Shit Rolls Downhill

Posted: January 22, 2013 in DVD Releases, Industry, Running a company
Tags: , , , ,

People often assume that because you’ve got movies on the shelves of mainstream shops, these films will be supplying you (or your company) with a regular supply of money. When they start digging for details of deals that you may have signed in the past, this belief seems to get more deeply ingrained.

Let’s take a hypothetical example.

“Right, so let me get this straight. You signed a worldwide distribution deal on this movie, right? And it has come out in at least ten territories in the world, right? And you’ve got a deal for how much of the profit? 50%? Jesus, that must be bringing you in at least some money” And then you truthfully admit that in the case of that particular movie, your company has seen nothing. Not just no profit, but nothing. Not a single cheque has been written to you in the two years since the movie came out. And then they ask; “But people are buying it, right?”

And you have to tell them that, yes, you get sent a sales report every three months detailing these international unit sales and advances for different territories, and how many hundreds of thousands of dollars your feature has generated for the distributors, all neatly accounted for down to the last cent. But there’s another column of expenses detailing exactly why none of that is going to be heading your way. And every three months, just as the incoming sales figure grows so does the expenses column, so it seems that you actually get further away from being due your cut the more money the film generates.

And then they say “But, hang on, that’s got to be illegal, right?” And you say no. And then they frustrated and start insisting that it must be illegal, surely, because you can’t just make profit disappear with accounting, and how can you just sit there are take it and why don’t you do something? It only crossed my mind this week to point out that, effectively, that international distributor is in the same position as Starbucks (who paid £8.6m in corporation tax in 14 years of trading in the UK, and nothing in the last three years up to 2012, despite UK sales of nearly £400m in 2011) with the small indie producer playing the role of the UK taxman. As long as the expenses on paper tot up faster than the income, they never have to pay that indie producer a single penny of the money generated by their film.

This goes on, frankly, all over the fucking place. Just because it’s morally rotten that doesn’t make it illegal. It’s a tough world out there for those distributors too, and shit rolls downhill. If there’s a legal way to hang on to every penny then quite a few of them will do exactly that. A few, however, don’t. A few write up contracts that they actually honour in spirit as well as in small print; a few have decided that, ultimately, totally screwing over the people who make the product that they sell isn’t always the most cost-effective way to do business, as you’re effectively kicking the geese to death before you even find out whether they can lay golden eggs or not. Which is why when those decent honourable distribs start getting crapped on by the companies larger than them, it breaks my heart all over again.

A colleague of mine who has worked in distribution for decades posted on Facebook this morning bemoaning the nightmare situation that indie distribs sometimes face when the big chains go into administration, namely; “…administrators approaching distributors/labels and offering them pence in the pound for stock sold and also for stock they don’t actually own. Look out for lots of small indie labels going to the wall because of this” Now, hopefully this won’t be the case with any of the current high-profile chains that might be crossing your mind but it’s clearly something that has happened in the past. Once again, shit rolls downhill, and when a giant crashes to the ground it might just use a few smaller folks to cushion the fall a bit.

All this stuff is, obviously, utterly depressing. Another symptom of a dying business model? Perhaps. Either way, it’s something that makes me hate and fear the small print of contracts even more. It’s not just distribution contracts, of course; screenwriters everywhere should beware of the type of contract that promises enormous rewards over countless pages, (percentage points, payments, etc.) and then has a tiny caveat of ‘subject to retaining sole screenwriting credit’ somewhere around page 8. Unless this caveat gets argued tooth and nail, it simply allows the producers to bring someone else onto the project to make some contributions to rewrites and thus void all of the rights that the screenwriter has fought for, leaving them in some cases with absolutely nothing.

Once again, back to the old mantra. Make sure you treat everyone with decency and respect, and hang on to all the ones who do the same to you. It’s a lifelong process of whittling out the assholes and making sure that, when the shit rolls downhill, as it inevitably does, there isn’t someone trying to make you get splattered worse than everyone else.

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