A Distribution Surprise you may or may not know…Hello, E&O.

By Greg A. Sager – July16, 2017

So you about to make a no/low budget independent film, well, kudos to you. Seriously, it truly takes some big “cojones” or lady “cojones” to decide to make an independent film, especially if it’s you first.

Getting a completed film in the can is going to be one of the biggest challenges you’ve ever faced. Do you have a distribution plan? But wait you say…I haven’t even shot my film yet, why do I need a distribution plan? Well I hate to be the bearer of bad news but you do.

Distribution is not easy nor is it cheap unless you’re just planning to use it as a calling card and slam it up on YouTube for free, but if you’re planning on hitting any of the major VOD streaming platforms or Cable/Broadcast markets well that’s where its going to start to cost you.

Whether you plan on self distributing or selling the rights to a distributor you’re going to need a game plan going into it, like where you want people to see it, who is your audience and what distributors are you planning to approach. But beyond that and what most first time filmmakers overlook (including myself on my first film) are the costs of distribution. This is where the title of this article comes into play.

One of the first things right out the gate that you will need to look into is E&O insurance (Errors & Omissions) before you can even begin to deliver your film to a distributor. E&O will run you about $5-$10K once the dust settles no matter what your budget was just to get it out into the world presuming you want to make money from it that is. This is just one of the many thing first time filmmakers and producers overlook when making their first film and what I like to call the “base costs” of distribution. So budget accordingly right from the beginning. It will be more painful and costly when you get to the distribution point and the money is there for this.

Most distributors require E&O insurance especially if you are going to release on certain platforms in North America such as VOD, broadcast and cable. Some distributors will cover this costs for you but understand you are still paying for it at a marked up rate and this is a “recoupable” cost for them, meaning they are going to get that money back before you see a dime.

Another over looked repercussion of E&O insurance is the lawyer fees associated with it. You see, for your film to even be eligible for E&O insurance you need to have an Entertainment Lawyer look over all you contracts, releases, clearances, chain of title and so on just to basically sign off on all the legalities of a production so the company assigning you the insurance is satisfied that there is very little chance of them getting sued and having to pay out on the policy for any of a multitude of reasons. Any of which can go something like this…Oh look we missed getting that release signed for that extra prominently displayed in the background. Or, the painting we hung on that wall in that scene is copyrighted. Maybe it’s, I thought you got the clearance on that piece of music, oh, I thought you did. Then there’s, oh wait..there’s a coke can on the table, Oh well, I’m sure the big faceless corporation won’t mind us putting it the movie without their permission will they? Of coarse they will!

Those example are just the tip of the giant pile of things the lawyer will go through and make sure that every piece of paper work is in place for, for every element in the final cut of your film. When you come out the other end of the E&O process just be prepared to expect to see a $3-$5K bill from your lawyer (plus the actual cost of the policy) at which point you will then be the proud owner of E&O insurance for your film.

So whether you are planning on going through a distribution company or self distributing your film yourself this is one thing you need to plan for right from the budgeting stage. Just remember it doesn’t matter if you’re making your film for $1000 or $100,000 don’t forget to budget for the E&O insurance.

Now that you have E&O your film is ready to go through “QC” (Quality Control). Oh, wait, did I not mention anything about the QC process your film now needs to go through? Oops, my bad. As they used to say on the beloved show ‘Tales of the Riverbank’ with Hammy Hamster…well, that’s another story.

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