The ‘Obsession’ Windfall and How Indie Hits Pay Out

Summary

Podcast Summary: The Town with Matthew Belloni

Episode: The ‘Obsession’ Windfall and How Indie Hits Pay Out

Date: June 12, 2026

Guest: Minette Louie – Independent Film Producer, Professor at Columbia University
Theme: How do the financials of a successful indie film like Obsession work—and who really gets paid?

---

Episode Overview

This episode dives into the complex financial ecosystem of independently produced movies, using the recent indie horror hit Obsession as a case study. With Obsession made for just $750,000 and selling for a $15 million minimum guarantee at a film festival before grossing over $240 million in theaters, Matthew Belloni brings on veteran indie producer and Columbia professor Minette Louie for a transparent breakdown of where the money flows, who gets what, and what misconceptions exist about indie film windfalls.

---

Key Discussion Points and Takeaways

1. How the Revenue “Waterfall” Works in Indie Film

(05:11 – 09:30)

• Two Waterfalls:

  • Distributor’s Waterfall: First, revenue goes through the distributor, who takes their cut.
  • Licensor’s (Producer’s) Waterfall: What’s left flows to the producers/license-holders and gets split among financiers, cast, crew, and talent with backend participation.

• Exhibitor’s Cut:

  • Theaters (exhibitors) generally take about 50% of box office receipts right off the top.

• Distributor’s Fee:

  • Distributors like Focus Features then typically take 30%-40% of gross receipts as their own fee for their work in getting the film into the marketplace.

“The main thing people misunderstand is that Focus gets half the money from the theaters… then Focus would take a distribution fee, usually 30%–40% of all the gross receipts.”
— Minette Louie [05:45]

• Minimum Guarantee (MG):

  • The upfront sum (here, $15 million), paid for rights at a festival, is an advance, recoupable with interest, and comes out before any profit-sharing.

• Recoupable Costs:

  • All marketing (P&A: Prints & Advertising), interest on the MG, and bonuses are recouped by the distributor before anyone else is paid.

“All that is recoupable to pay for shadow Twitter accounts to start promoting the movie by posting positive things.”
— Matthew Belloni [07:24] (in jest)

2. How Theatrical Success Dictates Other Revenue Streams

(08:29 – 09:43)

• Streaming and licensing fees are often tiered. Higher box office = better streaming deals:

“If the box office hits certain milestones, then the license fee goes up… if you hit $100 million, we’ll pay you $5 million more.”
— Minette Louie [08:52]

• Perceived theatrical value affects VOD, physical media, non-theatrical (airlines, etc.), and streaming value.

3. How Much Does the Distributor End Up Making?

(09:52 – 14:19)

• Focus’s path to profit in the Obsession scenario:
  • Distribution fee (e.g., 30% of receipts)
  • Recouped marketing & acquisition costs with interest
  • A negotiated share of net profits (could range from 25%–50%)

“If it gets to $300 million... 30% would be $90 million.”
— Matthew Belloni [10:34]

• There are also continual future rights and library value, sequel participation, Halloween Horror Nights tie-ins, etc.

4. How Do the Producers and Filmmakers Get Paid?

(14:33 – 18:07)

• Producer “Waterfall”:

  • Start with the MG (upfront sale price).
  • Backend net profit participation (after all distributor deductions).
  • Box office and VOD bonuses (negotiated, especially in a bidding war scenario).

• Usually, most indie producers only ever see the MG. Backend only comes into play if the film becomes hugely successful, as very few indie films reach true profitability.

  “Most of the time, [the MG is] all the money you’ll ever see from a movie.”
  — Minette Louie [17:43]

• Notable Quote:

  “It may not be as high as the 75% I put in my waterfall, but it could be 60%, 70%. I do think they probably got a majority.”
  — Minette Louie [12:02] (about the producer's share)

5. Crew and Cast Compensation — Why Is There Discontent?

(14:33 – 16:44)

• Art director Sally Choi’s complaint brought attention to low upfront pay and lack of bonus for crew.

• While exceptional cases like Sing Sing or projects from Artist Equity (Ben Affleck and Matt Damon) do profit-sharing broadly, this is rare and must be contractually set before shooting.

  “It is tough to go in after the fact. My very first film… the director… made some money… and gave us money. We didn’t ask for it. He gave it to us.”
  — Minette Louie [15:41]

• Indie norms: Often, years of producer’s work is unpaid unless the film wins big.

6. The Producer’s “Waterfall” Deductions

(19:02 – 23:15)

• All sorts of middlemen take a cut off the top:
  • Domestic sales agents: 5%–10%
  • International sales agents: 15%–25%
  • Sales agent expenses: $25k–$40k plus expenses (e.g., Cannes yacht parties)
  • Legal fees: 2%–2.5%
  • Collection agents: 1%
• Guild residuals (for union actors) and accountant reserves
• Recouped investment with a premium (typically 15%–25%)
• Deferred cast/crew payments (must be paid before any profits)

7. What Do Backend Points ACTUALLY Mean?

(24:35 – 26:36)

• A “point” is 1% of the net receipts; there are usually 100 points in a pool, with producers controlling 50 points for cast/crew sharing.
• High-profile actors might get the biggest shares.
• Agencies representing both sales and talent sometimes double-dip.

8. How Much Money Does a Hit Like Obsession REALLY Make for Creatives?

(28:54 – 31:49)

• Example: 1 producer point at present box office = ~$127K–$150K.
• For the director/writer (Curry Barker), total backend could be ~$6 million (not $10M+ “dotcom money”).
• Who wins? Director, lead producers, sometimes big-name executive producers like Jason Blum, investors, then the cast and department heads in rare cases.

“I put the numbers in and it’s like, it’s under ten, it’s like, six million bucks. It’s a lot of money, but it’s not like, you know, dot-com money or whatever.”
— Minette Louie [31:24]

9. How Rare Are These Indie Film Success Stories?

(32:14 – 34:45)

• Only about 2% of all indie films made actually recoup for investors.

“The number I often use is basically like 2% of all indie films that get made recoup for their investors, not even hit it big, just like recoup, period.”
— Minette Louie [33:16]

• The DVD-era safety net is gone; streamers now rarely buy indie films unless they see awards potential.
• “Distribution model is broken and needs to be fixed.” [33:51]

---

Notable Quotes and Memorable Moments

• On Marketing “Viral” Movies:

  “Viral is not real. Viral is a creation.”
  — Minette Louie [07:30]

• On the Indie Producer Struggle:

  “Very often, we, on tiny films like this, we don’t even pay ourselves. Like we get zero upfront for years of work, for years of developing and packaging.”
  — Minette Louie [16:56]

• On Backend Sharing Norms:

  “It’s kind of crazy that these so-called liberal filmmakers are arguing against sharing of wealth. It’s a little crazy to me.”
  — Minette Louie [16:26]

• On “Universal” Crew Bonuses:

  “Sing Sing did it. They treated everybody equally. They gave everyone the same pay. The only variable was time… Everybody participated.”
  — Minette Louie [14:55]

• On the Difficulty of Success:

  “It is a one in 10 million… Most indie films don’t make money.”
  — Minette Louie [20:29]

---

Important Timestamps

• [05:11–06:50] How indie waterfall works
• [08:29–09:43] Why theatrical matters for all future revenue
• [10:12–14:22] Distributor’s take: numbers breakdown
• [14:33–18:07] Producer’s waterfall, bonuses, and cases for crew sharing
• [23:02–26:06] Deductions off the producer’s share
• [28:54–31:49] Real amounts for directors and major players
• [32:14–34:45] Why almost no indie movies make money

---

Structure of Indie Film Pay-outs: The TL;DR Version

1. Theatrical Revenue: Exhibitors and distributors take their piece off the top, then recoup costs.
2. Producer Waterfall: What’s left goes to:
   • Sales agents, lawyers, collection agents, guilds
   • Investors (recoup + 15-25% premium)
   • Deferred pay and profit-sharing (for those with points)
3. Crew/Actors: Only those with negotiated backend points see further money—often department heads and key cast, rarely below the line crew.
4. Most Crew: Get only their modest upfront fee, unless special profit-sharing is pre-negotiated (rare).
5. Actual Big Winners: Producers, director, lead producers, top investors, high-leverage execs (e.g. Jason Blum).
6. Long-term Winner: Your next gig is the real windfall.

---

Final Thoughts

• Obsession is an outlier—a unicorn in indie film.
• Despite huge gross, very few see massive windfalls.
• The indie film biz is economically “terrible” for most investors, crew, and even many producers.
• There’s widespread consensus that indie film distribution needs reform.

---

Relevant Quote to Close:

“When you’re associated with something successful like this, your next thing is your payment.”
— Minette Louie [32:05]

---

For aspiring indie filmmakers, the lesson is clear: negotiate your backend and bonuses before the shoot—or your greatest payday will come from your next opportunity, not the current hit.

---

(Advertisements, intros, and outros have been omitted from this summary.)

Transcript

[A]

Foreign. This episode of the Town is presented by HBO Max. For your awards consideration. HBO Max presents DTF St. Louis in this darkly comedic series, a love triangle between three adults experiencing middle aged malaise leads to one of them ending up dead. Don't miss the series TV guide is calling transcendent and audacious. DTF St. Louis is streaming on HBO Max. Watch now. This episode is brought to you by FX's love story, John F. Kennedy Jr. And Carolyn Bessette. The critically acclaimed series explores the undeniable chemistry, whirlwind courtship and high profile marriage of one of the most iconic couples of the 20th century, with Sarah Pigeon and Paul Anthony Kelly leading a cast including Naomi Watts, Constance Zimmer, Alessandro Nivola and Grace Gummer. Called a stunning portrait of love by Variety, A Love Story is Emmy eligible in all limited series categories. Now streaming on Hulu and Hulu on Disney plus for bundle subscribers. It is Thursday, June 11 Hollywood movies are a fascinating mix of commerce and art. Sometimes those two things are at odds, sometimes they enhance each other. I've always found that even people who have worked in Hollywood for years often don't understand how the commerce part actually works, how the money is collected, who gets it, when they get it, and why. That's especially true in the world of independently produced movies. When a big studio or streamer makes a movie, they put up the money and hire people to make the movie and they collect about half the box office gross from the theaters and exploit the film in various windows, from premium video on demand all the way through to free TV and even YouTube. The talent involved is either paid upfront or a mix of upfront and a portion of the proceeds from various windows depending on what they've negotiated. It's more complicated than that, but not as complicated as the indie film world, where there can be dozens of financial backers on one film, all with a stake in the outcome, plus a distributor that pays to acquire a film and release it, sometimes globally, sometimes just in a specific territory or a handful of them, or for a specific term. The talent who makes the film often works for little money up front and a share of the proceeds in success. If they can negotiate that, often not. At the center of it all is the so called waterfall, the money that flows in from each window throughout the lifetime of the film. That revenue waterfall is especially relevant when a small budget indie movie becomes a big hit, something like the current horror thriller Obsession, which was made by filmmaker Curry Barker for only about $750,000 and it sold to Focus Features A division of Universal Pictures, last fall at a festival for about $15 million up front front. It's now grossed more than 240 million in worldwide theaters on its way to what could be a $300 million gross. That's just in theaters, too. So who profits from that? And how does that waterfall flow? There's been a lot of speculation about this topic online. A lot of garbage out there that an art director on the film has voiced her displeasure at being paid less than 10 grand total for her work. So that's our topic today, and to discuss it, we've got Minette Louis on the show. Minette is a professor in the graduate film program at Columbia University and a veteran indie film producer. She's taken projects to Sundance, Toronto, all the big festivals, and she's worked on countless deals. She's not involved in this movie at all. But last week, amid all the chatter about who got paid what on Obsession, she posted her own estimates based on her experience in the industry. Today we're going to go through those estimates. It's the Obsession windfall and who makes what on a big indie hit. From the ringer and Puck. I'm Matt Bellany, and this is the Town. Okay. We are here with Minette Louie, who is a veteran independent film producer as well as an assistant professor of professional practice and co head of creative producing in the graduate film program at Columbia University. I love that title. Welcome.

[B]

Thank you. It's a mouthful.

[A]

All right, so I wanted to have you on because, you know, we have a lot of very sophisticated listeners of the town who know everything we're about to talk about today. And we also have a lot of people who are not and don't. And we also have a lot of people who think they are sophisticated and really don't understand the minutiae of this stuff. So when the financials of Obsession started to go around the Internet and I started to do a bunch of face palms at some of the misinformation that that was out there. And then you posted a response to the face palms and said, listen, we. We got to get some, you know, basic facts right here. I said, let's have Manette on the show to just go through and do an explainer episode of how the financials of an independently financed and distributed movie through a studio specialty division makes money. Yeah. So can we do that? Well, first of all, explain briefly just how the waterfall of revenue works on an indie movie.

[B]

Yeah, I mean, it. It varies, obviously, from film to film, but there are some basic things, and I Just want to, you know, explain that. There's two different types of water. There's two different waterfalls, there's the distributor's waterfall. So that's the, you know, all the accounting statements that Focusput put out for Obsession. There's the distributor's waterfall, and then after that, below that is the licensor's waterfall, or some people call it the producer's waterfall.

[A]

Well, I guess there would be a. Which would be the exhibitor, the theaters, but we're not going into that today. They take half the revenue from the box office and then they take all the concessions.

[B]

Exactly.

[A]

They make their money that way.

[B]

Exactly. And that's the one thing that. The main thing that people misunderstand is that Focus gets half the money from the theaters, you know, just right off the top. So then once the money comes into Focus, Focus would take a distribution fee. It's usually like, you know, 30%, 35%, 40% of all the gross receipts they collect. And that's their fee. Fee for paying themselves to do the work through the hard work of releasing the movie.

[A]

And that's why they paid a $15 million minimum guarantee to acquire the film at a film festival like Toronto. They. That's when you see these headlines like obsession sells for $15 million. That is Focus paying the minimum guarantee of $15 million to acquire and distribute the film. In this case, worldwide.

[B]

No, it was us plus a couple of international rights, because Capstone, who is the financier, also, I believe, sold the international rights. So Focus took some territories, but the distribution fee is a little. Is separate from the mg. The mg, or minimum guarantee, is basically. It's a minimum guarantee or an advance against future sales.

[A]

Right, so it's recoupable.

[B]

It's recoupable and they recoup that plus interest. Okay, so like, on top of the 15 million, they're recouping interest plus 2%, usually prime, plus 2% on the interest, plus they have to recoup all the money they spend on marketing and distributing the movie, so. Or the P and A, as we call it, which I don't know what that number is, but, you know.

[A]

And is the P and A typically recoupable?

[B]

Yeah, they pay themselves back to create the DCPs, to create the posters, to design them, to cut the trailer, all that stuff to fly, Curry barker here, there and everywhere to promote the film. So, yes, all that is recoupable to

[A]

pay for shadow Twitter accounts to start promoting the movie by posting positive things and then retweeting it.

[B]

Yes. Yes, exactly. Viral is not, not a real. Viral is a creation.

[A]

Believe nothing you see on the Internet.

[B]

Exactly, exactly. And then also the box office bonuses that they pay out to folks like, you know, Jason Plum and, you know, whoever else is able to negotiate box office bonuses when the box office receipts hit a certain target.

[A]

Well, let's get, we'll get to that. But, but let's go through the distributor's waterfall here. So money comes in the door and where are all the different sources of money?

[B]

So there's, you know, theatrical, there's transactional vod. So you know, when you rent a movie or buy a movie on, on itunes or Amazon or whatever, that revenue is shrinking. There's still physical media, you know, a little bit dvd.

[A]

Oh yeah, Sean Fenasy, he's going to hold out to the very end.

[B]

Yeah. And then there's SVOD Stream streaming and television licenses, and that's kind of the biggest chunk right now. And then there's non theatrical like airlines and film festivals and various things like that.

[A]

But that revenue comes in later. That's why it's called a waterfall, because it, it, you know, sort of pours over the entirety of the film. And how is that accounted for? You, you hear that that opening weekend or the theatrical distribution will dictate the value put on the movie for other windows. Explain how that works in the indie context.

[B]

Yeah, sure. Well, there if basically like with these streaming deals, if the box office hits certain milestones, then the license fee goes up. So it's sort of a tiered system. So it's like if you hit 100 million, we're going to pay you, you know, 5 million more or something like that for the license fee.

[A]

That's why it's so important, because it's dictates the value of the film in all of the windows. You can say, oh, this movie didn't do well in theaters, but it'll probably be a big hit on streaming. The big thing is if it gets to 2,300 million dollars at the box office, it's treated differently throughout the other windows than a movie that doesn't.

[B]

Absolutely. And even if they don't hit those, I mean, the milestones is one thing, but just the sheer, you know, if you're doing big numbers at the box office, then a lot of people have seen your movie, a lot of people are aware of it, and so they'll come seek it out on Hulu or Netflix or whatever.

[A]

Okay, so that's all the incoming money for the distributor. Let's talk about the Deductions. You mentioned the distribution fee, which they take themselves.

[B]

Yes.

[A]

And let's say, you know, let's assume that this movie obsession gets to $300 million. So a typical distribution fee would be 30%, you're saying on an indie like

[B]

this, 30 to 40%. And it's different for every type of money. Theatrical is different than SVAD is different than tbod. So those numbers can vary.

[A]

So a distribution fee on a $300 million grossing movie, and I know this is not apples to oranges because that's the global number and Focus doesn't have all the territories, but just for the purposes of argument, let's just say that it was global. 30% of 300, that would be

[B]

90 million.

[A]

Yeah. So 30%. Let's just take the domestic number. If it gets to 150, I think it's a little above that. But let's use 1:50. That would be $45 million as a distribution fee in theaters for Focus. That's not bad. That's triple the price that they paid to acquire the film.

[B]

Yeah, it's not bad, but it could have gone the other way. I mean, they, they put in tons of millions of dollars into this film and if it didn't do well, then they would be at a loss.

[A]

Yeah, and they eat all the marketing costs, but those are recoupable. So what are the other deductions? You know, distribution and marketing.

[B]

So yeah, distribution, be the marketing expenses, any kind of bonuses they paid for box office and the minimum guarantee, the 15 million they paid to the licensor, that, that, that gets recouped, plus the interest on the minimum guarantee, which is like prime, plus 2%. So after all those things are deducted, that's when you get into the net receipts or the net profits. And that gets split between the distributor and the licensor. So it could be 50, 50. It could be like 75% in favor of the licensor. I've gotten a deal once where I got to keep 100% of that backend.

[A]

And what caused you to get 100%? Was that just the leverage you had, like in demand all night bidding war?

[B]

It was an all night bidding war. So yeah, and I heard this was too. So I do think that the producers did have some leverage here to, you know, get some good deal terms.

[A]

Right. And so in that kind of context, you think that the, the share of revenue for the producers is going to be very favorable?

[B]

I think so. I mean, it may not be as high as the 75% I put in my waterfall. But it could be like, you know, 60%, 70%. I do think they probably got a majority.

[A]

Okay, well, so let's use your number. Let's use 75% that you put in there. So let's, let's continue the analysis here. I feel like we're doing SAT prep courses. So first, first let's finish out the distributor. So let's get to all of the revenue that they are going to make.

[B]

Yes. So they're making their distribution fee, which we already talked about. They're making the interest on the 15 million milligrams they paid and then they're getting this 25% share of net. So those are the three different sources that they're getting money from.

[A]

Okay. Also Focus has sequel rights. So if there is obsession 2 through 10, they will participate in those movies. That's, you know, they're going to get to do a Halloween horror nights maze at Universal Studios. Like there will be other ways for them to profit off this. This kind of a movie could be an anchor in a package of movies that gets licensed to foreign television or others. And there are ways where these, you know, it will forever be in the Focus library, which is the Universal library, which brings value there. So there's a lot of ways that these studios get value out of these movies. We are just going through the specific P and L on this particular, on this particular title.

[B]

Yep.

[A]

Okay, so you have total there as being, you know, a windfall of. Let's say for the purposes of this argument, this movie gets to 200 million domestic and the territories that Focus controls on a 200 million grossing movie for a distributor like this in the indie context where they paid 15 million upfront, what do you estimate the take home from the theatrical window is for Focus?

[B]

I mean, here, let me plug it into my spreadsheet because I'm not going to estimate that off. So basically if they're getting, they're getting 100 million doll from that 200 and

[A]

we don't know what their marketing spend was exactly. And we, there's a lot of variables here.

[B]

Yeah, we don't know. Okay. They'd be getting 43 million.

[A]

Okay. Just from the theatrical distribution.

[B]

Yeah. Just, you know, assuming all my assumptions are correct.

[A]

Not bad. And that's just the beginning. So. But let's flip this because this is what I think most people want to know about. Let's flip this to the people who made the movie.

[B]

Yes.

[A]

Because that's where we saw this art director complain that, you know, she was paid $3,000, sorry, $300 a day. Ended up making less than $10,000 on the movie. She wanted to get additional payments. That typically doesn't happen. Have you ever seen in the indie context bonuses across the board to everybody who worked on the movie?

[B]

Yeah, Sing Sing did it.

[A]

Oh yeah, that's right.

[B]

Yeah. And there's A great, on YouTube, they did a very detailed case study with Dolby. So if you Google Sing Sing and Dolby, you'll hear the filmmakers talk about how they did that. And you know, they had 75 people in their cast and crew and they were able to do that. And they basically, you know, just very quickly they treated everybody equally. They had gave everyone the same pay. The only variable was time, like how much time each of them worked on the film. But everybody participated.

[A]

But wasn't that negotiated up front?

[B]

It was negotiated up front. Yeah.

[A]

And that's what Ben and Matt, Ben aff. Ben Affleck and Matt Damon, they do that with artist Equity where they give everyone a piece Right. Of the bonus if they get to the streaming bonus. But that's all negotiated up front. I mean when you have a contract and you agree to terms, it's really tough to go in after the fact.

[B]

It is tough to go in after the fact. But I, I, my, I've been given backend after the fact. I didn't negotiate it. You know, my very first film, Mutual Appreciation, the director Andrew Badowski came, he made some money from that movie, a little bit of money, not even that much. But as soon as he made some money, since none of us were paid, he gave us money. We didn't ask for it, he gave it to us.

[A]

You know, that's very nice of him. I don't know if a, a big corporate studio is going to do that.

[B]

They probably won't. They probably won't. But I myself have had like allocated points on my, like unallocated points on some of my films. And I'm like, hey, you know, this person does such a great job and I give them some points, you know, even though their deal is already closed. But I will say, you know, Sally, I'm really glad that Sally Choi brought it up because this conversation needs to be had. I think it's important and I think she was brave to do it, you know, especially as a woman of color in this industry, like, or unicorns, you know, we don't get second chances and we have to work 10 times as hard. So, you know, and it's, it's kind of crazy that these so called liberal Filmmakers are, they're arguing against sharing of wealth. It's a little crazy to me. Their minds have been like thoroughly colonized by, you know, traditional film capitalism or something.

[A]

I. Well, it would be nice if they did share. I know they probably don't have any obligation to. And there's companies like Blumhouse that came in after the fact and they could share as well. So we'll see if any of that ends up happening.

[B]

Yeah, I mean, you know, on the other side, there's a lot of crew who, you know, are saying that producers, directors are selfish for not sharing and, you know, they're not acknowledging or maybe they don't know that very often. We, on tiny films like this, we don't even pay ourselves. Like we get zero upfront for years of work, for years of development, developing and packaging.

[A]

Well, and you do 10 of these and nine don't work.

[B]

Yeah, exactly.

[A]

I know it's a very complicated issue, but I am glad we're talking about it. So let's get to the licensors waterfall, the producer's waterfall. So take us through who put up the money for this movie and how they get paid.

[B]

Yeah, so they, they get the minimum guarantee, the 15 million that Focus paid in the first place. And, and sometimes that's. Most of the time, that's all the money you'll ever see from a movie.

[A]

You know, that's why it's so important to get that up front.

[B]

Exactly, exactly. And it's an indication of how hard the distributor is going to work to distribute your film. If they pay you zero, they don't have to work very hard to make that back. Right. So. So they're getting $50 million aluminum guarantee, and in my example, they're getting a share of net, the 75% that we talked about earlier. And then they probably negotiated some box office and VOD bonuses as well.

[A]

That's on top of the share of net.

[B]

That's on top of the share of net. And you know, I didn't, I didn't put in estimates for those because those can range really widely. Like they can be all over the place. So I didn't want to gu.

[A]

Well, there was a report out there this week that said that Blumhouse had negotiated box office bonuses. So if Blumhouse had them, you got to assume the producers had them as well.

[B]

You would think so. But you know, Jason Blum is a, is a brand and you know, he has the leverage to negotiate that kind of stuff. So.

[A]

And he brings a lot of value if you, you Know, marketed via Blumhouse. They have expertise in how to get these movies to the right audiences, so.

[B]

Yeah, exactly.

[A]

We shouldn't assume you're right.

[B]

Right, But. But it was a, you know, a bidding war at tiff. Right. So when you have a bidding war situation, then you do have leverage.

[A]

Right?

[B]

Yeah.

[A]

So let's go through the rest of the waterfall. That's the revenue coming in to the producer. What are the deductions that are charged against it?

[B]

Yes, there's a lot of those. There's all the middle people that we have to work with to sell the movie. Right. So that includes a sales agent, you know, who's selling the movie. In this case, I believe it was caa, I think, who did that capstone, I think, was their international sales agent. CAA only did domestic. So domestic sales agents typically charge between 5 and 10% right. Off the top of whatever the producers make. So they're, you know, at TIFF, they took 10% of 15 million.

[A]

And that's off the sale price. That's not off of the box office.

[B]

It's off of the sale price, and it's off of whatever the producer makes. It's off of whatever comes into the producer's waterfall.

[A]

Oh, so it travels beyond just the sale of the festival.

[B]

Absolutely.

[A]

Goes to the net profits as well.

[B]

Yes, yes, it does.

[A]

Oh, interesting. It's so funny because you see the agencies pulling back these days on these independent film divisions. W me, you know, they let their people go and, you know, I. I keep hearing that that business is just so challenged for these agencies. If you are not, you know, rogue Southernland at caa, it's really tough to make that a real business because so many of these films just don't sell at all.

[B]

Yeah, yeah, it's true. It is tough.

[A]

So when you have a movie like this that is a 100% unequivocal success, I guess you. You want to capitalize as much as you can on it.

[B]

Yeah, no, absolutely. It is a tough business, but it

[A]

does take away from the producers.

[B]

Yeah. I mean, just keep in mind, like, this is a one in, like, 10 million, you know, example. Like, most indie films don't make money, so. Yeah. So 10% to CAA between 5 and 10.

[A]

I don't want to say it's always 10.

[B]

Between 5 and 10. Between 5 and 10. The international sales agent usually makes between, like 15 to 25% of the international receipts. Receipts.

[A]

Why is it more there?

[B]

Because they do sort of do more legwork because they have to go a lot of Them go like territory by territory. So they're selling films to like, you know, the Spanish distributor and the, you know, Middle Eastern distributor and like the Australian distributors. They kind of have to go knock on these doors and it's a lot more legwork having to travel to markets.

[A]

They have to go yacht to yacht at camp.

[B]

Yeah.

[A]

I mean, God, you know, who's going to do that work?

[B]

Exactly, exactly. So, and then they had those sales age, those same international sales agents, they have a lot of expenses going yacht to yacht. So they usually charge a bunch of expenses and it's usually like 25,000 to 40,000. So they take that off the top and then you need.

[A]

That's the rose bill at whatever can restaurant they do the dinner at.

[B]

Yes, exactly. And then, you know, you need lawyers to negotiate these deals. Right. And so you're usually paying either by the end hour or like, you know, sometimes you'll do like 2 to 2.5% of whatever's coming in to the producer with a floor and a ceiling. And then of course, there's the collection agent, if you engage one, which you should if you're, you know, making all this money and having to pay all these parties. So collection agent charges like 1% and they basically bring collect the money and make sure it's paid out properly to the right people.

[A]

Okay, so that's a lot of deductions.

[B]

There's more, there's more, there's more.

[A]

Okay, keep going.

[B]

There's the Guild residuals. Okay. So like usually so, you know, this. I think this movie only was sag. It didn't use Ayatsi Crew. And so usually Focus, a company like Focus, as big as Focus, they'll assume the residuals. So they'll pay the all the SAG residuals. But then these smaller distributors that Capstone is selling to, you know, like the Spanish distributor or whatever, they're not going to deal with paying residuals. So the producer has to do that. So we have to skim off the top in order to pay SAG so that SAG can then, you know, pay out those residuals to the actors. Residuals are a form of backend, by the way. And so that's why this was a non union crew. If it were a union crew crew, they'd be getting residuals on the back end in a big pot.

[A]

The only way you get to a $750,000 budget is if you use a non union crew.

[B]

Basically, yes.

[A]

There's no way to do a movie like that with a union crew at that price.

[B]

Right, that's right. Did I miss anything? I think that's basically it. And then you want to keep a reserve from the money you collect. As you know, the producer is saddled with dealing with the film for the rest of their lives. We have to deal with the tax accounting every year and the maintaining it and all that. So we keep a reserve to deal with that.

[A]

That's a lot of deductions. We're looking at, like, between 20, 30, 40% off the top.

[B]

Yep, yep. It's a lot. It's a lot.

[A]

And that's not even accounting for deferrals, right?

[B]

No, it's not where that comes later. So next in line is the investor recoupment. Okay, so, like, Capstone put in $750,000, I believe, for the film, and they get paid back that 750,000 plus a premium, which is usually like 15 to 25%. So let's use 20%. So on top of that 750, they're getting another 100 as their little reward. And then you go into cast and crude deferrals.

[A]

Oh, man.

[B]

Which I put at 100,000, you know, so it's like, you know, maybe Curry waived his entire fee, you know, so he's getting kind of paid from this residual, this deferral pool. And, you know, a lot of crew. I. I've paid like, the DP and department heads from this deferral pool. If I'm not able to pay them their usual rate up front. Okay.

[A]

So they take a risk and say, I'll work for much less or 3. And you pay me if we make money.

[B]

Exactly. They're investing their labor.

[A]

But the. The fact of the matter is, it's got to make a lot of money to end up in profits like this.

[B]

Yes, exactly. Because of all these deductions we've been talking about. Right. And then. Okay, then after the deferrals are paid out, then you. Here, we get into the points, the back end that everybody is talking about.

[A]

Right. And that's what we end up talking about on successful movies is what are you getting of the upside here? And we've already explained how, you know, there's a lot of things that have to happen and a lot of deductions that have to be made. But then if after all of these payouts, you get to profits net receipts, then there is a mechanism to share.

[B]

Yes. And those mechanisms, basically, it's the contracts that the crew and the cast have negotiated with the producer. You know, you negotiate your upfront pay, any deferred pay and then whatever points you get on the back end. And so if you hit it big, like in a movie like this, those points will actually materialize and you'll get money.

[A]

So if someone says, I have five points on this movie, what does that mean?

[B]

It depends. So the points can be confusing because basically there's a hundred percent, there's 100 points, a pool of 100 points. Half of those points go to the investor, usually, and half of them go to the producer or the licensor. And that half, that 50% is what we control as producers and we can dole out to cast and crew. So if somebody says, I have five points on the film, you assume it's five producer points, you know, not five total points. Five producer points. So that's 5% of that 50%.

[A]

So two and a half of the whole.

[B]

Two and a half of the entire pie. Exactly.

[A]

And if you say, like, oh, we weren't able to get a big actor, so we had to give five points to Chiwetel Ejiofor or Renata Ryan's vote to get them in backrooms or something like that. Yeah, that's what we're talking about.

[B]

Exactly. And yeah, for names like that, they usually take the biggest share of the pie.

[A]

And interestingly, they're represented by one of the big agencies, which is often the agency that ends up selling the movie.

[B]

Yes, there's a lot of dipping and here.

[A]

Yes, we don't have to get into that.

[B]

That's the other thing too, is like, you know, all, like, directors and writers and actors. They have to basically take 25% off the top of their own pay, 10% to their agent, 10% to their manager, and 5% to their lawyer. So I'd like people to keep that in mind as well.

[A]

This podcast is brought to you by Landman. As oil rises from the earth, so do the secrets. Billy Bob Thornton, Demi Moore and Sam Elliott star in the explosive second season of Landman, one of the best TV shows of the year. Raves the rap. This season is better than ever, says Esquire from Taylor Sheridan. Landman continues its run as a cultural phenomenon for your Emmy consideration in all categories. Now streaming on Paramount plus, this episode is brought to you by LinkedIn Ads. Ever invest in something that seemed incredible at first but didn't live up to the hype? Marketers know that feeling. They optimize for the numbers that look great, impressions reach and reacts. But when they don't show revenue, well, that's a not so great conversation with the CFO LinkedIn has a word for that bull spend. Instead, why not invest in what looks good to your CFO? LinkedIn Ads generates the highest roas of all major ad networks. Reach the right buyers with LinkedIn ads. You can target by company, industry, job title, and more. So cut the bull spend. Advertise on LinkedIn, the network that works for you. Spend $250 on your first campaign on LinkedIn ads and get a $250 credit for the next one. Just go to LinkedIn.com thetown that's LinkedIn.com thetown Terms and conditions apply. So let's go through the waterfall for the. The talent participants.

[B]

Yes.

[A]

How does that typically work? The producers get the most?

[B]

Well, no, the, the lead. The A list actor gets the most.

[A]

Okay. I mean, in the case of Obsession, these were not known names.

[B]

Yeah. So I don't think they got very much. I think I probably got a couple of points. Um, the producers probably got the most. The director got a lot, I would imagine. And I don't. And I usually give, you know, points to my department heads, at least. I don't know what happened here. I have no idea.

[A]

So a line producer or a DP or a composer editor, those people can get points on an indie movie.

[B]

Yeah. And most, and many of my indie producer colleagues do give points to these department heads because we're asking them to work for less than their usual rate, you know, on these little passion projects that we have. Right. So they're investing their labor and their time. So we're giving money because of that.

[A]

And in the ultimate success of a movie like this, is that. Are we looking at a million dollar windfall for a typical below the line participant? Are we looking at a couple hundred grand?

[B]

Even. Even in this situation? You know, my. What was my example? I can't even find my, my own example right now. But, you know, 1% at the current box office when I did, this was worth $127,000.

[A]

So now it's probably up to 150.

[B]

Yeah, yeah.

[A]

So if Sally Choi had gotten a point on this movie, she would have had an extra 150 grand.

[B]

She would have. She's an art director. She's not the person she worked under the production designer. So.

[A]

Right. So she's probably not getting that in the best case scenario, but let's say she did.

[B]

Yeah, yeah, she'd be getting an extra $130,000. $50,000.

[A]

All right, so bottom line here, give us your ranking of the people who made the most money on Obsession, taking The theaters out of it, taking focus out of it. Who is making the most money? Likely on Obsession.

[B]

Just from Obsession, not from. Because Curry Barker has gotten really great deals after Obsession. Right. For his subsequent films. Right?

[A]

No, we're not talking about the Heat. Everyone associated with the Obsession is going to get a bump. The. The stars of the movie are going to get big roles. I've already heard the lead actress is up for a ton of things. So give us your ranking of people just on this movie.

[B]

Okay. I would imagine Curry and the lead producers, those British guys, I believe, got the most. I mean, Curry is a brand, right. That's why they reached out to him in the first place. Those producers, like, you know, saw some promise in him. They saw he had an audience and they. They took the risk of, you know, making his first feature. So they should get rewarded for it. And. And so should Curry.

[A]

And what about Blum? Blum's got to be on there now

[B]

with that rap article that came out. You know, it sounds like he made a nice, sweet deal with Focus and Universal for his bonuses. So that's probably up there as well.

[C]

But so, okay, Minette. So, like, this movie makes $300 million. You take half of it. So are we saying Curry Barker, who wrote and directed this, like, is 10, 20 million bucks? Does that feel right?

[B]

I mean, I don't want to say because I don't know what he got in points. I really, I don't want to speculate. And everybody is always thinking, taking this as, like, fact. Right. So I don't want to use hard number, hard dollar numbers, but more just

[C]

to kind of have a sense of like, okay, if you are someone like him and you make a movie that hits big, like, what could you make off this?

[B]

Yeah, I put the numbers in and it's like, you know, it's under 10, it's like 6 million bucks. It's under 10 million. It's not. It's. Yeah, it's a lot. It's a lot of money, but it's not like, you know, dot com money or whatever. It's not tech money.

[A]

Right, but does that surprise you, Craig? I mean, this guy did not have, like, the biggest leverage going into this. This was a tiny movie.

[C]

Totally. And getting 6 or 10 million dollars is obviously great. And then of course, like, minute said, like, what this gets you is it sets you up for everything else afterwards.

[A]

Yeah. The whole reason you do this is for the next movie and the movie after that.

[C]

Yes. And the real winners here are. Are the producers.

[B]

Yeah.

[C]

And the Distributors.

[B]

Yeah. And the investor. A lot of money. Yeah.

[A]

And the stars who got a huge bump off this.

[B]

Yeah.

[A]

Have careers.

[B]

I think everybody crew, everyone. You know, I think when you're, when you're associated with something successful like this, like your next thing is your payment.

[A]

All right, so this movie obviously is an anomaly. What percentage of indie movies that sell at film festivals? I'm not talking about the morass of movies that try to find a distributor and don't or self distribute or whatever the headlines we see at film festivals. What percentage of those end up in profits?

[B]

You know, everybody asks this question. I've been trying to look for the answer. The reason why I think there's just not a lot of like reliable data out there is because these are. Each indie film is like a private company. You know, we form LLCs. We don't make any. Anything public. You know, we work in an industry of smoke and mirror, so nobody wants to admit their failures.

[A]

Well, that's why there's so much litigation also.

[B]

Exactly.

[A]

Shady people. And there's so many nuances to these deals that it just, it is a breeding ground for bad behavior and ultimately litigation.

[B]

Yeah, unfortunately. But you know, the, the number I often use is basically like 2% of all indie films that get. That get made recoup for their investors, not even hit it big, just like recoup, period.

[A]

2%.

[B]

2%.

[A]

That's worse than Broadway.

[B]

Yeah, it's pretty terrible. It's not a business you want to go into if you want to make a lot of money, you know, and

[A]

the old days of the DVD market, saving these films, that. That's long gone.

[B]

Unfortunately. Yes, we have to find an alternate because these stream, you know, with streaming for a little while, but these streamers are not buying these films anymore unless

[A]

Netflix thinks they can get an Oscar nomination out of it. Then they'll pick up some movies that can potentially.

[B]

But you know that, that only benefits a handful of movies. But like the distribution model is broken and needs to be fixed. That's the biggest thing problem in independent film right now.

[A]

Well, how would you fix it? You got a platform here.

[B]

I don't know. It's a huge problem. I'm going to teach a class on distribution in the spring. So I'm trying to figure it out. And I'll let you know, you can have me on again. And I'll tell you, I know we.

[A]

I want you to fix the indie distribution problem because I hear this all the time, people complaining about the model and you know, the streamers were great. For a few years because they were buying up global rights and everyone was getting paid. But then they backed away a little and now it's sort of left with this wasteland where a couple movies hit it big at these festivals and everybody else is chasing scraps.

[B]

Yeah, I mean, it's been that way for a long time. Like they're always. There's always like a handful of films that like, you know, have those bidding wars. But the rest of the films would find some kind of distribution, would find some kind of home. Even if it weren't like, you know, making a lot of money. They would find a distributor willing to take it on and putting in the effort to put it in theaters or on VOD or whatever. But we're not even finding that now.

[A]

Well, hopefully the outside success of Obsession will lead to people taking a little more risk and being willing to take chances on some films and we'll get a little bit more heat around this market.

[B]

I sure hope so. And I do hope that what Sally said will spark others to think about different models. And I did want to mention one other. There was a company called Indigent back in the early 2000s that really pioneered. They were the OG of like this back end sharing with crew and they were partnered with, with IFC Films, which basically funded their slate. And IFC was so generous, they shared like 50, 50 with the company from the first dollar, which is so. Which never would. Would never happen these days, you know.

[A]

And how long did they last?

[B]

I think maybe not quite a. Not quite a decade.

[A]

IFC might still be around.

[B]

IFC is still around. Yeah, yeah, yeah, yeah. IFC is still around. Yeah. That company is not, unfortunately. Yeah.

[A]

All right, well, we will figure it out at some point and we will revolutionize the indie film business, you and I. Thank you for coming on the show. Apprec it.

[B]

Thanks, Matt.

[A]

All right, today's call sheet is brought to you by FX's the Lowdown from Sterling Harrow starring five time Academy Award nominee Ethan Hawk. Craig, I'm gonna place a little bet here and say that you are a fan of the 21 Jump street franchise.

[C]

Absolutely.

[B]

Yeah.

[A]

Yeah, that. That seems like right in your wheelhouse.

[C]

Yeah, it's like 2010 to 2014 range. That was weird. That was the sweet spot.

[A]

Yeah, those movies are Good.

[C]

They're great.

[A]

21 Jump Street, 22 Jump Street. Good comedies.

[C]

The rare sequel that came out right after the original and also was great.

[A]

Yes. So they've been trying for 10 years to do a third one and it's always Been difficult because according to my sources, Jonah Hill, he didn't want to do a legacy sequel like that. He wanted to be a real filmmaker.

[C]

And he had elevated beyond that. He was doing Wolf of Wall street and. And directing cool movies like mid-90s and things like that.

[A]

Totally. That's why it was so funny to see the announcement this week that 24 Jump street, they're skipping 23. Apparently it's an inside joke and going straight to 24 Jump Street. And yes, Jonah Hill and Channing Tatum and Ice Cube all in talks to return. And my prediction is not just that that this will happen, but it's more why this is happening. I mean, Jonah Hill right now is not in a great spot as a filmmaker. Outrage. No, Outcome. Outcome. Worst title ever. Outcome just came out on Apple. Have you. And have you actually seen that movie?

[C]

No. It's in my queue. I need to watch it.

[A]

I'm not a critic, but, man, like, that's a whiff. And they paid a lot of money for that Keanu in it. They had Cameron Diaz in that movie. And then more importantly is he had a movie he directed called Cutoff with Kristen Wiig that was supposed to come out via Warner Brothers in July, and Warner's just punted the movie. No release date.

[C]

And Jonah was directing that?

[A]

Yes. No release date, nothing. I heard it was a total disaster. Unreleasable. They are trying to fix it now. And I think that because of those two setbacks, Jonah has fallen into the warm embrace of a franchise that he knows will be a hit.

[C]

Oh, I see. Okay. Got it. You think this is a reset here? Let's do something that's bankable, that everybody

[A]

likes, which is probably smart. Sure. You know? Yeah.

[C]

And like, they're not, you know, I know the premise of these movies is that these are two guys who could theoretically pretend that they're in high school or college. So I. I don't know what the new bit is going to be, but, you know, these guys are Jonah Hill's 42, Channing Tatum's 46.

[A]

46.

[C]

But they're a young 42 and 46.

[A]

So, sure, yeah, okay.

[C]

You can get away with it. They're not too old.

[A]

Yeah. I mean, I like the idea of them doing a kind of menial job or some kind of like, fast food job or something like that. That could be funny.

[C]

Yeah. I mean, Lord Miller are producing but not directing. They're not directing. Peter Rodney Rothman is directing.

[A]

Yeah. One of their guys who directed the

[C]

first Spider Verse movie. So he's in the Lord Miller family. Look, when you make a legacy reboot comedy or sequel comedy, I mean, it is rare that these work like Zoolander to the dumb and dumber to the ten years later comedy. It's hard to pull off.

[A]

Very hard. Remember they were going to do a Men in Black crossover at one point. Oh, yeah, that's not happening. The Men in Black not where it was. Yeah. Sony needs franchises. Jonah Hill now needs this. And I think all the stars are aligned. This movie will happen and it will probably be dated for summer of 2728.

[C]

Hopefully this will help remind people that they like to go to the theater to laugh.

[A]

Yeah. And hopefully it'll remind people that they like Jonah Hill. He's great. I love Jonah Hill.

[C]

Me too.

[A]

I want, I want him to do more movies like this. All right. Today's call she was brought to you by FX is the Lowdown. This gloriously off kilter NOIR is an AFI television program of the and one of 2025's most critically acclaimed shows. The Lowdown is available for your Emmy consideration on Hulu and Disney for bundle subscribers. Okay, that's the show for today. I want to thank my guests, Minette Louie, producer Craig Horlbeck, our editors Matt Pebic and Jesse Lopez. And I want to thank you. We will see you next week. You can't reason with the sun. Trust us, we've tried this summer. It's time to put that angry ball of fire on me.

[B]

Mute.

[A]

Columbia's Omnishade technology is engineered to protect you from the sun's harsh rays that can burn and damage your skin. The sun is relentless. But so is our gear. Level up your [e-mail] to spend more time outside and less time slathering on aloe lotion. You're welcome, Columbia. Engineered for whatever the right window treatments change everything. Your sleep, your privacy, the way every room looks and feels. @blinds.com, we've spent 30 years making it surprisingly simple to get exactly what your home needs. We've covered over 25 million windows and have 50,000 five star reviews to prove we deliver. Whether you DIY it or want a pro to handle everything from measure to install, we have you covered. Real design professionals, free samples, zero pressure right now. Get up to 50% off with minimum purchase. Plus get a free professional [e-mail] rules and restrictions apply.