US $6.

00

TOOLS FOR SELLING

YOUR FILM OVERSEAS:
A DO-IT-YOURSELF REPORT

By Ted Chalmers for

www.movieplan.net
© 2002 Chalmers Entertainment Corporation
 TOOLS FOR SELLING
YOUR FILM OVERSEAS:
A DO-IT-YOURSELF REPORT

By Ted Chalmers for

www.movieplan.net

Disclaimer: This report is not to be construed as legal advice in any matter or form. The
examples used are not based on any actual project, and the hypothetical dollar amounts
are shown for placement and layout purposes only.

This report will deal with the necessary tools you will need to properly track your sales
progress. these are mostly systems for tracking data regarding your sales efforts. Many
of these systems apply to most sales related industries, but some are particular to the
foreign sales industry.

1. Contact Database

This is your primary tool in any sale industry. This is your list of potential clients whom
you will contact in your sale campaign. You may buy your initial contact list, but over
the years it will become uniquely your own. That is you will add new buyers, delete old
ones that are no longer around, change information that is out dated, etc. A great source
for a database of Foreign and U.S. film and TV buyers is MTG Media
(www.mtgmedia.com) and The Hollywood Creative Directory publishes a Foreign
Buyers Directory (http://www.hcdonline.com/).

There are many contact management programs out there. Many are good but you should
find one that is set up for international addresses. You can also use a good database
program such as the one found in Microsoft Works. Its easy to use and sufficient for
your needs. I use Microsoft Outlook (not Express). But, many companies use ACT! and
Goldmine.

If you are not using a computer then you will have to keep your contact in a bound book
or rolodex. You may also want to use a direct mail service that can track your database
on computer for you and perform your mailings as needed. Be sure that it is a service
that specializes in international mailing lists.

You can also keep additional note about your clients as you see fit. Many sales people
like to track family information, birthdays, etc. In the this business, it is not really
necessary as many culture do not allow for such casual acquaintances.

Another good aspect of contact manager computer programs is that you can keep your
progress attached to each clients data. You can keep a record of the last time you
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contacted them, what was discussed and when you should contact them again.

Manual systems would include ticker files, folders that you keep copies of
correspondences in that need to be followed up after a certain amount of time passes.
You can have one file for each week in the month. Then, rotate the files on a weekly
basis and deal with correspondence in each file, moving it on to the next week for further
follow up. Or you can have just one file called "follow-up" where you keep everything
you need to follow-up on. After you have followed up three time, you should put it
away. Chances are nothing will come of the pursuit at that point.

2. Client Files

You should create a filing system that is categorized alphabetically by territory. A

complete list of territories is attached at the end of this section in Exhibit B.

You should two hole punch the topes of these files and insert the two prong clasps on the
right hand side. then, as each correspondence is filed you can punch it and put in the file.
Keep your correspondences organized by chronological date with oldest correspondence
at the bottom of the folder. If the whole file is kept like this it will provide anyone with
an easy overview of how a deal is progressing. Be sure to keep copies of all your
outgoing letters and faxes. Buy a copier or use your fax machine's copy command. You
will need these at some point.

Once you get to a deal memo (more later) all of the correspondence for that buyer should
be removed from the territories general folder and put into its own folder with the
correspondence on the right side of the folder and the deal memo or contract on the left
side (both two hole fastened at the top). Then keep this buyers file next to the territories
general file in the file cabinet.

I like to keep active files on my desk. That is, files where there is current activity with
regard to sales. I use this instead of a follow-up file.

You may also wish to file your correspondence in a general chronological file. this will
make easy to find a document that you think you sent out last week or last month. Keep
them by quarter or month depending on your volume. This can be just for outgoing
letters if you want. This may be overkill. It’s up to you.

Keep up on your filing at least on a weekly basis. Otherwise, it will bury you. You will
be surprised at how much paperwork there is in this business. The rule is don't throw
anything out. keep it all. You may need it someday.

3. Availability Lists

This is the key tool in selling your film. Because you are not actually selling a physical
item like traditional export (although you will deliver physical materials) you must keep
careful track of the licenses you make and the licenses that are available in each territory.

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More than that, which rights for which film in each territory. By which rights I mean
which media, video, television, theatrical... these are all different rights and can be sold
together in an All Rights deal or can be broken in out and sold as Video Only and
Television Only. Within each rights there are yet even more sub categories such as VCD,
Video cassette and DVD for Video and Pay TV, Free TV, Terrestrial TV, Satellite TV for
Television. You must keep track on all of these rights so that you can properly license
your film.

When a buyer makes a deal with you, he will buy certain rights or all rights to a film for
his territory. A territory can be a country like Japan. But, sometimes a buyer will buy
rights for German Speaking Europe. This will include countries other than Germany, like
Austria and Switzerland (which also speaks Italian and French). So this kind of contract
will have to carefully recorded in your availability list so that you do not make a double
sell for the same rights and same film in the same territory.

The best way to keep track of these rights is on computer in a database or spreadsheet.
You can also use an accountant’s ruled column paper or the enclosed blank sheet (ready
for duplication) that is at the back of this manual.

In any case you will be dealing with an X and Y axis. The X being the left column of the
sheet and the Y being the top row of the sheet. You should have one sheet per territory.
Remember territories are not countries. Territories like Benelux include other countries
such as Belgium, Netherlands and Luxembourg. Using the territories list, create a sheet
for each territory.

Across the top of the sheet you will see the different rights that are available, being
Theatrical, Video (All Video), Free Television, Pay Television and Satellite Television.
The title of your film or films would go on the left column. Since you have made no
sales yet, the rows to the right of the title will be blank. If you have any deals you would
put them in the appropriate columns denoting a license by the year of expiration. This
will always give you a valuable bit of information every time you are reviewing your
avails. Many buyers like to buy a film’s re-issue rights BEFORE the current license
expires. If you are unencumbered to do this then you will have the date the license
expires right in front of you.

As your film library grows, you will have the avails for all your films list on a territory by
territory basis. When you are taking a meeting it will all be there in front of you.

You can make photocopies of your avails and send them out to your clients. You can
also keep a master set of our avails in a bound note book that has the prices for each film
actually imprinted on the avails. DO NOT GIVE THIS COPY TO YOUR CLIENTS. It
is usually the take price and it will give your hand away to the lowest price you are open
to accepting. Only give your buyers the asking price (more later).

As I said, the best way to maintain an availability list is through a computer and a
database program. There are commercially available Rights Tracking software programs

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but they start at $5,000.00 to set up and can go as high as $13,000.00. On my website, in
the members area, you will find a simple rights tracking spreadsheet that you can import
into your existing spreadsheet software.

4. Prices

Of course, another helpful tool is a price list for each territory. But, in the foreign
distribution arena, pricing is very complicated. Since your dealing with a global
economy, the prices change drastically from territory to territory as the years go on.
What was a “boom” country for video last year may be a total “bust” this year. Pricing is
based on several different conditions for each territory:

Historical: These are licenses that were paid in recent years. These historical prices are
your best bet to getting an accurate pricing plan for each territory. The trouble is, if you
are new you don’t have history to get your prices. Many of the prices that I will give you
are based on historical pricing.

Current Market: These are factors that are currently effecting the territories. These are
usually political or economic situations within each country. To get a feel for these
conditions you will need to keep up on world events by reading TIME, NEWSWEEK,
the newspaper international sections and the international section of THE
HOLLYWOOD REPORTER and DAILY VARIETY. They have international issue that
come out weekly. You can get a good feel for dramatic turns in each territory by reading
these. If you are not that into reading so much, then you will have to ask around to see
how market conditions are in each country. You can also get a lot by just watching the
network evening news or CNN. Don’t rely solely on what the buyers tell you. They will
always whine about their economic conditions to drive the price down. Don’t be too
concerned with these gripes. A good rule of thumb is that if you give your asking price
and the DON’T cringe, then you have asked too little for the product. You want them to
think it’s too high. It gives you both room to negotiate. But, if you are way too high,
they will simply walk away. So try to be as knowledgeable as possible. An example of
market conditions that are disastrous are things like war and disaster. This can all but
eliminate a territory from the map economically and will take years to recover. These are
obvious situations that you can catch.

Budget: The budget of your film will also affect the price you will get. They will always
ask your budget. If it is a really low budget affair, just say “around a million” or “under a
million.” This can apply to almost anything. If the film looks good, they can try to guess
but it will usually be a higher guess in your favor. If you truly know that your budget is
$1 million or over then you can tell them the truth. Generally, people always exaggerate
in this area. A $1 million project can easily double or triple during negotiations. The
thing is, most buyers will know your doing this and they will discount in their head
accordingly. Usually, it all works out in the end.

Split Rights: Obviously, if you are selling All Rights you will get a better price than just
video and TV or video alone. But, if your project does not have theatrical available

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because there is no negative or prints, then you can only sell video and TV. You will get
a better price usually by selling Split Rights. But, then you must deal with the rights
window, which can a headache. The windows are the dates in which a right is available.
For instance, video will have a 1 year window in most territory. So, you will have to
Holdback TV exhibition for 1 year from the Video Release date. An all Rights Buyers
will deal with all this. Here are the typical windows:

• Theatrical (3 to 6 months)

• Airline/Hotel (60 Days)

• Home Video (3 to 12 Months)

• Pay Per View (60 – 90 Days)

• Pay Television (1 to 2 Years)

• Free Television, Basic Cable (2 to 3 years)

In order to maximize each window, the licensee for each window will want you to
Holdback the exhibition of the next window for the term of their window.

Production Year: Older films will get less license fees. It is just a fact. The older your
film, the more it will have to be discounted. How much is up to you and the buyer.

Re-Issues: these are films that have already been released in a territory and are now
available again to re-license. Typically, the rule is that you can re-issue the same rights
for 50% of the original price. If you know this price then you can base your prices
accordingly. Otherwise, you will have to wing it. Simply discount the prices by 50%.
That should do it.

Box Office: If a film does good box office numbers, especially in the U.S., the price of
the film can go up in the remaining territories. For example, THE BLAIR WITCH
PROJECT was sold to many countries well before it became the huge hit here in the U.S.
These buyers got the film for a good price. But, the countries that waited had to pay a
much higher price, as it was such a huge hit in the U.S.

Another great source for pricing info is in the trade papers, Hollywood Reporter and
Daily Variety (collectively referred to as “the trades”) again. They publish a chart in
every market issue (market issues being for AFM, Cannes, etc.). These prices are usually
WAY higher than you will ever get. But, it still give you a reference point.

You can also ask other distributors what they get in a territory. But they will almost
always lie and bump up the figures. Its hard to get anyone to admit what they actually
received in a territory. Its just the way the business works.

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So, I have included here a chart of prices in the attached price sheet. I also have a
spreadsheet which can also quickly calculate prices in territory based on the film's budget
available on the member’s section of my website at www.movieplan.net. I will also be
posting and updating current prices on my website.

These prices also include highs and lows. These can also be called your ask and take
price. But, really an ask price is higher than historical high and conversely a take is
lower than a historical low. But, you can go even higher and even lower. It all depends
on what you work out with the buyer. If someone makes an offer that is below your take
price but there are no other offers it could be money in the bank. You might want to just
take it. It all depends...

If you have specific questions or require advice in the area of Film Distribution, etc., Ted
Chalmers is available for individualized consulting. For rates and information, please
visit www.movieplan.net or email to tcprod@usa.net with the subject: Consulting.
Thanks.

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© 2002 Chalmers Entertainment Corporation

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 Exhibit A

Sample Availability List

AVAILABILITY LIST FOR TAIWAN

TITLE THEATRICAL VIDEO/DVD PPV PAY TV FREE TV

Alien Head AVAIL AVAIL AVAIL AVAIL AVAIL

Bad Men AVAIL AVAIL AVAIL AVAIL AVAIL
Bella 1-Jun-05 1-Jun-05 1-Jun-05 1-Jun-05 1-Jun-05
Bonzo takes A Bride AVAIL AVAIL AVAIL AVAIL AVAIL
Chasing the Sky AVAIL AVAIL AVAIL AVAIL AVAIL
Creature Time AVAIL AVAIL AVAIL AVAIL AVAIL
Dark Intent AVAIL AVAIL AVAIL AVAIL AVAIL
Dark Leaf: The Movie 15-Aug-08 15-Aug-08 15-Aug-08 15-Aug-08 15-Aug-08
Darkworld AVAIL AVAIL AVAIL AVAIL AVAIL
Demon Word AVAIL AVAIL AVAIL AVAIL AVAIL
Down The Mountain AVAIL AVAIL AVAIL AVAIL AVAIL
Fear Factory AVAIL AVAIL AVAIL AVAIL AVAIL
Flower Soup AVAIL 2-Mar-10AVAIL AVAIL AVAIL
Forward Motion AVAIL AVAIL AVAIL AVAIL AVAIL
Horror Night 15-Aug-08 15-Aug-08 15-Aug-08 15-Aug-08 15-Aug-08
Indian Ride 2 AVAIL AVAIL AVAIL AVAIL AVAIL
Kill The Day AVAIL AVAIL AVAIL AVAIL AVAIL
Laugh Riot AVAIL AVAIL AVAIL AVAIL AVAIL
Man from Thousand Oaks AVAIL AVAIL AVAIL AVAIL AVAIL
Over My Dead Body AVAIL AVAIL AVAIL AVAIL AVAIL
Past Tents 15-Aug-08 15-Aug-08 15-Aug-08 15-Aug-08 15-Aug-08
Porcupine Man AVAIL AVAIL AVAIL AVAIL AVAIL
Prison Planet AVAIL AVAIL AVAIL 15-Apr-05 AVAIL
Rover's Day AVAIL AVAIL AVAIL AVAIL AVAIL
Suicide 2 AVAIL AVAIL AVAIL AVAIL AVAIL
Thunder Roar AVAIL AVAIL AVAIL AVAIL AVAIL
Werther AVAIL 12-Apr-03 30-Jul-03 2-Jul-05 AVAIL

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 Exhibit B

Example Price Sheet

Title: “Alien Head”

TERRITORY ASK TAKE

ARGENTINA/PAR/UR $10,000.00 $5,000.00

AUSTRALIA $20,000.00 $10,000.00
BENELUX $20,000.00 $10,000.00
BOLIVIA $500.00 $250.00
BOSNIA $0.00 $0.00
BRAZIL $20,000.00 $10,000.00
BURMA $500.00 $250.00
CANADA (English) $20,000.00 $10,000.00
CANADA (French) ? $10,000.00 $5,000.00
CENTRAL AMERICA $1,000.00 $500.00
CEYLON $300.00 $150.00
CHILE $5,000.00 $2,500.00
CHINA $10,000.00 $5,000.00
COLUMBIA $3,000.00 $1,500.00
CZECH REPUBLIC $5,000.00 $2,500.00
DENMARK $10,000.00 $5,000.00
DOMINICAN REP. $2,000.00 $1,000.00
ECUADOR $2,000.00 $1,000.00
EGYPT $5,000.00 $2,500.00
FINLAND $6,000.00 $3,000.00
FRANCE $100,000.00 $50,000.00
GERMANY/AUSTRIA $100,000.00 $50,000.00
GREECE $3,500.00 $1,750.00
HOLLAND $0.00 $0.00
HONG KONG $5,000.00 $2,500.00
HUNGARY $4,000.00 $2,000.00
ICELAND $4,000.00 $2,000.00
INDIA $5,000.00 $2,500.00
INDONESIA $4,000.00 $2,000.00
IRAN $0.00 $0.00
IRAQ $0.00 $0.00
ISRAEL $10,000.00 $5,000.00
ITALY $80,000.00 $40,000.00
JAPAN $100,000.00 $50,000.00
LEBANON $2,000.00 $1,000.00
MALAYSIA $4,000.00 $2,000.00
MEXICO $20,000.00 $10,000.00
NEW ZEALAND $0.00 $0.00
NIGERIA $1,000.00 $500.00
NORWAY $5,000.00 $2,500.00
PAKISTAN $10,000.00 $5,000.00
PERU $1,000.00 $500.00
PHILIPPINES $12,000.00 $6,000.00
POLAND $10,000.00 $5,000.00

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PORTUGAL $10,000.00 $5,000.00
RUSSIA $10,000.00 $5,000.00
S. PACIFIC ISL. $1,000.00 $500.00
SERBIA $0.00 $0.00
SINGAPORE $0.00 $0.00
SLOVAK REPUBLIC $1,000.00 $500.00
SOUTH AFRICA $10,000.00 $5,000.00
SOUTH KOREA $70,000.00 $35,000.00
SPAIN $20,000.00 $10,000.00
SRI LANKA $0.00 $0.00
SWEDEN $5,000.00 $2,500.00
SWITZERLAND $5,000.00 $2,500.00
SYRIA $0.00 $0.00
TAIWAN $8,000.00 $4,000.00
THAILAND $3,000.00 $1,500.00
TURKEY $4,000.00 $2,000.00
UNITED KINDGOM $20,000.00 $10,000.00
USA $200,000.00 $100,000.00
VENEZUELA $5,000.00 $2,500.00
WEST INDIES $0.00 $0.00

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 Exhibit C

INTERNATIONAL RIGHTS DEAL MEMO

LICENSOR
FOREIGN SALES COMPANY LLC
269 South Beverly Drive, PMB 324
Beverly Hills, CA 90212

LICENSEE
FOREIGN BUYER, INC.
11th Floor, No. 10500 Cheng Tu Rd.
Taipei, Taiwan, R.O.C.

Contact: Steven Allen Chiang, President

PRINCIPLE TERMS:

FILM TITLE Alien Head

TERRITORY Taiwan
PRICE/MG (US$) $5,000.00
RIGHTS SOLD ALL AVAILABLE MEDIA
TERM (YEARS) FIVE (5) YEARS
DATE AVAILABLE Now
THEATRICAL ROYALTY N/A
VIDEO ROYALTY N/A
TELEVISION ROYALTY N/A
DEPOSIT AMOUNT $1,000.00
BALANCE DUE ON NOTICE $4,000.00
SPECIAL PROVISION 1 LICENSEE SHALL PAY ALL MATERIALS & SHIPPING
SPECIAL PROVISION 2 NO CENSORSHIP CLAUSE IN LONG-FORM
SPECIAL PROVISION 3

AGREED AND ACCEPTED:

__________________________________ 10/5/02
Seller/Licensor Date

__________________________________ 10/5/02
Buyer/Licensee Date

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