I’ve just talked to a director who’s sold a movie for broadcast and gotten a theatrical release, and he gave me the off-the-record skinny on some of his experiences and cleared up some other legal things we were discussing here.
Superchannel was interested in purchasing the broadcast rights to his movie, but required them to have Errors and Omissions Insurance. An E&O insurance company protects the broadcaster against getting sued for stuff: say you have a brand name in the shot, a store, or a person in the background. If they see themselves in a movie they don’t like they call up Superchannel or whoever, but Superchannel shuffles them off to the E&O insurance company. They have to settle with the person, or deal with it somehow.
So in this director’s case, they had to submit the movie to the E&O company and they assessed the potential risk and charged them accordingly. There was a brand of a local beer who’s appearance they were able to clear with the beer company since it wasn’t presented in a unpleasant way, which reduced how much they were charged. So every location/extra/music/actor/crew release you have signed is one less risk the E&O company has to take, and thus charge the moviemaker for. He thought companies and individuals were much more likely to be perceived as a risk than public spaces — he’d never heard of people having to produce permits from the city for on-the-fly shots. He imagined the insurance would cost $5-$10,000 but wouldn’t have to be paid until there was a broadcaster offer.
The rights to his movie, which he thought was pretty average or standard, sold for about $50,000 to Superchannel. So, overall, I think it’s worth it to do the paperwork as we go, as it amounts to location/extra/music/actor/crew releases drawn up and signed.
He said that broadcasters sometimes do presales based on a script, but they expect it to trigger other much bigger investor money (ie. Telefilm, who would be impressed you have a broadcaster); that they often have content input, and while this is not control, one is behooved to take it seriously if one wants to continue the relationship with other projects — a “too many cooks” situation. He threw out $15,000 as a hypothetical presale number, but it’d be based on a small percentage of the budget. Doesn’t sound worth it for the amount of shopping-around effort and potential interference.