Adventures in Self Releasing: Where the Money Comes from and How

by Jeffrey Goodman | Published July 3, 2009

We’re at a crossroads right now. Wrapped up the first part of the Lullaby tour and now trying to determine where to go from here. It looks like Cinemavault is opening the movie in at least a couple of theaters in Canada (Toronto and Montreal) the weekend of August 28, but I’m not sure of any other stops just yet.

I was speaking to a producer friend of mine this week and thought he had some great ideas for attacking the current landscape. I particularly found interesting the fact that he said any movie with a budget of over $500K needs to have at least an additional $200K set aside for marketing (and maybe as much as an additional $400K total, to include prints and advertising). The way that he described the money was “safety money.” In other words, this is money set aside in the event that a big-time distribution deal does not come, which, as I’ve mentioned before, is much more likely than not. This approach, outlined by the producer, requires great discipline: Even if you go over budget while making your movie, you need to refrain from taking money away from this marketing line in your budget.

Okay, moving on to a slightly different subject…

So how exactly do you get paid as a moviemaker? I’m not talking about salary, but, if you use the hybrid-model that we’re using (splitting sales to various distributors rather than selling off all of the movie’s rights to one party), where does the money come from and how?

1. Foreign Sales
If you have some name talent, a good amount of festival success or a genre movie, chances are you will find a foreign sales company to represent your movie. These companies will take your movie to the various markets around the world and attempt to sell off territories to various foreign distributors. Usually, if they do make sales, money will come to you only after the foreign sales company has recouped expenses and taken their cut (usually anywhere from 15-40 percent). As with most of this process, if money does come back to you, you can expect it to come back slowly and gradually.

2. DVD Sales
Many moviemakers nowadays are selling DVDs during their festival run and off of their websites using fulfillment services such as Neoflix. There’s real money here, particularly if you have a faithful core group (your e-mail list, Facebook group, etc.) and have fully tapped the niche markets for your movie. I’ve found that the real master of the latter is Marc Rosenbush. Marc was very clear on who the audience was for his movie, Zen Noir, and formed great alliances with fans of David Lynch, people interested in meditation, etc. I haven’t been as successful at this, as I feel that the niche markets for my movie are maybe a little more difficult to identify.

3. Domestic Cable/DVD Deal
Some moviemakers are selling DVDs first to their core group, retaining as much as 88 percent of the sales. Then, they are turning around and making a deal with a domestic distributor for the cable/DVD rights. This distributor will most often provide an advance. In return, they will get your movie into the major outlets like Wal-Mart, Best Buy, Netflix, etc. And, chances are, aside from the advance, you won’t see much more (if any) money.

4.Digital rights
This is an area that everyone acknowledges will be valuable in the future. But no one has quite figured out the exact future of digital rights. All this to say: Just realize, as a moviemaker, the potential value in these rights before you casually give them away.

The upside to the hybrid-model is it gives you, as a moviemaker, a great amount of control over how your movie goes out into the world. Plus, this model gives you various revenue streams as opposed to giving away all of your rights in exchange for an advance that will probably be all the money you’ll ever see.

The drawback is that this path will probably take another year of your creative life. So, you just have to decide if this is something you are willing to sacrifice.

After living in Los Angeles for seven years, Jeffrey Goodman returned to his hometown of Shreveport, Louisiana to direct The Last Lullaby. Co-written by the creator of Road to Perdition, and starring Tom Sizemore and Sasha Alexander, The Last Lullaby was filmed entirely in and around Shreveport and financed by 48 local investors.

COMMENTS | POST A COMMENT

Comment by new western movies on 7/04/09 at 1:20 am

I never knew about the foreign deals. But it does make sense.

Comment by Jeffrey Goodman on 7/04/09 at 6:31 am

Hi new western movies,

Yes, foreign can be a good source of revenue, although that money is strained too in this current economy. 

All the best,

Jeffrey

Comment by darmowe mp3 on 7/06/09 at 6:25 am

Intriguing. Finally a good breakup of all the potential profit sources, thanks :)

Comment by Jeffrey Goodman on 7/06/09 at 7:25 am

Hi darmowe mp3,

Thanks so much for your comments!  I hope that you’ll continue to follow along.

All the best,

Jeffrey

Comment by caroline on 7/06/09 at 10:16 am

I had no idea how the finances broke down..interesting. It said many sell DVDs during the festivals..how long does one usually wait to release the DVD? And when do you plan to?

Comment by Jeffrey Goodman on 7/06/09 at 12:26 pm

Hi caroline,

Thanks so much for your e-mail. 

Some moviemakers are starting to offer DVDs as soon as they begin their festival run (in fact, if I had to do it all over again I would do that.) Now, I’m hoping to have a limited edition, first-run copy in the next 6-8 weeks. 

I hope that you’ll continue to follow along.

All the best,

Jeffrey

Comment by Paul Chau on 7/08/09 at 3:05 pm

Hey Jeffrey
As you suggested in your last blog, I am gonna check in from time to time because I think we are both going through a seeking distribution process. To me the most interesting revenue stream is the digital rights one. It is the path where you have the most control with the least amount of expense in terms of getting your film out there. It seems like for the most part, revenue will either come from ads or from selling viewing of you film online. Many people have talked about perhaps chopping up a 90 - 120 min feature length film and showing it in 10 min “episodes” and making money via ads or even perhaps paying to view the episodes. My gut is that this would really depend on the film because a feature film is probably not designed for that and you would have to cut it so that each ending of an “episode” really makes you want to come back for more.

The second option, which is the streaming of a film online, well what if you did it on your own site. The trick there would there be enough people willing to pay to see it and how would you let enough people know about it. That is the value of being with companies who have broad product for VOD. But if you can’t link up with a major then if you stream on your own site, you control it and get all the revenue. When I think of your film, it is made by a Louisiana director, made in Louisiana and financed by 48 local investors. I wonder if you ran a newspaper ad in the biggest paper locally and noted that there is going to be a special opportunity to see the film online and it will only cost say $2 and appeal to locals to support their own, I wonder how many of the 4 million plus of residents would support. I wonder if some kind of notice in Louisiana Film Commisions website about this would help. As I mentioned before, I think marketing every indie film is different and when I think about your film, I feel the homegrown nature of the film is the key to generating an audience. While the $2 price is low, volume can make this attractive. Just a thought. Thanks

Paul

Comment by Jeffrey Goodman on 7/09/09 at 6:39 am

Hi Paul,

Thanks so much for the comments.  I think your ideas are very solid.  They brought up a few questions:

1.  Is there a streaming company that you’ve found that you would recommend? 

2.  Would you then bypass the DVD altogether?

3.  Is this an approach you’re also considering for SCALP?

Thanks, Paul.

All the best,

Jeffrey

Comment by Paul Chau on 7/09/09 at 8:46 am

Hi Jeffrey
Answers to your questions:

1) I am looking into it now. Given that I am not a highly web/tech savy person, I need to find out if there will be viewer limitations or bandwidth issues if one was to try to do that off a film specific website (say my Scalp website). If there is anybody out there that would know, please let us know.

2. I would not bypass the DVD stage because that is a different window. Also in the traditional sense, the VOD window is a window that comes before the DVD window. The way I look at it is that people could stil want to buy an indie DVD even after they see it if there is enough extras in the DVD that makes it worthwhile.

3. I am considering this approach for Scalp if I can’t get a traditional theatrical or strong DVD deal. If and when the time comes, the challenge is how to advertise/market it without spending a lot of money. Maybe Michael Bay or Quentin Taratino will come across this blog and say hey these guys are doing all they can, so why don’t we buy the films and let them move on to make their next film. Stranger things have happened. Thanks and until the next exchange.

Paul

Comment by Jeffrey Goodman on 7/10/09 at 7:09 am

Hi Paul,

All good stuff.  And I do think you’re onto something with this idea of the $2 VOD. 

I don’t know:  DOES ANYONE READING THIS HAVE A GOOD METHOD FOR TAKING A FEATURE-LENGTH FILM AND STREAMING IT OFF A FILM’S WEBSITE?

As for advertising, the best guerilla methods I’ve found are my monthly update list, social networking sites (Twitter, Facebook, etc), and any niche market I can partner up with (for instance, with LULLABY, I’m pretty certain that fans of crime fiction will be fans of the movie.) For SCALP, I would think that would mean tapping the horror world and all the different tools it has for communicating with its fans. 

Thanks, Paul.  I look forward to more dialogue.

All the best,

Jeffrey

Comment by Jeffrey Goodman on 7/14/09 at 6:40 am

Hi Ed,

Thank you so much!  I hope that you’ll continue to follow along.

All the best,

Jeffrey

Comment by Jake N. on 7/14/09 at 11:53 am

I would just like to know what Jeffrey’s experience in this business has been that makes him believe this statement to be true:

“This distributor will most often provide an advance.”

Certainly not in this climate.  It’s been hard enough in recent years for filmmakers without big names in their films or a big prestige-fest screening (like Sundance) to get an advance, and now it is even tougher.

I don’t write this to be a buzz kill, but to ground new filmmakers who are reading this in reality.  When I did my first feature I read articles like this and got all excited, day dreaming about my cash advance.  Once I got to the point where I had to select a producer’s rep for my film, the reputable ones (such as the company I signed with) would make sure that my expectations were realistic—cash advances are very rare.

Comment by Jeffrey Goodman on 7/14/09 at 12:42 pm

Hi Jake N.,

Thanks so much for your comments. 

I completely agree with you that the concept of a huge advance has almost disappeared in the current climate.  In fact, I referenced this some in two of my previous posts:

http://www.moviemaker.com/blog/item/jeffrey_goodman_the_last_lullaby_self_releasing_20090223/

http://www.moviemaker.com/blog/item/jeffrey_goodman_the_last_lullaby_self_distribution_20090407/

Yet, we (The Last Lullaby) did receive an offer with a small advance.  I decided not to take it, but that was the experience that led me to make the statement you reference above.  I think what’s important to remember for everyone is an advance doesn’t mean a sizable payment.  At times it can mean as little as $20K. 

I very much appreciate your feedback and hope that you’ll continue to follow along.

All the best,

Jeffrey

Comment by Hotel Basel on 7/15/09 at 6:33 am

Jeffrey, you hit the nail on the head. I’ve been meaning to tell you and I hope you consider this. Put your entire film up on your website as a streaming Pay-Per-View. Charge $9.95 to $15.95. You can contact me and I will give you the name of the company I use. People can watch it but not save it.  I made five times more money by having one of my film as an instant watch than I did from DVD sales the previous year. More people get to see it, you don’t have to mail out a DVD unless they want it on DVD (more money), and it’s just really cool to have such a large internet audience.

Comment by Jeffrey Goodman on 7/15/09 at 7:01 am

Hi Hotel Basel,

Thank you so much for your comments.  Yes, I’m very interested in knowing more about this.  Could you tell me the name of the company?  Could you also tell me the percentage they take each time someone watches the movie? 

Thanks so much.  I hope that you’ll continue to follow along.

All the best,

Jeffrey

Comment by DVD Rentals by email on 9/19/09 at 5:09 am

My husband has a rather battered DVD with a 49-minute video of his
mother’s 80th birthday party, recorded and burned by a cousin who
can’t provide us with the original files or another copy anymore.
Both she and my husband want more copies, but one of the .vob files
seems to be partially, sort of, corrupted.

There are 3 .vob files in the Video_TS folder, two are about 1GB (20
minutes) each, and the third is about 400MB (9 minutes).  The original
DVD will play all 49 minutes from start to finish in any DVD player,
but when I used our new external Memorex burner (32023288 16x16 Dual
Format) to make an exact copy (using my OEM version of Sonic) it
crashed due to a disc error.  That disc will play the first 40 minutes
of the party in the Memorex burner, but it never closed and won’t play
anywhere else.

So I dumped the Sonic and installed the OEM Nero that came with the
burner, gave the disc a good cleaning (but it’s still scratched up)
and tried to copy the files to my hard drive.  The first two .vob
files copied, but the third one would not.  I’ve tried different burn
and copy options in Nero, but it always hangs up on that third .vob
file, and video preview hangs part-way through that last 9 minutes of
the DVD.  I can successfully make a 40-minute video DVD with the first
two files but we really want the last 9 minutes.

Given that we can successfully play the original DVD all the way
through, using Dell Media Experience on my laptop or a regular DVD
player through our TV, how can we capture the video into a new
uncorrupted file (or files)?  My laptop is a Dell Inspiron 710m (WinXP
Home) with internal DVD player, using the new external Memorex for
burning.  Nero’s capture feature expects a camcorder to be attached
and I have cruised the software looking for other capture options but
I’m stumped.  I already know how to use Total Recorder to “capture”
audio recordings that are playing on my computer, so I’m thinking
there has to be a similar option for video - I’m confused by all of
the capture software and hardware out there as they appear to be for
live streams and TV.
DVD Rentals by email

Comment by Jeffrey Goodman on 9/19/09 at 6:44 am

Hi DVD Rentals by email,

Unfortunately, I don’t know the answer to your question.  But perhaps one of the readers will.  Readers?

All the best,

Jeffrey

Comment by Joshua Williams on 2/14/10 at 8:34 pm

Independent movie makers here in our place usually earn money through foreign sales.  Since most of them can’t compete with most stable and famous movie makers, they need to go out of the way in order to market their film.

Comment by windows vps on 3/19/10 at 6:20 am

es, I’m very interested in knowing more about this.  Could you tell me the name of the company?  Could you also tell me the percentage they take each time someone watches the movie?

Comment by Jeffrey Goodman on 3/19/10 at 7:17 am

windows vps,

Thanks so much for your comment!  I wasn’t sure what company you were referring to?

All the best,

Jeffrey

Comment by Canon S95 on 9/01/10 at 7:04 am

so perfect information, thanks all of you for a good info ;)

Comment by Jeffrey Goodman on 9/01/10 at 7:12 am

Hi Canon S95,

Thanks so much for the kind words.  I really appreciate ‘em.

All the best,

Jeffrey

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