The way the remuneration models currently work is that we partner with the producer of the film, who has entered into agreement with the creators, location managers and the like, and we are delivered a finished film or presented with a script and promised delivery of a finished film.
Our members review that film's prospects and come up with an amount they think they can guarantee the film will earn. The analogy we've used is that it's as if we were a real estate agent who has agreed to sell your house. We know the best buyers for your house and we know how best to market it; however, we will also guarantee you at least a certain amount for your home, and we put our revenue on the line as a starting point to guarantee that return.
The producer is then able to take the amount that has been guaranteed and go to a bank, funding agency or private equity funder and say, “We have interest in the Canadian market to the tune of this amount.” That's how the producer secures the remainder of the funding for the film's budget.
When the film is delivered, we are then responsible for taking it out to the market, approaching the theatrical exhibitors and the Amazons, Netflixes, Bells, Coruses and OUTtvs of the world and earning licence fees, revenue splits or transactional amounts for the exploitation of that film.
As those funds come back in, we recoup some percentage of the fee for ourselves. We recoup the expenses we incurred so doing, and the guaranteed amount as promised. All remaining funds, for the most part, will be paid back to the producer to then go back to their profit participants, however that has been negotiated.
We ask for a little as a middleman, but a middleman with financial risk associated with our investments. It's that risk that then allows Telefilm or whatever funding agency is involved to feel that, yes, there is market interest for this feature film, and their equity investments will be recouped.