According to Jungleboys MD/executive producer Jason Burrows producers need to make their money primarily in production fees because distribution profits are so low, even for some of the more successful Australian exports.
At last week’s Screen Forever conference in Melbourne Burrows said that even if a series sold to multiple territories and made $300,000 in sales, it would return little money for the production company.
The distributor normally gets a standard distribution fee of 35% including expenses, so by the time the distributor recoups an advance of, say, $100,000, the pot is reduced to $165,000.
The producer then gets 20% of what's left, meaning $33,000 (20% representing the producer offset, which is counted as the production company’s investment).
In addition, there is the potential income from a US format sale. In the US networks might typically buy 70 pilot scripts, of which 12 pilots might get produced, and just threee might go to air.
“If your show is one of the lucky ones to make it to the end of the first season, you would do well to get a format fee of around $20,000 per episode on network TV, and a fair bit lower on cable TV,” he tells IF.
“So that’s 22 episodes x $20,000 equalling $440,000. Now, presuming the distribution advance has been recouped, that’s another $88,000 for the production company.
“If a production company has US representation, as Jungleboys has with UTA, they are wise to hold onto the US format rights as a decent agent has all the necessary contacts to make the deal happen. Part of this deal would be to ensure that the original creators receive fees as part of the deal.
“For example on a big US network show, the executive producer, the writer and the director of the original show might charge $30,000 per episode each in fees.
“Pilots pay very well with a writer often charging over $150,000 for a pilot episode and a director maybe $100,000 for a pilot episode. Percentages of backend can also be very lucrative but only usually if the show lasts for at least three seasons. With all these fees not flowing back through the investors, the EPs, writers and directors are getting 100% instead of 20%.
“So it’s no wonder production companies are doing what they can to hold onto US format rights.”