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June 3 at 8:30am

Alternative Finance and Distribution for Documentaries

By Ted Hope

by Andrew Einspruch

Filmmaker Andrew Einspruch recently attended the Australian International Documentary Conference and wrote a series of articles for the event, which he’s graciously allowed us to reprint here. These articles originally appeared in Screen Hub, the daily online newspaper for Australian film and television professionals.

Cathy Henkel is a producer, director, academic and researcher. She brings all of those skills to bear on her documentary projects, and recently has been looking into what it takes to navigate an independent path as a filmmaker. In a session called Riding the Freedom Streams at this year`s Australian International Documentary Conference (AIDC), she invited documentary makers to brave the waters of a freer path.

Starting off with her nautical theme, Henkel said that you have to decide what kind of vessel you want your business to be.

One option is to wade into the main stream, the province of vessels she called the Good Ship Enterprise. The AIDC is primarily devoted to established and wannabe Enterprise ships. These businesses get their money from three main sources: broadcast pre-sales and distribution advances, government (grants or investments), and the Producer Offset. They are larger businesses with larger staff and larger overheads, and they have worked out how to get deals with the broadcasters and distributors, whose pre-sales and advances are needed to trigger government money.

How does one grow into an Enterprise ship? By persisting with mainstream activities. You get to know the broadcasters and distributors, and learn how to pitch to them effectively. You do what it takes to establish a track record, or you do what the agencies tell you to do if you don’t have one – team up with someone who does. You go to conferences. You pitch at pitch forums (which requires bullet-proof, well-developed concepts). And you tantalise them with your compelling documentary, where you have unique access to a particular world, out of which you can harvest a unique story.

But Enterprise ships become “servants to their funding masters,” as Henkel put it. They may get the business, but they get locked into the rigidity of timeslots, the need to keep their output up, and a loss of freedom in terms of style and format. The distributors they partner with want all rights deals, which means those Enterprise ships can’t plan their own release strategies, and have little hope for additional returns. The government funds they depend on come with strings attached, and it is easy for a project to bog down in contracting and administration. The result can be cash-flow problems, or projects that simply die because they are time critical, and the wheels of progress turn too slowly.

Still want to go that route? Yes? Then go for it. Just know that the river can only accommodate a handful of Enterprise ships. The competition is fierce, and you are likely to smack into what Henkel called a log jam. The simple fact is it is harder and harder for newcomers to crack into the mainstream business. The gatekeepers are harder to get to, and the money they pass out is shrinking. And it’s not like the established Enterprise ships are likely to toss you a rope and help tow you into safe, profitable water.

Then again, you might want to find a path that avoids the log jam. That is what Henkel has been doing for her own projects, and is the opportunity open to the many, more nimble players. She represented those smaller businesses as kayaks, and said they had four “freedom streams” that could provide finance.
Those freedom streams include:

    • Private investment. This source of funds expects their money back, with interest. You have to pitch your project in terms of return on investment. But if they come on board, then the agreements can be done much faster, and the money can flow in quickly. They tend to leave you alone to make the project you want to make. Plus, the investors become your allies, and can open doors to audiences you would not otherwise reach.
    • Grants and philanthropy. Henkel called this “the sweetest finance of all”. Unlike private investors, there is no expectation that you will return their money in any form. It is a grant, which means the producers part of the project equity is higher. You can route the money through the Documentary Australia Foundation, which can benefit the giver with a tax deduction. Charitable givers are looking for returns in the form of social capital and social good. Like investors, they tend not to exert creative influence. You do, however, need to tend the relationship, so they know their money is spent well and they are getting a favourable result. They, too, can be advocates andhelp you reach a broader audience.
    • Corporate sponsorship/investment. Companies can come on board as an investor, providing cash or in-kind services. In that case, they expect their money back down the track. Alternatively, they can sponsor your film with cash or in-kind, which means they don’t expect a direct financial return. The third option is where a service provider agrees to re-invest part of their fee in the project. Facilities deals often take this form. In all cases, though, they want some kind of product recognition or acknowledgement. Plus, you have to make sure you don’t have so much of this that it jeopardises your producer offset.
    • Crowdfunding. Crowdfunding is people making glorified gifts, which means they do not expect a financial return. Like charitable grants, the money becomes part of the producer’s equity, and it is not encumbered with creative strings. It flows in at a predictable time. Just know that crowdfunding is hard work to do well, and you have to make sure that the goodies you offer don’t make the exercise unprofitable.

Being a freedom stream rider is very hands-on for the producer. You have to be temperamentally suited to sticking with your project for years, and doing all the things that otherwise a distributor or sales agent might do. Henkel, for example, has a documentary coming out in in the second half of 2013 called Rise of the Eco-Warriors . She expects that project to significantly occupy her for the bulk of 2014 as well.

That’s because distribution is a big deal, and getting your doco out into the world is what it is all about.

Henkel cited the spiritual godfather of SPAA Fringe, Peter Broderick, who has been preaching a gospel of alternative distribution for years. As a producer, you can access audiences anywhere in the world, using online platforms. You can gather a personal audience who you can take with you from project to project. If you distribute yourself, then the money comes to you, and you can implement a distribution strategy that suits you and your project. Plus, no one will care about your documentary more than you. You can translate that passion into a greater chance of success.

The term Henkel and Broderick use is “hybrid distribution”, which she said involves “Self-management of distribution and direct sales to audiences, combined with selective release of rights to third party distributors such as DVD distributors, TV channels, VOD companies, educational distributors, and online outlets.” She emphasised that it was not about doing it all yourself. Rather, you carefully choose partners who help you – but the producer keeps control. This contrasts directly with a traditional arrangement with distributors, where the producer hands over the product, and more or less waves goodbye.

Just know that doling out small bundles of rights to a variety of partners means the producer has to do more deal-making, sign more contracts, and put up with the additional hassles involved.

A key benefit of this hybrid approach is your direct connection to the audience. In the old model, the producer had no idea who was watching the doco, because that information stayed with the distributor or exhibitor. But direct distribution lets you know who bought your film. As Broderick says, you convert your fans from customers to patrons. They can become active advocates for your work. Many filmmakers, Henkel included, say that one of the best aspects of crowdfunding is that it lets you raise the profile of the project, test whether an audience is going to respond to it, and helps you tap a pool of people who want you and your film to succeed.

In the end, Henkel said the choice is yours. One choice is, “Partnering with the big companies, going the Enterprise way, increasing overheads and trading off freedom for the existing TV pre-sales, old world distribution offers and government funding,” she said. “Or you can combine the four freedom streams with the three traditional stream and experimenting with Hybrid distribution. And have fun along the way.

“The freedom streams are not an easy option. But they offer more control over your own destiny, better returns if you succeed, and more creative freedom.”
Henkel was clear which direction she prefers. She said she did not yet know if this path was sustainable. But even if it wasn`t, she knew that what she learned would help her do it differently in the future.


Andrew Einspruch is a producer with Wild Pure Heart Productions . His current project is the low budget feature film The Farmer.

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leave a comment
  1. Douglas Morse / Jun 3 at 8:30am

    To think that crowd funding is just glorified gifts is a huge, huge misunderstanding of what it is and how it works. If you called it glorified pre-sales, I might agree. Crowdfunding is not begging. It is offering value for pledges and a community that supports a creative endeavor. htkck.st/117INCN

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