Adventures in Self-Releasing: Where the Money Comes From

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.