From writing and production to marketing and distribution, films and television programs are the result of the contributions of tens of thousands of hard working people, such as lawyers, accountants, actors, writers, producers, directors, make-up artists, and so on. Therefore, the production and distribution of films and television shows is crucial to economic growth both for content creators and their families and for our nation. As such, there’s an urgent need to put in place policies and procedures for protecting both the property rights and the livelihood of content creators.
The following are 10 essential things that, in general, ought to be done if filmmakers are to bring their creation to life on screen and be compensated for their work.
1. Writing the Script
Almost every good film or TV program begins with a great script. A great script will attract great talent. Great talent helps the filmmaker make a good film. Finding a good script means the filmmaker writes the script herself, hires a screenwriter to write it, purchases or options an existing script, or hires a writer to perform one or more rewrites or polishes.
When writing the screenplay, a filmmaker is best served to write what he loves and don’t try to predict what will sell or what is commercial. Whenever filmmakers try to anticipate the market, their writing usually end up with clichés, and lack freshness and originality.
2. Owning the Script
If the filmmaker hires a writer to write the scrip or to perform rewrites or polishes, she must ensure that the results and proceeds of the writer’s services are either “works made for hire,” or such arrangement include a written copyright assignment agreement, irrevocably assigning the rights in all the results and proceeds of the writer’s creative contributions to the filmmaker or filmmaker’s production company.
If the filmmaker writes the script with another writer, it is important to have a co-authorship or writer collaboration agreement describing how the writers plan to share the rights and obligations related to the screenplay. Also, if the script is based on another author’s copyrighted material (such as a book, video game, article, and so on), the filmmaker may need to obtain a copyright assignment or license to use the underlying literary material in the script.
A filmmaker will not need a copyright assignment or a license for an original screenplay (or an original story, or original teleplay) that he writes. An original screenplay is a script based on the screenwriter’s original idea, that is, it is not based on any literary material. An original screenplay will be owned by the filmmaker outright. However, a filmmaker usually will license, transfer or assign the screenplay to the production company (such as a LLC) that is developing or producing the film.
3. Buying or Selling the Script
If the filmmaker decides not to write the script himself or hire a writer to write, the filmmaker will need to acquire the rights to the screenplay (or an underlying literary property on which the screenplay will be based). Rather than purchasing the script (or underlying literary material) outright, the filmmaker, or her production company, usually acquires an option from the author or owner of the script (and any underlying literary property). This begins with the parties negotiating an Option Agreement and/or a Literary Purchase Agreement. The key deal terms are purchase price, option fee, option period, writing services, credit (billing), backend (contingent compensation), rights conveyed and representations and warranties.
When optioning an original screenplay, the filmmaker buyer is dealing with just one copyright owner. In contrast, when optioning a screenplay that is an adaptation (that is, based on previously existing material, such as a novel), the filmmaker will have to ensure that he is also getting the option for the underlying literary material. The right to make a film based on a script that is based on a novel will necessitate obtaining the right to make the novel into a film.
In general, an option allows the filmmaker the exclusive, irrevocable right to purchase the screenplay at a fixed price within a specified period of time, during which the filmmaker gets to undertake development activities, attach name director and actors, and obtain production financing.
In some cases, a filmmaker who has written or acquired a script, will look to sell/option the script to a third party (such as director, actor, studio or independent production company) with the intention of the third party producing the film based on the script. In any event, the filmmaker may at some point have to submit or pitch the script or the idea for the film to third parties.
4. Pitching the Script
The filmmaker may have to pitch the idea, treatment or script to a studio, mini-major, independent distributor (such as Netflix and Amazon), producer, star actor, name director, well-known writer or potential investor. However, studios and production companies, in general, have a policy of not accepting unsolicited submissions (whether they be screenplays, treatments, short stories, or ideas). This is because they want to avoid potential litigation, such as claims of plagiarism or copyright violation, when projects developed by the company are similar to the unsolicited script or ideas received by the company. To get past such company’s unsolicited submissions policy, the filmmaker will, in general, submit his material through his agent or entertainment attorney.
Prior to making any unsolicited script submission, the filmmaker must check to see whether the company or entity receiving the information has any established script submission policies and procedures. These submission policies are often posted on the receiving entity’s websites, often embodied in a submission release. The filmmaker should fully understand the receiving entity’s submission release. Some companies’ submission release may give the company complete discretion over whether to use an idea or script and, if used, over whether any compensation is paid to the filmmaker and the amount of such compensation. Other submission policies may require that the filmmaker automatically assigns all rights to the script to the receiving company as part of the submission process.
A filmmaker can protect his or her idea during the submission process, as follows:
- Avoid revealing too much information. When pitching an idea to a potential producer, for example, give only the details necessary to convey the idea.
- Use confidentiality/Non-Disclosure Agreements. A confidentiality agreement or non-disclosure agreement (NDA) can help protect a filmmaker’s idea before revealing it to a writer, investor or other potential collaborators. A NDA or confidentiality agreement requires that the recipient promise not to reveal any of the secrets or other confidential information given to them prior to completion of the script and/or release of the finished film or TV program.
- Register the script with the U.S. Copyright Office and/or with the Writers Guild of America (WGA).
Studios and production companies almost never agree to treat an unsolicited idea or script as confidential, or enter into a written or oral nondisclosure agreement. This is because the existence of a confidential relationship may be a key factor in determining whether the filmmaker will be able to have a claim for compensation against the company under a theory of breach of contract.
However, whenever the receiving party of an idea or script is willing to sign a confidentiality agreement, such agreement should contain language describing the purpose of the meeting (e.g., funding) and a general description of the information that will be shared.
Alternatively, the parties may enter into a submission agreement. Such submission agreement should contain terms of confidentiality and non-disclosure. Since submission agreements are not only for protection of the idea or script from unauthorized use or disclosure, they will usually include terms specifying that payment be made to the filmmaker in the event the receiving party uses the idea without the filmmaker’s consent.
5. Producing the Script
What tools a filmmaker uses to develop, produce, sell or distribute a motion picture will depend the filmmaker’s role in the filmmaking process. For example, a screenwriter who wants to maintain creative control of her vision will negotiate in his option/purchase agreement for the right of approval (or at least meaningful consultation) over certain creative aspects of the production. Otherwise, the screenwriter may use every resource he has and find a way to direct his own material, or hire a director who can execute the screenwriter’s vision.
Whether a filmmaker is producing the film or selling the script or both, the process is like having a startup company. The filmmaker’s first task is to select and form a business entity for optioning, selling and/or producing the script, such as a Limited Partnership, Limited Liability Company or Corporation. The type of business entity that is formed can play a large role in determining the success of the film, as well as have an impact on the filmmaker’s exit strategy.
A business entity is necessary for purposes of project control, financing and liability.
- Control refers to the manner in which the filmmaker intends to manage, operate and maintain control over the film or television project. This involves such important issues as to ownership of the film’s intellectual property, who makes final decisions regarding the creative, financial and business aspects of the production, and who will undertake the task of securing all necessary licenses, permits and consents. The filmmaker and his entertainment attorney will have to deal with a host of production agreements and documents, all of which will usually be entered into with the production company.
- Financing refers to the source of funding for the production, post-production, marketing and distribution of the film, including attending meetings with investors, film markets and the film festival premiere. Sources of funding may include self, debt or equity-based financing. Partial funding may also come through foreign co-productions, partnerships and state tax credits. For example, the New York State (NYS) Tax Credit program enables production companies to recover up to 35% of qualified production and post-production costs, with an additional 10% credit on qualified labor expenses incurred in certain counties in Upstate New York. The amount of the tax credit will be reported to the production company, which the filmmaker or investors then claim as a refund on their personal income tax returns.
- Liability refers to the debts and other obligations incurred by the production company (such production loans and union fees) and whether the filmmaker is personally liable for or guarantee for any such obligations. In general, a filmmaker is not personally liable for the debts and other obligations of the production company.
6. Packaging the Script
Once the project moves from the development stage, the next step is packaging talent for the film. As recruitment of key talent is vital to a successful business, so too is having the right actors, producer, director and below-the-line crew. Obviously, once you have a good script, ultimately, for an indie film to be successful, it is all about the acting. Therefore, a filmmaker must cast well. The manner of packaging talent will depend on the story, genre, script, budget and type of financing (if any) already in place.
7. Working with Unions
Labor Unions are designed to protect workers from unfair wages and poor working conditions. The Writers Guild of America (WGA) Minimum Basic Agreement provides minimum guidelines concerning most of the issues relating to the agreements of screenwriters. Many non-guild writers choose to have various WGA Minimum Basic Agreement minimums negotiated into their writing contracts, whether or not the production company is a WGA signatory employer. Professional actors’ agreements are regulated by the Screen Actors Guild and the American Federation of Television and Radio Artists (SAG-AFTRA). SAG-AFTRA and/or American Federation of Musicians (AFM) also regulates voiceover artists, recording artists, singers, arrangers and instrumental musicians who participate in recording the music for films, television programs and commercials. Directors agreements are governed by the terms of the Directors Guild of America (DGA) Basic Agreement (BA). The DGA BA covers employment of Directors, Assistant Directors and Unit Production Managers. The International Alliance of Theatrical Stage Employees (IATSE) regulates agreements for below-the-line crew, and Teamsters union for other key production personnel, such as drivers.
If a filmmaker wants to use union labor, the production company must become a signatory to the applicable union agreement. However, the production does not have to be big budget to use union labor. Some unions, such as SAG-AFTRA offers various contract options for lower budget films, such as the Ultra Low Budget Agreement for independent films budgeted under $250,000.
8. Financing the Picture
Starting a production will always give rise to the need to raise capital, whether it is the filmmaker’s own cash, family and friends or outside investors. In general, any movie proposal seeking to raise outside financing for an indie film will have to be supported by a good film business plan. A business plan often contains information about the production team, the type of film, shooting schedule, marketing and distribution strategy, the amount of funding being raised, how the financing is to be raised (the financing plan), the revenue/sales projections and the order in which investors will recoup their investment (waterfall).
Attracting investors to help turn screenplays into actual movies usually requires an entertainment attorney or one or more sales agents experienced with securities laws, financing arrangements, and highly skilled in the art of film packaging.
Marketing is an important step to attracting the film’s core audiences and selling the product. Obviously, a filmmaker must know who the film’s core audience is. A smart filmmaker will get the word out early and often via all available media, such as, digital media, broadcast TV, and print. Having a website, a social media presence (such as Facebook, Twitter, Pinterest, and YouTube), good SEO, and a great film, are a great way for filmmakers to reach potential consumers and fans. Filmmakers also often use some form of a theatrical release as a launchpad for marketing, garnering reviews, initial viewership and building a buzz around the film, usually in anticipation of the film’s video-on-demand (VOD) release.
Most filmmakers want to be compensated for their work. In most cases, this is achieved through the sale or acquisition of the completed film in both the domestic and international markets. So, invariably, a filmmaker must consider going the route of either traditional or non-traditional distribution, or a combination of both.
Regardless of the planned distribution strategy (Self, All-rights or Hybrid), a smart filmmaker will partner with a distribution company, sales agent or sales team that’s right for the particular film or television project. For example, with the increasing number of digital platforms nowadays, some distributors and sales agents are more specialized to deal with exploiting global VOD rights than others. Other distributors, such as Netflix, have a resistance to the traditional release windows system, so that their movies get a minimal or no theatrical release. Amazon has been more amenable to a windowed release schedule, releasing films like Manchester by the Sea and Chi-Raq in cinemas before making them available to their VOD subscribers.
If a filmmaker has made an awards-friendly film, he or she may end up having to make the hard choice about what is more valuable – more money up front, or a theatrical release. A smart filmmaker almost always makes these decisions long before the festival premiere, and before anyone starts to bid on the film.