Predatory Film Distributors: How the Business Model Guarantees Loss

Independent filmmakers don’t lose money because their films fail.

They lose money because predatory film distributors are built to extract value, not share it.

This isn’t about “bad actors.”
It’s about a business model that guarantees filmmaker loss through contracts, accounting, and leverage — even when a film performs.

Once you understand the structure, the outcome becomes obvious.

What Makes a Film Distributor Predatory

A predatory film distributor is not defined by attitude or reputation.

They are defined by how their money is made.

Predatory distributors:

profit before filmmakers see revenue
control reporting through self-reporting
recoup undefined expenses first
retain rights for long terms
structure deals that never close deficits

They don’t need your film to succeed.

They need it to exist under their control.

The Core Truth Filmmakers Aren’t Told

If a distributor gets paid before you, and controls the reporting, you are not a partner — you are inventory.

Once you accept that, the entire system makes sense.

How the Predatory Distribution Model Works

Predatory film distribution relies on four structural advantages.

1. They Control the Money Flow

Distributors sit between:

streaming platforms
broadcasters
international buyers
and you

All revenue flows through them first.

You never see gross receipts.
You only see what remains after they’ve been paid.

This alone creates asymmetry.

2. They Define “Recoupable Expenses”

Most distribution contracts allow distributors to recoup:

marketing
delivery
legal
administrative costs

Before paying filmmakers.

But these costs are:

undefined
internally calculated
self-reported
often inflated

Common examples include:

marketing charges for campaigns that never ran
QC and encoding billed at 300%+ markup
legal fees paid to internal counsel
overhead disguised as film-specific expenses

Because the distributor defines the expense, the deficit is controllable.

3. They Self-Report Revenue

Predatory distributors self-report:

platform revenue
territory performance
licensing income

Without attaching platform statements.

You cannot verify:

actual payments
view metrics
completion rates
backend calculations

This is not a flaw.

It’s the mechanism.

4. They Lock You into Long-Term Control

Predatory contracts often include:

exclusive worldwide rights
15–25 year terms
automatic renewals
restrictive termination clauses
penalties for early exit

You may “own” the film — but you don’t control it.

And control is what matters.

Why Predatory Distribution Guarantees Filmmaker Loss

The math is simple.

Even when revenue exists:

expenses expand
revenue is summarized downward
fees are taken first
deficits never close

Quarter after quarter, the report looks the same:

“Still recouping.”

This is why filmmakers never see backend.

Not because films fail — but because the model requires failure on paper.

The Filmmaker Deficit Is Not Accidental

Predatory distribution creates what I call the filmmaker deficit:

A permanent financial position where:

revenue exists
expenses always exceed it
and the filmmaker remains unpaid indefinitely

This deficit is not the result of poor performance.

It is the product being sold.

Why This Same Model Collapsed Hollywood

The predatory distributor model is a scaled-down version of legacy Hollywood accounting.

Studios relied on:

leverage debt
inflated budgets
internal cost allocation
self-reported profitability

That’s how billion-dollar films “lost money” on paper.

When streaming disrupted theatrical revenue and debt matured, the illusion collapsed.

The same accounting logic that bankrupted studios is still being used on filmmakers.

How Predatory Distributors Maintain Power

They rely on:

filmmaker inexperience
information asymmetry
fear of litigation
expensive audits
opaque language

Most filmmakers don’t fight back because:

legal battles are costly
contracts are intimidating
rights are already locked

Predatory distribution survives on silence.

How Filmmakers Avoid Predatory Distribution

Filmmakers who survive today do not “pick better distributors.”

They change the structure.

They:

1. Eliminate Recoupment-Based Deals

No undefined expenses.
No net-profit participation.
No backend dependent on internal accounting.

2. Use Aggregators as Infrastructure, Not Principals

Aggregators deliver files.
They don’t control money.
They don’t recoup expenses.
They don’t retain rights.

3. Control Chain of Title and Deliverables

Ownership of:

master files
metadata
captions
QC-compliant deliverables

Ownership removes leverage.

4. Learn the Business, Not Just the Craft

Filmmakers who understand:

contracts
reporting
deliverables
platform requirements

are not exploitable.

Predatory Distribution Is Not the Future

It’s the past — still feeding on filmmakers who were never taught the system.

The industry has shifted.

Platforms care about:

compliance
data
efficiency

Not middlemen.

Neo Hollywood™ Replaces Predatory Distribution

Neo Hollywood™ does not rely on:

opaque accounting
recoupment traps
rights extraction
permanent deficits

It operates on:

filmmaker ownership
transparent reporting
AI-powered efficiency
direct platform access

This system runs on The Berserker Method™ — a patent-pending AI + business workflow built to replace predatory film distribution entirely.

This is the reality of filmmaking in Neo Hollywood™.

About the Author

I’m Krista Grotte Saxon, founder of Filmmaker Berserk, creator of Neo Hollywood™, and architect of The Berserker Method™.

I invested $1.3 million into a SAG feature film, worked directly with Oscar-winning producers, and later uncovered how predatory distribution guarantees filmmaker loss through contract structure and self-reporting.

I didn’t survive this system by luck.

I dismantled it by understanding it.