How to Sell Rights to Your Digital ProductsThere are three main ways you can sell your digital rights, none of which are mutually exclusive. You can have an aggregator or distributor sell the content on your behalf, do it all yourself, or use a combination of both.

What is an Aggregator?

An aggregator is a company that has a pre-established relationship with major buyers in the digital distribution area and acts as the content gatekeeper. Many of these aggregators have already been in business because of DVDs. In the beginning, companies such as iTunes and Hulu would accept filmmakers on their platform, but with an overabundance of films, they became overwhelmed and now only take digital products from aggregators. Aggregators typically take between 15-30%.

Since iTunes makes the most money for filmmakers, it is important that aggregators establish a relationship with the site.

Who is New Video?

This popular aggregator for independent films works with companies such as iTunes, Hulu, Netflix, YouTube, Sony PlayStation, Cinema Now, and Microsoft Xbox/Zune to name a few. They currently charge 15% and will soon be offering digital content globally via VOD platforms. This company has a great reputation within the independent filmmakers’ community.

Another Option

Gravitas Ventures works as an aggregator for VOD. They release films in one of two ways: they either use Warner Brothers for digital distribution or they use Time Warner and Comcast. This company utilizes different marketing avenues to promote the films with Warner Brothers. They program between 20-30 hours of films monthly for over 40 different independent satellite, cable, telco, and online VOD companies in order to reach millions of homes.

The Job of a Distributor

Aggregators choose the content, present it to a variety of online services, and prepare it for delivery. They tend to function like a distributor because they create a strategy to sell your rights and distribute them. While aggregators may have established relationships with certain companies, a distributor will have relationships with companies all over the world.

When looking at entering into business with a distributor, it’s important to know if the company has access to every type of platform. If it doesn’t, make sure to include the areas not covered in the contract as territories you can address with another company. However, it is much easier to have all of your digital rights under the same roof so that there is less confusion regarding territories or terms.  You can benefit from the deals the distributors already have in place.

Example of a Distribution Company

One distribution company, known as Cinetic Rights Management, began as a link between filmmakers and the audience. Its rates range in the 25 to 50 percent and are higher other aggregators’.  This company focuses on new movies and movies that did not get the attention they deserved on the first go round. The company also focuses on Internet releases for specific niches, productions that are cast driven, and movies that have received a fair share of word of mouth.

DVD Fulfillment Companies

DVD fulfillment companies help when a filmmaker wants to sell his own digital rights. This can be done through a website or another party that is connected to the website. This company will collect money as it delivers your product, taking their fee off the top before transferring it to the filmmaker.

The Hybrid Approach

In this case, a filmmaker would choose either a distributor or an aggregator, but also maintains her own website, which allows her to sell to unaddressed locations or territories.

Hybrid Distributors

The company IndieFlix operates with filmmakers and their business in both DVDs and digital rights. It uses a social networking platform to encourage successful filmmakers in accessing the right audiences. It is non-exclusive and takes 30 percent of the distributions. They work in PPV and DVDs and also sell to traditional stores. This company also organizes offline marketing, festivals, event screening, and more.

Before You Sign on the Dotted Line

Always have an attorney review your contracts before signing. The attorney will take into consideration the filmmaker’s rights, cost of encoding, covered territories, timelines, terms, third party assignments, editing rights, website links, and performance clauses. 

Negotiating with Online Sites

When dealing with online sites, it’s important to remember all of the above information. A filmmaker must understand the difference between worldwide sites that allow for streaming of videos versus a download in which the purchaser owns the copy. These can vary. Streaming rights should be clear and limited to streaming alone.

Exclusivity protects the filmmaker and is best when limited in time. Escape clauses can be beneficial for more lucrative deals. They ensure that there are no third party assignments, which means the company can’t just turn your hard work over to someone else.

Holdbacks are as important as their scope and allotted time. Include a clause so re-edits can only happen with the filmmaker’s approval. Address accounting issues such as date of payments and schedules of monetary gains. Finally, set marketing or publicity dates, methods, and frequency.

In a Nutshell

Even though a filmmaker may have done extensive research into the laws, rights, and the process of digital distribution, it is imperative to have an attorney who is well versed in these issues and on board with the project.

Although the filmmaker can negotiate and decide on the terms acceptable to the project, an attorney can clarify any legal terms or issues. When filmmakers enter the negotiation with a lawyer, digital distribution companies are more likely to be more diligent and forthcoming in their negotiations.