From my perspective, 2016 was an exciting, challenging, and revealing year for indie filmmaking. Bandit Motion Pictures, the company I formed with Brian K. Williams, released its first two films and as the year ends we are on the verge of shooting our third. I attended a few film festivals, a few horror conventions, and I got to meet more filmmaking comrades-in-arms. I also talked with distributors and sales reps. And while pretty much everyone agrees the industry is in a tail spin, most of us believe it will eventually level out and find its footing. It’ll never be what it used to be, but I’m optimistic that hard-working, talented people can still make a living as independent filmmakers.
When I was invited to write this guest editorial, I figured I’d share what I’ve learned (and re-learned) this year. Maybe it will help you, or at the very least start a conversation that keeps all of us thinking and pointed in the right direction.
Traditional Distribution Is Not Working for Most U.S. Indie Filmmakers.
This is something I already believed at the end of 2015, but 2016 has only reinforced my happy decision to no longer pursue domestic distribution deals with my films. There are many factors involved here, not the least of which is the simple fact that distribution isn’t what it used to be. The supply of indie films has grown and the demand has diminished. Hard formats have become a niche market and digital delivery is still in its infancy, really. The industry is scrambling to figure things out.
In the meantime, however, many indie filmmakers still believe the old idea that a third-party distribution company is their only path to success. And I get it: it’s somewhat of a validation when a company, particularly a well-known or well-regarded company, gives your movie their seal of approval with a distribution deal. You get to tout your success on social media and it makes the movie suddenly feel like a “real” movie, instead of something you made with your own money in your back yard. And unfortunately, that’s also still how audiences feel. They take comfort in brand names and labels, and when they see a title at Walmart or in Redbox, they feel relatively assured that the film has passed at least one guardian of quality.
But here’s what I’ve learned: Few indie filmmakers ever see much (or any!) money from their third-party traditional distribution deals. Even in the best of circumstances, it can take one or two years to see the first dollar from a traditional deal. You have to wait for the distribution company to actually release your movie, which from my experiences can take anywhere from five to nine months. Then you have to wait for the distributor to make back their marketing and promotional expenses (and pray that they don’t cook the books). From my experience, it can take up to a year for the title to clear those expenses. Then you also have to wait for retailers to have a chance to return any unsold physical media before those earnings will be paid out – that alone usually takes 9 months to a year.
But then, in theory, you are supposed to get paid, but only if sales are good, if the books aren’t cooked, and if the distributor or any of its contractors haven’t filed for bankruptcy. And these conditions are very, very important, now more than ever before. One horror label told me that fifteen years ago, selling a quarter million physical copies of a title was ‘doing good.’ Now, they define ‘doing good’ as selling five thousand copies. And this year I was forced to say goodbye to tens of thousands of dollars in expected profit because a company I’d never heard of went bankrupt. The company wasn’t my distributor, but they worked with my distributor, and with their bankruptcy went all my profit for that title. Bottom line: When you sign an exclusive deal, your movie is then married to that company. If the company turns out to be a bad one, or if something bad happens to that company, your movie goes down with the ship.
Content is King… So Try to Keep It!
I have made more money self-distributing my movies than I’ve made from traditional distribution deals. Self-distribution is something you get to do when you own your content. When you license it to traditional distributors, you lose that right – usually for anywhere from 5 to 20 years, depending on your contract. I think it’s telling that two of the very best indie horror films this year, The Barn and Night of Something Strange, are being self-distributed. It’s also telling that after success with The Battery, Jeremy Gardner turned to crowdfunding $50K on Kickstarter to release his next film, Tex Montana Will Survive. The campaign met its goal and as a result, Gardner then made the film free to the world. ($50K, incidentally, is a popular going rate for a North American distribution deal.) I can’t speak for these filmmakers, but I’m confident they received offers. They decided to self-distribute for a reason.
If you’re still not sold, think about the future. Why are Amazon and Netflix so focused on creating original content these days? Could it be that they both realize avenues for distribution are apt to change with technology and viewing habits? I think they realize the real money is in content. And it always will be. So one of my biggest lessons learned is to hold onto it if you can!
Cut Out the Middle Man…
There are all kinds of middle men in any business, and there are plenty in the indie film business. At best, they are helpful but costly. At worst, they are blood-sucking parasites.
Sales reps are one form of middle man. I’ve worked with a couple and experienced the best and worst of both worlds. They usually take between 15 and 30 percent of whatever money they make for you, so you have to ask yourself: are they worth it? Are they able to market your film to companies you wouldn’t be able to reach on your own? Are they good negotiators? On one hand, they’re motivated by profit to care about your film – and I’d say that’s a good thing. But on the other hand, can you afford to lose that 15-30 percent of profit? Couldn’t you just use the internet to Google distribution companies and contact them on your own? For what it’s worth, most of my distribution deals have been made with companies that reached out to me (from film festival screenings and online press), not the other way around. But since I had reps in place, I had to refer the companies to my reps. If your rep has contacts and a history of sales, or if you personally trust the person, I say go for it. Otherwise, don’t bother – especially if they want an exclusive relationship, because then your movie’s chances of landing a deal are hostage to them. And if they find another movie they think they can sell better, faster, or for more money, your baby will start to look like the red-headed step-movie in their catalog.
I’ve decided to use sales reps for markets where I don’t yet have any relationships. I wouldn’t have gotten Found into Japan without a sales rep, for example. And I also don’t look for exclusive arrangements anymore. If an agent can sell your movie and make a profit off it, they should be able to do so without monopolizing your film’s chances for a few years. Competition makes the world go-round. You look for deals, they look for deals, everyone looks for deals – whoever finds the best deal wins.
Hard Formats are a Collector’s Market You Should be in.
Everyone says hard formats are dying. But that’s not really true. They’re transitioning from a mass consumer product to a niche consumer product. I think movies are going to follow the music industry to a large degree. When CDs died, vinyl was reborn and now people are paying $30-$50 to get albums in snazzy vinyl packaging. The albums are designed and marketed toward collectors and hard core music lovers who are happy to pay a premium price for a quality product. Film has a similar, die-hard fanbase. I think there will ALWAYS be an audience out there who will pay a premium price to have their favorite films on their shelves and adorning their man-caves (or woman-caves).
I’ve yet to see any digital revenue from any of my traditional distribution deals, and Bandit Motion Pictures has only recently branched out onto Vimeo and Amazon Direct Video, so nearly all my experience is with physical media. I believe what everyone says, that digital is where it’s all at now, but physical media still sells! In just under a year, Bandit has sold 900 copies of Harvest Lakeon blu-ray, and in just the last couple of months we’ve sold 600 blu-ray copies of Plank Face. Fortunately for us, there is a huge cross-over between hard format enthusiasts and genre film fans. Horror fans, in particular, love their collectible hard formats. So if you’re going to stay engaged with physical media, know your audience and make your product a truly special one.
Why bother with hard formats? A few reasons. First of all, distributors no longer want rights to hard formats. They really only care about VOD, streaming, and other digital distribution methods. You can probably negotiate a deal with most distributors to keep the right to distribute hard formats for yourself. There’s not enough money in hard formats for distributors to care about anymore, but as I mentioned above, 1500 blu-ray sales in a year is pretty damned significant if you get to keep the money for yourself.
Also, disc manufacturing is more affordable than ever before. We use discmakers.com. If you author your own disc and supply your own artwork, you can usually get one thousand replicated DVDs for just over $1,000, or one thousand replicated blu-rays for between $2600 and $3200. It’s a little bit of an investment, but that brings me to the next lesson learned…
Crowdfunding is for Pre-Orders.
People used to use crowdfunding sites like Kickstarter or Indiegogo to raise money to make their movies. But then a bunch of shady types abused the system, took the money, and ran – never fulfilling their promise to produce or deliver the film to the campaign backers. It’s definitely impacted a new, unknown filmmaker’s chances of successfully raising funds. Crowdfunding raised $20K for me to coproduce Headless in 2014, but then completely failed me when I tried to raise money for The Bad Man in 2015. There are many factors involved, but I believe backers have been burned so many times they just aren’t as eager to contribute anymore.
But in the last year, filmmakers have turned crowdfunding around and made it helpful again by using it for pre-orders and marketing expenses, instead of for production expenses. Backers like this better, because the movie has already been shot! During the campaign, they can even see photos and a trailer. And they won’t have to wait as long to receive their campaign rewards. We used Indiegogo to launch our Plank Face pre-orders this Fall, and it succeeded far beyond our wildest expectations (nearly 500 of those 600 blu-ray sales were through the Indiegogo campaign). If you can finance your production without resorting to crowdfunding, you should definitely consider using crowdfunding to finance your hard format manufacturing, film festival expenses, and promotional considerations.
Micro-Budget Film making is Going to be Big.
I’m going to end with this one, but I have to admit that it’s more of a belief or a hopeful suspicion than a lesson learned. A film used to be considered ‘low budget’ if its budget was under a quarter-million dollars. But I think we’re about to redefine things. I’ve heard rumblings from the most recent American Film Market that distributors are now turning to micro-budget filmmakers who are used to making films for $35 to $50K. And if this continues to be a trend, I wouldn’t be surprised. Because when you add up the average going rates for distribution deals for indie titles across the global marketplace, they no longer cover a quarter-million dollar budget. And quite frankly, technology has advanced so much, that you really can make a Hollywood-quality film for well under a quarter-million now. Headless blew the curve because of its massive makeup effects budget, but all my other movies have had total budgets under $10K. The key is to keep your cast and crew as small as possible, because payroll is your biggest expense.
At Bandit, Brian K. Williams and I take care of the writing, producing, directing, photography, editing, and music. All of those jobs are done by one or both of us on every feature. I know it’s hard to find people who can do all those things, but I feel like the successful indie filmmaker of tomorrow is going to need to try. Because if you’re only a producer, you have to hire all those other people in order for the film to be made. If you’re only a director, you’re stuck in the mud until you at least hire a director of photography and an editor. And so on. The more hats you can wear on a production, the cheaper your movie will cost.
Companies like Blumhouse are already experiencing success after success with tiny budgeted, high concept horror movies. It’s only a matter of time before Hollywood realizes the massive profit-earning potential of multi-hat-wearing, hard-working, passionate and dedicated micro-budget filmmakers.
Or at least I hope so. (Blumhouse, call me!)