Filmmaking (Actually) Ep. 9 "What Do You Need to Know About Film Distribution, Actually??"
Updated: Dec 2, 2022
With Erik Lundmark
Join Koura Linda in part two of a two-part series as she discusses film distribution with Erik Lundmark, CEO of Leomark Studios, a film production, post-production, and distribution company with more than 50 film titles in its catalog. Film distribution is changing day by day, and while there’s no one model for the trajectory of a feature film’s release, this conversation highlights some of the basics for filmmakers and film enthusiasts alike to learn about. For more on Leomark Studios, check them out on Twitter @LeomarkStudios and Facebook Leomark Studios and Instagram @LeomarkStudios.
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Below please find a transcript of this episode. Episodes are also available as audio-only podcasts here or with subtitles in this video:
What Do You Need to Know About Film Distribution, Actually?? With Erik Lundmark.
SPACEY: Hey guys this is Spacey and welcome to Koura's podcast “Filmmaking Actually”. This is an interview with film distributor Erik Landmark and they talk film distributing and all that fun stuff. This is part two so enjoy!
KOURA: What would you say like — Because I mean honestly, I have absolutely no idea how much Netflix pays for indie films. I know just from my involvement in the film festival circuit, and the films that I see and then I see get distribution — so I know that like those quote unquote “Netflix Originals” or “Amazon Originals” a lot of those are made and done and finished (Maybe they did some final tweaks) but they bought the finished film and just kind of put their name on it. What should a filmmaker expect if they're gonna sell their film? Like, it's a good feature film, it has a celebrity or two in it, it's a good story and people relate to it and they've done their market research, and they've done all the work — What should they expect? Are they gonna get like — “Here, Netflix will buy it for ten thousand dollars!” Or um, if it's a feature film which usually doesn't cost — usually costs a lot more than ten thousand dollars especially if there's a celebrity involved — um, what could an indie filmmaker expect on distribution for a film that they're not doing a theatrical release on? Because I think I would think most indie filmmakers are not thinking with theatrical releases ‘cause that's a much bigger um — I feel like that's a whole different — maybe I'm wrong but I feel like that's a whole different uh, kettle of fish as it were, of its own marketing and getting space in the theaters, and getting people to buy tickets and all that stuff feels like a much, much different beast than a straight TV or streaming type distribution.
ERIK: Yeah, that's a big question. Haha!
ERIK: How much are you gonna get? Okay, sounds like an easy question but it depends on so many factors. Uh let me just address the Netflix and now also Hulu because they kind of fall in the same category. More or less in principle they don't buy indie movies anymore. At least not the micro budget low budget movies that yeah, you see the you know, the Netflix original — I can't answer for sure because I don't work for Netflix but, the way I understand it at least is: Sometimes it's a co-production or production for hire that they have um, higher production services. The script came from somewhere, they initiated it and said “Let's make this movie even if someone else made it.” Sometimes maybe the movie was already made and they acquired it, and in their contract they have a class that says it should be called the Netflix Original and so on. But they used to buy a lot of indie films, but they don't do that anymore because they have changed their model into only making their own stuff. Even though we do talk and meet with Netflix, They're not really interested in buying third party. Especially very low budget films which is what we mostly work with. So that's just — don't count on that because even if they would be interested, they usually (Again based on my experience with other filmmakers) they usually want all rights worldwide, and they're going to give you one flat fee up front and that's it, you have no more chance to make revenue from the film. Because it makes it easier for them, they pay you once and then there's no more paperwork or reporting or anything like that and they just pump it out everywhere.
And other sales, straight sales to different platforms like television and cable and red box and so on, it really depends on many factors. Depends on the film, it depends on what the TV channel or cable channel are willing to pay for it, what they think their threshold is. I mean it varies widely. It varies within several hundred thousand dollars from very low money to, you know, very good money. And internationally the money has gone down a lot as I'm sad to say. TV is still the best paying platform internationally. Just money from a regular distributor, an international distributor or they call foreign buyers. They really are distributors in their own home territory right? So, the money that they're offering has gone down a lot. So we see less and less offers from international buyers that are distributors in their own country. The only ones — the difference is that television in the international countries, they can still pay decent money.
So then we go back to the genre thing, if you're really thinking about making money then you should really focus on TV safe movies. So we can spend half an hour talking about Horror, how it used to be a solid business when we still had Blockbuster and your local DVD store and so on. But since that is gone, it's hard to find an outlet for horror movies uh beyond the digital, beyond the VUD, that is a steady stream of revenue. Because none of these platforms pays money upfront right? So you're gonna have to make the movie and then wait a long time to make it back. Because Blockbuster used to pay for the movie up front and you got enough cash to go out and make another one! And it was a system, a business system that worked! But now with all these digital platforms no one is willing to do that because it's just way too much content.
So with the horror stuff you can't sell it to TV because there are no channels for it. So if people are interested in making those sales we say “All right, think Family, Comedy, Rom-Com, Drama, Romance, straight Romance, anything that's kind of safe. Sure Action, but it's very expensive to do Action and I doubt you can do a good Action movie on a micro budget. So if you're going to make an Action movie, then you're going to the other categories you have to think about pre-sales, or talking to the outlet before you even make the movie saying “Hey if I'm going to make this movie, this is something you'd be interested in?” You really have to check on the receiving end if they want this if you're going to make it. Otherwise you're just going to lose all that money.
KOURA: Let's say like um — I mean I'll just say “So I've got this friend!” I'm just kidding, it's me. Haha!
ERIK: “I'm asking for a friend.” Yeah.
KOURA: It's me, I’m the friend. But um, my husband and I have our our little production company Space Dream Productions, and we optioned a feature film that we're developing, and we just got our budget done and we're putting it all together, and we're — the next thing we're doing is bringing on someone for casting to attach our name actors and all that stuff. When we did the breakdown like — this isn't like a 200 000 budget. We went through it. I mean, I was very very fortunate to work with a line producer who's worked on some giant blockbusters for the last several decades, and she really went through with me every single line. She teaches film now, and went through every single line of the budget and explained what it all was. We took out everything we could. I then brought it to another line producer who's a much smaller scale, does a lot more indie projects. And I had him look at it, and he went through everything. And I had another line producer look at it just to kind of get an idea from like, the range of, you know, someone who works on films like American History X versus someone who works on much smaller lower budgets, not millions and millions of dollars. And everyone pretty much said that the budget — they all had like one or two things that they would change like “Oh well I would drop this but I would raise this” And when you average it all out, they were all saying the same range for the budget.
And one producer said something to me that I thought was really interesting, she said that the real $500,000 indie features don't really exist anymore. Like if you're gonna actually pay people, if you're gonna feed people, you're gonna pay them their rate if they deserve it. We're really lucky that the cinematographer that we're working with is a multi-award-winning cinematographer whose work is outstanding and I'm — I worked with him on one other project and I'm really excited to be working with him again. But you know he's not a hundred dollars a day, he has his rate which is still extremely reasonable compared to what he could be charging. We did our market research on it, we know that there's audience interest in it, we did almost 200 surveys literally across the country. Um, and people are interested in the story, they're interested in seeing the film, they want to see it get made, so we feel like it has the relevancy, but should — I guess, I don't know like, I'm kind of asking like on a personal note — like as an indie filmmaker I kind of feel like if your feature film wasn't made for five thousand dollars you're not making a profit. What would your thoughts on that be? And if this is too weird and rambling I may just cut it out of the podcast but — I just feel like it's important! Because people get told all the time “Make your feature film for nothing." you know, "You need to prove it if you want to make money.” but the thing is, it's not nothing! It's like you said, you know, you hire a sales rep. It's because they have all those years of experience, they have the connections, they know what they’re doing and you're paying for that.
KOURA: You know if you want to hire people that know what they're doing, that you know, an art director who knows — I mean I started in production design. And for me like, yeah I can come in and I can bring your budget down, and I can make your art department, you know, I can decorate an entire girl's bedroom out of an empty space for a hundred dollars. Because I worked in production design for 10 years and I know exactly where to buy everything, and exactly how to do it and I can put a design together in my sleep. But I would prefer if you didn't pay me $100 and then tell me I can keep what's left out of the entire budget after I spent everything. Because it's my time. So to make that, like you said, a “High Skill” film and bring people in, if it's looking like “Okay it's gonna be a million dollars, 1.5 million dollars.” Is that just like a joke? Like okay, don't even tell an investor they're going to get their money back because they never will. Or is that something that could be sold? Sorry for the long question!
ERIK: Oh no I understand we get this all the time also. There's a simple answer to it. To just put it broadly, there are two budgets. Either like some of your friends said, ‘Make it for nothing’ that's one option. And usually in the beginning, you want to try to make it for nothing. And it becomes a friend project, family and friend project, just do something, just get your feet wet, just get in the game you know, but don't spend too much money because you don't really know what you're doing yet right? In terms of a producer and trying to get sales and all that. Just start making a name for yourself, even if you have a lot of experience as a production designer or something else, now you want to be a producer or director or whatever it is. And that part is new, and you have to just accept the fact this is new for me and I don't have a track record. If you have a rich uncle or find some guy or a woman who's willing to give you a million dollars, then take the money and run and make that movie! But usually what happens is, no one will lend you that much money. Anything that has millions in the name of it, you will typically not get that unless you have a track record being a producer or director. That's what you're doing right now. You're not just being a production designer, you are actually making the movie right, you are the one who is initiating the whole thing, and it sounds like —
KOURA: Yeah! I mean I should back up and just say I was a production designer almost 10 years ago. I've been producing and directing for the last — um, my husband and I released our first film in 2016 and we've made about 15 projects since then. And we have like 50 festival acceptances and 45 award nominations. We've won 15 awards in the last three years, like, we're doing pretty good. So —
ERIK: Okay. So you have the track record. So then you find someone who can lend you the money. That's great! So you've solved a lot of a lot of problems, but before you make something with that much money, you know, you can always spend the money but you gotta make it back. And then you have to reach out before we even start shooting and figure out: Who wants this? Without that it's too risky. It's just too dangerous to spend that much money on something that you don't even know if it's going to work or not. Because you can't do it — if you're going to say you know “Am I doing the right thing or am I doing the wrong thing?” Well it sounds like you are doing the wrong thing if you don't know how to vet the market or reach out and find out: Is anyone going to want to buy this? Because you need — just as well as you need to find the money to invest, you don't borrow this much money because then you're doomed. You need to find someone who understand that this is risk investment, but they believe in you and your team, and understand that this film may not make their money back, but it's a great stepping stone in your career and they believe in you and they want to keep working with you for you know the near and far future. But you really do need to find out if this movie will have a business at the receiving end.
I'll tell you a little anecdote just to understand the (Goes back to the money part again) We had, well we still have a very nice family film, but and and it was made for you know that range (you know, millions) and it's very, very good. It didn't get a big theatrical release in the US. We did a small day and date. We played it in 11 cities, and released it at the same time on Cable VUD. We talked to our Italian buyer, TV buyer, and he said well you know, since it didn't have a theatrical release, I can probably get somewhere between twenty and thirty thousand dollars for a Italian TV sale. But if I'm gonna have to give you an MG, and have to dub the movie, and this and that, I will best case break even. He said this movie has no business. If however the movie had been released theatrically, the TV stations, they would add another zero and it will sell for at least $200,000 in Italy for television. So, but then again making a theatrical release is very very very very expensive. So, you know it takes millions and millions of dollars to do it right and you need a bigger distributor. We're too small to do, you know, a really big theatrical distribution because, it's not just the distribution to the theaters and making the DCP’s, it's the marketing. If you don't spend money marketing it, then no one's gonna see the movie.
KOURA: Right, because you have to market it. You can't just like —
ERIK: You can't just put it in theaters, no one's gonna go and see it.
ERIK: But you know, that's the same as when we used to do digital releases. We actually do marketing. So we do come up with a marketing plan together with the filmmakers and we spend money on social media marketing, because it's very well spent money you don't have to overspend to get the result. We see the results right away you know, we work with Bitly links and we can see where the clicks are coming from and when and and so on. And we see right away when we start a campaign the clicks go up and when the campaign is over the click start stop. So it’s — there are very good tools these days to do affordable marketing that makes sense for you know, low budget movies.
KOURA: Yeah and that makes sense. I mean I will say that one of the reasons the budget is where it is, is because we put in PNM for the end, and we put in the full post budget, everything is in there so that we know we're not going to be like, turning around to our investors and saying “So we made the movie and it's in the can, BUT now we need…” You know, the full M&E track is in there, we got a quote from our — the guys we work with for post sound. Like we have everything laid out on paper so that's taken into account but, I think those are really good points, and I hope that's useful for anyone listening. I mean I wasn't trying to be self-serving by asking you (haha!) in the interview! I think it's important because people don't — it's not really talked about, or at least not (I don't know if it's just the circles that I'm in or the Facebook groups that I'm in) but it seems to be a pretty big question that doesn't — it doesn't just get like laid out on the table. There's like this big kind of veil of mystery and confusion and it's like this elusive — like you said a lottery ticket you know? It kind of feels like — to make a good film and sell it is like: Merry Christmas.
ERIK: Yeah and I know. And unfortunately the lottery ticket stories, they're the ones everyone is pointing to and saying “Oh look at them! They did it. I'm sure I can do it too!” But that's why I said, it's very hard to plan to win the lottery.
KOURA: I wish I could, then I could just make all the movies!
ERIK: Haha Yeah.
KOURA: All right awesome! Well I have to say I think that all the information that you've shared has been extremely helpful, and I'm really looking forward to being able to share it with fellow filmmakers and with people who are looking at you know, how do they get their film distributed? How do they even start this path? Are there any other important elements that you would say a filmmaker should consider when they're, uh you know — whether they're starting a film, or have a film that they've completed, (I mean, I do think that it's probably easier before it's been started) but um, just anything that you think is kind of an important point that maybe I didn't ask, or hasn't been mentioned yet?
ERIK: I think we covered a lot, but I think if you're a new filmmaker, you're just gonna have to look at your career building years as something where you do two or three micro budget movies, and you get some kind of distribution, and don't set your hopes too high in terms of revenue. It's more of making a name for yourself, getting your work out there. ‘Cause here's what's going to happen, once you have that project that's going to cost you anywhere from two to five million, which is typically where the real business starts. Because then you can make plans, right? You can hire the names etc. etc. But let's say you have that project in your hand, you wrote the script or you found the script or whatever, you're going to go to an investor, and they're going to ask you, “Have you made films before?” and you say yes! “Did it get distribution?” Yes! “Is it making any money?” Yes! Then you just try to avoid the question, “Did it make a profit?”, “Oh look, an airplane!” (Haha!)
But if you usually answer those three first questions, then they say “Okay so show me what you have!” and then you're kind of in the door, and then you can start talking at a different level than those first you know, two or three micro budgets, just you know, just make something get it out there. But don't expect too much money to come back from those first projects. And if you have more experience under your belt, accept the fact that the market is changing. There are less and less international sales for indie semi-unknown filmmakers. And you're gonna have to team up with other partners like a distributor or colleagues in different areas. But the key is to talk to the outlet platform, whether it's a TV station, Cable station or a video platform or something something, and plan with them saying “Look if I make this, will you buy it from me? Or will you make an offer?” Something to that effect, otherwise it's too risky when you go above two hundred thousand Dollars.
KOURA: Would you say that um, could you split it up? Could you do like maybe a TV release and then have it go to Netflix, or TV release and then have it go to Prime, or something like that? Or do they prefer to keep it separate like “Oh no! If it was on TV, we don't want it!” or whatever.
ERIK: No, that's fine! TV comes first, ‘cause anyone who puts money on the table, they're going to get an exclusive, period. So, we have three films on Showtime right now, and they all have an exclusive period where we can't do other sales in certain areas and so on. Netflix, I don't know, they keep changing. I really don't know. You know, we don't have an ongoing sales channel with Netflix. We pitch things but it just, over the last five years there's just less and less and less interest in you know indie films. They just want to make their own stuff. So Netflix is a bad partner in that respect. I mean they're a powerhouse you know, just look at the latest Golden Globe nominations! They're leading the pack with nominated films. They're turning into a giant. So, I can't really speak on their behalf. But, the moral is to talk to TV and Cable still. Maybe Amazon Originals might be more interested? It's hard to tell. But definitely the bottom line is: You need to figure out if what you're making will have interest from people who will put money on the table.
KOURA: And those are — like Showtime's not going to pay like 2 million dollars for your film.
ERIK: No no no no no no no. Yeah. That's like — no one will pay that much money. Even if you spend that money it's not gonna come from one paycheck or one sale. It's gonna still gonna take time, it's still not gonna be easy, but you're gonna have to sell it to a lot of different places. And you know, hopefully you'll make the money back within a few years. And again you hear the success stories where “Oh we sold it for blah blah blah right away!” and you know, okay great!
KOURA: Yeah, the “Napoleon Dynamite” foreign did a thousand dollar budget, or whatever it was, a couple hundred thousand dollars and it made like millions and millions and millions back.
ERIK: Right. Yeah those things — they are those lottery winners that everyone is pointing to but. You know, here's a simple lesson that I did a few years ago, that anyone can do, and just kind of read between the lines yourself. Just do a simple internet search on ‘Successful indie films’, or ‘Indie films that made money’ or blah blah. However you want to phrase it, you're going to get the same result. You're going to get about (Depending how they count) between 14 and 25 maybe, successful so-called indie films in the last 40 years. And you look at them, what do they all have in common? Is it a genre, is it the director, the cast, the what, this and that? No! And it hits you, the one thing they all have in common is that they got distribution from a studio. Because they are the only ones who can afford the marketing campaign to make sure people get to know about it and say “Wow! Oh yeah that looks interesting. I gotta see that!” That is the power of marketing and it's very expensive.
KOURA: So I should just double the budget? You know you say like “Okay my film costs five hundred thousand dollars, we're going to ask for a million dollars, and we put $500,000 into marketing.” Haha!
ERIK: Yeah you can build in a marketing campaign in your budget for sure! But if you don't aim to do a theatrical, you should set aside marketing money for your digital release just to cover that. Because you don't have to spend so much with a digital release, but you see pretty good results anyway.
KOURA: Sweet. Anything else that you think is uh — while you have the ears of the indie filmmakers
ERIK: I also want to say, both us and a lot of smaller distribution companies, we work very closely with the filmmakers, and we pick a street to take together, and we come up with a marketing plan, and so on and so forth. And we are open to submissions! You don't have to go through a lawyer or an agent or anything, that's only for the really big companies. We get — we are solicited all the time with emails. Rather not take a lot of phone calls but, you're more than welcome to email and saying “Hey, I heard your thing on blah blah blah and I'd like to show you my trailer and see if you're interested!” We do that every day so that's perfectly fine.
KOURA: Oh awesome! And what email should they reach out to you on?
ERIK: Oh the regular company email is info(at)leomarkstudios.com
KOURA: Okay great! I can put it in the description of the podcast so that it's spelled out for them, if that's okay with you? I don't want to like bombard you with emails either but like —
ERIK: No, that's part of the business, we are bombarded with emails and you know, I have a list of 200 films on my watch list that I'm going through slowly.
KOURA: Awesome! Well I mean — I really appreciate that. I think that's great! And I love when people are accessible. I think that's really important especially in indie film because there's so many doors that just get closed in your face every day. So it’s nice to not be a *SLAM* right in your face. Awesome, well thank you very much for your time. I really, really appreciate it. And to everyone listening, I hope you found this helpful and if you have any questions, you can email us at filmmakingactually(at) gmail.com or you can leave a comment, or you can message us on Facebook on our Space Dream Productions page, or you can like and comment and share and all that super exciting stuff. And okay that’s it.
SPACEY: You've been listening to “Filmmaking Actually” with Koura Linda. Space Dream Productions podcast. Subscribe to us on any or all the podcast platforms, but we especially recommend our sponsor Anchor. If you like what you hear, leave us five star ratings and positive reviews on iTunes and Stitcher, it helps more listeners like you discover the show. But the best thing you can do if you really like the show is tell a friend. Want to leave a comment or ask a question? Email at filmmakingactually(at) gmail.com. This is Spacey speaking and remember: Twas beauty that killed the beast, or in the Disney version Gaston. And we'll see you next time.
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