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GETTING FAIRER COMPENSATION FROM INTERNET SALES
By Gary Tompkins, The Fidelx Group
 
Every Friday (and sometimes on Thursdays), at some time or another, one of my five kids will tug my arm and ask, “Dad, can I have my allowance now?”  It can be annoying at times, but their question is valid.  They did work and they are looking for fair and timely compensation for the extra chores they completed around the house.  We all have grown up, or should have, expecting the same…getting fair compensation for the work we do.  How can independent, Christian filmmakers get their fair share of compensation using online sales channels for tangible and downloadable versions of their films?  This is the question I will attempt to answer.  Please note that my examples offered later of Christian filmmakers are limited to businesses providing media to pastors and churches, since this is my background.
 
Many of us are familiar with the workhorse model of product driven businesses: Manufacturer > Distributor > Reseller > Consumer.  This model continues to offer benefits especially for tangible goods sold through retail chains.  A manufacturer, for example, wants to focus on building products, so contracts with a distributor to make sure those products are delivered to the reseller, who in turn offers those products to consumers.
 
Businesses that control more than one function expect to make gains in several areas.  Over the past decades, to save costs, streamline operations, and increase profitability, some retail chains have opted to control at least two of these functions, e.g., distributor and reseller.  Wal-Mart and JC Penny are two good examples.  One could even argue that private labeling of generic products (OTC medications, first aid supplies, etc.) project the image that the reseller is also a manufacturer, thus, casting a shadow over this function, too. 
 
What does all this mean to independent Christian filmmakers?  In our case, the business model can be modified: Filmmaker > Distributor > Reseller > Consumer.  The filmmaker creates a work, contracts with a distributor (frequently an exclusive arrangement), who markets to resellers who sell to consumers.
 
Many filmmakers have discovered that having an exclusive contract with a distributor can either make or break a production.  Having a reputable distributor means fewer worries, perhaps some predictable income, and more time to focus on future productions.  Having a distributor, however, who ends up shelving your production for the life of your contract means lost income, lost potential for future projects, and maybe even a lost business if its existence depends on sales revenue from a particular project. 
 
To mitigate the risk of exclusivity and to increase revenue, some Christian filmmakers have been willing and fully capable of filling as many as three functions: Filmmaker, Distributor and Reseller.  They have been able to do this in large part because of the advent of the Internet.  E.g., many Christian filmmakers are offering their films directly to consumers from their websites, primarily through DVD orders.  Three examples of this are Highway Video, Igniter Media Group, and Worship Films. 
 
There are also websites offering downloadable media files.  Oxygen Multimedia Group offers its own content.  Worship House Media offers both its own videos (Igniter Media Group materials) as well as resells other filmmakers’ materials.  Sermonspice is solely a reseller of other filmmakers’ productions.
 
On a per sales basis, a company’s own website may offer the highest level of revenue possible, since it controls all functions.  But the filmmaker must have significant traffic, staff and sales to make this a viable, stand alone operation. 
 
We are getting warmer to my point so hang in there.  Many filmmakers prefer to work with a distributor.  Some distributors are looking for exclusivity when marketing your films online.  That may be okay in some cases, but here is the big misnomer I am seeing today.  An online distributor may, in fact, NOT be a distributor at all!  By definition, a distributor offers to resellers a wholesale price on products so that the reseller can make a profit selling to consumers.  So if a company claiming to be a distributor is selling directly to consumers, it is a reseller and NOT a true distributor!  Questions to ask yourself: Do you want an online reseller (disguised as a distributor) having exclusive rights to sell your films?  Isn’t the goal to have as many reputable resellers as possible selling your films?
 
Here is my point!  Regarding online sales channels, who, then, is the real distributor of your films?  You are!  And if you function as both filmmaker and distributor, you should be getting these benefits: a higher percentage of revenue from online sales channels and control over who can or cannot resell your films. 
 
In closing, the best way to get fairer compensation from Internet sales is by recognizing that you are most likely fulfilling more than one function and, therefore, can rightly justify receiving more compensation from sales.
 
 
Gary Tompkins is owner of The Fidelx Group.  His business manages agreements between filmmakers and their respective resellers. Email: gtompkins@fidelx.com.
 

DRAMA IS ONE WAY TO BRING MEDIA EVANGELISM TO YOUR CONGREGATION
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