Sramana: Somebody else made the film and you were distributing it. How did you get someone to let you distribute the film if you had not done that before?
Tobias Bauckhage: Nobody knew us so we went to film festivals and watched a lot of films and followed various films to see which ones would get picked up. We then evaluated the films that remained free to see if there was any potential in them. We were looking for a marketing potential idea around it. Word of mouth is everything for movies, so we needed to have some sort of marketing edge.
If we found a movie that had that edge, and if the movie was still free, we approached the film maker and gave them our pitch. We showed them our marketing plan, set out the minimum payment options and just convinced them through our passion and enthusiasm. That is really how we got the rights to the first film. By the time we had to secure the second film, we already had built a name for ourselves with our crazy guerilla marketing campaigns. That film maker really liked us and we invested some money there. However, those investments are really small, usually between €100,000 and €800,000.
Sramana: What were the terms of the first movie that you distributed?
Tobias Bauckhage: In the movie industry it’s very simple. You either buy or you don’t buy. You get the movie rights and you have those upfront costs. This was in 2005 and it was not digital, so you had to produce film reels and have 20 to 40 different copies of those films so that it could be shown at 20 to 40 different cinemas. You also had to come up with the movie poster and packaging, and then you have to convince cinemas that don’t know you why they should show your movie. You basically have a Promotion and Advertising budget and a budget for film reels. That may be $100,000. Cinemas may charge $10 per ticket and you will get back about $2 per ticket.
Sramana: Did you have to pay the film makers for the rights?
Tobias Bauckhage: Normally, how it works is that a split is negotiated. It could be 50/50 or 70/30. It depends on the power of the film maker. The distributor can recoup all costs including the guarantee. After that the costs are split. Our split with the film maker was fair and we had low costs in the beginning. What we were able to promise the film makers is that we were willing to work five times harder than anyone else to get into the industry. We kept marketing costs lower so that they could see money earlier and see a better split.