Hopefully by the time you've finished your film, you've been contacted by a producer's rep, or sales agent wanting to take a look. But it's really confusing... what is the difference? And sometimes sales agents are also "distributors," so it makes it even more confusing. So, who are these people?
A producer's rep is like an agent for a filmmaker... they will, supposedly, use their "relationships" with distributors to help sell your film. I talked with dozens of reps, and as one rep I spoke with put it, "our services would include developing and implementing a strategy for film festivals, consulting on your marketing materials (trailer, press kit, etc), cajoling distributors and festivals to watch your film, counseling on the various offers that you receive, and then advising on your agreements."
All for the low, low price of $7,500 plus 10% of all sales. What a bargain... of course that was after his initial offer of $5000. Hmm... I've been in this business for a long time, and I know better than to pay an agent an up front fee to represent me. If they believe in me, 10% commission is enough. This rep did come down to $3750, but still didn't answer any of my questions regarding how many films he actively represented, or any of the minor amendments I wanted to make to our contract. If he signs 10 new filmmakers a month at that fee, that's a pretty good living. Maybe I should become a producer's rep.
All of his emails were cut and paste responses, and I have multiple emails with the same identical phrases pasted in... I don't think he even watched my film, as he only ever discussed it in general terms. And to top it off, he was just going to place it with a sales agent anyway. At this point I already had a dozen sales agents contact me regarding the film. I figure I didn't need the middle man. Though I will say, I talked with several filmmakers who this rep had sold films for, and they were all happy. Just didn't feel right for me...
So, what is a sales agent, you ask? A sales agent represents your film, along with a slate of other films, at the film markets. Their primary goal is foreign sales, although some do have domestic distribution divisions or relationships with domestic distributors.
Sales agents do not charge an upfront fee, but will ask for a hefty commission and a marketing expense. Everything is negotiable. This is where the attorney comes in... you need competent legal advice when negotiating these contracts. Typically they will settle for 25% of sales, plus a recoupable marketing expense that you should cap at no more that $50,000, preferably less. Film markets are expensive, and you need to give them some room to work, but you also need to make sure that the marketing expense you are being charged for was actually spent on your film.
When a sale is made, the sales agent will take their cut plus everything up to the marketing cap... so, say your film sold for $50,000 to Germany - the sales agent would take $12500 (25% commission), plus the marketing expense of $37,500, leaving you with, you guessed it, ZERO. Now, the next sale of $50,000 to the UK, they would take $12,500 (25%), plus the remain allowable marketing expense of $12,500 (for a total marketing expense of $50,000) and you would get $25,000. After that it's a straight 25/75 split. But it may take a year to actually get the money from the foreign country.
BTW, those sales numbers are high... you aren't going to get that amount without a star in your film. I hope you didn't spend a million dollars on your film without a recognizable name. My preference is to do a 30/70 first dollar split with no marketing expense. That way you are getting 70% out of every sale.
I didn't "know" anybody when I made my first film. I submitted to 30 film festivals, all of them turned me down - except for the last one... Slamdance. The first of the alternative Sundance festivals in Park City, Slamdance is now one of the top 5 film festivals in the world. My short "Bad Habits" won the Anarchy Film Showcase, and subsequently got offers from every distributor that had previously turned the film down. Imagine that.
But the work didn't stop once I had a distributor. I kept marketing the film, took it to Cannes, and sold it myself again to the largest distributor of films in the UK, and had them do the deal with my domestic distributor. The distributors made money - I've never seen a dime past my advance.
Lesson learned... I can sell my own movie, and keep more of the profits. It todays market, it is more and more economically viable to self distribute, provided you can stomach the upfront marketing and replication expenses. There are pros and cons to everything, and there are some great producer's reps, and sales agents out there, and it just depends on your film and your goals as to which is the right path for you. Take your time, trust your instincts and read the fine print. Better yet, have your attorney read the fine print.
I will keep you posted on how this little adventure all pans out.
