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Indie Filmmakers Waiting on Major Payments from iTunes and Amazon As Distribber Faces Financial Woes

Distribber has hired a bankruptcy reorganization firm as users say they're owed thousands in royalty payments they worry they might never see.

Distribber’s website

Distribber

Distribber, a service that acts as a middleman between independent filmmakers and streaming platforms, has tapped a firm that specializes in bankruptcy reorganization as clients say they’re owed thousands in royalty payments they worry they might never see.

Aggregators like Distribber receive filmmakers’ work and, for a fee, will encode and post it on multiple platforms for streaming, rental, or purchase, then collect the revenue and cut the checks. In theory, anyway.

In December, director Todd Jenkins used the service to send his horror comedy “Cherokee Creek” to iTunes, Amazon, Vudu, and Google Play. (Distribber charged $1,650 to service a feature for iTunes.) He went on to collect about $2,150 for the few days that remained in the final quarter of 2018. But he hasn’t received a dime for 2019 sales, he said.

Distribber, which recently stopped accepting new orders, kept its users abreast of sales though an online dashboard — they have no access to direct information from the sales platforms. The last completed quarterly report Jenkins received was for the first quarter of 2018, which said he would be getting around $10,000. He expects his cut for subsequent quarters to bring that total to $14,000.

“It got to the point where I couldn’t reach them at all,” he said. “A producer who was on the project who was in LA went by their office in August, she said nobody was there. That’s when the alarm bells really started going off.”

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It’s an amount of money that would be a drop in the bucket for a film that has studio backing, but Jenkins and others who relied on Distribber to get their films in front of audiences oftentimes put their personal finances on the line to see their passion projects realized.

Jenkins and his wife used loans and credit cards to finance some of the production and marketing of “Cherokee Creek,” which cost around $40,000. He built up a fanbase that he knew would buy or rent his movie, and all seemed to be well when it was No. 2 in its genre on iTunes — but then Distribber failed to send the royalties.

“You have to risk it all when you’re an independent filmmaker because nobody’s going to give it to you,” he said.

News of the trouble with Distribber was broken by Alex Ferrari through his popular blog Indie Film Hustle. He used the service for his 2017 feature “This Is Meg,” and had previously championed the service as a good player in a sometimes sleazy segment of the industry. As a consultant, he also used it for filmmaker-clients — he said he’s owed money for two of his client’s films that he paid to be sent to platforms, but were never posted.

“They owe me a minimum of $4,000,” Ferrari said. “I’m actually one of the better-case scenarios.”

Ferrari, too, hounded the company. He got a reply from Michael Sorenson, director of business affairs at Distribber parent company GoDigital Inc., on Sept. 6:

“Distribber and the GoDigital, Inc. group of companies are undergoing reorganization. As a result, we are unable to provide you with a retail launch ETA for the titles in question before the end of business this afternoon

“With this in mind, it may be best to cancel your order with Distribber and allow these clients to move on to another aggregation provider who can provide a release calendar guarantee. Regarding refunds, GoDigital, Inc. has engaged financial services firm GlassRatner to assist with royalty and refund processing matters during our transition and we hope to provide additional information on payment scheduling status within the next 30 days. Let us know if you have other questions in the meantime.”

Other filmmakers have received similar emails — and posted them in the 320-member strong Facebook group “Protect Yourself from Distribber” created by Ferrari. Distribber and GoDigital Inc. did not return a request for comment, but Seth Freeman of GlassRatner provided the following statement to IndieWire:

“I can confirm that GlassRatner Advisory & Capital Group, LLC, a B. Riley Financial Company, has been engaged to assist GoDigital, Inc. and its Distribber division. The engagement is managed by GlassRatner’s Senior Managing Directors, Seth R. Freeman, CIRA, CTP and George Demos, CPA (inactive), CTP. GlassRatner is one of the country’s leading national specialized financial consulting firms with 120 professional in 14 offices.”

It’s unclear exactly how many people could be impacted by Distribber’s financial woes, but an Amazon search of the word “Distribber” last month showed close to 1,000 films. On Thursday, that number was down to 200 — perhaps due to the number of filmmakers who have requested their Distribber-linked work be removed from the platform during the uncertain financial situation.

One poster in the Facebook group, citing a conversation with Freeman, said the company would soon be filing for bankruptcy. Freeman denied the accuracy of the post to IndieWire, but declined to get into specifics.

Attorneys say it’s still an open question of what exactly will happen to Distribber customers’ money, especially without knowing exactly how its contracts were structured.

Silvia Vannini, partner at the Los Angeles firm O’Melveny & Myers LLP, said things could be trickier for filmmakers if their licenses actually passed through Distribber, compared to if Distribber was simply acting as an agent for the filmmakers.

“From the content-producer perspective, it would be preferable if the relationship with the aggregator were an agency relationship,” she said.

Filmmakers say Distribber’s downfall is all the more troubling because the platforms vouched for it as an approved or preferred aggregator.

“You can’t put any movies up on Apple yourself,” said Ross Patterson, director of “Range 15,” which he sent to iTunes using Distribber in 2016. “You need to go through an aggregator. It seemed like they were the savior. If you’re an independent filmmaker who doesn’t get a distribution deal, you need to put your film out on your own, you’re trying to make some money, there’s no other game in town other than five or six places.”

Among the platform-sanctioned aggregators, Patterson and others said that Distribber was particularly highly regarded in the independent film community.

Distribber and its GoDigital affiliates were also used by distribution companies. Joe Dain, president of worldwide distribution of Terror Films and Global Digital Releasing, said he pulled his films out of the GoDigital realm earlier this year after noticing sloppy mistakes and getting a sense that the business was not being properly managed.

The platforms levy stringent technical requirements on aggregators. Dain says the platforms also should enforce strict financial controls, since the aggregators also act as financial clearinghouses.

“Why would I doubt they’ve been vetted?” he said. “We are forced to use these aggregators. They collect our royalties, and that’s absurd if you’re not going to require them to meet any kind of financial regulation.

Apple, Netflix, Hulu, and Amazon either declined to comment about their relationship with aggregators or did not respond to IndieWire’s calls for comment. However, Netflix has been contacting filmmakers who used Distribber or GoDigital Inc. to get their films on the platform.

Emily Best, founder and CEO Seed&Spark, which works with filmmakers to fund, build an audience, and distribute their films, said the technology solution of aggregation has sometimes been sold as a silver-bullet solution to a distribution problem.

As for Distribber’s downfall, she said it’s a familiar story with a new take for the streaming age.

“They’re no different from the thousands of distribution companies that have overpromised, underdelivered, and screwed over filmmakers in the process,” she said. “This is our favorite remake in Hollywood.”

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