These six include banks, sales agents and producers. Unlike other collecting agencies — which it describes as being more like collecting societies monitoring and distributing cash – Protocol International actually goes out and gets money owed. However, it stresses a softly softly approach is better than just sticking a gun into a distributor’s ribs telling it to pay up. Often a distributor wants to pay the sales agent but is having cash-flow problems; in that case a table of repayments can be worked out.
Distributors not paying what they owe is the dirty secret of the indie film business. Without distribs in smaller territories paying up, the entire indie film model could collapse. Deadline’s comments board had plenty of tales of woe of filmmakers pursuing miscreants in court last time I wrote about this. It can cost $50-100,000 to pursue somebody through arbitration, with no guarantee you’ll see any money at the end.
London-based Protocol charges between 10-40% of cash outstanding for its services. This sliding scale can drop down to a single figure the earlier it is brought on board.
The company, which launched in February at the Berlin Film Festival, doesn’t just act as a debt collector. It also polices overages as well, whether that’s net profits or gross participations. And it provides early risk analysis for financiers thinking of investing into movies.
Rebecca Roffey, director of Protocol, used to work for film financier Aramid while co-director Peter Kostense is a veteran of Fintage House, the Netherlands-based entertainment financial services company which co-owns Protocol. Having Fintage as co-owner means that Protocol has the back-up of 25 Fintage staff in Budapest, Hungary. Roffey says: “It’s designed to be an all encompassing aftercare solution for anyone who has a revenue interest in a film.”
The problem is that distributors are increasingly putting down 20% of a distribution licence to hold a film. The sales agent or producer then finance the movie based on what distributors say they will pay on delivery. But distributors – especially those in smaller or more far-flung territories – are shrugging their shoulders and saying they’ll pay what they want. Often this means 50% of the previously agreed price. Sales agents, mindful of not upsetting future relationships with buyers, urge financiers to settle. “From the sales agent’s point of view they’re often conflicted because they want to say in business with the distributor,” says Roffey.