of your negotiations, you’ll “need” a lawyer to verify everything. And therein lies the problem – if you’re a hammer (ahem, the lawyer) everything looks like a nail (“over-reaching” language in a contract).

I’ve been involved in more than a handful of deals where a lawyer came in, traded 30 messages between distributor and content creator and, when the dust settled, all that’s functionally changed is that the deal has taken 6 additional months to close, the content creators have a large legal bill to pay and the distributor has spent considerable time (which may or may not have resulted in vying for better terms for themselves) by changing the language of the agreement to “protect” the content holder…despite the fact that the content-holder didn’t need the protection. Why didn’t they need it? Any time you deal with a distrib, middle man, etc. – you should vet them before doing so. If they’re reputable, a disagreement isn’t going to come to a lawsuit, anyway – for the most part, distributors aren’t in the business of “screwing” filmmakers — and if they aren’t reputable, you probably shouldn’t be dealing with them—contract be damned.

4.) You’re likely to be an attorney’s least important client, which means they’re going to be slow (and/or “I don’t have time for this shit”)

Most films that do get distribution deals these days won’t make a ton of money. Don’t get me wrong – if you’re dealing with a reputable distributor, you’ll start seeing checks – even if it takes a couple of royalty statements to recoup the initial delivery/ingestion expenses– but that doesn’t mean a 5-figure check will be landing in your mailbox every quarter. Far from it, in most cases. This is problematic for any “normal” filmmaker for a litany of reasons, and one of them is that there are people to pay – including, in some unfortunate cases, their attorneys. Lawyers are pretty expensive – period. They’re used to getting paid well and their entire industry relies on that – they have loans to pay back, offices to keep open (usually complete with assistants or paralegals) etc. In many cases, they charge their clients up front – at a rate of hundreds of dollars per hour – which few filmmakers – even those with distribution deals – will be able to afford with their proceeds from the film. Another common form of payment is commission, much like a sales agent, distribution consultant or producer’s rep.

I point a finger at attorneys, though, for two reasons – they have higher costs and most of their clients will pay them handsomely in cold, hard cash. As a result, if they’re paid on commission, they’re pretty de-incentivized to prioritize closing a film deal, as they have “more important” deals to focus on. The result? Often times, lawyers will significantly slow down negotiations – in some cases missing a necessary deadline set by a distributor and killing a deal or, in some cases, keeping the filmmaker & distributor from capitalizing on an enormous time-sensitive opportunity to promote and sell a film. Why? Put yourself in their shoes and you can pretty easily hear yourself saying “I don’t have time for this shit.”

Lastly, and not to be dismissed, the same is true for the distributors’ side of things. If you’re dealing with a large-volume distributor (which, by the numbers, most filmmakers who get distribution deals will be doing) then it’s highly unlikely you’re one of their most important acquisitions targets. What does this mean for you, the filmmaker? Unless you have the leverage of a high-value film, it’s pretty easily to have your film pegged as “more trouble than it’s worth.”

“Oh, you didn’t clear any of your music rights yet? Screw it, not interested.” “Oh, there’s a lawsuit against the film from an actor whose release you didn’t get signed? In that case, it’s a pass.” If you’re an acquisitions exec closing dozens—even hundreds—of films a year, it’s pretty easy to shrug your shoulders and say “on to the next one” if things don’t work out – but having an attorney return an agreement that’s half re-written using their own preferred  language is just about the fastest and most effective way.

***

There are, as always, a litany of exceptions to any positions I take in these posts – but this one is more clear-cut than most, and really it boils down to one big, fat exception: Can everyone immediately see the value in your film? i.e. – Does it have a “name” cast? Did it win awards or make a splash at a top-tier festival? Did the film have a respectable 10 city theatrical run? Was the film an NY Critics Pick? Basically – is it obviously a high-value piece of content that distribs would fight over? Go ahead and lawyer up if you feel like you really need to – but unless it’s one of the top 50 specialty films released that year and will be pulling down lots of revenue, chances are a good sales agent or really seasoned producer could close the deal without any hiccups. The real, nasty secret about contracts and licensing agreements? They only get legitimately “complicated” when there’s an enormous amount of money at stake.

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With the launch the newly minted DCL comes a new post every few weeks. A lot of these will focus on content licensing/sales/rights issues, and this first one is no exception.

***

SO you (or your rep) are ready to start selling/licensing the rights to your finished film, series, etc. to distributors. A lot of the deal points are pretty cut and dry but you end up negotiating with your distributor (with some trouble) as to whether or not the inclusion of worldwide rights is warranted as part of the deal.

The reality of how to approach this issue, as you might suspect, isn’t so simple. The old-school way of thinking, still championed by many (in my experience this is still very common in dealing with European sales agents) is that if at all possible, you want to sell rights on a territory-by-territory basis. Generally speaking, there are two big reasons why people gravitate towards this approach:

1.) People often assume (with good reason, as this is largely accurate) that distributors only really “earn” their slice of the pie in their home territory. They also assume (this is less true in ancillary markets these days, but used to be par for the course, too) that distributors who license worldwide rights will just sub-license foreign rights to local distributors to do the actual “heavy lifting” in distributing the film — which means an added a middle-man to take a massive cut of your proceeds in foreign territories.

2.) By selling territory-by-territory, you’re working with many smaller distributors rather than handing your worldwide rights to a single large one; smaller distribs have less inherent leverage in negotiations and, as such, you’re likely to get better deal points when you sign with them.

With prominent pieces of content, say, films which have been either “qualified” by top-tier film fests or a high-profile cast, the above arguments hold water—if you have a high-value film, the above two points will have to be weighed very heavily in considering any offer you might get for an “all-rights, all-territories” deal from a distributor and negotiated accordingly.

***

Most filmmakers, though, will never make a high-value film. Instead, most filmmakers will cast an either relatively unknown cast (though, if they’re thinking about distribution, may focus on relative unknowns who have a fan-base they can tap) and will only play at mid-tier film fests. As such, most filmmakers find themselves in a situation in which while there may be some interest in their film from distributors, those distribs aren’t going to exactly getting into a bidding war over them. The sad truth is, there’s a massive over-abundance of supply, whereas the demand stays relatively static over the years – so sales where filmmakers really have significant leverage in negotiations are actually very few and far between.

In selling a “small” or “mid-level” feature in our current distribution environment/market, it actually rarely makes sense to focus on selling rights territory by territory rather than to a single worldwide distributor. Here are a few reasons why:

1.) If you limit the territories in which your distributor can distribute your content/film, you “tie their hands” and prevent them from including you in distribution opportunities that come their way.

In future posts I’ll be going into the more detailed business models of the most common types of film/video distributors today but, for now, the crux of this first point lies in one thing large companies have that small companies (as well as individual filmmakers) don’t: scale. A distributor that handles a lot of films – hundreds a year, for example, as most aggregators do – is the most likely to push for worldwide rights. There’s a great reason for this – the fact that they handle so much content is the very reason it makes sense for filmmakers to sign away these rights; by holding a lot of inventory, these companies are in the best position to get into favorable relationships with regional distributors or future worldwide distributors that operate in some not-yet-foreseen ancillary market.

As an example: In many cases it won’t make financial sense for a U.K film distributor to go through the trouble of setting up a relationship with a filmmaker (signing deals and forming working relationships take time, time = money) of an “American” indie that’s less than an already-qualified hit. But—that same distributor can possibly justify making a deal with an American film distributor that holds the rights to dozens of American indie films. Even if the U.K. distributor only licenses 5 or 6 from that library of dozens of films, that’s 5 or 6 times the value for the same amount of work—and those 5 or 6 films are now seeing revenue from the U.K., revenue they wouldn’t have seen if their respective producers tried to sell off those films’ rights into that market independently.

Middle-men exist in content distribution because relationships are expensive (in overhead costs) to set up and manage: licensing a library of content from (or setting up an output partnership with) a company with dozens, even hundreds of titles is only marginally more complex and time-consuming than setting up a relationship with an individual filmmaker.

It’s true that if you sell the worldwide rights to a film to an American distributor who only markets and promotes their content in America they’ll often sub-license the foreign rights to other other distributors who actually do the heavy lifting abroad – and it’s true that you’ve essentially added another layer of middle-men cutting into your gross. But— even if there may be more people taking slices of the “foreign gross” pie you have to ask yourself – if the pie never would have been made under any other scenario, isn’t this still a better option than the alternative?

2.) The more distributors you involve, the more costs you incur. Sales & delivery isn’t cheap.

This is an often-overlooked cost because, well, people tend to ignore costs that don’t come out of their pocket as tangible money. The truth is, though, that there are a slew of unseen or poorly accounted-for costs associated with rights management/sales: The more territories you sell off individually, the more time is sucked from your next project or promoting/marketing your current one. Beyond your time and energy (which shouldn’t be written off – there’s a reason the old adage of “time is money” continues to hold up) the small hard costs you incur – (i.e. incremental costs like, say, shipping fees) add up. Beyond the aforementioned, while distributors may shoulder the most expensive fee associated with distributing video content — encoding costs (sort of; we’ll get back to that) in the end, this usually costs you money, too. Those encoding costs that the distributor covers to encode and deliver your film to video platforms? Generally speaking, those are expensed against your royalty payments. Worse yet, a lot of distributors – even well known, reputable ones – don’t only charge back third party costs – they charge fees for delivery services done in-house, for which they can dictate pricing for their in-house services at whatever rate they wish (this is often obfuscated in contractual language and often comes as a shock to producers who actually look into cost breakdowns come royalty time) . My personal feelings about how shady this practice is aside, it’s very common – and by selling off to distribs territory by territory, you may very quickly find yourself thousands – or tens of thousands – of dollars in the red before your content ever hits audience. Even if you’re not paying upfront by cutting checks, this means you may never see them from your distributors, either.

3.) The internet carries no flags.

For several years now, most “small” films that don’t end up getting distribution deals that carry P&A commitments & theatrical releasing end up being all-digital (for a lucky few, all-digital + cable VOD) releases. The big reason for this is that a digital roll-out is low cost/risk versus packaged media (which isn’t terribly expensive to do a bare-bones release, but doesn’t provide very good ROI any more) or theatrical (very expensive) and Television/VOD are tightly controlled pipelines in which there’s value in scarcity (and as such, tend to only license films with prior metrics of success, like having been programmed at top-tier film festivals or having had a multi-city theatrical run). If every film from every festival landed on cable VOD, the very obvious would happen: the average film would make just a fraction of what the average film released on cable VOD does today—and neither distributors or cable operators want to see this happen.

So…all-digital releasing it is—for the vast majority of films that are licensed by distributors, anyway. And distributing a film across the internet means playing by the rules of the internet – which means all territorial lines are imaginary.

The upshot of this fact is that most of the players that operate in the digital space – aggregators – have direct output deals with platforms of all shapes and sizes—and in virtually all regions where there’s enough interest in film and video for a delivery platform to be a viable business.

If your film has some regional or international appeal, a worldwide day-and-date release can be pretty helpful. DCL is currently working with filmmaker Gary King of HOW DO YOU WRITE A JOE SHERMAN SONG; when the film is launched this Spring, we’ll be able to launch in all English-language territories—U.S., U.K., Canada, Australia/New Zealand, etc. in which there’s a viable market for English-language independent film– on a single coordinated launch date. Since HOW DO YOU WRITE A JOE SHERMAN SONG played prominently (and won a top prize there) at the Raindance Film Festival and, with that, garnered interest in the U.K. – a day-and-date territory launch will be ideal.

Additionally, going with a worldwide launch with a single distributor means one encoding fee, one date by which promotion could be done worldwide to all known and potential fans and, not to be ignored, one pipeline by which revenue would flow back – which makes for much simpler and more transparent accounting. If you’re a producer who hasn’t yet had to deal taking in (and later doling out to whomever has percentages) funds from distributors – trust me, this last bit is ulcer-preventingly valuable in a way it’s hard to describe.

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Now there are more than a few instances in which the above doesn’t make enough of a case to warrant a worldwide deal. I mentioned the most obvious examples in the beginning of this post–though there’s one more worth mention (since it’s also fairly common) is when your content or film features a subject, cast, other other element which a secondary territory would be particularly interested in a title – i.e. an “American” film by an “American” creative team that happens to have a Norwegian celebrity in the cast. In instances like this – where a secondary territory (in this case, Norway) might have significant interest and distributors might be motivated to shell out for a comprehensive release, you’d want to be really mindful about this and entertain the idea of isolating those territorial release rights from any worldwide distribution offers. This is also true of docs that focus on a foreign issue or subject.

Like all the posts I’ll be putting up here, the above isn’t meant to be taken as an instruction guide, but rather as a point which warrants serious consideration by content creators. Connecting content with audiences is rarely a black-and-white, right-or-wrong endeavor but rather more complex; each film, series, album or other piece of content will have it’s own opportunities and challenges – the way I see it, though, the more creators know (and think) about the underlying business of content distribution, the more empowered those creators are to make good decisions.

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