Distribution : Can "FLOPS" get a new life on Netflix? by Karen "Kay" Ross

Karen "Kay" Ross

Can "FLOPS" get a new life on Netflix?

That's what the popularity charts are showing - and it's wild just how old they are! Some far outside the usual 5-year projection of back-end distribution:

https://www.indiewire.com/news/box-office/in-the-heart-of-the-sea-tops-n...

How do you think this will change distribution deals? How do you think this will change backend points?

Sam Sokolow

This is pretty amazing, Karen "Kay" Ross. Happy to see films like this finding their audence when the audience has all of the choice and ease of access. I'm not sure exactly how it will change backend definitions as the long tail has often been where the money is for creatives who get backend - some waterfalls take 7-10 years to bare fruit for people with MAG (modified adjusted gross) - but I'm sure lawyers will, or should, fight for best definitions with long tails given this emerging trend. I'd ask my lawyer to try to put provisions in where my backend definitions improve over the long haul - like after 5-7 years studios overhead and distribution fees shrink, or something like that - and maybe that's where some big wins can eventualy come. Its a lot (and fun) to consider. Thank you for sharing!

Maurice Vaughan

I think flops can get a new life on Netflix and other streaming platforms, Karen "Kay" Ross. I see it this way. Movies can flop for different reasons. It doesn't always mean people didn't like the movies. A movie could flop because of ineffective marketing, the time it was released in theaters, etc. And maybe even because people just weren't interested in the movie, but when it goes to Netflix or another streaming platform, people might become interested in it.

Jon Shallit

Netflix won't look at your film unless you pay them unless it's got buzz and stars or did well in festivals...even then? That's what i was told.

Dan MaxXx

Smoke & mirrors. Netflix has their own secret algorithm pay scale with labor unions and nobody outside of Netflix understands their audience data, or have publicly reveal how much filmmakers make/or prod company makes streaming movies on Netflix.

Geoff Hall

Jon Shallit not quite true, Jon. There have been people on this site saying that their indie film was accepted on Netflix, without having ‘A’ list talent.

Dan MaxXx

Geoff Hall has anyone ever say how much they made streaming their indie film on Netflix?

The article by KR doesnt mention anything about paying money.

Karen "Kay" Ross

That's a really good point, Sam Sokolow ! Wait - could you talk a little bit more about "studios overhead and distribution fees shrink"? Is that a normal thing? What about studios that only come in to distribute?

Karen "Kay" Ross

Hey, Jon Shallit I've never heard of anyone paying to have their film distributed on Netflix. Did you read this somewhere? I'd love to have you share the article! If not, then let's consider that myth BUSTED. We don't want to make major financial decisions based on conjecture, ya know?

Karen "Kay" Ross

That's a good question, Dan MaxXx - my understanding is that Netflix pays a licensing fee for the rights to distribute based on territories. One initial flat rate to start, with a distribution fee taken out to cover marketing costs, and then paid twice yearly based on performance. But let's see what we can dig up, yeah?

Geoff Hall

Dan MaxXx I didn’t ask them Dan. Sorry.

Jon Shallit

I had heard that Netflix charges to have a film looked at for consideration.

Sam Sokolow

Karen "Kay" Ross - there was time when points in films were whole - gross points - and as stars/directors/producers in the creative community eeked out more power/control/importance and demanded these points the studios came up with something called MAG - "Modified Adjusted Gross" points. So in deals you'd feel like you were getting points but instead of gross points - a penny of every dollar earned - you got NET points after their modifications and adjustments, which they categorized as "overhead & distribution" fees that they would take off the top before you saw your points. So, then everything became a legal position of how the MAG was defined. If you, or your lawyer, didn't know how to navigate that, then you'd get your creatigve fees and, say, 5 modified and adjusted points and the modifications and adjustments could be anything and everything... say the studio hosted a screening and the food, parking, venue and cleanup after was part of "overhead" and executives flying to screenings was part of "distribution" costs. So the hurdles are so high that you never see a cent. A savvy lawyer, who knows the nuances of these deals, can get in the weeds on these definitions and cap those costs, carve things out and potentially put dates when terms shift more in the artist's favor. It takes leverage to achieve it, which is why the best you can do sometimes is aligning yourself with the biggest dogs in the fight by getting what's known as MFN - Most Favored Nations - which means that you are guarahteed the same definitions as the best definitions anyone else gets on their points. Its a shell game and you need to know how to play it - or your lawyer does - when dealing with studios. So if/when you make a studio deal and you are offered MAG, it sounds great, but the detailed definition of the modifications is the whole game. Distributors use the same tactics and you have to bring a gun to the gunfight, legally speaking. I hope that makes some sense and isn't a word salad - they want it to feel like one by design.

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