Percent of distribution

1. cubby
   Member

   

   I showed this guy my videos and he saw my potential so he started working with me and now wants me to sign a contract.

   He wants me to make a monthly dvd which he will make 5000 copies of to sell. To make these dvds i go to shows in the city, film them, then edit them down and also film n edit interviews and even film n edit short films to put on the dvd. what percent of dvd sales should i ask for in the contract? He is an entrepreneur with many connections but is just starting to build his company now.

   I'm 20 n didn't complete my schooling for video editing as i just moved to the city to continue it somewhere else and fell short in funds. <-- those are my professional qualifications lol i know i'm not working with much there.

   I greatly appreciate your help and will gladly give you more necessary information that i may have left out! 

   Posted 1 year ago #

2. EarlC
   Moderator

   

   Outside of the assortment of opinions and experience you'll get from your inquiry, Cubby, I STRONGLY recommend you consider the expense of acquiring legal representation. Even then there's NO way to guarantee you'll come out right. Right off the top I'd have to say that no matter HOW great this guy is, or how wonderful the total concept might be, you NEED to have appropriate legal counsel — YOUR counsel, not his, before you commit to something that will take advantage of your creative and productive efforts.

   Posted 1 year ago #

3. cubby
   Member

   

   Yes, with respect to everything you just said i need cash before i can seek legal counsel. So in the meantime i was hoping to get opinions n feedback so i can go into that situation with something to discuss. Know what i mean? You stated your point very effectively tho i'd like you to know. 

   Posted 1 year ago #

4. EarlC
   Moderator

   

   If this guy's putting up all the money then you can demand 50 percent and settle for 15 percent. I personally doubt he'll be willing to accept more than 10 percent. That is an off-the-cuff comment based on some general experience.

   Be aware that there are a LOT of issues that need to be resolved: work for hire, vs partnership, vs joint copyright, etc. Insurances such as errors and omissions coverage, liability, theft, damage, personal injury. Responsibility for releases, talent releases, approval by ALL parties involved in these "shows" whatever they are.

   I wasn't at all trying to be "cute" with you, Cubby, and I very well know and understand about fiscal matters. It's just that when you go whole hog on something like this there's so darn much that comes into play above and below the line it nearly ALWAYS turns out to be more than an inexperienced videographer/editor and unaware businessperson can fathom.

   I've bumped up against problems even on productions where I PAID an attorney to (insert chuckle here) generate an "iron clad" agreement or contract.

   Be aware of the rights you're willing to relinquish and the rights you WANT to retain such as foreign distribution rights, etc. Not knowing the SCOPE of your enterprise I have to say I'd tread carefully with a so-called "gentleman's agreement" or handshake, and I can just bet you your source will want to hedge all bets in his favor.

   Start out making HUGE demands: All copyrights reserved, ownership of all production and its content, rights to use any and all content for personal marketing and promotion, 10 percent of gross sales, full credit on all productions and all marketing materials, labels, cases, DVDs, etc. Joint liability and other insurance coverage responsibility and NO WORK FOR HIRE. See what happens then go from there.

   I am NOT an attorney and all comments/opinions offered are opinion only and do not represent licensed legal counsel or advice. Any action taken by you based on any opinions I offer is at your own risk and I am to be held without liability for any and all claims real or perceived resulting from your use of my opinions. Sorry about the CYA stuff. :-)

   Posted 1 year ago #

5. vid-e-o-man
   Member

   

   cubby, EarlC stated very well that you need to consult a lawyer. If you are short on cash, you might contact a local law school, the bar association, small business administration or local business incubator foundation to see if there might be lawyers that volunteer services for people starting out or with meager means. There are a number of pitfalls in this situation that legal advice can help you avoid. Considerations you should think about: your compensation set-up (monitoring sales and your share), your ownership rights of the video you produce, the releases that would have to be obtained from the shows (performers, venues, music rights, etc.) plus other considerations that others will probably ad to the discussion. You are doing a lot of the work: video, interview, editing, authoring films, etc. A great deal of your time and talent will be expended before you will probably receive any compensation. Maybe if upfront funds are important to you, you could start by being paid for your time (hourly rate or give bid for finished DVD) as you produce the first video or two and move into some sort of contract arrangement as things progress. If you search these forums you will find references to standard video contracts. Good luck with your endeavors. Keep shooting.

   Posted 1 year ago #

6. vid-e-o-man
   Member

   

   EarlC, sorry for being redundant with some of my comments. We must have been typing at the same time. 

   Posted 1 year ago #

7. composite1
   Moderator

   

   Cubby,

   5,000 copies? Earl and Videoman are dead on. You need a lawyer but not just any lawyer. You need an entertainment lawyer and a contract specialist. Entertainment lawyers specialize in deals concerning distribution and a contract specialist will help you put together either a WFHA (work for hire agreement) or a straight contract involving your work as the producer and your cut of the distribution.

   Like Earl said, if your guy is putting up all the cash you'll be lucky to pull down 10% of the profits. What you'll have to do is like most producers do is get your salary and production costs up front in the deal and a percentage of the royalties on the back end (that's where the 10% comes in.) Most distribution companies when working with low end producers usually try to pull the old we'll pay you on the back end (meaning you'll get your money from royalties.) Don't go for that, it's a trick.

   What will happen is in the contract there will be stipulations for the distributor to recoup their expenditures and losses from the gross monies made from the sale of the project. You'll be written in to receive payment from the net monies remaining after the distributor recoups it's investment. You'll be amazed at the myriad of expenditures the distributor will accrue during the recouping period. So, you'll get 10% of what's left of any profits remaining. So if say the first 1000 copies make $40k and the distributor says they expended $39,990 to package, promote and distribute those copies you get 10% of the profits which remain which is $1. Don't spend it all in one place.

   An entertainment lawyer will spot that old chestnut right off and the contract specialist will too. Now, if you can't afford both you better get one or the other! Preferably the EL but the CS at the minimum. Distribution is where all content creators take it in the rear. The golden rule about producing content is; the more capability you have in being part of the distribution process, the more you'll be able to profit from it." Far as that 'gentleman's agreement' Earl mentioned, screw that! Get a lawyer or contract specialist and get the deal written down on paper in plain english. Don't let your having 'short money' make you do something you'll break your back for and end up kicking yourself because you got done.

   H.Wolfgang Porter, Composite Media Producer
   Dreaded Enterprises Unlimited, Inc.
   http://www.dreadedenterprises.com

   Posted 1 year ago #

8. grinner
   Member

   

    Distributors keep 30 percent. That's the norm.

   http://grinnerhester.com

   Posted 1 year ago #

9. composite1
   Moderator

   

   25-30% off the top plus up to 30% for expenses.

   Here's a breakdown of what you'll be up against with an established distributor. It doesn't make mention of the stipulations or deal amendments which will pop up if like in your case the distributor is putting up all the money.

   Making the Deal: what you need to know

   Posted 1 year ago #

10. lomaymi
    Member

    

    I totally agree, you should really get a lawyer. Like Earl mentioned "NO WORK FOR HIRE".  I had one experience where someone was interested in the Internet marketing services that we offer and he wanted to hire me to work as a regular employee in his company. He (and some of his employees) called me several times trying to convince me, telling me that I will have health benefits, life insurance benefits and many other things. I politely told him that our business does not work that way and in order to get our services he needed to hire us as an independent company. He continues pushing me with some new offers, more benefits and I keep telling him that I do not work for hire. So I send him an email with the contract I use for Internet marketing services (written by my lawyer) which it states all the requirements and demands that we have for this service. I also told him that if he was interested in hiring us we demanded to sign the contract in a notary's office. After that he never called back or send me any emails.

    It's important to have legal representation because there are a lot of clever people around that could take advantage of your talents. Another experience I had was that some company my brother work for an internship wanted a video animation of their logo for the next day. I work 6 continuous hours in After Effects making that logo animation and I finish (at 3:00am) it send it to them via email (in a video with our business logo watermark and a low video quality) and we quoted that job for $540. The next day when I woke up my brother told me that they didn't like it and that wasn't what they wanted. Just for that I lost 6 hours of my time and $540, just because we didn't do a signed contract agreement.

    I'm 22 Cubby and I can tell you that having legal backup is the best investment you can make because you will be safe (well you will still get problems, but far less) and people that hire you will take you very seriously. They will not see you as an inexperience business video producer wanting to get his feet wet, they will see you as an aware young business person. Like Composite mentioned "Don't let your having 'short money' make you do something you'll break
    your back for and end up kicking yourself because you got done."

    The meaning of a movie are the characters, the life of the movie is the music, but the magic is in the editing.
    Luis O. Maymí
    Follow me on Twitter @lomaymi

    Posted 1 year ago #

11. Jack Wolcott
    Production Host

    

    As Earl and others have advised, get an attorney. 

    That said, consider this: "To make these dvds i go to shows in the city, film them, then edit them
    down and also film n edit interviews and even film n edit short films to
    put on the dvd" means that you'll be doing a ton of work and not receiving a penny for it. In Vegas it's called "betting on the come."

    I'd approach it this way: I'll shoot, interview and edit for you for $XX per hour. Additionally, I want XX% of the sales. If you don't get paid for your time, and get paid before you turn over the tapes and final edit to the entrepreneur,  you're going to find yourself doing a great deal of work for free. And whatever you do, don't put a nickle of your own money into this project. Even with a contract you'll probably end up getting burned.

    I've been in and out of business for more than 50 years and have seen these warning signs many many times.

    Good luck.

    Jack

    Posted 1 year ago #

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