Is There A "Too Many" (When It Comes To Film Festivals)?

I moderated a panel at New York Women In Film two weeks back on "prepping for film festivals".  One of the panelists, Ryan Werner of IFC Films, said something that resonated with me.  Ryan said that there are films that play so many festivals that they diminish his company's appetite for acquisition.

That raises the question then: Can an undistributed film play too many film festivals?
Ryan's answer is essentially yes -- that is if the filmmakers are looking for acquisition.  The bigger question is whether anyone should be looking for acquisition these days, and if so, are film festivals still the best way to do it?
It sounds like it should be obvious, but I think it's worth asking what is so appealing about acquisition by a distributor these days.  Until very recently, the money you received for licensing film was the dominant factor.  We all have to recoup our budgets (and our marketing costs), right? But in this day and age, less than a handful of a films are receiving advances of seven figures or more.  Unless you are making your films for very low budgets, how do you expect to get your investment back?  If you don't get your investment back, why should anyone give you money for your next film?  If you don't get your money back, why should others invest in similarly themed films?  
Maybe it's no longer about theatrical, but we have yet to hear the success stories of films that receive significant amounts on the back end of VOD or increased video sales due to ad-supported free streaming either; that may come, but I wouldn't hold my breath waiting.  Sure, if you make your film cheap enough it may seem tempting to surrender your rights across all media for twenty long years for $75K and significant cut of future revenue, if any.  But without a theatrical release stateside, will there be any foreign value to it?  I have been getting reports that foreign acquisition prices have dropped 40% in recent times -- so where does that leave average foreign value for a US Indie?  36% of costs (that is assuming, foreign value was only at 60% of costs, which is pretty conservative on what hand, but probably generous for most indie filmmakers)?  Eek!
The problem is that most filmmakers still think of festivals as a step towards acquisition.  As Ryan's comment points out, that is only true for your first two or three festivals.  After those, if you haven't secured distribution, your chances of acquisition are diminishing with each festival play.
Festivals have an increasingly vital role to play in independent film.  They are one of the critical steps in delivering a Truly Free Film Culture.  As has been said here many times before (and I anticipate saying many more times in the future), festivals must be looked at as the launch in audience-building, marketing, and distribution.  
If you do not have distribution, you are not ready to play film festivals if:
  • you do not have your trailer made and up on the web;
  • you do not have clips selected and up on the web;
  • you have not been writing a blog regarding the film for a significant length of time;
  • you do not have a plan on how to keep that blog interesting for the next year;
  • you do not have a website for the film up on the web;
  • you do not have a simple way to collect email addresses for fans;
  • you have not set up a way for fans to subscribe to updates about the film;
  • you have not joined multiple social networks, both as an individual and as the film;
  • you have not created a press kit with press notes for the film;
  • you have not identified the blogs and critics you think will help promote your film;
  • you have not built a study guide for the film for film clubs;
  • you have not mapped out a festival strategy that builds to local releases;
  • you have not made several versions of a poster, and have enough to sell & give away;
  • you have not made additional promotional items for your film;
  • you have not manufactured the dvd, and made great packaging for it;
and there are probably more to add this list, but....
I look forward to a time when film festivals actually make such things a requirement.  I would love to see a film festival that was only about films that were prepared for self-distribution if necessary.  Film festivals are currently selling the dream and not confronting the reality.  Filmmakers keep buying that dream.  It is all a downward cycle as the business side of it is being neglected.  Distributors, both corporate and personal, need festivals to launch the film to their core audiences.  If filmmakers aren't prepped to do that, they squander that opportunity and diminish their chances of reaching that audience.  Sure there are other methods out there, but why not use your best tools in the way they have been most proven to work?