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Netflix Steps Up to Pay Filmmaker Royalties as Distribber/GoDigital Payments Go AWOL

GoDigital Inc. is liquidating, leaving hundreds of filmmakers unpaid. Now Netflix is stepping up to make some of them whole.

Distribber’s website

Distribber

As film aggregator Distribber and its corporate parent, GoDigital Inc., veered toward financial collapse, it continued collecting royalty payments from platforms like iTunes, Amazon, and Netflix. For filmmakers, collecting those royalties is another matter: Restructuring firm GlassRatner, which is overseeing Distribber’s liquidation, offers no assurance whether or when filmmakers can expect to be paid what they’re owed.

However, there is one clear exception: Netflix. The streamer is working directly with filmmakers to account for payments that Netflix sent to GoDigital and were not passed on to the filmmakers. That means Netflix plans to pay out those royalties twice — this time, directly to the filmmakers — according to a person familiar with the situation.

“Although we have not reached an agreement with GoDigital for the assignment of your license agreement, we are now moving forward with the process of getting paperwork in place in order to begin releasing payments to you,” reads an email that Netflix sent to affected filmmakers in October. It also requests that filmmakers forward supporting documents, including a tally of all outstanding payments.

Most Distribber and GoDigital filmmakers placed their films on transactional platforms like Amazon and iTunes, with the aggregator acting as a middleman that handles encoding, quality control, and serves as a royalty clearinghouse. However, since the platforms take a cut from the rental or purchase of each film, they have broader standards for acceptance. Netflix worked with GoDigital less frequently since the streamer doesn’t have an open-submission strategy. It accepts a more select number of films in exchange for flat-rate royalties over a set period.

One self-financed filmmaker said he’s owed three quarterly payments from GoDigital totaling between $40,000 and $50,000. Most comes from the flat rate paid by Netflix each quarter. He said he’s counting on those funds to compensate people who worked on his project and recoup his investment, he said.

GlassRatner managing director Seth Freeman has suggested that filmmakers might have better luck looking to the platforms for their payments. “There may be a legal argument that since the film was exploited on their platform and they received payment, the platform is responsible to pay the film owner,” he told Variety. “Absent any legal duty, the reality is that the platforms need the content and the amounts needed to take care of the unpaid licensing fees is tiny for them, but still important to the film owners. From a PR and goodwill standpoint, the platforms would greatly benefit.”

While Netflix’s action could certainly generate goodwill, it can only help a small portion of the GoDigital clients now waiting for their royalties. According to a website set up by GlassRatner to offer information about the liquidation process, all GoDigital content has been removed from Amazon, while Netflix “is prepared to enter into a direct license” with former GoDigital filmmakers.

As for Apple, however, GlassRatner “has had a couple conversations with iTunes (Apple) and it does not appear they share the same sense of urgency in facilitating a transition of GoDigital’s account that avoids having to remove content from iTunes (Apple) and the time and expense of relaunching it.”

As the site notes, “[GlassRatner] is continuing to have conversations with certain platforms on how to implement a smooth transition that would avoid removing films already on their platforms. This is not progressing as quickly as [GlassRatner] desires.”

Last month, an attorney representing Distribber filmmaker Jevona Watson told IndieWire that Distribber’s failure calls for criminal investigation, saying the company’s failure to pay filmmakers what they’re owed amounts to theft.

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