This book provides an orientation in four key areas essential to the business of making films: financial, legal, marketing, and distribution. With Renee Harmon by your side, you will learn how to prepare a professional prospectus for your film, the importance of "high concept" and "hook," how to develop a theatrical release plan, and what should go into an electronic press kit. Here are facts you need to know about letters of intent, presales, completion bonds, sell-through, theatrical windows, cost-profit scenarios, pick-up deals, and saturation - plus many other issues you need to understand to succeed in the film industry. Whether you want to market a single video or launch an entire film company, this is the book to read first.
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Renee Harmon lectures and offers popular seminars on various aspects of the film industry at several colleges and universities in southern California.
Share of profits. It is mandatory that you inform your prospective investors that profits are not to be shared until after the costs of the film have been paid back to the investors. The traditional profit participation is 50/50, that is to say, 50 percent of the profits go to the investors and 50 percent of the profits go to the producer. Investors share their profits based on the percentage level of investment. Profits will be shared on net profits only. (Later, we will discuss the delicate balance between net profit and gross profit, since accounting concepts do vary from distributor to distributor and studio to studio.)
A film of special appeal to certain geographic areas and/or socioeconomic groups does best if distributed market-by-market. A rather small number of prints, rarely more than about two hundred, supported by adequate but not expensive local advertising, moves from territory to territory. Most independent distribution companies employ market-by-market distribution, by "farming" a picture out to territorial subdistributors. Both distributor and subdistributor (called "territorials") share the advertising cost. Of course, ultimately you, the producer, will pay for these. A film distributed market-by-market does not utilize any national advertising.
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