Distribution Issues in Independent Film

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Led by sites like YouTube, Joost, iTunes and Amazon we are in the midst of a new digital movement. As we merge away from traditional distribution and the age of home video entertainment, we move on to a new web based entertainment format that is bound to dominate the industry. This opportunity will allow creators to expose their material and maximize their exposure to develop in a dramatic way. I recently read an article that discusses how the film industry is following the model that the music industry has set by using the internet to expose content. By using digital distribution, independent filmmakers are able to generate an audience for their projects that was not necessarily available before. The writer argues that, "films that cannot attract a theatrical release can certainly have a presence online." The web serves as a emerging source of entertainment and convenience for consumers. The article also asserts that Independent creators tend to adapt to market conditions and are ideally positioned to take advantage of new and existing online distribution opportunities. The delivery methods of entertainment are expanding. Along with hand held books, convenient gaming and smart devices, the digital movement also allows motion pictures and online television viewing to emerge. This article also offers key tips that all creators must consider prior to digitally releasing their material. Familiarize yourself with the key terms and the tips listed below:

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The Grant of Rights
Do not be quick to give away more rights than you should. Know the costs and procedures involved in new digital delivery methods and you will be able to negotiate knowledgeably from a position of strength. Online digital distribution entities are attempting to build product libraries as assets by taking expansive rights for long periods of time. Do not accept an agreement that grants a distributor, all rights in all media worldwide. Be sure to specify if you are allowing a company to have digital, online or view-on-demand rights. 

Exclusivity
It is risky to grant exclusivity. It would be safe to grant a nonexclusive online license for a limited term. This will allow the market to continue to mature and you can reassess your position after a relatively short term. Few distributors will ask for exclusive online exploitation, although some may try.

Territory
Your goal is to get the online distributor to limit the territory to the United States or a specific territory in which it is primarily doing business. The trick is that, online distributors may ask for worldwide rights.

Licensing Period/License Fee/Payment Terms/Audit
Your goal is to Keep your license period as short as possible. The license term for online exploitation depend on other rights, if any, you have previously licensed. If you have no previous exploitation, its good to try an limit the license period to 6 to 18 months so that you can reassess the online marketplace in short order.

Your goal is to negotiate an advance and royalties. You should also consider asking for stock options, and the right to purchase stock at lower than market rates. Also, specify the minimum rates to be charged for downloads and viewings.

If an advance is not possible, its good to ask for a large share of the gross revenues for downloads, streaming or other licenses (50-70% is obtainable).  Also, try for a share of advertising revenues associated with viewing your product.  Obtaining an advance against royalties for an online license may be difficult, because several online start-up companies claim poverty in the  developing market.

Cross-Links
Your goal is to retain the right to exhibit the product on your official site, along with the right to sell merchandise, videos and DVD's of your product from your own site. To make this happen: Be sure you include a provision in your agreement that requires cross-linking of the online distributor’s site with your official website for your product or company.

These tips have helped me and I hope they help others. Today has been great, tomorrow will be even better! Until next time!

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Emerging Online Distribution Issues for Independent Films « Indie Music Musings. (n.d.). Indie Music Musings. Retrieved April 1, 2011, from http://indiemusicmusings.wordpress.com/2010/03/19/emerging-online-distribution-issues-for-independent-films/