On May 4, 2009, the New York chapter of the Institute for International Film Financing (IIFF) hosted a Town Hall Meeting addressing current issues relating to independent film finance and film distribution. This time the panel of experts included: longtime theatrical distributor Wendy Lidell (International Film Circuit, Inc.), independent documentary distributor Richard Lorber, (Lorber HT Digital), entertainment attorney Steven Beer (Greenberg Taurig), and online documentary distributor Andrew Mer (Snag Films), moderated by David Rosen.
Lidell opened her presentation by acknowledging that notwithstanding the technological shifts in the areas of production, distribution, and media PR, theatrical exhibition is still the best way to brand a film. Just like has been experienced in the music business, the old model is broken and everyone is searching to understand or build a new working model for independent film distribution. For example, Wayne Wang’s “Princess of Nebraska” eschewed theatrical distribution with a direct to digital release, even though it enjoyed the laurel of a New York Times review.
Noting that 15 years ago, 150 films were submitted to Sundance, last year the number was more like 9000, of which about 200 were selected. Back when the existing film distribution model first was developed during the 1980s, ancillary distribution essentially consisted of VHS and 12 channel cable outlets. At that time, the price point for rental video sales was about $79.99 per unit. Today, there is a much lower price point for ancillary dvd or download revenue. Under the traditional distribution model, distributors typically take a 20-25% share, but also incur promotional expenses off the top that may result in no actual back-end money to the producer. In contrast, Lorber‘s current typical distribution deal calls for a 50/50 net revenue share across all media.
Lidell noted the continued decline in newspaper readership has led to a diminution of the impact of print reviews. Further, many advertising budgets have been displaced away from traditional print and television advertising campaigns. If a project is critic driven, it is important to try to get a review from the most prestigious source possible (typically a New York Times review). From a public relations and marketing perspective, an “adopt a critic” strategy was suggested by Lorber as an alternative to chasing an New York Times review, where a producer would seek to hire a reviewer to write favorable copy that could be used as part of the project’s publicity materials. Online opinion site such as Rotten Tomatoes and MetaCritic also provide potentially useful feedback on audience response to a film.
Lorber stated that theatrical exhibition is no longer a loss leader, but now more of a loss follower, as it no longer necessarily represents the first film distribution window. Unlike the traditional film distribution model consisting of more or less exclusive release “windows” (i.e., theatrical, home video, pay-per-view, non-theatrical, pay cable, basic cable and broadcast tv, etc.), he characterized the present distribution situation as more like a kaleidoscopic mix of shards of glass (representing the myriad ways of exhibiting/delivering content, simultaneously and overlapping).
In his view, the explosion of cable channels saved the tv syndication business, even as home video saved the theatrical business by pouring new money into the industry. Although dvds similarly revitalized the home video market, he expressed pessimism regarding the prospect for another “silver bullet” solution to save the film business. Instead, he indicated that it appears the future lies in a kind of monetization “cocktail” combining different revenue sources, including such innovations as micro payment streams.
Although the primacy of traditional theatrical exhibition may be waning, the prohibitive expense and overcrowded surplus of new content each year has led to a rise in “destination events,” including guerrilla screenings in non-traditional venues. Even though many people now have the capability and desire to screen films privately in home theater settings, the human need for community will likely continue to bring people together “around the campfire” to enjoy films in public settings.
Mer‘s company, SnagFilms provides a free online streaming platform for documentary films, supported by paid advertising. He recognized the strong expectation of “freemium” content on the web, which is monetizable when supported by advertising, such as a pre-roll of 15 second ads in front of otherwise free content. SnagFilms aims to pursue what Mer calls the “double bottom line,” seeking to accomplish the filmmakers’ goals (e.g., to promote an issue), along with achieving recoupment and profit to investors.
Beer commented that there is currently a trend toward a much greater user-managed culture for independent film distribution. Digital rights, formerly a throw-in, have become increasingly primary deal points in a distribution deal. Buyers for digital content include aggregators and sub-aggregators, however, digital rights revenues are small, typically less than $.25 per view. Content generators would be advised to be careful to limit the term of any exclusivity provision (e.g., “in perpetuity”), as new technology and changes in viewer usage may greatly impact the monetization of digital content.
Independent film finance and distribution is undergoing rapid and far-reaching change, and it is important to look forward toward the future as viewing habits and media continue to evolve into a new model.
Michael
WinGateFilms
www.wingatefilms
WinGateFilms' Weblog 