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in Filmmaking
on Jul 3, 2008

Over at Indiewire Anthony Kaufman writes about Ballast director Lance Hammer’s decision to withdraw from a planned distribution deal with IFC to self-distribute via his own Alluvial Film Company along with Required Viewing.

From the piece:

“IFC is a really good company,” Hammer told indieWIRE last week. “The problem is the larger issue that’s plaguing every filmmaker right now: The distributors don’t really offer any money. That’s not that big of a deal if they would allow you to have control of your project, but they don’t.”

If the current art-house climate isn’t challenging enough, Hammer’s decision highlights the harsh reality for indie filmmakers: distribution advances, or “minimum guarantees,” barely ever recoup a film’s budget.

Hammer says conventional distribution advances for a small film like “Ballast” range between $25,000-$50,000. “If you made a $50,000 project, that makes sense,” Hammer said. “If you happen to spend more money than that, it becomes difficult to justify giving up creative control.”

Hammer was particularly dissatisfied with the lengthy term of the contracts. “Giving up Internet rights for 20 years, that’s just crazy,” he said. He also disagreed with IFC’s exclusive home video deal with Blockbuster, which he called a “deal breaker.”

Both Hammer and IFC execs describe the split as amicable, however.

“We’re disappointed and we love the movie,” admitted IFC Films’ head of acquisitions Arianna Bocco. “But how can you argue with an independent filmmaker who wrote, directed, produced and financed his own movie and wants to take that final step of ownership? I respect that choice.”

Of all the small distribution companies that exist, Hammer said he still thinks IFC would have “put the project out in the best way,” he said. “They’re very creative, the day-and-date plan actually works, but unfortunately, that only benefits them financially.” (indieWIRE contacted a small handful of filmmakers who have participated in IFC’s First Take program, but only one, Caveh Zahedi, director of the 2006 release “I Am A Sex Addict,” said money was beginning to “trickle in.”)

Hammer’s action is a bold one. He’s raising an additional 250K in P&A for his film on top of his production costs. With regards to his rationale, I’ll say a couple of things. First, it’s pretty common for films to receive MGs from distributor that are far short of the film’s production budgets. When films don’t sell big at the outset, filmmakers and sales agents are accustomed to “taking the best offer” and moving on, hoping that success in theatrical and ancillary markets will provide overages. And while these overages don’t occur as often as they should, I think producers and sales agents understand the risk/reward ratio — they know how much needs to get spent on theatrical P&A, and they have a rough idea of what level of theatrical box-office is required to produce significant numbers through a distributor’s video distribution operation and pay-TV output deals.

When it comes to new models like the IFC’s pay-per-view/day-and-date operation, however, I think producers are confused. Because it’s a nascent business, they don’t really know what the potential revenue can be, and thus they have a hard time evaluating the overage potential of a low-advance deal. When a film opens day and date, the theatrical box office is only part of the story. If we’re to take the rationale for the program at face value, then we’d really need to know the number of PPV purchases that first weekend as well. And when filmmakers hear that accounting numbers are hard to come by (as Cinetic’s John Sloss said recently on KCRW’s “The Business”), or when they hear that overages are only trickling in for only a single filmmaker, then it makes decisions like Hammer’s (and his investors’) a bit more understandable.

I think IFC’s model is a great one, and I think the PPV day-and-date makes a lot of sense for a lot of indies. But like a lot of these indies, I’d love to hear more about the terms of the PPV deals and how much revenue might flow back to the filmmaker.

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