How To Avoid Signing a Bad Distribution Contract
14 September 20106 Rules To Keep Your Film Safe
1. Term - Usually distributors will bind you to a long time relationship, unlike a miserable marriage, there's no way out once you've signed the agreement.Never sign a contract for more than two years with a small distribution company, they usually want your commitment for 10 or 15 years. Most Distributors will do their best to pitch filmmakers the perfect revenue strategy, but they'll move on and leave your movie on the shelf, if it doesn't meet their expectations in the first month of releasing. The less the better.
2. Territory - Spread your distributors, again if you are dealing with small distribution companies, try and find out what their strength are in Europe, South America, Asia, Middle East and the US. You can have more than one distribution company for each teritory. It's not a must, and usualy one company can handle all teritories.
3. Distribution Rights - Keep your DVD and Digital rights non exclusive! If possible, keep your digital and DVD rights to yourslef, or give your digital rights only to companies specializing in that area.
4. Collections - This is the key problem most filmmakers are dealing with, collection of their revenues. Make sure to get full transparency. Often
distributors offer an audit option, don't hesitate to use your right to have your accountant go over their books when first distribution deal is signed and the first cycle of payments is delivered to your bank account Insist on getting your share at least 60 days after deals are signed, get specific and add an exact amount of days when first invoice is out. Add penalties for delay in payment. Try and negotiate a better perecntage deal, the usual fee for distributors is around %35, make it less.5. Expenses - If your distributor add this to your contract, your red lights should go berserk. Your distributor takes percentages from each deal they make. The excuse for covering their expenses comes from the notion that distributors take a risk with your film, flying to film markets, negotiating and marketing. That's doesn't always make sense when considering they have at least 30 films at the same market. The marketing material can be sum up to PDF brochure at best with lazy agents and distributors. Why should filmmakers finance their hotels and telephone bills? You took a financial risk producing the film, now it's the distributor turn to generate profits like he promised, otherwise he wasted your time and money. They insist on their expenses covered? Great, than you should ask them to cover your production expenses. Let them know you are not willing to pay another dollar beside the overall percentage agreed. One filmmaker we know once got a report from his distributor (after he reminded them for two month that his report is due) He fell to the floor when he saw that his distributor took almost 75 percent when he agreed to 35, they added "expenses". You get the point. In any case, if you do agree for distributor expenses fee, insist to add to your contract "upon getting receipts" Demand a full list what those expenses were.
6. Termination - Give it a year, if your distributor can't deliver a theatrical screening, and at least 3 Television deals, we suggest terminating the contract by adding this section.
At last, add your list of film markets you want your distributor to pitch your film. Also a good idea would be in case the distribution company declares bankruptcy, your film may be at risk of claims by third parties, make sure you get full rights on your film if that scenario happens.
DocMovies Tip - Documentary filmmakers, seriously consider DIY!