Is Independent Exhibition/Distribution Saved? Or Doomed...

Was it good news for film lovers everywhere that Cinedigm, a company that provides smaller theaters with digital projection, said it helped arrange funding to save 3,000 screens from extinction when studios phase out film prints of movies?

Early this month I wrote about how Independent Exhibition & Distribution In The US Is Seriously Threatened by the conversion to digital.  If only it was simple as putting in the digital projectors and servers.  Don't get me wrong, that's a great leap forward... in some ways.

Virtual Print Fees (VPFs) may provide a way for exhibitors to afford the equipment to go digital, but they indirectly, but severely, limit the type of films that can play theatrically.  The answer to a Grand Abundance of movies is not to limit accessibility but to curate audiences as well as films.  We have to give communities what they are hungry for… but between exhibiton splits & VPFs only films that can afford to buy (not build) audiences can truly be distributed.  

The math is simple.  Let's say exhibitors take at a 60/40 split at the box office.  A small film might hope to do $2500/week. That means that the distributor is left with $1000.  The VPF is generally $800 I believe.  That means if they are 10% off that projection, they loss money playing that theater.  And from the filmmaker perspective, when the the distributor is taking a 30% fee on rentals, you are in in the hole no matter what.  And that doesn't take in the fact that costs, plus mark up and interest are in front of the line.  

Say good-bye to small movies playing theatrically.  Unless something else is done

It's so ironic that the promise of digital delivery was a more diverse menu for audiences, but it is proving to be anything but.

Another problem with the digital exhibition set-up was recently pointed out to me.  Back in the days of film, when a movie was performing better than expected, all the exhibitor had to do was move the print to a bigger room.  Ditto when it was bombing, the film went whoosh into a smaller room.  DCP's give the studios more control over what room a film plays in in the multiplex than ever before.  If they book BATTLESHIP into the big room and it dogs, guess what?  No move over because the DCP's key code only works for that projector -- unless you get on the horn and track down the distributor and the flunkey on the phone gets the aproval of the uberlord to allow a move over.  Too much friction prevents efficiencies of old from taking hold.

CINEDIGM DIGITAL CINEMA LAUNCHES INDIE DIRECT™

Everyday brings a better world for the independent filmmaker. Why should today not be like all others?

I was glad to receive today's press release announcing Cinedigm's new endeavor. I was even gladder though to learn of it, which is why I gave them this quote expressing it! CINEDIGM DIGITAL CINEMA LAUNCHES INDIE DIRECT™, A FULL SERVICE THEATRICAL DISTRIBUTION AND MARKETING SOLUTION FOR INDEPENDENT FILMS

Utilizing the Digital Cinema Backbone, Indie Direct™ Navigates Indies Through Theatrical Release Process

Woodland Hills, CA, September 7, 2011 – Cinedigm Digital Cinema Corp. (NASDAQ: CIDM), the global leader in digital cinema, today announced the formation of Indie Direct™, a full service distribution and marketing solution for independent film producers and distributors. Utilizing the digital cinema backbone, Indie Direct™ provides independent producers access to Cinedigm’s long-time industry standard services for managing theatrical digital distribution, including booking software, content delivery, sales, distribution strategy, marketing planning and execution and box office recoupment.

“From day one of digital cinema, Cinedigm has been at the forefront of deployment and installations,” said Chris McGurk, Chairman and CEO of Cinedigm Digital Cinema. “With Indie Direct™, we have tapped into our many years of experience and expertise to pioneer a turnkey method for indie producers to benefit from the flexible, precise and efficient distribution model digital cinema enables. Now, indie producers can reap the benefits of a full service studio in a one-stop shop.”

“Cinedigm is offering independent film makers autonomy to control their own destiny with Indie Direct™,” said Ted Hope, acclaimed independent producer of such films as 21 Grams, American Splendor and In the Bedroom. “Anything we can do to strengthen the indie community is vital to the health of the entertainment industry overall and I applaud their efforts.”

The first two production entities to sign up for Indie Direct™ are ARC Entertainment and Seven Arts Pictures. ARC is using the highest level of Indie Direct™ for eight titles it is releasing by the end of the year, including a horror film double feature with Zombie Diaries and Hellraiser, Smell of Success, Revelations, Killing Bono, Bunraku, Greening of Whitney Brown, Sundance Film Festival pick-up Knuckle, and Snowmen. Seven Arts Pictures will be using Indie Direct™ for the US release of The Pool Boys on September 30, 2011.

”A theatrical run tremendously enhances the value of the ancillary downstream revenue opportunities for our projects,” said Trevor Drinkwater, CEO of ARC Entertainment. “Cinedigm’s Indie Direct™ makes that theatrical play both efficient and affordable.”

”We are pleased that Indie Direct™ promotes the independent film community by putting a theatrical release within reach, both financially and from an execution perspective, ” said Jill Newhouse Calcaterra, Chief Marketing Officer, Cinedigm. “Previously producers had to go to multiple vendors for these services that are now available under our one roof.”

Completely customizable based on scope of needs and project release, the suite of services provided by Indie Direct™ includes: · Booking software · Distribution strategy · Sales · Content management and delivery · In theatre marketing · Box Office tracking, settlement and collections · Marketing strategy planning · Marketing execution · Publicity campaign strategy and execution

About Cinedigm

Cinedigm is a leader in providing the services, experience, technology and content critical to transforming movie theatres into digital and networked entertainment centers. The Company partners with Hollywood movie studios, independent movie distributors, and exhibitors to bring movies in digital cinema format to audiences across the country. Cinedigm's digital cinema deployment organization, software, satellite and hard drive digital movie delivery network; pre-show in-theatre advertising services; and marketing and distribution platform for alternative content such as CineLive® 3-D and 2-D sports and concerts, thematic programming and independent movies is a cornerstone of the digital cinema transformation. Cinedigm™ and Cinedigm Digital Cinema Corp™ are trademarks of Cinedigm Digital Cinema Corp. www.cinedigm.com

Theatrical: To Do… or NOT To Do.

Today's guest post is from Orly Ravid of The Film Collaborative. Theatrical: To Do… or NOT To Do. (or perhaps more, HOW and WHEN To Do):

We all struggle with this, filmmakers, distributors alike. I remember giving a presentation to distributors about digital distribution and theatrical came up. I talked about the weirdness of showing a film 5 or 6 times a day to an almost always-empty house save a couple showings. This makes no sense for most films. When I released Baise Moi in 2000 we broke the boxoffice records at the time, and the “raincoat crowd” did show up at the oddest morning hours, but that is the exception, not the rule. Not every film has an 8-minute rape scene that just must be seen by post-punk-feminists and pornography-lovers alike. It’s an odd set-up for smaller films and it’s not the only means to the end we are looking for.

Recently The Film Collaborative released Eyes Wide Open in NYC, LA, Palm Beach and Palm Springs. We have a little over $10,000, all in it will be about $12,000 tops). We have made our money back and the great reviews and extra marketing / visibility will drive ancillary sales but we also did not invest or risk too much as you can see. That is a great formula (one that small, disciplined and seasoned distributors such as First Run Features, Strand, Zeitgeist, employ) but it is not viable for all films. First of all we have an “A” list festival film (Cannes & TIFF & LAFF) and second it caters to two or three niches (gay and Jewish/Israeli) though one can argue that the niches also slightly cancel each other out to some extent, the film did well so obviously the campaign worked.

But there are many films for which that strategy would not work, either theatres could not be booked, or reviews would not always be great, and / or the film would simply not galvanize a theatrical audience. Plus, once you start adding up 4-Wall Fees the bottom line leans more likely to be shades of red. The Quad Cinema sent an E-blast promoting its 4-Wall program. It was a good sales pitch and I am not going into it all here but the take home is that you’re more likely to get a broader theatrical, and/or a distribution deal, and/or picked up by Netflix and other digital platforms if you open theatrically in New York. I would argue that is true to some extent but also VERY MUCH dependent on the FILM itself and there should still be a cost-analysis and overall strategy consideration before one pays the Quad for their services and hopes for the best. Here is a link to the info and we are happy to email the blast to any who request it www.quadcinema4wall.com . It should also be noted that generally speaking, The New York Times does not consider your film among “All the News That is Fit to Print” unless it’s opening wider than just New York.

So how to decide? Companies such as Oscilloscope are all about theatrical but they pick their films carefully and my guess is Adam Yauch can afford to lose money too if it comes to that. Home Video companies such as New Video, and Phase4 are doing some theatrical but on an as-needed basis and yes, to service the ancillary rights, but that’s a very experienced analysis on their part. When we posted on Twitter about the Cable Operators warning they will start requiring a ten (10) city theatrical, all at once, believe me, if everyone blindly follows suit the bar will get raised even higher right until we all go broke. The point is to mitigate the glut and distinguish films in the marketplace not get us all to be lemmings and empty our bank accounts. There is math to be done and I know it’s hard without all the back-end numbers at your disposal but they are coming. We will publish case studies of all our films and we encourage you to get down to the detailed back-end numbers analysis before spending more on the front end and often gratuitously.

We have both experienced and heard about the impact a filmmaker can have in his or her city when working the film and then really impact the gross.. and that is inspiring but usually not long-lasting because it takes a lot to get people to pay to see your film in a theatre when there are so many other films, and so many more marketing dollars behind them. And what’s in it for you? The only reviews that matter are the big ones and we all know what they are… and remember what we said above about The New York Times.

The general perception of indie film releases is interesting. Most don’t take into account the money that is spent to get the “gross”. More of the time the distributor or whomever booked the film gets less than half of the boxoffice revenues. Sometimes as little as 25% - 30% though of course sometimes more. And there are the expenses. The Kids Are Alright may not even be in the black right now but you’d never know that reading certain coverage. I love Exit Through A Gift Shop and actually flagged that release as stellar release and then I learned that the marketing spend was actually a lot more than I realized such that the spend may be up to a million dollars. I don’t actually know, and not sure anyone will tell me. I do know that the bottom line for many of The Weinstein releases was reported to be in the red because of spending. And you know if you have a film that can sell a lot of units and especially in an evergreen manner, and if you can trigger a great TV sales and if you have foreign sales legs than there’s a real upside. If you don’t, then be clear what you’re goals are. Sometimes it’s just a career move and that makes sense. Canadian filmmakers need a theatrical release to get their next projects funded (say that like this: ‘pro-jects’). Sometimes people just want that awards qualification and that’s another ballgame.

We have written some of our TFC Distribution Tid Bits about Hybrid Theatrical and Marketing options but here is a bit more on the topic:

If creating buzz is what you want, you don’t need a traditional theatrical and you definitely don’t need to overpay for the privilege.

Some OPTIONS – try HYBRID THEATRICAL – do FILM FESTIVAL, CREATE EVENTS, HOLD SCREENING WITH ORGANIZATIONS, show in MUSEUMS (in some cases), other ALTERNATIVE VENUES depending on the film, and also there are all sorts of ways to book a few days here and a few days there at theatres (we cover that below). Theatres are and will continue to do this more and more. AMCi announced their intentions and they are still in the marinating phase but we know you’ll all be ready when they are.

We’re interested in these companies and services:

1. Cinedigm: They have a program in the works that is meant to be similar to ScreenVision and Fathom (which is no longer handling indie films generally speaking, as far as we know) but aimed at independent cinema, and working with all the big theatre chains (Regal, AMC, Cinemark). I asked them to write a few words for me about themselves and their plans: Cinedigm Entertainment, a theatrical distributor, has built several “channels” of content for movie theatres. This is niche content that plays at what is traditionally slower times for the theatres. Examples are; Kidtoons a monthly matinee program; Live 3D sports, like the World Cup and NCAA Final Four basketball; and 3D and 2D concert films with artists from Dave Mathews to Beyonce. For each “channel” the most appropriate theatres are chosen and theatres sign on to play the content as a series, thereby creating the expectation in the marketplace for the next installment. In the company’s newest “channel” it looks to apply the concept to indie-films which will provide filmmakers with the theatrical element for distribution.

2. Emerging Pictures: Owned by Ira Deutchman (now also a Film Prof. at Columbia University) I spoke with Joshua Green who I have known for a while and booked with, though no real revenues were made in the past, their latest network of theatres sounds potent. They connect up to 75 theatres and they do very well with Opera, Ballet and Shakespeare but also indie films. They work with all the usual indie film distributors either taking on 2nd run of films in major markets or handing the first run in secondary markets. On screen now for example is Mother & Child, My Name is Love, and Girl with a Dragon Tattoo. 30% of the Gross is paid to the distributor or filmmaker. They charge usually a 1-time encoding fee to get the files needed for the theatres. The fee is $1,000. If that’s an issue that can sometimes in advance to make sure the bookings will happen to make the fee worthwhile. They create a Hi Rez file 720p VC1 file which is a professional HD version of MS Windows. They work with the Laemmle theatres in LA and Sympany Space in NY and lots of others across the country. What does well on the Art House circuit will do well with them I was told. Makes sense.

3. Variance Films: Dylan Marchetti (former exec at Imaginasian and Think Film) is a firm believer in Theatrical and it’s his business. He may promote its necessities a bit more than I will and its not his money to spend and he was honest about the range of success (meaning not all films work theatrically and sometimes money is lost, and we know of at least one example but it happens). We spoke for the first time and I was comforted by his grassroots approach (they do that work themselves) and his commitment to alternative low cost venues: event screenings, niche-specific / lifestyle specific venues, as well as traditional theatres (all the usual chains and small theatres etc). He noted that generally speaking they do not charge more than $50,000 and that they get paid via back-end fees only. He said a release in NY and LA for $20,000 can be done. Variance is not a believe in print advertising; they have to believe in the film to take it on; and Dylan said that there is no correlation between P&A spending and a film’s success. Amen. They don’t do PR but rather refer out to outside agencies, as does The Film Collaborative.

The Film Collaborative is theatrically releasing UNDERTOW (which won the World Cinema Audience Award at Sundance). Stay tuned.

Orly Ravid is the Founder and Co-Executive Director of The Film Collaborative, the first non-profit devoted to distribution. Having previously served as a distribution executive at Senator and Wolfe, and worked as a Programming Associate at Sundance and Programming Consultant at PSIFF, she also co-owns New American Vision, a boutique B:B marketing services company whose clients include AFI Fest, LAFF, IDA, and Roadside Attractions.

Fathom & Cinedigm: reinventing cinema entertainment

Tuesday's post on  A POWERFUL NOISE introduced me to Fathom.  It seems like a great service but I have no idea about the pricing.   I am curious to hear more from folks that have used it.

From Fathom's website:

Fathom, the entertainment division of National CineMedia (NCM), is reinventing the who, what, when, where and how of cinema entertainment. It’s a revolutionary concept that uses NCM’s vast nationwide Digital Content Network to deliver truly one-of-a-kind entertainment events — all showcased in amazing High Definition with Cinema Surround Sound — to movie theatre audiences across North America. And each benefits from extensive marketing support.

Working directly with the country’s leading entertainment producers, Fathom offers unique marketing and distribution opportunities for highly coveted programming: live concerts, theatrical and DVD premieres, live broadcasts from The New York Metropolitan Opera, sports events, exclusive stand-up comedy engagements and much more.

The Digital Content Network is comprised of more than 14,500 digital screens, with 75% of the screens in the top 49 markets. This puts well over half of US households within 10 miles of the theatres, including Regal Cinemas, United Artists, Edwards Theatres, AMC Theatres, Cinemark/Century, Clearview Cinemas, Kerasotes Theatres, Goodrich Quality Theaters, Hoyts Theatres, Marcus Theatres, Malco Theatres, National Amusements Theatres and Georgia Theatre Company. Additionally, Fathom has limited distribution in local performing arts centers and theatres in specific markets.

Fathom’s technical staff receives, tests, encrypts and digests source content for seamless playback over the network to all participating theatres’ auditoriums. Each auditorium is tested for optimum audio and visual presentation prior to event day. Plus, Fathom has a dedicated “event management” department that manages all troubleshooting before, during and after the event to ensure its success.

It's mostly been opera, concerts, and anime so far, but they have also presented This American Life and a live event with the film IOUSA.  The full list is here.

Another similar service is Cinedigm, which to date seems to have focused solely on live events.
Michael Walker over at PangoFilms just tipped me to this announcement in BusinessWeek that says that focus is about to change.  They have just done a distribution pact with Olympus Pictures  for some indie films. Things a be a changin'...