The My Hollywood System
Chapter 33

After shaking hands with Carl and George, Will asks George for health. He almost had a heart attack at the end of the movie, and Will was afraid he would die of his old age.

George, however, seemed like a loud madman, laughing and reminiscing about the past when he told Will how much effort they put into the movie 'Janitor of the Asylum'.

“Yes knew, long ago, when we started shooting that movie, even though the idea of the movie was very unique, it greatly influenced the acting of the main cast in that movie. Especially because of the raw expression we need, which is the main material to make a film with the technique of Found Footage success.”

George paused and added, "Although the film worked, I have an instinctive feeling that your film will most likely surpass that one."

Will smiled, “Thank you very much. I'm glad that all of this worked well for us. Everyone in the crew, from the main cast to the editor, has spent hours on this and has tried to make it as realistic as possible.”

George nodded, “Undeniable. I have to say, if this movie becomes a hit, it will most likely change the lives of everyone involved in this project.”

"Cross." Will replied, “I also have high expectations for it.”

George thought for a moment and then said, “Let's continue with the distributor agreement discussion. I am very excited about this film. It's been a long time since I last saw a horror movie that made a splash and thrilling.”

…

The filming process is said to have only been completed when the film is distributed to the public. A film is distributed through various methods such as through theater, OTT platform, DVD and so on. Distribution agreements are negotiated between production companies and distributors.

The distribution agreement specifies the region in which the film is planned to be released. Regions can be worldwide or may be limited to a specific region or country. Long distribution time period added. The agreement specified the number of cinemas/screens on which the film would be shown. In it are also set obligations and rights of each party. Promotional and advertising activities approved by the parties are provided in detail.

The agreement will also have a detailed clause on the collection and remuneration of each party. For example, if it is a theatrical release, the agreement clearly regulates the amount or percentage of daily collections that are eligible to be received by distributors, producers and theater owners. The amount can vary according to the number of days the movie is playing in the cinema.

Typically, movie distributors earn about 10-15% of total box office revenue, and thirty percent go to production houses. However, Will's case is quite special.

And to understand why Will's case is special enough, we have to understand how box office movies are distributed.

The way film revenue is collected and distributed is known as Recoupment Waterfall. Revenue came from various sources and the money was then returned to the filmmakers through a number of third parties. Along the way, these third parties can earn back the money they spent promoting the movie and also charge a pre-agreed fee for their work. What is left after a party pays the fees and maintains their fees will be passed on to the next party.

This can be easily understood using the following waterfalls:

[Total Income: From theater, non-theater, VOD, home ent., television, extras.)

In this section, about 40-70% of revenue is saved by exhibitors, for example theaters.

↓

[Income received to the distributor.]

Let's say 60% comes to distributors, from which about 25%-35% is taken by distributors for publication and advertising.

↓

[Sales agent]

The sales agent, or sales company, acts on behalf of the producer to sell the rights to independent films or TV dramas to distributors, who then release the film on various platforms (cinemas, TVs, DVDs, etc, Blu-ray, streaming platform). Sales agents negotiate with distributors based on sales estimates and a detailed assessment of the commercial value of production.

↓

After sales agency cuts and crew payments, about 10-25% of total box office revenue lagged in the pockets of investors and producers.

…

The explanation above is the most fundamental explanation of the complicated structure of the film industry, and what makes Will's case special is that he is the Producer, Director, and most importantly, the director, he is also a Sales Agent because he himself came to negotiate the contract. .

And because of the excess genre, the part he would get would be great.

Right now, 40% of whatever a box office movie achieves will go to Will's pocket.

But that doesn't mean Will will be satisfied with this. He wanted to get the largest portion of pie on his plate.

And another plus is that, although Wheel Works Studio CEO George Carter was enthusiastic about the film, it was mainly because of his love of the horror genre.

From a business point of view, the film is a huge risk.

And this was why he did not plan to put his toes too deep into this.

“30%. That was my last offer.” George said, "My company will handle all advertising and publications."

"30% is too high for this movie," Will shook his head, "This movie doesn't need a lot of advertising. This is a horror genre, and we will create curiosity among the audience, and it will serve as a spark to trigger this film.”

George pursed his lips, "What's your counteroffer?"

“8%.”

“8?!” Both George and Carl were shocked. “It's too low. I estimate the film will reach one to three million at the box office, and given its budget, it will be considered a big hit. However, eight percent of it is too low.”.

Carl added, “It's not even half a million as expected. And do not forget that we are considering the highest possible box office number.”

Will shook his head, "8% is my last offer."

"What if ..." George thought for a moment and asked, "What if the movie fails? Wouldn't I face a huge loss? Don't forget I also have another shareholder.”

"What about this ..." Will thought for a moment and added, "Because you think this movie will give you 100-300rb with 8% off .. How about I give you 200rb as an upfront payment?"

“Hm?” George narrowed his eyes, "You're giving this, not 12%?"

"No." Will shook his head, “You will now own 8% box office shares. But I also have a condition if you accept this deal.”

"8% ..." George asked, "How is the condition?"