VOD Digital Distribution: Distributors Vs Aggregators
Nigel Horne
Executive Producer at Viking Film and Television and founder of The Fundamental Filmmaker
Digital technology’s impact on distribution over the last few years has been nothing short of staggering. The revenue streams for films have changed out of all recognition because of this and changes in how consumers access content.
The implications for filmmakers have been revolutionary. No longer are filmmakers bound by the traditional model of film sales. You do not need to deal with a whole series of middlemen (sales agents and distributors) to get your film seen by an audience. The traditional system can be bypassed completely if you are so inclined. How? Well one option is by using an aggregator. But who are these aggregators, where do you find them, what do they do for you and when should you use them? Good questions.
Evaluate Your Film Distribution Options
You should have evaluated your distribution options and formulated a plan at the inception of your film. Your budget, cast and your individual goals will, to a large extent, determine these options. For example if you have a budget of $1mil then you will not be going down the autonomous (DIY) distribution route as you will have a named cast and a sales agent who has been attached to the project since before the shoot….hopefully. As an aside I sat next to an exec producer on the train on the way to the EFM in Berlin. He showed me his promo bumf for a London gangster film in which he was investing. I asked him the budget. It was one million pounds. I looked again at the material. I didn’t recognise a single actor. And these were the lead actors. I wished him luck. He’d need it. You don’t recoup ￡1mil with a no name cast. (He would probably have been exaggerating the budget, as everyone does, but the same goes for a ￡500,000 budget). You need names. Don’t believe anyone who says you don’t. This guy had a producer who was telling him he could make his money back with a no named cast. (Not cool).
So you have a good quality, micro to low budget film completed. In an ideal world you will have 5,000 true fans chomping at the bit to download your film. This is true whichever route you take, either traditional or autonomous, as demonstrating an audience will help immensely with attracting representation of your film. You may have planned to go the autonomous route from the get go or you may have planned to get a good distribution deal first, but then fell back onto your planned autonomous path when you didn't succeed attracting one. (Did you notice how many times I deliberately used the word “planned” in that last sentence?) You do not want to be in the unpleasant situation where you have assumed you will get distribution and then fail without a back up plan. (Any good film business plan will have these options mapped out for any potential investor). I have underlined the word good in the above sentence because there is nothing worse than signing a bad distribution contract. Having no distribution contract is a better option. So you should know when to say no. (...and get a media lawyer to check any contracts).
Vimeo - a great option for those filmmakers who develop hives at the thought of dealing with distributors or aggregators.
Do you need or want an Aggregator for your Digital Film Release?
We have now established that you are either a producer who doesn’t like the idea of forking out up to 50% of your film’s revenue to a distributor or a producer who has tried and failed to get a good distribution deal. Your next option is to decide whether you need an aggregator or not. (Yes, you can self distribute on VOD without an aggregator). You will have formulated various plans from the inception of your film (I know I keep saying it…but it’s important!) that set out in detail your distribution strategy. If your plan was always to go the autonomous route then you may have had an aggregator on board from the very start. (There are some that help with marketing, audience building and even crowdfunding). You will have decided on the aggregator of choice and budgeted accordingly. (Some aggregators charge a lump sum to handle your film). At the very least you will have researched who the aggregators are, what they do and how their fees are structured.
So what is an aggregator, and how do they differ from your average distributor?
Generally, distributors curate their catalogue of films, by which I mean they watch your film and make a decision whether or not they want to license it. They either…
- have close relationships with the individual VOD platforms and so will present your film directly to them themselves or
- they do not and so will have to use a middleman who does have those relationships in place. This middleman is called an aggregator.
The good news for autonomous or DIY distributors is that some aggregators work directly with filmmakers, however they usually do not have access to all the platforms. But they do not usually curate the films they handle. So as long as you stump up their fees (usually around $1000) they’ll place your film onto VOD platforms. Some have revenue share recoupment models with no up front payment.
A Distributor’s Remit….
If you are working with a distributor (as opposed to an aggregator) they often charge $800-$1000 on average, for encoding and QC’ing a 90 min feature. This will get you onto all non-curated platforms and, if accepted, also onto the curated platforms. Remember that a distributor will create new digital artwork and deal with any classification requirements. They also, in theory, market the film in their territory. All distribution costs will be recouped by the distributor before they work out your royalty. You may or may not have received an minimum guarantee from them. If you did they would recoup this as well before your royalty split.
So what does an aggregator do?
An aggregator will encode your film to the specs of a particular platform, QC it and then deliver it to them. They create a package that includes layered artwork, (that you will have to create), stills, metadata and are able to, if desired, create closed captions and subtitles.
As an autonomous (DIY) distributor you will need to create A1 artwork. There are multiple designs for both Amazon and Itunes.
Aggregators’ business models vary from an upfront charge with no rev share, to no upfront charge with rev share. If the production process has made you cash strapped then obviously the no upfront fee option is attractive, if you can afford the $800+ that will be charged in an upfront model then that may be worth it.
Aggregators may not be able to supply to all digital platforms, for instance, in the UK they are usually limited to Amazon, iTunes and Xbox. (Remember you can access Amazon directly without the need of an aggregator). They often charge a larger amount for the first platform, usually iTunes, then a smaller amount for every additional platform.
But there is nothing stopping you from using an aggregator for the bigger platforms and, because your relationship with the aggregator will be non-exclusive, you can put your film on platforms that do not require aggregators or distributors. For example Amazon.
As an aside…Once on iTunes in one territory, you can switch it on in other territories without incurring any further QCing costs. These territories must need no other technical specifications (closed captions or subtitles for instance), or classification requirements. For example, you can put your film onto iTunes in the US if you have it on iTunes in the UK without incurring any further QCing or encoding costs. But you will need closed captions for the US.
A brief note about marketing your film….
Marketing from a filmmaker's perspective.
So you have your film on a number of platforms. Great. Now what? Well, either you have a large fan base, or as I call it, your “Clan”, or you don’t. I will be dealing with the whole marketing aspect in another blog, but suffice to say that at this point - Would you prefer to have 5 thousand true fans to whom you can email the link to iTunes or your Vimeo page, at a press of a button…or would you not? Mmmmm…?
There is a lot more information regarding digital distribution in the 2021 New Edition to my book "A Handbook to Digital Film Distribution" that will be published soon!
If you have any queries or feedback regarding this blog or if you would like me to cover another topic whether it's on film distribution or production please let me know in the comment section below...
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About Nigel Horne:
Nigel Horne, MSc, BSc, has over 20 years business experience in the UK Film, Television and Media Industry as a Screenwriter, Producer and Film Distributor.
He is head of content acquisition for Silversheaf Media, a UK-based film distribution company. He is also an executive producer at Viking Film, and creates original content (film and tv) for Cinema, TV and online, including the award winning World War Two thriller feature film “Soldiers of the Damned” and black comedy feature, “The Wedding Tackle”, starring James Purefoy and Adrian Dunbar. Nigel’s work has been broadcast by BBC, C4, Sky movies and sold and theatrically released internationally.
Nigel holds an MSc in Business Management from Durham University Business School.