When it comes to film distribution, many filmmakers subscribe to outdated release strategies. Not Jack Kelley. He spent the majority of his career working in structured finance in New York. And he was able to leverage his finance background to produce and distribute his new film, Solver.
Jason Brubaker: Tell us about Solver. You filled the film with puzzles to make it interactive and sticky for the audience?
Jack Kelley: Yeah, I think anytime you’re looking at making Indie film you want to have some type of unique angle and our concept was sort of the Goonies meets an escape room. We’re really drawing on that world, a kind of puzzles games, escape rooms, mystery adventures and some analogues would be films like Da Vinci Code or National Treasure… But obviously on an Indies scale. Our movie is set in a small town.
Jason Brubaker: You leveraged this thing called “Solver Puzzle Hunt” to help you spread word of mouth. How did that come about?
Jack Kelley: When we started creating the film, escape rooms had not reached the same level of popularity as today. So when we were brainstorming ideas three years ago, I had only just kind of heard about escape rooms. In that sense we got very lucky with the timing of a phenomenon that sort of supports the kind of world of our film.
Filmmaker Jack Kelley Unlocks Film Distribution In Solver
Jason Brubaker: So it’s not like you were chasing the escape room trend. But at the same time, making a film that appeals to people who love escape rooms can’t hurt.
Jack Kelley: On one hand you’ve got to have a project that you really believe in, that has some interest. But on the other hand, I caution against just basing your film on what’s popular at a given moment. Solver is a film with interesting characters, so you have an emotional story working on one half of your brain, and you have a puzzle solving mystery working the other side of your brain. So we try to create that kind of full experience and I think that, that is in a sense future of entertainment.
Jason Brubaker: When it comes to film distribution, often it’s popular films that don’t necessarily need a distributor that get distribution offers. Because you tapped into an existing market, a lot of distributors expressed interest in your content. But instead of signing a worldwide deal, you split up your rights into what we call a “Hybrid Distribution Deal.” What was your process in deciding to on a hybrid strategy?
Jack Kelley: Film distribution is a complex and thorny issue. Distribution is generally divided up into International and Domestic. A film distributor is going to want everything because it’s just easier for them. They don’t have to worry about the timing of somebody else putting the film out in the US while they’re trying to sell the film in China.
Jason Brubaker: But in your case, you held on to domestic and gave up international?
Jack Kelley: If we decided to fly around the world and attend all the major film markets, what was the likelihood anyone would listen to us? We realized that we needed International Sales Agent. We were able to get one because we have quality film.
Jason Brubaker: And you decided to self-distribute in the US and Canada?
Jack Kelley: For domestic, we wanted to hang on to and control.
Jason Brubaker: When it comes to domestic film distribution, most filmmakers give up control.
Jack Kelley: I was just having a conversation last night with two Indie filmmakers who recently completed a horror film and they’re looking for advice about distribution. I kind of said, “Look there’s no sure way to know exactly what’s going to be the best route because you might get a great worldwide distributor who does a fantastic job. They are totally honest in their reporting. They keep expenses tight and you might wind up making money and more people see your film than they would of otherwise.”
Jason Brubaker: There are still some very good distributors out there… But can they do a better job releasing and promoting a film domestically than a filmmaker with a plan?
Jack Kelley: Most money for independent film in the domestic market comes from Transactional VOD like iTunes and Amazon and other platforms like Google Play. Most Indie films don’t have a big theatrical run and as everybody is aware DVD is probably a shrinking market. Furthermore, Indie films making a lot of money in ancillary markets like education, cruise ship and airlines and things like that… Those are pretty low unless you have a specific subject matter documentary, like vacationing in Thailand. And then Thailand Airways wants to license your documentary.
Jason Brubaker: So for domestic film distribution, you sparked word of mouth with a puzzle hunt. Then you leveraged your puzzle hunt to start driving traffic to your film page on iTunes.
Jack Kelley: Yeah. We actually saw interview you did with the filmmakers from Range 15.
Jason Brubaker: Oh yeah. Those guys are great. And similar to you, they identified their target audience figured out how to reach them to quickly spark word of mouth and make sales.
Jack Kelley: Rather that trying to be successful on a dozen different platforms. they were focused on one platform. And it’s maybe a little bit better to have a thousand people buy your movie on iTunes than it is to have eighty people buy your movie on each of the different platforms.
Jason Brubaker: In addition to your TVOD strategy, didn’t you also have some screenings?
Jack Kelley: When we built up the whole puzzle thing, we also did a bunch of sneak preview theatrical screenings. We didn’t treat it like a regular theatrical run. We treated them as a special preview events and tried to have at least one member of our cast or crew at every event to engage with our fans. That was really successful. We were selling out three hundred seat auditoriums in the middle of snowstorms, because we were really able to focus our efforts. So these screenings plus our PR marketing helped people gain awareness about the film on TVOD.
Jason Brubaker: When you got into TVOD, you decided to self-distribute. Was that a tough decision for you? You decided to work with Distribber. And in full disclosure (for our readers), in addition to writing for this site, I work full time at Distribber. So I know from some of our earlier conversations that you had many traditional distribution options on the table. What ultimately led you to decide on a self-distribution strategy for domestic digital?
Jack Kelley: We had a about five distribution offers and some of them were from pretty reputable groups. We actually went down the road with one group. And we actually really liked those guys. But it really boiled down to economics and sort of control of the property.
Jason Brubaker: Can you give an example of “control?”
Jack Kelley: So if you’re an Indie filmmaker, your goal is to distribute your film. You want people to see your film and you want to make your money back so that you can make another film. Basically when a film distributor comes in, all that the distributor does is take the film you created and they are going to manage various distribution methods. So it could be theatrical. It could be VOD. It could be DVD. Or it could be ancillary…. And the film distributor is essentially a middle man who is taking a product and getting it out to the consumers via platform, right?
Jason Brubaker: Unless something mysterious and magical happens…
Jack Kelley: When you have a film and you distribute this, you are licensing the rights to the film to this distributor for a period of time. The deal might be three years. Or it might be fifteen years, or twenty-five years. A lot of filmmakers sign these distribution deals without realizing they are completely giving up all rights and control over your film when you sign the deal.
Jason Brubaker: Many filmmakers who regret the distribution deals they sign. Especially when they realize all control is gone.
Jack Kelley: Anything that you’re not carving out of that agreement, you don’t have the control over. So if you wanted to make a bunch of DVDs and give them out to your grandparents, if you signed away the rights to license and distribute DVDs, you can’t do that. That would be illegal.
Jason Brubaker: Ha! Well that would be terrible for any filmmaker.
Jack Kelley: I’m using a ridiculous example here. But my background is in finance. So I ran excel models looking at how much additional sales would we need to make to net the same amount of money if we went with a distributor.
Jason Brubaker: And what did you discover?
Jack Kelley: In these typical distribution deals, let’s say you make a $100,000.000 gross sales. Then your distributor is going to take anywhere from 40% to 60% of that off the top. So then you are left with $40,000.00. You say, okay great, I still get $40,000. But before you see a nickel, all the marketing and sales and kind of other costs are netted out. And if you didn’t negotiate a cap on that, then that could completely eat up the remainder of the money.
Jason Brubaker: This is where you educate our readers on “creative accounting.”
Jack Kelley: Right. You will only get what’s left over. And there are some shady people out there who will fleece off a portion of their overhead, into the sales and marketing number. There are all sorts of tricky things, and it’s on you to go audit that film distributor… Which is a real pain. And then you may have inconclusive evidence. And who knows where you are in terms of the relationship and actually getting any money back?
Jason Brubaker: Again, that is an extreme example. The good news is, there are many ethical and good distributors out there… But you still have to be careful.
Jack Kelley: Based on our experience, there are a lot of earnest people, and there are some shady people. But overall, we just didn’t like a lot of the contracts or the terms. A lot of the distributors were not willing to negotiate on them. So we chose to retain the domestic rights and we decided to go with Distribber.
Jason Brubaker: It’s cool that you did some financial models to assist in your decision.
Jack Kelley: [Distribber is] essentially for flat fees. They take your content, encode it and get it onto the various digital platforms. Apart from small administrative fees, every dollar that comes in, comes back to the filmmaker. So until the end of time, we hang on to the rights. And any marketing we do, we control those costs and we are the direct beneficiaries. So that’s why we chose to retain the rights. I will say that self distribution requires a lot more work than just handing something off to somebody and hoping they will do a good job with it. On the flip-side, you get to maintain control over something you spent years working on.
Jason Brubaker: With a traditional distributor, once the honeymoon ends you’re still required to hustle if you want sales. But you are locked into a distribution deal for years, so the distributor continually benefits from your hustle. Knowing what you now know, what is the future of film distribution?
Jack Kelley: This comes down to how much interest an independent filmmakers can generate with their content in a world where Amazon and Netflix are generating their own content. For example let’s say you want to do an Indie action film, but Netflix is also doing kind of Indie action film. Netflix can just hit a switch and have that pop-up in a queue on Netflix and get eyeballs. Whereas if you’re the Indie filmmaker, you kind of have to go the extra mile and that’s the challenge.
Jason Brubaker: The film distribution landscape is challenging. That is why every filmmaker needs a plan from day one.
Jack Kelley: I’ve been having conversations with members of the National Theatre Owners Association and they are also fed up with the current distribution model because you have the Indie filmmakers, and you have the audience. And in the middle of that you have a distributor eating up all the profits. A lot of independent theatre owners don’t like the deals. But if they don’t take those deals, they’re not going to get the films that they need to show to keep keep the lights on.
Jason Brubaker: Right. If you don’t have the blockbusters, it’s tough to sell popcorn.
Jack Kelley: I won’t use names, but a certain very large Sci-Fi movie recently came out. I talked to a couple of the theatre owners and they said, “We’re getting to keep thirty-five cents on the dollar when we sell a ticket.”
Jason Brubaker: I’m sure it’s super annoying to send so much money back to the distributors.
Jack Kelley: The theatre owners are on the side of Indie filmmakers. They would rather be doing a deal where they can keep 50% or maybe even 55% of tickets that they sell, because that margin makes a huge difference. Especially for somebody running an independent theatre.
Jason Brubaker: It was similar back in the day for home video. But digital film distribution changed all of that.
Jack Kelley: Digital is great leveler. That’s one of the reasons I like Distribber. Once your film is on those platforms, you can deliver the content straight to your audience. But then the question becomes what you are going to do for marketing? Because even a $10,000,000 studio movie is going to have a marketing budget that is probably bigger than most independent films.
Jason Brubaker: Is this where your structured finance background comes in?
Jack Kelley: We have to remember that when filmmakers sit around and say, “I can’t understand why I’m not getting views on my film…” You have to remember just how much marketing dollars are being spent by studios.
Jason Brubaker: But it’s not like a mid level distributor can do the kind of promotion a studio can.
Jack Kelley: A certain distributor (who will remain nameless), confided to me that the system is broken and unsustainable because the economics are not there for the filmmakers.
Jason Brubaker: They are if the filmmakers have a plan and hustle.
Jack Kelley: Think about it. As a filmmaker, you take all the risks and you put in all the effort. You made your film and you’re going to hand it off to somebody. You don’t really know what’s going to happen.
Jason Brubaker: And that’s a big reason you chose to self distribute Solver.
Jack Kelley: With Solver we chose to take additional risk, but also hang on to the additional responsibility. We don’t think bringing in a distributor is going to bring five times more eyeballs to our film. It’s not going to change the quality of the film and in terms of marketing.
Jason Brubaker: And no distributor is going love your film as much as you.
Jack Kelley: We came up with promotional ideas that were fun and interesting and engaging. These tactics are basically free in terms of the work we put in. We would have to pay a marketing agency or something like that if we worked through a distributor.
Jason Brubaker: Well the good news here is you have a film out there and it seems largely embraced by an audience that you pre-identified. You built the film with all sorts of intricate puzzles and clues and mechanical designs, which probably took you twenty years to figure out. Now you have a target audience embracing the movie.
Jack Kelley: Solver from the get-go was designed as a high concept film on an Indie budget. We wanted to differentiate ourselves in the marketplace, and we feel we definitely done a good job with that by making it a kind of treasure hunt type movie. We are excited that the escape room community has embraced the film as strongly as they have. We regularly get emails from people who run escape rooms across the country, asking us where they can see the movie.
Jason Brubaker: Strong word of mouth is the dream of every filmmaker.
Jack Kelley: We feel very lucky that the audience has embraced Solver and we do everything we can to be responsive to them and to encourage that interest.
Jason Brubaker: So what’s next?
Jack Kelley: [Laughing] We may or may not be in discussion with a major International Escape Room company right now to potentially do a partnership with Solver. That’s something we would not have been able to do if we had gone with a traditional distributor in terms of controlling the rights.
Jason Brubaker: Where can we find Solver and watch it?
Jack Kelley: Right now the film is available on iTunes, Amazon and Vimeo. We chose to focus on those three platforms and if you follow our Instagram @SolverFilm, there may be fun little puzzles or discount codes and things coming down the line. If you watch the film, we’d love to hear your feedback at Solvermovie.com.