How We Lost 150K by Getting a Grant: Hard Lessons in Doc Funding


Documentary filmmaker and long time Academy of Storytellers member Scott Drucker wrote an article on his experience with funding his documentary 'Who is Arthur Chu?'. With grant season upon us, we both thought it would be great to share his article here.
    
    Remember in film school (or more likely in law school) when they told you to read the fine print? I mean I vaguely remember it–about as much as the old adage, “no deal is a good deal.” But if you’re at all like me, you’re left with a lot more knowledge on the production side of filmmaking than the business. So here’s my story and the advice I wish I had before going into the grant application process (which, as you will see, is inextricably linked to your distribution plan).

     Here’s the backstory first. 5 years ago I started making a documentary about Arthur Chu, that guy who went viral for his controversial playing style on Jeopardy! I’ve always been fascinated by the reality of people’s lives verse our perception of them on TV, and I felt that Arthur’s story was an especially important one. What compels us as humans to say, “I hope your wife dies,” simply because of the way they play on a gameshow. As Jeff Yang of the New York Times put it, Arthur’s run on Jeopardy! was an “underdocumented cultural moment.”

     So I emailed Arthur and he was in. Then we reached out to Jeopardy, and surprisingly they were in. . .or at least as in as they ever would be. My mentor from USC (and three-time Academy Award winner) Mark Jonathan Harris was also willing to come on board to help produce the film so I did what any overzealous filmmaker would do and I launched a Kickstarter before knowing what a successful campaign actually entailed. We didn’t come close to reaching our goal (it’s more work than you think so don’t rush into this one). So when we were offered a $40,000 grant from the Center for Asian American Media (aka CAAM), it seemed like a no-brainer: this was going to keep our film alive. We had to say yes. We had been rejected from a few grants before so it especially felt good to crack the grant code, likely due to the fact that we had refined our ability to say what the story was in a log line. We read the fine print and so did Donaldson+Callif (arguably one of the best entertainment legal firms in the country). They marked up the contract in spots, but for the most part everything was a go except for one key section: “Do you really want to give up your broadcast rights?” I thought to myself, ‘I mean they’re helping us get a broadcast, this is a good thing right? And who wants broadcast rights these days when it’s all about Netflix and streaming?’ Looking back on it now, these thoughts only affirm how little I understood about the grant process, and in turn distribution. The main takeaway is sure, read the fine print. . .but also ask A LOT of questions. Here’s a few more things to think about as you apply, particularly before accepting a grant.

 

  1. Understand your story.

Know how to describe your film in one to two sentences– encapsulating the characters needs and desires, the journey you’re about to take people on, and why it matters. We drastically underestimated how important the elevator pitch is–even after the grant process–as it is the most common question you’ll receive, even at film festivals. You have to be able to communicate with conviction what your story is about and why it’s important.

 

  1. Keep ALL of your rights.

I’ve heard and read so many things on this (from carving out your rights to defining release windows for each platform). But the reality is, if you think your film has a chance of being distributed by the likes of The Orchard Submarine, or any of the larger players, then KEEP YOUR RIGHTS. Everyone asked for ALL rights to the film after we premiered at Slamdance (although they were more willing to concede educational). Even Gravitas mentioned it in passing at Hot Docs, where we ultimately could’ve negotiated a minimum guarantee for the film. And they were all troubled by the fact that CAAM had our broadcast rights. Kevin Iwashina was our sales agent and he tried to negotiate with Don, the Director of Programs at CAAM, but ultimately he wasn’t willing to compromise (“Did you read the contract?” was something we often heard). And thus we had to pass on all deals, left stuck with a broadcast on World Channel, which paid us 0 dollars because we had already received money from the government. CAAM also owns a percentage of our film, but it turns this was less concerning than the clauses that truly prevented the film from reaching the widest audience. The moral of the story is, if it is a true grant, they shouldn’t be taking any of your rights, nor a percentage on the backend. Save those percentages for investors who actually want to see the widest distribution for your film.

 

  1. Get legal counsel.

If you’re going to give away some of your rights, get some legal counsel on what the implications may be. If you’re planning a strong educational push of your film on Kanopy (since that’s where you’ll have the biggest potential for a return), then you’ll want to ensure nothing in your contract conflicts with that, i.e. a free stream on PBS’s World Channel. You don’t necessarily need legal on every distribution contract as you can quickly look out for red flags on your own–like no spending caps on marketing the film or distribution fees just to have your film in a company’s catalogue. However, I strongly recommend paying for the legal services before taking a substantial grant as it can entirely change the trajectory of your film’s distribution plan. Sometimes you don’t realize that ‘best judgement' can still come back to hurt you in ways you didn’t anticipate. . .i.e. Donaldson + Callif flagging the broadcast rights. We were under the assumption that CAAM was going to find the best deal possible (due to the stake they had in our film). We didn’t realize that CAAM was essentially our distributor by proxy, simply because we didn’t know what to ask to reach that conclusion ourselves. Which leads to the next point:

 

  1. Ask Questions.

Like, “What happens if we get an offer from HBO?” “Can we broadcast on HBO instead of World Channel online?” Or a better starter is, “What are your objectives and how can we help you accomplish them?” In hindsight, we could have worked together to create a lesson plan with CAAM for our educational outreach, knowing that educational was our only outlet. Ask about the rights they’re taking and what that entails, and ask for examples of distribution models for films that reached a wider audience with said restrictions in place. And be sure to ask about your responsibilities to the grantor after you’ve received your funds. I interviewed someone who had received a small grant from their local state fund and it turned out they had a really tight deadline for the delivery of a “fine” cut, which they had to screen publicly to students along with a Q+A. The film was in such rough shape still because of the tight turn around, they ended up spending extra funds to deliver an edit earlier than anticipated, funds that could have been better spent if they waited until they were completely ready to start the edit process (another post-production tip to save $$$: wait until you have completed at least one pass at a story structure, along with all of your interview selects placed into your outline, before going into editing. Knowing what you want your film to say and having a basic approach will save you money). And finally, ask colleagues who have previously received that grant about their experiences. It turns out, everyone I had spoken to for this article has had a negative experience with CAAM. . .a good indicator to at least proceed with caution.

 

  1. Clarify Release Windows.

You want to be able to maximize educational sales before going to VOD (DVD first before Kanopy since you can make way more on DVD sales still. . .yes this surprised me as well). AVOD is becoming more relevant so maybe there’s some money there, but SVOD is not that lucrative because as our distributor put it, “People don’t want to pay to watch documentaries anymore.” Most grants will leave you with just SVOD eventually (not including lucrative HBO or Netflix deals) which means that you enter a pool with everyone else willing to pay an aggregator to get on Amazon and iTunes. The thing they don’t tell you is that Amazon pays .06 per hour of streaming so unless you’re a big studio film that is on the front page of Prime, you’ll never make any money from this. This is more on the back-end, but the moral is that you should ask how your grant impacts different release windows and what you can do with the film after it screens at film festivals and suddenly garners interest from distributors. If they tell you that you have to wait 2 years after the release of the film, you should know that it will be an uphill battle. Allowing PBS to stream your film for free for 30 days will only hurt your Kanopy sales so be weary of that as well, as many CPB (Corporation for Public Broadcast) grants want some sort of streaming rights.

 

  1. Contemplate the Hours You’re Spending.

Think about how much time you’ve spent fundraising, writing grant applications, emailing, etc. vs. the hours you could be spending working another job and putting some of it toward your film. This idea may seem controversial since there are still lots of benefits to getting a grant, but it’s just to say not everyone is going to get one. The reality is that we’re all making films as a second job of sorts when we start, and while the aforementioned could help build your audience, I’ve found that it’s never as much as I’d like, especially for the hours I’ve put in. The reality is that a minimum wage second job could give you just as much money toward your film as the traditional fundraising efforts in terms of the sweat equity it takes to raise the same funds–whether that’s writing a grant or doing a kickstarter. And then you have a greater stake in your film. Instead of the traditional 50/50 split between filmmaker and investor, perhaps you can make the same film with the same resources but can keep 100%. There’s no easy answer to this, it’s just something to think about and I’ve heard a few success stories here. We spent so many hours writing the grants themselves and yet if we just looked back at the previous recipients, we would have deduced that we were not likely candidates.

 

  1. Change Your Approach.

Looking back on Who is Arthur Chu? I think we could have changed the way we approached making this film, found areas to cut, etc. I think you can probably do the same. If you can make the same film and it gets a great deal while the other isn’t eligible for any deals because you took a 40k grant, you’d rather be in those shoes where you’re eligible for that distribution deal. I’m not recommending that you go to Best Buy and continue a cycle of buy and return like they did in My Date With Drew, but in the end the film was successful for its story, not because they had beautifully lit interviews (they didn’t). There are also creative ways to find support nowadays and with a good business plan, perhaps you can find someone outside of the industry to be an angel investor in your film. We found one in Cleveland, Ohio while filming the doc, and he’s truly been a godsend.

 

     I think all too often as filmmakers we feel overly desperate, needy perhaps, for any sort of grant or financial backing and don’t really stop to realize, we have the asset! We have what they want. It’s not always the other way around. So where do we go from there? If we feel like our message is important and should be shared, do we give it away with no chance of recouping our costs for investors (or our own costs for that matter)? And what about all the costs beyond the financial: personal turmoil, relationships, family.

     To me it was important that people saw our work, that our message was heard. If we lost money but ended up on platforms where more people could view the film, we were also sharing empathy. And the film does resonate with people. We’ve heard it over and over again. It resonates with young Asian Americans, with anyone who’s been bullied online, and with anyone who has ever felt like an outsider, even inside of their own family. So while in theory, reaching this wider audience parallels CAAM’s whole mission statement to begin with, the CAAM grant itself prevented us from reaching beyond the scope of public broadcast. And in turn, it also killed our chances of recouping even though CAAM has a 12% ownership stake in our film. So that’s the story. I’ve learned a lot about the distribution process by doing this and I will happily field any questions as you move along in your process, as it is really difficult to navigate this part of it. . .even with experience. I always recommend legal counsel first, but there are things that come with experience (and word of mouth) that legal may not be able to advise on. For example, I had no idea that DVD was still so popular and that you can get a distributor solely for your DVD sales (which is the only way to get into the Best Buys and Walmarts). I didn’t know that college librarians were still buying DVD’s either and if I could do it over again I would spend 6 months from June to December doing just educational DVD sales–there are lists of librarian names you can buy–before moving the film over to Kanopy and other SVOD platforms. It’s another article at this point, but hopefully this serves as a good resource for you as you move forward in the grant process; it’s so important to think about the life of your film itself, even as the initial idea itself takes shape.

Who is Arthur Chu? can be seen for free with a library card on Kanopy: http://bit.ly/ChuDocKanopy




Scott Drucker
MFA at USC School of Cinematic Arts, 2010.