Plain-language definitions of the terms used throughout FilmWaterfall — recoupment, pari passu, distributor fees, and more. Each term links back to how it's actually used in the calculator.
Waterfall
The order in which revenue is distributed. Each party gets paid in strict sequence — nobody in a lower tier sees a dollar until everyone above them is paid in full.
Gross revenue
All money received from the exploitation of the film — streaming, AVOD, TVOD, theatrical, broadcast, airlines — before any deductions.
Reserve holdback
A percentage of gross revenue withheld temporarily to cover potential future liabilities. Typically 10%. Released after the risk period passes.
Distributor fee
The percentage a distributor charges for releasing and selling the film. Typically 20% to 35% of gross revenue, deducted before anyone else gets paid.
Sales agent fee
Commission for selling the film to distributors in different territories. Typically 10% to 20%. Both fees come off the top before investors see anything.
P&A / marketing recoup
Prints and Advertising — the cost of marketing and releasing the film. Includes trailers, posters, advertising, and press. This amount is recouped once cumulatively across all revenue before investor recoupment begins. In theatrical releases P&A can exceed the production budget itself.
Delivery expenses
The technical cost of getting the film onto platforms — encoding, quality control, closed captions, subtitle creation, and platform delivery specifications. Separate from marketing. A streaming deal with Netflix or Amazon will typically require specific technical delivery that costs money.
Loan financing
Debt used to finance part of production. Must be repaid — principal plus interest — before equity investors see any recoupment.
Recoupment
The process by which investors get their original investment back. Until fully recouped, 100% of available net proceeds flow to investors.
Recoupment multiple
A premium on top of the original investment. A 1.2× multiple on a $300,000 investment means the investor recoups $360,000 before the producer sees any backend profits. The recoupment multiple is only meaningful in the upside scenario — when the film actually performs well enough to fully recoup. It is the premium investors receive for taking the risk, but only when the film succeeds.
Backend split
After the investor fully recoups, remaining net profit is divided between investor and producer per the agreed percentage.
Producer net
What the producer receives after all other waterfall tiers have been paid — either everything after investor recoupment (Friends & Family) or their share of the backend split.
Pari passu
Latin for "on equal footing." Multiple investors recouping pari passu are paid proportionally at the same time — no single investor jumps the queue.
AVOD / SVOD / TVOD
Ad-supported (free, ad-funded like Tubi), Subscription (Netflix, Amazon), and Transactional (pay-per-view rental/purchase). Each pays differently across a film's release window.