The State of International Sales for Independent Films

November 21, 2012
posted by sheric

This piece was originally published on The Film Collaborative blog on November 20, 2012.

In our continuing look at film sales, today we are featuring an interview with an international sales agent for independent films, Ariel Veneziano of Recreation Media. He has handled international sales for many films including the highest grossing documentary of its time Michael Moore’s Bowling For Columbine, the highest grossing independent film of all time Mel Gibson’s The Passion of the Christ, and America’s most watched television show CSI: Crime Scene Investigation. The Film Collaborative works closely with Recreation Media for its international sales efforts.

SC: How are things different now than they were 5-10 years ago?

AV: In one word: worse.  Sorry to start this off on a down note!

SC: Do you mean money-wise or just sales interest at all?

AV: I think both. It is best to acknowledge what the reality is. At the same time, there are some opportunities that emerged, new ways of doing business that didn’t exist several years ago. It is important for filmmakers to have a reality check that there have been changes in the way viewers consume media and that has led to radical changes in the market. People go to movie theaters to see independent films much less than they did. Although global box office appears higher, this is only for a very small percentage of films. We’re talking Twilight, Iron Man, Dark Knight, James Bond. That share of the box office numbers is cannibalizing all of the other films out there.

Home entertainment revenues have been shrinking. DVD is progressively becoming marginal, and while broadcasters are multiplying, the license fees they are paying, especially for independent product, are getting smaller. While VOD and digital distribution are on the rise revenue wise, there is also an overabundance of product being made because of the sudden availability of low cost production methods.

Piracy is a threat to revenues. People still watch movies, but they don’t always pay for them. There is now a generation who sees this like going to the faucet and turning on the water, you don’t pay for every glass you fill. You pay a monthly fee and you can get a lot of water. Same with many internet subscriptions, one fee, unlimited choice.

The good side to digital and particularly online distribution is the ability to, in theory at least, reach a broad audience without need for a large infrastructure. Are there ways to capitalize on that trend? Yes. Are they easy? Not necessarily, it is a very fast moving situation and even the so called experts who have done this for years, they don’t know what is going on. There’s a lot of chaos here, the wild west.

SC: If we were to look at 5 years ago, what would have been a pretty normal deal scenario for an independent film with no names, but some festival pedigree?

AV: If we’re talking about one of the major festivals, like Cannes, Venice, Berlin that you could put on the poster, those are the big 3, you could have made a several hundred thousand of dollars in worldwide sales. But that’s not necessarily the case anymore.

SC: Right, I was noticing out of Toronto in September that films with more than notable names were being picked up in groups for $5 million, when their budgets must be nearer to $20 million combined. Lionsgate/Roadside Attractions bought Stuart Blumberg’s “Thanks for Sharing,”(Gwyneth Paltrow, Mark Ruffalo, Tim Robbins),  Shari Springer Berman and Robert Pulcini’s “Imogene” (Kristin Wiig, Annette Benning, Matt Dillon) and Joss Whedon’s “Much Ado About Nothing” all for a reported total of $5 million. So those films are not making their money back in advances. It used to be you could be made whole or close to it, but now that is not nearly the case.

AV: Right, it means you have to be smarter with the budgets, keep them low. Smarter with the finance plans and use soft money, something that isn’t going to be high risk for investors.

What happened in the music industry is now happening to film. When is the last time you bought a CD? With technology progressing so fast, storage capacity growing, speed of transmission of data, availability of mobile devices. Few people are going to want a DVD collection, why? I can access a gazillion movies in my cloud storage. So if people aren’t really spending money on music, the revenues for albums have gone way down. Why would they continue to spend for films? If you want to know what the future holds for the film industry, look at the music industry.

And because there is so much uncertainty, buyers are trying to safeguard themselves. They are being much more particular about titles they take on and for what prices because they don’t know how well it will sell.

SC: So when you go to a market, what attracts their interest to buy anything?

AV: Bigger theatrical pictures. For foreign buyers, they want to know the film will have a wide domestic theatrical release. Some domestic distributors can promise that like Weinstein, Summit, or if you are an international sales agent who struck a deal with a studio early on to release the film with a minimum 1000 screens, buyers are receptive to that.

Cast of course makes a difference. Certain genres like action do very well. Everything related to action travels well. So, adventure, sci fi, thriller, fantasy are all cousins of the action genre and those typically do well.

SC: One genre I see a lot in indie film is the “coming of age” drama story. How well does that kind of story do?

AV: AWFUL  in terms of revenue. I am talking as a businessman. As a viewer, I love coming of age dramas, but I can’t sell them. Nobody wants to buy them unless: 1) it is directed by a world class filmmaker. If it is a Woody Allen or Terrence Malick film, you’ll sell it 2) big names in the cast and when it comes to getting buyer excited about the cast level, the bar has gotten a lot higher as far as this  3) based on a best-selling novel 4) selection in a MAJOR festival. For international revenue that would be Cannes, Berlin, Venice. Sundance has an impact domestically, but internationally people don’t care. Toronto the same, it is fine for a repeat screening, but if that is your only claim to fame, not going to help you that much.

Coming of age drama is one of the worst for travel; that and comedy. Buyers just flee unless it comes with any or lots of those 4 criteria. So Terrence Malick’s Tree of Life, fits 3 of those criteria. World class director, A level cast, major festival selection. That is desirable to buyers.

SC: So you are really saying that a microbudget indie film with all of those things absent really has no chance for a buy at a foreign market?

AV: None.  Absolutely zero.

SC: This is good to know, we’re tempering expectations here. This doesn’t mean there is no audience for the film. It simply means that it has no value to a buyer.

AV: It is going to bring in too little money for them that it isn’t worth investing in. But you’re right, does it mean you can’t put it on iTunes or some other online outlets on your own and get people in foreign countries to pay to see it? No, you can absolutely do that. But since it is such a wild-west scenario at the moment, the revenue could still be zero for you.

SC: Are you saying that there are no prospects even in broadcast for this kind of film?

AV: No prospects, but as with anything there are a few exceptions.

A Lifetime movie, like a women in peril kind of film. If it was bought by Lifetime in the US, then there could be some broadcast value elsewhere. But that is a very specific kind of film, very formulaic.

SC: What about a low budget documentary? What if it was picked up by HBO in the States?

AV: Now we’re mixing types of films. Docs are a little bit different, but it depends on what they are about.  If it strikes the right chord with something timely, you find the right broadcaster who is filling their schedule with a thematic type of programming and your doc fits that profile, then boom you have a deal. A small deal probably, but still a deal.  A theatrical doc is the exception, docs are mostly for TV. Having it on HBO? No, it doesn’t make a difference. Not PBS either. It is more about the right subject matter, being topical.

The brands broadcast buyers respond to for narratives are Syfy Channel, Lifetime, Disney, Nickelodeon,  maybe Hallmark. Again, those films are very specific and formulaic. No fancy effects, no flashbacks and weird montage, just very straightforward stories.

SC: A foreign sales agent does what? You go to markets, but what is done in between? Should I get a specialist foreign sales agent or a worldwide sales agent?  

AV: Typically domestic and foreign markets are two different animals. There are some sales companies that can act as a good one stop shop, handling both within the same company and that can simplify administration. But the option to hire a dedicated domestic sales agent – also known as a producer’s rep – is a common way to go as well.

What we do as a sales agent is that we help you maximize revenue on the film from all available sources around the world. So that entails marketing, highlighting an existing campaign or creating a new one; working the press, getting a film into the right festival. Then leveraging the relationships we already have with buyers around the world. Negotiating and papering the deals. Delivering the movies. Invoicing and collecting the revenue. Monitoring how a film does in a territory and requesting (or demanding!) the revenue reports. Structuring the deal correctly so you can have some money up front and then see more money later down the road – if the film does well. It is a “technical” job and is very relationship driven.  Probably the most important aspect for a filmmaker in electing a sales agent, is working with someone you can establish a relationship of trust with. Trust can be an elusive thing sometimes. You keep hearing stories about filmmakers being ripped off by sales agents.

Some films are probably not meant to be handled by a sales agent because it is just too many layers of middlemen for too little available revenue, and the filmmaker would have been better off handling it themselves for the amount of sales revenue that can be gained from it. It will be a lot of work though for the filmmakers and some people are very naïve about that, thinking ‘oh who needs a sales agent?’ and they take their film to markets or put it up for sale themselves online and at the end of the day, a lot less revenue comes in than they thought. It is a lot harder to make money than it seems…

SC: Sometimes filmmakers try to call buyers and they find their calls aren’t returned. Buyers don’t know who they are.

AV: Trust me, sometimes we have trouble getting them to return our calls too! And they do know who we are.

SC: What is the typical length of time for a sales agent agreement?

AV: There are two types of agreements. One is a straight distribution agreement where the sales agent comes on just to sell the film into territories. Another is when a sales agent comes in with a minimum guarantee, some money upfront. If they put in some money, they will be more demanding on the terms. If it is just straight distribution, the filmmaker has more leverage to negotiate it.  So a typical term is 10-15 years.

SC: Why does it need to be that long?

AV: Well there’s two questions here. The first is the sales agent’s engagement term. How long is the agent going to be selling the film? And the second is for how long is the agent allowed to sell the rights? How long will the contract last for each deal brokered?  I might sell the film to a buyer in the first year, but the buyer might want a 20 year contract on that film especially if it is an all rights deal where they can exploit each window over a long length of time. They might spend a lot of money to release the film theatrically and make up the bulk of that money on DVD/VOD and then digital then broadcast which can then mean relicense and relicense over a long period of time. You know, when you watch TV, there are rerun movies, things that came out a long time ago. Those  have been relicensed over time.  So if you are going to all this effort and expense, you want to have a long period of revenue coming in on that.

So if a producer and a sales agent have a good relationship, they should both want that. It is not just about selling and walking away, there is the monitoring of the sales.  You may get an advance from the buyer, but then there is a revenue sharing structure that has to be enforced. A buyer might release theatrically and not make money, but then it goes into DVD and broadcast, and especially in Europe broadcast is where a lot of the money is, in TV, so when that revenue is coming in, you have to make sure reporting is being done correctly.  That can be many years after the fact.  If a film is doing really well, you may have to check the reports or audit them to make sure you are getting all that is due.  It can be complicated to do this and costly. You want your buyer to comply, but you may have to send in someone to check the records.

You need to manage the revenues coming in, the agent gets commission and expenses and then the rest flows through to the filmmakers.  So for us this lasts 15 years typically.

SC: 15 years to maintain the film, the sales contracts on the film?

AV: Yes.

SC: So then the question is if after a year or two, the agent hasn’t made deals in many territories. Why should they still hold the rights to my film for 15 years? If I know that I have an audience in Indonesia based on my website traffic, but it isn’t enough to satisfy a broadcaster or a distributor in that territory, I could service them directly from my website, but I can’t do that because legally I don’t own my film, the agent does.  An agreement for that length of time in this case doesn’t seem to serve anyone.

AV: Well in TV sales it can take a while for a sale to come through. The decision making process is slower in TV.  Also it can be about the right theme being programmed in the schedule.  A film may not be a fit for this year’s schedule, but maybe for a schedule 2 years from now.  If the agent has the rights to a film that fits, a sale can be made then.  But I think good practice for a sales agent is to yield to the filmmaker if they find after a reasonable amount of time that there is no real sales potential.  A clause should be worked into the contract that after X amount of time, if no sales are pending and interest is limited, then the rights go back to the filmmaker or the sales agent agrees to arrange for another type of distribution (iTunes aggregation or other kind of digital VOD distribution) and any revenue would be subject to whatever commission was agreed – if the sales agent helped to get the film onto a revenue generating platform, then they should get a commission out of it.

SC: Walk me through the revenue flow. If it is just a straight distribution deal, the agent has not given the filmmaker an MG to represent the film, how does the money flow from the buyers through the sales agent to the filmmaker?

AV: Everything is up for negotiation, but here’s the typical structure. The revenue comes in from the distributor, the agent takes a commission,  then the agent takes reimbursement on the expenses that have been capped and agreed, then the filmmaker gets the rest. Let’s say there is $100,000 of revenue. Commission is 20% and the agent spent $10,000 in expense. The commission is $20,000 plus the $10,000 for expenses so $70,000 goes to the filmmakers.

SC: Ok say that it isn’t $100,000 in one go. Say it is $2,000 this month and $5000 last month and all of this revenue flows through the agent.  Does that mean every time there is revenue, the agent gets 20% of it, or is this a flat 20% of all revenue?

AV: Usually reporting is on a quarterly basis in the first year or two and after that it is only twice a year.  So every time there is a statement, commission is disbursed.

SC: And how do you show me expenses? How do I know what my expense was for the trailer or the one sheet design and printing or the market booth?

AV: Again different companies have different practices, but typically expenses are amortized across all of the current titles the sales agent is handling. We have costs from the markets that we split across the slate of films. We do a fair assessment of the films we are actively selling and then there are direct costs. If we hold a screening of a film in a venue during the market, 100% of that cost is going against that particular film. But a booth at Cannes for all of the active slate of films, that cost will be amortized across the slate.

So everything should be documented as far as expenses. If you feel like the expenses are unfair, you should have audit rights in your agreement. When you have that ongoing relationship with your sales agent and they are motivated to do repeat business with you, they will want to do things right. Ideally you want to work with someone you can 100% trust, but we hear every day how there are disputes in Hollywood studios, independent studios. Lots of creative accounting, people don’t always report accurately and things end in arbitration or litigation.

SC: A few years back someone on a panel said that especially in low budget filmmaking there are a lot of first time filmmakers, but not a lot of second time ones. So relationship building on either side, the agent or the filmmaker, there isn’t a lot of loyalty there. The filmmaker may  never work again, the agent may not even want another film from this person, the filmmaker will choose whatever agent seems to be bringing them the best deal.  So is the motivation to be loyal and honest really there?

AV: Well maybe filmmakers should have more of a career plan. Don’t think one film at a time, but have a vision for what your career will look like and plan for the relationships that will help you realize it over time. Also, films aren’t made by only one person. There is the producer, the director, the writer, the cast and sometimes cast members are also producers. There can be relationships with all of these people that benefit a trust factor being present.  And then there is the carrot and the stick principle. Yes, we want to have relationships where we believe all are being honest, but we know some people are more honest with those they know than with those they don’t. You have to trust, but verify.

You can always question what doesn’t seem like a reasonable expense.  You won’t go through every receipt and say “are you sure at that dinner you talked about my movie?” Come on, you aren’t going to do that. But if you see some weird expenses for things you don’t remember happening, like a screening at a market, then you should question it and request backup documentation. The sales agent should be able to provide it.

SC: Lastly, what kinds of things should be included in my sales agent contract. Should there be non performance clauses, bankruptcy clauses, a limit to the years my title is held by the agent?

AV: Well, I am going to be on the other side of the negotiating table and I will want less encumbrances of course. So who am I advising here?!

SC: If we are transparent and honest people who really want what is equitable, we should be honest about this. Also  what kind of things are you expecting from the filmmaker in the contract?

AV: I will want to be efficient. I want to know that they have all the deliverables ready or in a timely manner. This includes master drive or prints as physical material, but also legal documents. Chain of title, music clearances, E&O everything that is included in the delivery list. So many times attention isn’t paid to the details of this both from the physical perspective, but also the budgeting perspective.  Often these materials have to be created and that costs money and a budget needs to be available for this.

We might have an offer that will bring in a good amount of revenue, but if the producers can’t deliver the items required by the buyers, there is no deal.  Sometimes we take on that expense ourselves say a 35mm print might be needed, but one wasn’t made. We wait to see how interest goes at the first market and if 5 territories want to do a theatrical release,  then we will take on that expense because we know it will be recouped.  A 35 mm print may be optional depending on the film, but there are other things that are required. For example an M&E track so that the film can be dubbed in foreign territories.

SC: What is the worst thing people tend to forget or deliver in the wrong format?

AV: One thing that happens a lot is stalling, letting things drag and not delivering the final elements. The final music tracks are being cleared or the M&E track is being finished. Several situations where the film never really seems to be finished.  The deals were struck, the buyer is getting impatient waiting for everything to be sent over. A film isn’t like red wine, it doesn’t get better with age, it doesn’t gain value, it does the opposite.  The film got old and it never came out.

Also, one thing that is perpetually a disappointment: still photography. Good photography is super important to promote the film, to design into the campaign. Buyers really want good stills.  On low budget films, good photography is perpetually dismissed. Make everyone’s life easier, get lots of on set shots. Not behind the scenes stuff with the crew goofing off and doing set ups.  Get shots from the scenes, good shots of the cast, the atmosphere of the scene, things that we will see on screen.

SC: What would you tell someone who hasn’t yet made their film, but they are about to embark on the process. What to expect?

AV: First start with why you are motivated to do this? Making money isn’t always the prime objective for some people. They have an urge to tell a story and yeah, maybe some business person may find it genius, but it is ok if they don’t. Be very clear about that with yourself and others, that you are doing something that has only a remote chance of making money. That way, you won’t be this frustrated filmmaker who is suddenly surprised when all the odds are against you. You knew it going in. Maybe this first film is a calling card and all part of the career plan.

Ultimately, if you want to make a career in this industry, you are going to have to make film that connects with paying audiences and make some commercial sense. First films can be something very striking visually or artistically, but not make much or any money. They can have an artistic integrity that isn’t necessarily attractive to a buyer, but can find a small audience.  In order to capture industry attention, the films are going to have to be accessible to an audience.

I think Ariel Veneziano for sharing his time and information with us. Remember, The Film Collaborative does handle films sales on a limited basis and we are always open to advising our members on the best course for getting their films out to market

PMD’s Should Know Deliverables

April 15, 2011
posted by sheric

If you don’t, don’t worry many inexperienced filmmakers don’t know all that is expected either to deliver the film to a sales agent/distributor for a theatrical and/or DVD deal. But since you have elected to undertake the job of marketing AND distribution, you will need to be keeping up with these elements all along the production phase.

I asked my friend Orly Ravid from The Film Collaborative to give me a list of the kind of deliverables distributors are requesting right now in contracts. She sent me a few and they all seem pretty boilerplate similar.

Initial Delivery Items

A.            PUBLICITY MATERIAL

1.            Key Art – Physical delivery of key art in fully layered photoshop files on CD.

2.            Advertising/Publicity Material – All publicity which may have been prepared in connection with the Picture, but not less than one complete set of all advertising materials available, including, without limitation, press books, posters and publicity material.  In addition, a written report of all additional photography in existence, including, without limitation, special shoots, photo agency art, etc. These materials may be delivered on CD or DVD.

3.             Artwork Images - Physical delivery of fifty (50) or more color digital images of cast/characters as they appear in the film (no behind-the-scenes) with a corresponding index in English including appropriate captions identifying the subject and scene depicted in each digital image.  Any and all approvals or other authorizations that may be required in connection with the use of said digital images will be secured and delivered.  These materials may be delivered on CD or DVD.

4.            Press Kits – Three (3) press kits which include a synopsis, production notes, biographies for key players, director, producer, screenwriter, and credit list of both cast and crew (and their English translations, if in a foreign language)

5.            Electronic Press Kit – If available, delivery of EPK Materials on Digital Betacam Videotape.

B.            DOCUMENTATION MATERIAL

1.              E&O APPLICATION – Completed and signed application for Producer’s Errors & Omissions insurance (Distributor to supply form).

2.            CAST/TALENT/PERSONNEL AGREEMENTS – Fully executed agreements for all cast, crew and other entities and related personnel who have been accorded paid advertising and/or screen credit.  For any person listed in the billing block or main titles who does not have an agreement, please deliver a signed Certificate of Ownership (form to be provided by Distributor).  ANY CAST/TALENT/ PERSONNEL AGREEMENT CONTAINING, WITHOUT LIMITATION, EXCLUDED AD OBLIGATIONS, PAID AD, KEY ART, OR ON-SCREEN CREDIT OBLIGATIONS, ARTWORK TITLE ENTITLEMENTS, CREDIT TIES, NAME AND LIKENESS APPROVALS OR OTHER RESTRICTIONS OR TIES SHALL BE DELIVERED TO DISTRIBUTOR WITHIN TEN (10) BUSINESS DAYS OF EXECUTION OF THIS ACQUISITION AGREEMENT.  If there are no such credit obligations included in these agreements, they may be delivered at any time up to the Initial Delivery Date.

(a)            Cast/Talent/Personnel Agreements must include a waiver of injunctive relief, “work-made-for-hire” language, and allow for the use of name and likeness.  If such agreements do not include the aforementioned language, Licensor will obtain signed Certificates of Ownership (form to be provided by Distributor).

(b)            Composer Agreements shall include the above-mentioned language and provide for underscoring on an all media buy-out basis (Distributor to provide a Composer Certificate of Ownership upon Licensor’s request), and evidence of payment shall be delivered for each composer of underscoring for the Picture.

(c)            Agreements shall be delivered with an accompanying English translation if not in English originally.

(d)            In the event that the Cast/Talent/Personnel Agreements for the Picture do not meet the above requirements and Licensor delivers Certificates of Ownership, Licensor will also deliver the defective Personnel Agreements if these agreements include any credit obligations, artwork title obligations, name and likeness provisions, or any other provisions that would have any bearing on the creation of artwork or marketing materials for the Picture.

3.              CREDIT INFORMATION – Statements and/or lists in English summarizing all contractual credit/likeness obligations applicable to the Picture, including, but not limited to the following.  Credits must comply with all applicable guild and union requirements, and any and all guild related waivers or determination must be obtained prior to Delivery.  LICENSOR MUST INFORM DISTRIBUTOR OF ANY EXCLUDED AD OBLIGATIONS, PAID AD, KEY ART OR ON-SCREEN CREDIT OBLIGATIONS, ARTWORK TITLE ENTITLEMENTS, CREDIT OR LIKENESS TIES, NAME AND LIKENESS APPROVALS, LOGO OBLIGATIONS, OR OTHER RESTRICTIONS, OBLIGATIONS, OR TIES RELATING TO THE CREATION OF ARTWORK OR MARKETING MATERIALS, WITHIN TEN (10) BUSINESS DAYS OF EXECUTION OF THE ACQUISITION AGREEMENT.

(a)            Screen Credits

(i)            A list of all contractual screen credit obligations.  (If there is no contractual obligation to accord a certain credit which has been accorded on screen, the “obligation” should be stated as “Licensor’s Discretion”).

(ii)            A typed list of the final main and end credits as they ultimately appear on screen.

(b)            Paid Advertising Credits

(i)            Artwork title credit obligations, inclusive of proper positioning information.

(ii)            Billing block credit obligations, inclusive of proper positioning information.

(iii)          Excluded advertising credit obligations.

(iv)            Any and all logos that Licensor is contractually obligated to include below the billing block in paid advertising, together with the underlying agreements substantiating any logo obligations, such as Sales Agency Agreements and Financing Agreements.  Any such underlying agreements shall be delivered to Distributor within ten (10) business days of execution of the Acquisition Agreement.  Logos must be provided on CD as “.psd” files in full color and B/W.

(c)            Key Art Obligations & Photograph/Likeness Approvals

(i)            A list of all cast members who are contractually entitled to appear in the key art and paid ads for the Picture, and/or whose contractual entitlement is tied to one or more other persons in the Picture, and/or who have been granted approval rights (as well as specifics regarding those rights) over the photographic images or artistic likenesses used in any artwork or marketing materials for the Picture (e.g. percentage of kills alone, percentage of kills with one other person, etc.).

4.            STATEMENT OF THIRD PARTY RESTRICTIONS – If requested, a statement in English from Licensor listing all dubbing, subtitling, editing, cutting and any other third party restrictions applicable to the Picture of which Distributor and its licensees must be aware.

5.            CHAIN OF TITLE

(a)            All documents evidencing proof of ownership and all documents evidencing proof of payment in connection with any transfer of rights (including, but not limited to, Writer Agreements, Option/Purchase Agreements, Assignments of Copyright; Assignments of Rights, etc) (translated into English if not in English originally);

(b)             A filed U.S. Copyright Registration form for the Screenplay.   If this form has not yet been submitted to the US Copyright Office, please allow us to approve the filing beforehand in order to avoid the time and cost associated with incorrect filings.  In the event that the endorsed registration form has not yet been received from the US Copyright Office (USCO), we will accept on a provisional basis a filing packet consisting of:

  • a copy of the Form PA as filed, a copy of proof of payment, and a copy of the courier receipt evidencing date of submission.  When received, a copy of the endorsed Form PA must be sent by Licensor to Distributor; or
  • a copy of the Form PA as filed, a receipt from Thomson CompuMark or other filing agency evidencing date of filing, and a copy of proof of payment. When received, a copy of the endorsed Form PA must be sent by Licensor to Distributor; or
  • a copy of the electronic Service Request Detail from the USCO reflecting the online filing of a Form CO (equivalent to the old Form PA), a copy of the e-mail payment confirmation, a copy of USCO bar-coded Deposit Copy Shipping Slip for Deposit Copies Sent to Accompany an Electronically Submitted Application, and a copy of the FedEx Airbill evidencing shipment of the DVD to the Copyright Office. When received, a copy of the endorsed Form CO must be sent by Licensor to Distributor.

(c)            A filed U.S. Copyright Registration form for the Motion Picture.   If this form has not yet been submitted to the US Copyright Office, please allow us to approve the filing beforehand in order to avoid the time and cost associated with incorrect filings.  In the event that the endorsed registration form has not yet been received from the US Copyright Office (USCO), we will accept on a provisional basis a filing packet consisting of:

  • a copy of the Form PA as filed, a copy of proof of payment, and a copy of the courier receipt evidencing date of submission.  When received, a copy of the endorsed Form PA must be sent by Licensor to Distributor; or
  • a copy of the Form PA as filed, a receipt from Thomson CompuMark or other filing agency evidencing date of filing, and a copy of proof of payment. When received, a copy of the endorsed Form PA must be sent by Licensor to Distributor; or
  • a copy of the electronic Service Request Detail from the USCO reflecting the online filing of a Form CO (equivalent to the old Form PA), a copy of the e-mail payment confirmation, a copy of USCO bar-coded Deposit Copy Shipping Slip for Deposit Copies Sent to Accompany an Electronically Submitted Application, and a copy of the FedEx Airbill evidencing shipment of the DVD to the Copyright Office. When received, a copy of the endorsed Form CO must be sent by Licensor to Distributor.

(d)            Title Report dated within sixty (60) days of Delivery, and a Title Opinion, if available;

(e)            Copyright Report dated within sixty (60) days of Delivery; and

(f)            Two (2) original Certificates of Authorship.

6.            IRS FORMS:

  • For domestic licensors, one (1) completed and signed original Form W-9.
  • For foreign licensors, one (1) completed and signed original Form W-8BEN.  Distributor will provide all foreign licensors with full instructions on how to correctly complete this form.

7.            FACT SHEET:  One (1) completed original Fact Sheet in English.

COMPLETE DELIVERY ITEMS

A.            FILM AND VIDEO MATERIAL:

1.              Pre-Print Elements

(a)            Lab access to the 35mm fully assembled original negative, if available

(b)            Lab access to the 35mm Interpositive of the full feature, if available

2.            Videotape Elements

(a)            Physical delivery of the following high definition (“HD”) videotape masters:

For 1.85:1 or 1.78:1 films:

HD Cam SR 16:9 (1.33 side-matted)

HD Cam SR 16:9 full frame (1.78)

For 2.35:1 (or other scope measurement) films:

HD Cam SR 16:9 (1.33 side-matted)

HD Cam SR 16:9 full frame (1.78)

HD Cam SR 16:9 (2.35)

Each HD videotape master shall be recorded at 1080/23.98Psf. Each HD videotape master shall have the 2-track LT/RT printmaster on channels 1 and 2, and the 2-track LT/RT M&E on channels 3 and 4, and the 5.1 Printmaster on Channels 5-10. Textless backgrounds for the main, insert and end titles shall appear sixty (60) seconds after Picture in each videotape master. The textless backgrounds shall be color corrected to match the corresponding texted shots.

(b) Physical delivery of a Digital Betacam NTSC broadcast quality 16×9 anamorphic videotape master (respecting the original aspect ratio of the film) and 4×3 1.33:1 master with stereo mix on channels 1 & 2 and separate music and effects on channels 3 & 4 and the textless background sections included after the Picture. These elements may not be conversions.

(c)            Physical delivery of the following Sound Elements on DVD-R, DA-88 or Magneto Optical Disc or Harddrive conformed to the final version of the Picture:

Stereo 2 track Printmaster

5.1 Printmaster

5.1 M & E printmaster w/ Dialogue Guide on Ch. 7 and Optional Audio on Ch. 8

Separate Dialogue, Music and Effects Stereo Stems

Separate Dialogue, Music and Effects 5.1 Stems

3.              Promotional and DVD Added Value Materials – Licensor shall deliver a minimum of twenty (20) minutes of added value materials for promotional purposes or for the DVD release, including, without limitation, all outtakes, deleted scenes, and trims, soundtracks (whether negative, positive or magnetic) produced for or used in the process of preparing the Picture, “Making of”/ “Behind the Scenes” featurettes, storyboards, interviews, alternate openings/endings, or commentaries.  Additionally, Licensor shall deliver all added value materials resulting from any theatrical release of the Picture, whether inside or outside the Territory. Should Distributor elect to create extra commentary or other added value content in connection with the video release of the Picture, Licensor shall cause the individuals listed in Paragraph 1 of the Agreement (i.e., the director, stars, and producers of the Picture) to render services in connection therewith. Delivery of A/V materials shall be on HDCam (if available) with Stereo Comp on Channels 1&2 and Separate Production audio and Music as .wav/.aiff files delivered on DVD.

4.              Foreign Language Dub Versions –

(a)            If available, physical delivery of the Neutral Spanish (i.e. non-Castilian) overlay.

(b)            If available, free access to the Neutral French (i.e. non-Canadian) overlay.

5.              SHOOTING SCRIPT

(a)            Physical delivery of the final shooting script of the Picture.

(b)            If available, physical delivery of the final shooting script of the Picture on disk.

6.             DIALOGUE CONTINUITY/SPOTTING LIST

Combined dialogue action continuity and spotting list containing all spotted dialogue, narration, sound vocals, all opening titles and complete end credits appearing in Picture, as well as a cut-by-cut description of the action of the Picture in its final form, with footage and frame counts showing footage in, footage out and total duration of each line of dialogue (translated into English if not in English originally).

B.            TRAILER MATERIAL:

1.              Videotape Elements

(a)            Physical delivery of a Digital Betacam NTSC broadcast quality videotape master with stereo mix (if applicable) on channels 1 & 2 and separate music and effects on channels 3 & 4 and the textless background sections (if applicable) included after the Picture.

(b)            Physical delivery of Sound Elements on DA-88 or Magneto Optical Disc conformed to the final version of the trailer, with separate Narration, Dialogue, Music, and Effects tracks.

2.              Foreign Language Dub Versions – If available, free access to the Neutral Spanish (i.e. non-Castilian) overlay.

3.              Foreign Language Dub Versions – If available, free access to the Neutral French overlay.

4.              Dialogue Continuity/Spotting List – Required only if Distributor uses Licensor’s Trailer.

Combined dialogue action continuity and spotting list containing all spotted dialogue, narration, sound vocals, all opening titles and complete end credits appearing in Trailer, as well as a cut-by-cut description of the action of the Picture in its final form, with footage and frame counts showing footage in, footage out and total duration of each line of dialogue (translated into English if not in English originally).

C.             DOCUMENTATION MATERIAL

1.              MUSIC DOCUMENTATION

(a)            Music Cue Sheet – A Music Cue Sheet in English stating for each composition in the Picture: the title, the composer(s), publisher(s), copyright owner(s), performer(s), arranger(s), usage, performing rights society, timecodes indicating where each cue appears in the Picture (“ins” and “outs”), as well as the film footage and running time.

(b)              Music Licenses – Fully executed synchronization and master use licenses on an all media buy-out basis for each item of licensed music used in the Picture with the Term stated as “in perpetuity” and the Territory stated as “the world” for each license.  Evidence of payment under each synchronization and master use license and composer agreement shall also be delivered.  Licenses and Agreements shall be translated into English if not in English originally.

2.              CERTIFICATE OF ORIGIN – One (1) notarized original of a Certificate of Origin.

3.              MPAA RATING – A paid rating certificate from the Motion Picture Code and Rating Administration of America, Inc., no more restrictive than R.

4.              GUILD AFFILIATION LETTER – A letter in English, signed by the producer or director of the Picture setting forth all United States and foreign guilds and unions whose members rendered services on the Picture (for specific guilds, see below). If none, then a letter in English, signed by the producer or director of the Picture setting forth that no members of any United States or foreign guilds and unions rendered services on the Picture.

(a)            SAG:  If the Picture was produced under the jurisdiction of SAG:  Completed copies of the SAG “Final Cast Report” covering all actors engaged on the Picture, including without limitation actors rendering singing, looping and “voice-over” services in post-production. (b)            DGA:  If the Picture was produced under the jurisdiction of the DGA:  The name, social security number, loan-out information (where appropriate) and job description of all DGA members engaged on the Picture; and the DGA approval of the final main and end title credits, signed by an authorized representative of the DGA.

(c)            WGA:  If the Picture is subject to WGA jurisdiction:  The name, address, social security number and loan-out information (where appropriate) for all writers receiving credit on the Picture; a copy of the final WGA notice of final determination or credit on the Picture, signed by an authorized representative of the WGA; and the WGA approval of the final main and end title credits, signed by an authorized representative of the WGA.

5.              ADDITIONAL AGREEMENTS / STATEMENTS – As applicable, copies of all agreements and documents relating to the Picture not delivered as part of Initial Delivery delivered with an accompanying English translation if not in English originally, including, but not limited to:

(a)            Minor confirmations:  If applicable, and to the extent required by applicable law, all talent agreements for all minors shall be confirmed by the court.  In the event that court confirmation is not applicable, a letter from an attorney in the jurisdiction in which principal production took place stating that the agreements are valid, binding and enforceable under the laws of said jurisdiction shall be provided.

(b)            Nudity Riders:  If applicable, all actors appearing partially or wholly nude on-screen, or in simulated sex scenes, must give written consent to such nudity.  If Talent Agreements do not include nudity language, Licensor will obtain signed Nudity Riders (form to be provided by Distributor).  However, if an actor is a member of the Screen Actors Guild (SAG), a SAG Nudity Rider must be provided even if language pertaining to nudity appears in Talent’s contract.

(c)            Clip Documentation:  If clips from other films are used in the Picture, Licensor shall provide copies of all necessary Clip Licenses, or permissions granting the rights to use the clips in the Picture (translated into English if not in English originally), and a proof of payment for each clip used.  Licensor shall also deliver a Clip Cue Sheet in English stating for each clip used in the Picture: the title of the original work, the licensor of the clip, the film footage and running time, and timecodes indicating where the clip appears in the Picture (“ins” and “outs”).

(d)            Releases – If requested, signed releases from all persons identified by name or likeness in the Picture, who do not have signed contracts.

(e)            Coverage – If requested, access to the original negative, answerprint, work picture, magnetic or digital soundtracks, filled music and effect tracks and the original sound recordings, of all alternative takes, cover shots looped dialogue lines and other materials (collectively referred to as “coverage”) for the purpose of re-transferring and / or conforming to rating requirements, broadcast standards and practices and censorship.

(f)            Dolby License – If applicable, a copy of the executed license agreement in full force and effect between the producer and Dolby Laboratories, Inc. in connection with the Picture, as well as a copy of the license with the appropriate digital entity (e.g. SRD, Sony Digital/SDDS or Digital Theater Systems).

(g)            Laboratory Access Letter – If delivering 35mm pre-print materials, Laboratory Access Letter in the form attached as Exhibit “E” to this Agreement, signed by the Licensor and each respective Laboratory and/or facility having possession of the preprint and sound materials for the Picture (all versions) and trailer(s), including film, sound and storage facilities.

(h) Negative Cost Statement – If delivering 35mm pre-print materials, a one line statement in English of the final negative cost of the Picture and signed by an officer of Licensor or a completion guarantor.

Whew! Best to print this out, organize it in a folder so you can keep track of the forms and other elements. While on bigger productions, many of the crew roles are tasked with keeping track of these items. On small productions, these things come as a surprise when they seek distribution agreements and to go back and pick these items up can be time/financially costly. Best to be prepared well in advance. Incidentally, Orly tells me that foreign distributors will often pay for delivery as part of the deal.

TOTBO Tip of the Day-Tip 18

May 11, 2010
posted by sheric

Don’t Despair

Since sales reps generally work on commission, they will be choosier about the films that they select. Hence more and more films will end up not being represented by a sales rep or will not have a sales rep for each right. So don’t despair if you don’t have one. If a sales rep is helping you obtain and negotiate split rights deals, they are helpful, but you can function without them. If a sales rep requests a large up front fee to represent your film, I strongly recommend doing your research before paying these fees to a representative. You must talk to filmmakers the rep has worked with to make sure that it was worth it.

Join me in Cannes on May 15th at the Producer’s Network Breakfast at 9am and on May 16th where Liz Rosenthal and I will be doing a presentation at the Short Film Corner from 4pm to 5pm.   Check out my blog, for more information. Follow me  @Jon_Reiss on twitter, or on the TOTBO Facebook page.  Check out the book and workshops here.  I look forward to hearing from you

TOTBO Tip of the Day-Tip 17

May 10, 2010
posted by sheric

Before Bringing on Principal Crew

If you have one or more sales representatives interested in your film, certainly talk to them.   But have your distribution and marketing strategy ready before even talking to sales reps, then present it to them to determine whether or not they feel that they can help implement that strategy.  This helps put their recommendations into context for your film. Remember, your strategy will evolve, so at least have the first draft before you take these meetings. In general you should go to any meeting with the following:

  1. Knowing what you want from the meeting or person.
  2. Having researched the person you are meeting with so that you know what they want, or can provide for you.   

Leaving for the Amsterdam tomorrow.  Then to Cannes. Check out the TOTBO site for more information. Comment here or on my blog, or @Jon_Reiss on twitter, or on the TOTBO Facebook page. Check out the book and workshops here.    I look forward to hearing from you.

Sales Agents and Contracts-What to Watch Out For

October 7, 2009
posted by sheric

handshakeThis is an excerpt from a great blog I have been reading by John Rodsett, also known as Mr. Film Biz. It is reprinted here with his permission, but I encourage you to check out what he has to say on his site.

 

 

I always think it sad when a producer finishes his film, signs on a sales agent and then waits for months and hears nothing. What is worse is they get no money from any sales during this time. To help mitigate this dilemma, a producer must use some common sense and be on guard for an agent who does not fit with his needs or hopes.

How does one select a good sales agent?

Well this is not easy. Start by finding out who are the sales agents. Do this by obtaining copy of the Hollywood Distribution Directory, published by the Hollywood reporter. This directory is a fine source of information. Select a few and check them out. Look at the type of films they represent; how long have they been in business; if they attend film markets; if they provide references; ask friends in the film biz if they know of them, use due diligence!

Producer & sales agent agreement – points to watch.

Finalizing an agreement with a sales agent can go on and on, but I think these points will assist you.

 Term of the contract

A producer needs to ensure the agent has enough time to sell, but if he is not doing a great job, you need to be able to terminate the agreement. One way is to agree to a short term deal, maybe one year with option of additional year. Another way to try and ensure performance by the agent is to state that if the sales agent does not approach a certain amount of within a period of time, the producer can terminate. This area can be contentious, so be prepared to negotiate.

Potential revenue

A producer should ask the agent to provide a list of potential revenues for the major territories. This usually covers all rights for the individual countries such as Germany, UK, Japan etc. Such a list can be very revealing, as it will show the producer, probably for the first time, the potential revenue he may get for the film he has spent two years of his life to make and, also, whether his investors will ever get their money back. Please note these estimates by territory provided are only estimates and many factors go into such a list including, budget, actors, genre, etc.

What is beneficial about this list given to you by your potential agent is that the producer can state that territories cannot be sold beneath a set price without producer agreement. This prevents an agent selling your film below a value you wish to obtain – of course that has its own downside in that you need to negotiate that with the agent and the might feel inhibited during the sales process at a market. So there is good and bad in this area.

Arbitration

Make sure you have in any agreement with an agent for a binding arbitration clause that in event of a dispute no law courts are used to settle the matter, but an arbitration tribunal will make a decision that is binding on all parties. Cheaper and quicker that law courts.

Access to film/digital masters

Never, never, never, NEVER allow the agent access to your film negative or digital masters. You provide to the agent only the masters specified in the licensing agreements for sales with buyers. However, I must warn you, the agent has ways around that control, but that is a completely different discussion……..

Documentation/Accounting

The producer MUST get full and documented accounting of all costs and revenue from the agent. Quarterly for the first year, then half yearly from then on. Also, get signed and fully executed copies of all licensing agreements with buyers on sales made for your film.

Wrapping it up…

A contract between a producer and sales agent is an important and complex document and if not fully examined can cause the producer real heart ache over a long period of time. So try and do it right up front and pay for a good entertainment lawyer to help you!!!