So, you have an idea for a great movie and think it has “legs”. Where do you start?
Let’s look at it like any product to be sold in the marketplace. To understand how to make and market your movie, there are three basic questions that you need to answer:
- What are you selling?
- Who is the seller?
- Who is the buyer?
First, you need to translate your idea into a concrete form. It might be recorded on film or it might be recorded in a digital format. It will be your idea translated into a tangible product. Regardless of how you have recorded or plan to record your idea, for the sake of simplicity let’s call it a film. What you will be selling is the copyright in your film. This is your product: the copyright in your film.
Copyright is a bundle of rights. Think of a package of licorice strings. You can divide up the package amongst your friends in any number of ways. Some friends get more strings than others. You can do the same with copyright. You can divide up your copyright in various ways and then sell it. You can divide the copyright into different territories of the world. You can divide the copyright into different platforms that exist today to exhibit films. You can exhibit your film in theatres or on television, or allow it to be streamed or downloaded. You can break your film down into smaller pieces or versions. You can create episodes from a longer version. You can expand your film to make sequels, prequels and series. You can translate your film into different languages. All of these are the “strings” that you can bundle for sale. So, for example, you can sell your film to theatres limited to North America for one year. Or you can sell your film to a streaming service in Europe for three years. If your film is a nature documentary, you can create stock footage (that shot of the caribou herd running across the tundra) which you can sell. If you have a musical score accompanying your film, you can create a soundtrack which you can sell.
You can divide up your copyright in various ways and then sell it.Because you are not putting licorice strings in a box and shipping them off, you need to pay attention to what rights you are selling. Selling the rights to your film is complicated. You need to be clear on what exactly you are putting in the conceptual box that is being shipped off. You need to keep track of all the rights you have sold and make sure you don’t do the equivalent of selling 200% of your licorice strings.
The term “sell” is not usually used when dealing with copyright because generally you will not give away your copyright. The term used when you deal in copyright is “license”. You let a user have the copyright for a period of time, and then usually the user returns the copyright to you.
It may seem obvious but if you are going to license the rights in the film, then you must own the rights in the film. The rights to a film are assembled much like a car is assembled in a factory. A car is made up of many parts that are assembled in a factory. A film is made up of many parts that are assembled in the production and post-production “factory”. The parts consist of (to name but a few):
- the screenplay
- the computer graphics and animation
- the performances by actors or musicians
- the music
- the set design.
You need to buy these parts just like the car manufacturer has to buy the steel and the rubber. The parts you need to acquire for your film include the copyright owned by the contributors to your film. These include the copyright in any screenplay, computer graphics, animation, artistic works used on the set, and music. It includes the performing rights of the actors and musicians. You buy these parts by licensing the copyright from the owners. When you license these rights, you need to make sure you have the correct bundle of rights. That is, you need to make sure you have enough rights from the contributors to be able to sell your film in the intended markets. For example, if you hire a writer for your screenplay and only license from her all rights for a single theatrical production, you will not have the right to release your film to television or on streaming services. It is advisable to hire a lawyer to help you acquire all the rights for your film.
It may seem obvious but if you are going to license the rights in the film, then you must own the rights in the film.Continuing with our analogy, who owns the car? It is the manufacturer. As the “manufacturer” of the film, you should own all the rights. Who is “you”? In the film world often the acquisition of copyright for your film starts off with you personally acquiring rights to a screenplay. You hire a writer to help you with the first draft. The license with your writer gives you the rights to the first draft screenplay. As the budget and the financing for your film grows, it usually becomes necessary or advisable to create a corporation. Once you have created a corporation, you need to transfer the first draft screenplay rights to your corporation. If you have acquired any other rights during this development stage, you need to ensure all these rights are turned over to your corporation. And as you move into production, you need to ensure that all copyright acquired going forward is given to your corporation. On completion of the production, your corporation needs to have acquired all the “parts” in order to be the owner of the film.
A buyer can appear at any time. There may be a buyer or buyers so interested in your film that they are willing to help finance the production process. The financing may be in the form of a license from a broadcaster who will pay you for the exclusive right to broadcast your film once the film is completed. The financing may be in the form of a distribution advance from a distributor who believes that your film will be very saleable and gives you an advance on future sales. In fact, in Canada, to be eligible for certain tax breaks and grants, you often need to have a broadcast license or distribution advance in hand before you can even apply.
If you do not find a buyer during the production process, or if you have not fully exploited the sales of your film, then you will be looking for a buyer of your completed film. You can try to sell the film on your own to the various owners of media platforms around the world. Or you can try to find a distributor who will help you do all or some of this job for you.
Because of the complexity in licensing copyright, any licensing of film rights needs to be set out in writing. Furthermore, under Canadian copyright law, you cannot enforce a licensing agreement that is not in writing.
As with the sale of any product, you need to be concerned with what you are being paid and when you will be paid. If you are selling directly to an end user, such as a broadcaster or streaming service, you will usually be paid a set amount. Generally there are conditions you must meet before you are paid. Make sure you have read your agreement and understand what these conditions or requirements are. For example:
- What are the specific technical requirements that your film must meet?
- Do you need to provide the translation into another language?
- Do you need to register the copyright in the territory?
- Do you need to provide proof of errors and omissions insurance?
If that is the case, you need to know what it will cost you to meet these conditions.
If you are using a distributor to sell your film, then you usually authorize the distributor to sign license agreements with the end user on your behalf. The distributor must keep your apprised of the license agreements they have entered into.
… under Canadian copyright law, you cannot enforce a licensing agreement that is not in writing.If you are allowing a distributor to sell your film, then what you are paid will usually depend on the sales they make from your film. Generally, the distributor collects all of the revenue from sales. Before the distributor pays you, it reimburses itself for its expenses in marketing your film. You and your distributor then split the remaining amount according to your agreement. If you entered into any agreements to share profits with financiers, writers, musicians, cast or crew, these amounts need to be taken into account too.
What expenses the distributor can claim is often a point of contention. So is how the split with your distributor is calculated. You should carefully examine your agreement to make sure you understand how all these are calculated. The agreement with your distributor also needs to be clear on who pays out the profit shares to the other parties and out of whose share (yours or the distributor’s) these profits are paid.
Your distributor will usually pay you periodically. It could be monthly, quarterly, semi-annually or annually. The distributor should be required to provide, on a regular basis, a report to you on the sales of your film along with a clear calculation of how your share is determined. The distributor should also be required to provide you with copies of all licensing agreements for your film.
A sales agent is similar to a distributor in that you are giving them the right to sell the film on your behalf. The difference is that usually the sales agent negotiates the agreement with an end user. However, it is you, not the sales agent, who signs the agreement.
Technology is making it easier to pick up a camera and tell a story that you can share with the world. To be successful though, you need to understand the market you are in and what you are selling.