The New ABC of California Corporations

There are two brand new corporations that could be kind of cool for socially-conscious filmmakers: They are the “B Corp.” and the “Flexible Purpose Corp.”

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So How Much Should You Allocate to the Producer of Marketing & Distribution?

by Jeff Steele

A producer recently inquired as to how much she should allocate to the Producer of Marketing & Distribution (PMD), in her film’s budget.  Seriously?  Another producer title?!  While initially dismissive of that concept, I’ve actually come to terms with the viability and necessity of such a role, given the inability of most independent films to acquire distribution in the United States, which is mostly due to:

  • Prohibitively expensive Marketing, Advertising and Distribution costs (if you’re not spending at least $25m on a national campaign, then you probably shouldn’t spend anything at all);
  • An overall dearth of independent US distributors (due to the high cost of marketing);
  • Studios shifting their focus to a few blockbusters and franchises, rather than indies.

It used to be quasi-acceptable to assume in a film’s Finance Plan that 20% of a film’s budget would come from exploitation of U.S. theatrical, video, and TV rights.  Now the U.S. can only be reasonably relied upon for a $150-$250k “fire sale” price, for Direct-to-DVD/VOD rights — regardless of whether the film was made for $2m or $25m.  With this measure of uncertainty in the air, it makes sense to have somebody at the Producer level who is focused solely on developing and executing a marketing and advertising campaign, starting from the first day of pre-production, until the film is delivered to the distributors.

Most films have a Unit Publicist, who works on-set with the Still Photographer and a small video unit, to put together basic marketing materials like footage and interviews for DVD extras and press-junkets, all of which is necessary for facilitating the delivery of some standard/basic marketing materials for U.S. and international distributors.  The Producer of Marketing & Distribution, however, would operate on a much higher level:

  • Creating and managing the social marketing campaigns (which start on the first day of each cast and crew member’s hiring, including the writer, director and producers.)
  • Generating an overall marketing and distribution strategy and implementation plan;
  • Wooing investors who specialize in financing Prints & Advertising (P&A);
  • Making sure that key executives at every distribution company are aware and kept abreast of the project (building anticipation for possible acquisition.)

I believe that an actor’s social media stats (the number of Facebook friends, Twittter followers and Linked-in connections, along with the overall frequency of social media activity) are as important as their head-shot, resume, and demo reel.  Agents and managers need to start including their clients’ Social Stats on resumes: this is as true for writers, directors, producers and actors as it is for cinematographers, production designers, grips and other crew members.  All of this falls under the purview of the Producer of Marketing & Distribution.

Traditionally, this higher-level marketing strategy fell within The Producer’s role, but speaking from experience, most producers are too mired in the daily demands of physical production, post-production, and delivery demands to have the time and clarity to contemplate all the facets of a film’s marketing campaign, which means it gets put-off until the film is completed, which is way too late in the game.

Most indie films (of any budget) would benefit from having a Creative Producer, Production Producer, Financing Producer, and Marketing/Distribution Producer, all of whom report to The Producer of record: the person who gets the Produced By credit and all the accolades.  This may sound like a saturation and further dilution of the Producer role/title, but it really does take a village to make a movie.  It’s also important that the film not be comprised of all Generals, with no soldiers.  Independent films that don’t have the luxury of being backed by studios, mini-majors, or large production companies (that already have an internal infrastructure of creative, production, financing, and marketing executives and staff) will benefit in the long-run from the delegation and compartmentalization of these core Producing functions. [see the last 2 paragraphs of my previous post on producing credits.]

It’s important to remember that each film is both a start-up company and an initial product launch.  Like a start-up, it has development and financing stages; and like a product launch is has a production stage, marketing stage, and a distribution/retail stage.  If the CEO of a start-up claimed he could manage all the start-up and product launch phases by himself, he would be dismissed as too naive to run his business.  Yet most independent producers set out to do just that — then they wonder why the buyers weren’t interested and the film didn’t recoup its money.

So back to the initial question: how much should The Producer allocate to the PMD?  The answer is: the allocation is inversely proportional to how inherently commercial the film is (at home and abroad).  Put another way: how important is making your investor’s money back?

  • LfO

    Hi Jeff

    I agree that the importance of the publicity and marketing campaigne is up there as a really big one …

    However, I’m not sure we should be giving it a Producer label.

    Rather it should be up there as a Head of Department.

    Traditionally this department has been excluded from the production side … and left to the distributor. However now there is certainly an expectation that far exceeds the traditional duties/skills of a production Unit Publicist.

    In the same way one would have a CFO on a larger production overseeing all things relating to the expenditure of the budget, and reporting back to investors (rather than just a production accountant), and other stakeholders.

    … and a COO (Production Manager/Post Production Supervisor) overseeing all things relating to the “manufacturing/delivery” … working closely with the CFO/Prod Acct.

    A CMO – is more what this role appears to be.

    What will be more difficult will be getting government bodies into that “mindset”, that this role and related expenses are now a very real line item of any production budget. When traditionally all such “marketing” expenses are non qualifying spend for tax credits/offsets etc

    And consequently the pressure is passed on to the Producer/EP to find the extra investment to cover what the distributors have effectively handed back down to the producers as an additional delivery expense.

    Nonetheless, I think that serious investors should see with the good sense it presents as they compare their investment options with other industries – which have a CMO and Marketing budget allocations.

    Finance plans that cover these bases will offer more comfort (less risk) than those that don’t !!

    It would certainly be viewed with disbelief if a car manufacturer planned to make a new model of car – but had no budget or manpower/expertise allocated to promoting it’s release for sale ….

    What investor in the new line would take them seriously?

    LfO

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  • http://linkein.com/in/brucenahin bruce nahin

    If there is such a post i think it should be as an associate producer, much as i get as a business affairs guy

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    • Jeff Steele

      Seems reasonable.

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  • http://milesmaker.com Miles Maker

    The concept of compensation must be partly based on the concept of the role in bringing a PM aboard. Is the risk/exposure level this Producer is willing to undertake just as high as the other Producers on the team, or is your PM simply a hired gun? In my opinion this role is NOT a hit & run job!

    I believe the PM should be just as vested as each and every other Producer on the team and be compensated as they are; relative to the production budget plus operational expenses with negotiable back-end compensation along with performance incentives for quantifiable audience development/fan acquisitions, sales, etc.

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    • Jeff Steele

      Well put Miles. I’m going to contradict my previous comment to Bruce; this is not an Associate Producer level job; this is truly a C-level job (CEO, CFO, CMO) and their pay can be as you suggest, but in the end, every film has its unique set of parameters and limits, so you need make whatever deal both sides can live with. In my experience, the highest loyalty comes from cash-in-hand.

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    • http://www.anitathemovie.com Joe Orlandino

      Spot on Miles.

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  • http://WWW.FILMARTISAN.COM ANAND VARMA

    Dear Jeff,
    This is one of the best articles you have written. I really enjoyed this one! So many facets and angles to look at.
    Thanks,
    Anand

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  • Cotty Chubb

    Hi Jeff, this is a very clean synthesis of an idea that Ted Hope has been exploring in his wonderful and sometimes messy way over the past two years at Hope On Film.

    I agree that it’s really needed. As a producer, I need all kinds of help from people who know more than I do about many of the specific aspects of production and the many crafts required to defend and support the film.

    Independent marketing and distribution expertise, for the reasons you describe, is essential in ways it wasn’t even ten years ago.

    Cotty

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  • Andy Halmay

    There have been very few producers in the history of Hollywood who were very good at marketing their films but the smarts must come from the main man, not an associate or hired gun. Howard Hughes was the only great one who comes to mind offhand. Joseph E. Levine might qualify partially. He picked up cheap Italian muscle films and hyped them gloriously with solid box office results. Harvey Weinstein would fall into this category. But. Jeff, the gal who asked you the question that inspired this article shouldn’t be producing on her own. She’d be better off going to work for some bright people for a while to get some first hand experience. Marketing films effectively is an art very few have mastered. That is why Hollywood blows such big bucks on the effort with most often negligible results.

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  • http://www.deliveredmovie.com Linda Nelson

    Since this job starts at conception and continues throughout distribution, it should be compensated for and be on the level of a producer. I’ve been doing it for three years already on our film, DELIVERED and we’ve barely started distribution efforts, but I can tell you that it pays off in spades. It can bring you niche markets you never new existed and partners that will support you in ways you could never have imagined. How do you put a price tag on that?

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    • Jeff Steele

      I agree Linda — see my previous comment above.

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  • http://www.creativecvg.com Philippa Burgess

    Hi Jeff,
    Great article. Most of what we do at our creative convergence is cross-platform content development & marketing, so I really appreciate this line of conversation. You’re insights are right on! Hope all is well and look forward to reconnecting.
    Best,
    Philippa

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  • Scott Hillman

    Suprised things like this haven’t evolved earlier. So much of indie film distribution seems to be “well lets go to the film festivals” which seems such a laughable idea.

    I would think at what ever level you might be suprised what kind of bang you can make with budgeting money for publicty and advertising.
    Your right that most mainstream movies have a budgets in publicty around 25 million-but you can do more with less in that regard. Especailly with named actors you might be surpised.

    Check how much entertainment weekly requires for an ad. Its not 25 million, its not even 25,000.

    Check with indies theaters how much a trailer costs to put on the screen-its something but not 25 million. You do a Landmark theater trailer, probabbly the major internet sites will pick up on it.

    Good websites aren’t cheap but they are in the realm.

    Radio Ads are cheap. Not something you want for a major release, but you get a couple of theaters you might be surprised.Targeted Cable TV ads aren’t that much more expensive

    Remember a magazine gets advertsing, a theater plays a trailer-its invested and how has a little bit of a vested intrest in playing your film.
    All of this is saying if maybe you can get 1/3 1/2 your budget for P & A even for realitivly small film you might be surpised what you can do, and what that says to a distributor. People talk a lot about Parinomal activty and Blair witch, but even at the early stage i suspect there publicty budget was higher then there production costs.

    (that said i am working on a project, and if any good marketing producers out there contact me:))

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    • Jeff Steele

      If you have the time, money, and resources to market your film city-by-city (or market-by-market) then you can release a film for exponentially less than the premium you pay for a national campaign buy (the latter being the $25m point of reference in my article.) I did it, back in the day, on a $50k film that grossed almost $2m in domestic box office: it’s very difficult and taxing, but it paid off, barely.

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  • http://www.bloodpaganfilms.com Angus Brown (UK)

    Great article written by Jeff Steele re: getting your priorities right with Marketing & Distribution linked to having a proper strategy in place for marketing and distributing Independent Film – with the right level of expertise in place to undertake this challenging role. I’m in agreement with Ifo, in that we should give it a Head of Department category for ‘Marketing & Distribution’ rather than PMD.

    On the other hand – an Independent Film may simply need two or three Producers (as opposed to one Producer) with specific responsibilities, so that financing, logistics, marketing, distribution etc. all get covered as part of the overall plan of getting the film produced and out into the marketplace.

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    • Jeff Steele

      I agree, but there still needs to be one ultimate CEO Producer that makes the final call, and keeps the ship moving forward.

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  • http://NOMPCo.com Stan Gill

    I have to admit Jeff, I never thought I’d live to see such dynamic changes in this industry in my entire career.

    It’s frightening and exhilarating all at the same time.

    Great piece as always.

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    • Jeff Steele

      You haven’t seen anything yet…this is just the beginning.

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  • http://www.irvbauerscreenwriting.com Irv Bauer

    Good article! Comprehensive and accurate. However there are far too many films today that have all the marketing requirements; star power, dynamic direction, “car chases,”and after the first power surge of marketing, fail because the script and the resulting film lack real story development and character interest. Too many films overlook the very fundamental first stage, which is the script and rely on the marketing. When marketing drives the process film-making is in trouble. Which sadly is where we are today.

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    • Jeff Steele

      It goes without saying (and I wrote a whole piece on it HERE) that the quality of the screenplay always comes first, otherwise it’s just lipstick on a pig. Second is the producer. Actors/Directors are mixed together in third/fourth.

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  • http://www.anitathemovie.com Joe Orlandino

    Great insights Jeff.
    I believe the position is indeed a C-Suite job.
    The PMD should have a strong background (and track record) in all aspects of advertising and promotion. If this person is an on-line/Social Media guru but has no experience in direct mail, print, broadcast, media buying, mobile or IMC in general, this could be the wrong person for the job. Salaries for proven CMO’s generally run in the mid to high six figure range. That would also include a sizeable budget and a small staff. I don’t believe most small-budget indies can allocate those kinds of funds. So, I agree with Miles Maker’s comments above, “(this person should be) vested as each and every other Producer on the team and be compensated as they are; relative to the production budget plus operational expenses with negotiable back-end compensation along with performance incentives for quantifiable audience development/fan acquisitions, sales, etc.”

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  • tres miah

    Hi Jeff,

    Thank you for your wisdom and thoughtful work which – and I think I can speak for everyone – is greatly appreciated.

    It’s apparent to me that in making a film today unless you have the backing of a studio or their mini majors your best best is a work with an production company that has that infrastructure.

    The other thing I see is budget. Either go low 250k-700k to recoup or if you’re in the 1-5mil you BEST have some marketable elements (director, talent, etc) to garner PR ( read: “The Kids Are Alright” to insure that you can recoup cost. Am I on TRACK?

    Yes, there are a dearth of distributors which compounds and limits opportunities for indies along side the cost of marketing.

    However, am I to infer from this post that all is lost for an indie film if it is not positioned in any of the three the situations I mentioned above?

    Also, are there any established companies that specifically do PMD work for indie films (on any tier level of budget) at the moment?

    Or, is this specific discipline so new that it has yet to establish itself in the infrastructure and workflow of making a film like distribution, Production accounting, Editing, etc.?

    Thanks,

    Tres

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  • http://www.winterpalacefilms.com Jan

    Hey…

    I realize we are trying to justify a producer credit for the position of PMD or even the Producer Representative. However if the PMD or PR is actually garnering more than 25% of the financing for the film (paying deferred production staff and expenses or even a return for investors and maybe a profit), after production has ceased, aren’t they actually acting as an Executive Producer under the PGA’s producers code?

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