The Distribution Wars: What I Learned in the Trenches

"What I Learned in the Trenches"

by Joe Zimmerman | Published September 19, 1999

Michael Cox and Andrew Divoff in Crossfire (1998).

When my partner, Gary S. Lipsky (Goosed, and the upcoming Peppermint Lounge) and I ventured out to make our first genuine feature film, Crossfire, on 35mm with SAG actors, we knew we'd have to overcome the challenges faced by all independent moviemakers. Although we eventually won those difficult battles, (which consisted of, for starters, an 18-day production schedule which required the wrangling of boats, helicopters and children in three states with very little money), little did we realize the actual fight had not even begun.

I'm referring, of course, to the war with the film's distributors. Before continuing, let me explain that I am not an entertainment attorney, and prior to our movie's completion I had no experience with dis­tribution contracts. I'm simply a moviemaker who's been learning the hard way, in the trenches with nearly a half dozen distributors for two years trying to find our movie a friendly home. And although I employed the services of good lawyers, I now realize that lawyers in no way insulate you from unscrupulous distributors.

One of the first things I realized after completing Crossfire and embarking on my search for distribution was that no distributor is ever going to be as passionate about your movie as you are. No matter what vision you had for your movie when you embarked on the project, your distrib­utor's vision will always be clouded by dollar signs.  Whatever it takes to put dollars into his pocket (though not necessarily in yours), he will do. It's the nature of the beast. Bottom line, don't ever forget that distributors are salespeople. And boy, do

THEY HAVE A CAR TO SELL YOU.

Despite exhibiting millions of dollars of production value throughout our movie- such as the aforementioned helicopters, boats and ample locations, and in spite of the superb perfor­do battle. mances by the likes of David Gianaopolous (Under Siege II, Candyman II) and Robert LaSardo (Drop Zone, Hard to Kill) to name a few, sales had not been to our expectations. There was, I discovered, an underlying reason.

At the 1997 American Film Market in Santa Monica, CA, we had a friend privately visit our distributor's booth. He overheard the dis­tributor claim to a foreign buyer that the distributor's own independently produced movie was of much higher quality than Crossfire. The distributor is entitled to his opinion, but obviously a good salesman would never say something like that unless he had ulterior motives. It became clear that the distributor had picked up our film as fall-back material in case his own projects didn't sell.

Zimmerman: Ready to do battle.

It wasn't long afterward, while the distributor tried to rationalize Crossfire's lack of business to us, that the company's front men insisted one of their upcoming in-house productions was likely to be a huge hit and they would supposedly help us by packaging it with our film to ensure Crossfire's sales. In truth, that meant they were going to sell their film at full price and offer ours as addi­tional product at a discount.

The packaging of movies can come in many shapes and forms, and sometimes without your knowledge. One domestic broadcast distributor representing us tried to convince us to "give" our film away for free to air on digital cable. If we agreed, he said, our movie "would qualify us to move up to pay-per-view and eventually HBO or Showtime." Don't buy it. If you're going to sell the movie for nothing, then it's worth nothing-because nothing is what you've received. The guy was prob­ably offering another one of his films to the cable station for a fee and packaging ours as a freebie to make his sales. Have you ever wondered how such crap gets aired on late-night cable television?

You just don't know. Nothing prevents a distributor from calling all the first-time filmmakers he's handling and simply asking if they'd be willing to sell their films for $40 to get it on the air as a jumpstart to a more lucrative medium. If he can convince two or three of his clients to do this, then he's just picked up two or three movies he can package with his existing products, offering more for less at your expense. No matter how nice your distributor may seem, I've been burned enough times to know that this kind of thing happens routinely.

Crossfire eventually jumped from one foreign distributor to another; we left one who declared " Japan would never purchase Crossfire" for another distributor who imme­diately informed us "Crossfire was the only action movie Japan bought from us." Although reports like this seemed promising, little did we know we had stepped out of a frying pan and into an inferno. With front cover ads in Variety celebrating five years of growth, handling films with name actors, the new company seemed to be very promising.

But it didn't take long for the corruption to commence, and that's really when

OUR NIGHTMARE BEGAN.

Withholding and effectively stealing tens of thousands of dollars from our film sales, this distributor not only showed no accountability for reporting the film's income, they didn't even feel the need to return phone calls or respond to letters and faxes, even from our lawyer. But experience did provide me an enormous lesson regarding contracts: signed documents are meaningless to some people. In one instance during February of '99, as I sat in front of this company's CEO, with his lawyers on both sides, while he casually declared: "Yes, we've stolen your money and broken the contract, but that's spilled milk. If you want to sue us, be my guest because although we're still in busi­ness, everything you see around us, computers, tables, etc... is owned by the bank. It will be a waste of your time."

Despite the ample supply of devious dis­tributors throughout the industry, you can bolster your position. First of all,

PROTECT YOUR RIGHTS.

Review distributors' work as much as possible. Stay on top of them. And contact as many other moviemakers who have used them in the past as you can. If possible, demand your contract include a clause allowing you to pre-approve promotional material and artwork before it's completed, because odds are you're paying for it anyway.

After seeing our distributor's final "one sheets," which contained an incorrect syn­opsis of our film and other grammar, spelling and typographical errors, the response was, "Oh, sorry about that, but we're dealing with foreign buyers who'll never know the difference. Besides, you can't afford to have this done over." One of our recent domestic video distributors was no different. Only after the video was released did we see the final art product. If someone's name had been misspelled or positioned in the wrong place, we would have been out of luck. Mind you, as producers we are contractually obligated to position cast and crew credits in a certain manner, but were unable to confirm that any of this would happen.

Don't wait until after the fact. Take steps to ensure your distributor is abiding by the contractual terms during distribution sales. As noted earlier, send a friend to the distributor's booth at one of the film markets to verify just how hard the company is pushing your film. Check the position of your movie's poster in the booth. Upon entering one distributor's room to find a row of about a half-dozen large movie posters, most of which were not even in production, I was stunned to find Crossfire's poster virtu­ally hidden to the side. Crossfire's announcement was not even visible from the entrance. These are some of the games you will likely (inad­vertently) be caught up in if your distribution company is also producing and selling movies of its own, which many do.

No matter how hard you try to reduce your risks with a distrib­utor, it will nevertheless absolutely be a battle to

SAFEGUARD ALL YOUR INTERESTS.

MORE THAN ANYTHING, follow your gut instincts. Besides never signing a supplied "dummy" contract (standard contract from the distributor), wherever possible add clauses to your agreement that will save your butt in case things don't work out. Try as hard as you can to include something stating what the distributor has to do for you, as most stan­dard contracts will be geared to what you must provide for the distributor. An example clause would be: "DUTY OF DISTRIB­UTOR: Distributor shall have the duty to take reasonable steps and make "best efforts" to distribute the picture in accordance with the rest of the contract." Something as simple as this line may one day give you the leverage you might need to get out of a bad situation.

That earlier domestic distributor I mentioned had locked up Crossfire for nearly a year without attempts to represent us in good faith. This lengthy waste of time not only decreased the film's value, but turned away revenue in the form of a cable deal. Although I brought up the fact that the distributor had missed two major opportunities to coordi­nate our release with two very high-profile films (Air Force One and Wishmaster), which both starred our lead actor, the distributor did absolutely nothing to market our film until legal action was threatened.

Stay cautious. If possible, put in a performance clause in the con­tract so that you're not locked into a non-performing distributor forever. The contract should state if the distributor has not brought in a significant amount of sales by a certain period of time (let's say a year or two), the producers (you) shall have the right to terminate the contract concerning all territories not yet sold. Otherwise your dis­tributor can (unintentionally, or not) tie up your film for years.

Try to have the distributor participate in some of the risk and reward. Persuade him to take a lower commission on sales until you've regained a certain amount, then reward him with higher commissions. I'm not talking about mean sales on paper, but rather money that is deposited into your bank account. Note that sales come in two forms-cash and paper. A sales report on paper declaring $200,000 in territory sales doesn't necessarily mean ' you'll soon be cashing a check. Pieces of paper can most often turn into a waiting game that could take years before you see any- 3 thing that resembles cash, if at all. Be realistic when you're quoted sales numbers by the distributor.

As for bargaining with a distributor to downsize his commission... An example of how to do this is simply to ask that the distributor only take five percent or 10 percent commission until a you have recouped 100 percent of your budget, at which time the distributor could then be allowed to take his 20 percent, or what ever his standard fees are. Not only is this a modest request, it adds a little spark of motivation on his part to reach a certain number which would make him happy. Of course, you will also be reaching your desired return faster. Just think of it like this ­you're not saying no to his fees, but simply asking him to "earn it."

Remember, the best way to deal with salesmen is to know their game. That takes experience, of course. But for the first-time moviemaker in the trenches with a ques­tionable distributor, I suggest you never leave out the option of locking up your master film print and denying the enemy lab access if it comes down to dirty war tactics.

As for Crossfire, it's presently being repre­sented by foreign distributor "AmSell Entertainment" and domestic distributor "Tapeworm Inc." Have we finally won the war? Only time will tell. MM

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