Distributors-for-Hire

The concept of "service deals" for independent filmmakers is an emerging one in the indie film space, one that generates criticism from some and talk of new paradigms from others. These service deals used be the last resort for filmmakers who couldn't find traditional acquisition, but that business model is changing, and Rania Richardson wrote a great article for us in indieWIRE looking at that in depth (after the topic was part of the buzz surrounding the Florida Film Festival and SXSW.)

"Where once a filmmaker only agreed to pay for prints and advertising (P&A) and give a distributor a fee to release a film theatrically when a traditional acquisition was not forthcoming, filmmakers are now actively pursuing more risk for a greater cut of the profit. "

The article goes on to mention and quote alot of the "usual suspects" (and I mean that in a good way) among the indie film industry: this is still about using capital to control the situation, so you shouldn't be surprised to see those more able to leverage capital innovating here. Mike Monello over at Haxan, though, says that self-financing the release of "The Blair Witch Project" in New York and Los Angeles was always one of their backup plans (and a service deal would have been the answer.) The question that big films like "Monster" and "The Passion of Christ" and "My Big Fat Greek Wedding" raises for independents is if "actively pursuing" more risk for better returns isn't a smarter strategy: there are far more ways to raise capital than there are to convince the existing distribution system to take a risk they don't want to take.

Longtime low-budget filmmaking sage Peter Broderick wrote an interesting piece for DGA Magazine on "Maximizing Distribution" and provides one of the most enthusiastic evaluations of the service deal (although the editor disclaims the opinions with a "This article is intended to give DGA independent directors interesting and varied perspectives on the business aspects of filmmaking and, as such, is the opinion of the author, not necessarily the DGA"):

"The filmmaker hires a company or an individual to provide a range of distribution services: supervising the creation of the ad campaign, press kit and marketing materials; booking theaters; hiring publicists; shipping prints and collecting revenues. Service deal companies are given the monies to cover distribution expenses, and paid a fee (typically $50,000 or more), usually against a percentage of revenues (10% to 25%). By retaining control of the film's theatrical distribution rights, the filmmakers can participate in key decisions on spending, the trailer, the poster, positioning, publicity efforts and timing since the service company is working for them. The filmmakers can decide whether to change the distribution strategy, and whether additional expenditures are justified. While retaining control, the filmmakers have the benefit of the expertise and relationships of the service deal company. However, in an overall distribution deal, the distributor covers the distribution costs and has more leverage booking theaters and collecting revenues (since they supply the theaters with a steady stream of product)."

Not the kind of deal for everyone, but a very different course for filmmakers to chart than the "take it on the Festival circuit and see if it gets acquired" model (which has always seemed a somewhat dependent form of independent filmmaking.)

posted to Film & Video on March 23, 2004