Music Biz Is Quicker Than Film Biz (again!)

Doesn't it bug you how everyone knows the world has changed but so few folks do anything about it?  Or even worse, how whole industries choose to ignore the realities of today.  We call something the the way it is, because THEY say it is, not because it actually is.  Instead of moaning about it though, I find it heartening when some adjustments occur, bringing us closer to reality, even when it is not my community doing the readjustment.  Each step closer to the reality gives me hope.

My twelve year old boy likes to point out that curses are curses only because we call them curses.  Well, what we call success is only success because of how we define it.  I do think we have to get far beyond money as the basis of most achievement, but all that aside, even in the revenue reporting we've got a lot of ground to cover.

I was pleasantly surprised to see that The Music Biz's paper of record, Billboard, has changed the way that they determine chart toppers, adding in digital download sales and streaming data.  Yes, this has it's share of problems too, but I do think it more accurately reflects how people consume music (but what do I know).  And I do wish something similar would occur in the Film Biz.

Imagine if we had VOD data and streaming data.  Wouldn't that show what people are really watching?  Yup.  So when will we start having access to the VOD & Streaming numbers.  Not until the numbers HAVE to be reported.  Indiewire recently tried to explain the problem. But unfortunately there is even more to it. I found that many distributors have confidentiality clause in the contracts with the VOD companies & digital platforms, where they can report numbers but not terms. Even numbers though are difficult to extract. A producer recently complained to me how a distributors statement did not even break out digital revenue, let alone all the varieties thereof.

If we don't have the numbers available, we can not use success as something we can build upon.  And it is not just the filmmakers, their supporters, and the fans that want this number.  Theater owners want it too.  What's it going to take to get the Film Biz to follow the Music's lead?

Good News Re: Getting Attention For VOD Titles

This press release just came in... As a fan of both outlets, I am jazzed.  As a fan of specialized film and a dreamer of a land where we have the filters and curators necessary to deal with the challenge of The Grand Abundance (of Films), I am hopeful.  As a producer of films far too cognizant of the challenges we all face, I am happy to share this news!
 
Filmwax Radio, a weekly talk show about independent film, is increasing its focus to include Video On Demand (VOD) subject matter and guests. The radio show, hosted by Filmwax's Adam Schartoff, is partnering with popular online publicationOn Demand Weekly to devote a monthly episode to movies on demand. Adam has interviewed film notables such as Ed Burns, William H. Macy and Joe Swanberg for On Demand Weekly in the past.
 
 
“We recognized Adam’s passion for film and gift of conversation with filmmakers. Working with Adam on the radio will shed a stronger light to our coverage of upcoming movies on demand. We’re looking foward to expanding our reach,” said Britt Bensen, Editor-In-Chief, Co-founder, On Demand Weekly.
 
 
“With the pre-theatrical and day-and-date models, the number of VOD releases is increasing and film fans are taking notice. Working with On Demand Weekly will help us identify the best new movies and talent for our audience,” said Adam Schartoff, Filmwax Radio.
 
 
Filmwax
Adam Schartoff, Fimwax Radio
 
 
The VOD interviews will be available on BBoxRadio.com and will also have a presence on www.ondemandweekly.com.

 

Piracy: (Some Of) The Short & The Long Of It

Thankfully, Taylor Hackford recognizes that the film industry needs to wise up and educate itself on piracy. He and I agree on that. And I think we agree on the goal of it all, but I suspect we have completely different approaches to solving the problem.  And that is where I am really concerned.  To solve it, Hackford seems willing to sacrifice greater principles in the service of business, and that is a shame.  I hope I am wrong. Mr. Hackford, president of the DGA, was recently speaking at the Content Protection Summit and Variety reported on it. Reading the article I remain unclear as to what Hackford's point is about piracy beyond that it is bad and we need to make it a real concern of the industry. He seems to be saying that if we want to protect our content, we have to be willing to give up on a free and open internet. He claims groups like Public Knowledge and Free Press as enemies. Shutting down a free and open internet is not the path to solving the piracy problem; it is the path to a closed society that favors a class or capital over access and opportunity -- and that is the antithesis of what we need to do.

We can not create a system that favors the powerful, the connected, or the well capitalized. The Film Business already favors all those niches quite well, and government and utilities should do all they can to provide for all equally.  Equality under the law and within the society remains one of the greatest ideals, and personally speaking, I would rather have a world that strives for that ideal's enforcement, even if that striving has to support some bad apples, rather than risk that anyone does not have equal access or equal opportunity.

Hackford was insightful to link Hollywood's focus on event pictures to piracy, in that if piracy is eroding film's revenue -- or even thought to be -- then investors will be more likely to put money into the projects most likely to generate the quickest return and the most unique experience.  The insight would actually make sense if individual investors were backers of event pictures, let alone studio pictures.  They rarely have such opportunities.

Being someone who has depended on private equity for all but a few of my 60+ films, I have never once heard an investor confess concern about piracy (and granted some of that may have to do with their education on the issue).  I do have investors express concern about distribution opportunities, access to markets, cost of promotion, and difficulties to reaching audiences.     I do hear people intrigued about using the systems that have been developed by pirates and copy-forward advocates to reach audiences that they have not reached before.  They know that the system has to change and recognize the realities of the time we are living in.

I have witnessed first hand, and was one of the key witnesses, in a successful anti-trust suit against the MPAA for coercing the studios to take action that unfairly hurt independents in the process.  That case, popularly known as The Screener Ban, used piracy as the fear that prompted excluding the key marketing tool of Award Screeners from all filmmakers' arsenal.  The powerful often look out for their interests without even consulting the rest of the industry about their practices.  When Dan Glickman took over at the MPAA, he was quite vigilant at soliciting the indie sector's opinion on the state of the industry, and I hope his successor remains as committed.  I hope whomever takes over the MPAA recognizes the necessity of our culture industry to commit to a free & open internet or else exclude a serious sector of our community.

When it comes to protecting artists' rights, piracy is a serious issue, but open and free access to a public good (i.e. the internet) is a greater one.  We can not look at short term solutions that have long term repercussions.  The focus on the piracy issue tends to take place at events that exclude a large portion of the film community -- namely the truly independent artists that will never have access to the studio system.  We need institutions, organizations, and methods that make sure to include this segment's voice -- and that includes the DGA.

I, and artists everywhere, will not be able to support ourselves -- and thus generate new work -- if our work is widely stolen and we are not compensated.   Mr. Hackford is right on when he speaks of the need for passion and education when it comes to the issue of intellectual property theft, but as we enter that discussion, we need to strenuously protect the greater ideal of equal access and opportunity.  We also need to recognize human behavior and the current state of things -- people want convenience, but they also want other things.  The large media corporations have done little to offer a better option to theft.  Our methods of licensing and distributing work relies on out of date analogue models.  There are actions that can be taken, by artists and businesses, and it is hight time that we begun this discussion in earnest -- but let's not abandon the ideals as we start the march down the road.

Save the internet!

Is The Hell Worth It? Content Licensing for Digital New Media Platforms

Guest post by Wendy Bernfeld, Managing Director, Rights Stuff It’s no surprise for producers and distributors, that revenues from traditional sources such as TV and DVD have generally been declining, along with minimum guarantees for international sales. Despite earlier disappointments, we have seen that the digital marketplace (web, mobile, IPTV/vod, etc) has now become a source of real revenue, although requiring careful attention to suitable platforms, ’windowing’ and deal structuring.

Rights Stuff has spent the last decade dedicated particulary new media platforms , or traditional platforms expanding into new media dealings, as well as filmmakers/distributors/ content owners, helping them in content acquisition/licensing and maximising revenue streams. There are a wealth of opportunities arising from non-traditional/digital platform buyers and funding sources, outside the comfort zone of your usual buyers database . Even beyond known IPTV, web and mobile platforms; there are also gaming/consumer electronics platforms, kiosks, memory card makers and handset manufacturers in the video space. Even as recently as this summer, New tablet devices, OTT (Over-the-top) boxes and web enabled connected TV’s further blur the distinctions and assumptions affecting deal-making and audiences. Opportunities are multiplied when you take the international arena into account, and good target markets for new media deals are often overlooked.

For example, VOD is no longer just ‘one thing’ to hold back or give away; it can span up to a dozen different forms,(Transactional (TVOD),Suscription (SVOD,) free, ad-supported ( AVOD), sell-thru (EST/DTO, etc), and span different platforms (IPTV, web, mobile, handhelds etc) each affecting rights and license potential. Each can now represent a small but cumulative revenue stream in the generally non exclusive new media licensing scheme.

Even if a producer is blocked in his local country due to prior production or broadcaster funding /presales, the opportunities are often wider outside their own local region. Overall, whether electing to focus time maximizing exploitation across all possible avenues, or just focussing on a few key big brand deals, it is already worth the hell!

However, keep in mind that in most European countries, there are still extremely limited, legal alternatives for video viewing, (for example I-tunes video is still NOT available in most of Europe) and pirated free viewing is the real competition.

One of our European clients, indiemoviesonline.com, tackled this challenge by offering high end independent feature films, streamed online, free to consumer, but on a targeted premium rate ad-supported (AVOD) basis. With clever SEO (search engine optimization) and other tech tools, they managed to redirect significant traffic away from these pirate sites. In one case, they achieved 10,000 views in one weekend for an otherwise lesser known film.

For another client, a top European art house film traditional distributor, we helped them select from their back catalogue, important films/key genres to digitize and rights-clear, as well as upgrading acquisition deals, to allow for various forms of new media exploitation. That client achieved literally 10s of thousands of views within a month or two on a simple pay per view basis and for just one film – whereas before, such film would normally have gone straight to pay tv. Even without minimum guarantees they more than recouped and profited from that new window. . Who’s out there? Aside from the biggest web VOD/EST partners such as YouTube, Hulu I-Tunes, Netflix, and the more ‘general interest’ and American sites, content owners can target other regions for international IPTV and web/mobile platforms seeking film, and engage with various smaller but high quality and genre focussed reputable sites, such as indiemoviesonline.com, cinemalink.nl, mubi.com, and thematic channels including via IPTV ‘tv everywhere’ platforms. The mainstream sites and some gaming platforms like Sony PS3 have also finally started to expand their programming, to embrace more niche programming including indie and art house, and to selectively commission online premieres.

As to negotiations, It’s still the same negotiation “ballet” as in traditional media, between the buying in (get wide rights) and licensing out (give narrow rights), so be sure to read the fine print. One can deal direct (more work, but more returns) or go via aggregators or sales agents/distributors, but in the latter case ensure they’re really focussed on, savvy in and committed to the new media exploitation, not just a contractual rights-grab. Remember that new media deals, other than the more familiar TVOD, are not yet “standard,” and again, at least in the short term, remember to watch media, delivery means, devices, windows, and revenue definitions. With careful windowing and deal making, there are finally real new media revenue streams to be made, and it can be worth the hell.

Wendy Bernfeld  MD Rights Stuff  Rights Stuff is an int’l content licensing consultancy specialized in acquisition, distribution, and pragmatic approaches to related rights issues, primarily in the new media and cross platform sector (e.g. film/TV and/or original content for Internet, VOD, mobile, subscription TV, handheld devices, and other digital platforms), including made-for-web and cross-platform /transmedia productions. Rights Stuff also assists producers and distributors seeking to maximize exploitation of their rights across multiple windows and platforms/screens and also assists transmedia productions that contemplate from inception both storytelling and business models across multiple screens. Rights Stuff is also active in new digital channel creation,development and programming, including international adaptations and channel carriage negotiations.

For more info (incl. services, case studies & clients), please refer to www.rights-stuff.com.

GREAT EXPECTATIONS: Not Just a Dickens Novel.

What do Filmmakers want from film markets and what they can realistically get?

Discerning the difference between a film that can actually sell well enough to justify having a third party sales agent and going to markets vs a film that is best served by DIY methods that should be planned and employed BEFORE the film’s first exhibition”

Guest post from Orly Ravid, Founder of The Film Collaborative (TFC)

We get questioned all the time by members and others about which markets should filmmakers attend and which sales agents should they go with. Having unrealistic expectations is dangerous. It sets people up to do nothing on their own but wait for some third party to make their dreams come true.

We’re just coming off of AFM. indieWIRE reports growth attendance at the market. See this article if you want to read the stats. They are however only relative to last year, a real low, and not addressing the question on everyone’s mind, what about the sales themselves.  AFM has always been known more for genre films and cast-driven films. Troma films do well for the genre category and Henry’s Crime starring Keanu Reeves, James Caan and Vera Farmiga is a cast driven narrative was being sold this year, for example.

It was decently busy from my p.o..v and buyers were there a bit more to buy than they were at say Toronto, according to our foreign sales partner, Ariel Veneziano of Re-Creation Media. But, the question is what are they there to buy and at what price?  The shift in the business from the 80’s and 90’s till now is not reversing itself and I don’t think it ever will. Prices have come down, dramatically because ancillary business has shifted so much, retailers have gone under, and supply has grown. That is the case across the board.

Digital services such as Fluent, Gravitas, Distribber, Brainstorm (all of whom we work with) were all at AFM, digital is where the business is now, not in getting big MGs per territory for most films anymore, not for most art house films. Of course there is some of that business still but the people benefiting from it are the Sales Companies with big libraries and the aggregators with the same. The individual sales prices, after expenses are deducted, are more often than not, not making money for the filmmakers,  not given the terms most companies offer, at least not from our vantage point, . Of course we’re not in the business of selling big genre films or cast-driven films so we are not addressing those. Docs do sell best to TV at doc markets such as Hot Docs and IDFA, to name two, and those so far still seem to be worth it and that business still has value.  And of course a lucky few theatrical-potential docs sell at Sundance and TIFF etc.

Why do I bring this up? Because we get questioned all the time by members and others about which markets should filmmakers attend and which sales agents should they go with and the truth is, very often the films are not viable for a sales agent because the sales would be too small and if a sales agent did take the film on, the filmmaker would never see a dime after the sales agents recouped their expenses and fees and after one has paid for Delivery. And then the sales agent  / sales company would have the right to do the DIGITAL DISTRIBUTION DIRECTLY that the FILMMAKER SHOULD BE DOING. That is the point of this blog.  Discerning the difference between a film that can actually sell well enough to justify having a third party sales agent and going to markets vs a film that is best served by DIY methods that should be planned and employed BEFORE the film’s first exhibition.

Stacey Parks recently sent this missive out to her members: “So AFM is coming to a close and the overall good news for everyone out there is that business is picking up from last year. Sales are brisk and even Pre-Sales are brisk for the right projects. I've met with several clients who are here at AFM and all of them are reporting good results in meeting a variety of people and companies as potential financiers for their projects, or sellers, or both.”

That’s exciting and we know Stacey knows her stuff and she’s a friend so all good. But I still want to know the numbers from everyone who sold a film, or didn’t after spending money trying, and ask all of you readers to share the real numbers, as we will of course (you will soon see), so that people can know what expectations are reasonable and what is not reasonable to expect.

Having unrealistic expectations is dangerous. It sets people up to do nothing on their own but wait for some third party to make their dreams come true. And then time goes by, months and even years, and one has done anything to build community around the film or get it out there. Then filmmakers are disappointed and blame others instead of making it happen for themselves.  There is no excuse for that anymore.

We announced a partnership with Palm Springs International Film Festival to help its filmmakers distribute and we will be working with other film festivals to do the same. Filmmakers are embracing Jon Reiss and Sheri Candler’s PMD concept and that can really create success via DIY distribution or get an audience started to give leverage in negotiating a deal.  The options for accessing Cable VOD and digital platform distribution and also having mobile Apps distribute the film are only growing, though of course the space gets only more glutted too.

But solutions are being worked out for that. Companies such as Gravitas are working with Cable operators vigorously to better program and highlight various categories of cinema, making it easier for audiences to find what they might be looking for. Comcast debuted a VOD search feature that imitates Google’s, and this will help in time: http://www.multichannel.com/article/459677-Comcast_Debuts_VOD_Sear

Verizon introduced Flex view to help consumers manage content on all their devices and all the players involved in digital are competing with each other to get as much good content to consumers in the most useful and user-friendly way to grow that market further, so whilst the space gets more glutted, there are more solutions in play to manage the paradox of choice a bit better and that’s why it’s imperative that filmmakers get engaged with their own success more and more, and sooner and sooner.  Lastly, these days, aggregators such as Cinetic and many distributors openly rely on filmmakers to do a lot of their own community building and marketing so if you are already doing the work, you might as well keep your rights.

Again, we do sales ourselves, we know there is still value in that, but we implore you filmmakers to do the research before you give up the rights and before you just forge forward trying to figure out which market to attend or having organizations like us do that for you, for many many films, there is no market you can attend that will be worth your while. Create your own market that will pay off in the long run.

-Orly Ravid

Orly Ravid has worked in film acquisitions / sales / direct distribution and festival programming for the last twelve years since moving to Los Angeles from home town Manhattan. In January 2010, Orly founded The Film Collaborative (TFC), the first non-profit devoted to film distribution of independent cinema www.TheFilmCollaborative.org Orly runs TFC w/ her business partner, co-exec director Jeffrey Winter.

Rejoice! NOBODY Knows What To Do.

The LATimes Company Town Blog has a post on a recent conference on Blu-Ray that the Five Studios Home Entertainment Heads all participated.

The executives said the biggest issue they face is sorting through a proliferating array of distribution platforms and figuring out when and where to release their movies and at what price in order to maximize profits. Such staggered release strategies are known in Hollywood parlance as "windows."

Read the full post, but my takeaway is that the indie sector needs to figure out new ways to experiment and gain both understandings and footholds.

Eddie Burns Learns To Love Doing It DIY

Michael Tully of HammerToNail has a really great interview with Edward Burns on his path from small to medium to sorta big and then back again.  It's filled with the kind of insights that can only be offered by those that have been there -- and are willing to be truly honest, with both themselves and us.

I remember when we were at Tribeca, and John Sloss, who I’m sure you know, has this new venture called FilmBuff, who is our distribution partner with this film. And he gave me an argument, but not so much for VOD. Maybe five years ago, I had this movie called Looking For Kitty. And the movie got one tiny, tiny distribution offer from THINKFilm. It was one of those no advance partnerships, and we had made the movie for a quarter of a million dollars. John said, “Look, you’re gonna sell the movie for nothing and they’re gonna own it, just so you can satisfy that part of your ego that wants the film to be released theatrically.” He goes, “If you were to just go straight to DVD, you could make your money back. And maybe make some more money.” At the time—this was maybe ’04 or ’05—my ego wouldn’t allow me to do it. So, we sell the film to THINKFilm, get no money, we’re supposed to have a partnership, and we’ve never seen a red cent from it. Years later, when we’re presented with the same kind of offer for Purple Violets, now iTunes is up and the iTunes movie site is in their infancy. And we thought, “Look at how bands are delivering their music directly to their fans. Maybe there’s a way for us to try and do that with the film.” And we did. I don’t have the numbers exactly right but I think it was like a nine-month exclusive window for iTunes. And we did surprisingly good business there.

Flash forward three years later to Nice Guy Johnny. Two different things happened. We knew what we could make at iTunes even if we didn’t have the kind of “stars” and well-known faces that we had in Purple Violets, which certainly helped. So we said, “Let’s just think the lowest possible number we can do on iTunes. If we’re even gonna entertain theatrical, someone needs to beat that number.” But we never even got there, because John then said to me, “Remember back to Looking For Kitty. This is the moment. We can sell your film for theatrical distribution, and you’re gonna open up on four screens in New York and LA, like you did with Looking For Kitty, and we’ll keep our fingers crossed that if this company has enough money to market the thing, we might make an impression, and you can expand to the next level of a platform release. If we do well there, maybe, maybe you can go on and expand fully.” He said, “Or, you can release your film onto VOD and be in 46 million living rooms, in that moment when you’re doing all of your press.” I heard that, and I was like, maybe if I was a young guy and this was my first film, I don’t know that I would be willing to forego theatrical, because you do fantasize about having your movie play in theaters. I don’t want to say “I’ve been there, done that,” but most times I’ve ended up disappointed with how the films were handled theatrically. As my producing partner says, “There’s nothing special about a specialized film release.” We just thought, we’ll take our film and we’ll do the most aggressive film festival tour we’ve ever done. And that’ll satisfy the need to see it in theaters, sit in the back row with an audience, hear the laughter, and get the thrill of theatrical out of that. But financially, it just made absolutely no sense to try and sell the film to an audience theatrically. And those were all of the things that played into embracing this model.

THANK YOU EDDIE.  There's a whole lot more of it on HammerToNail.  Check it out.

Old Is New Again

I have often felt that you could do a shot for shot remake of Godard's A WOMAN IS A WOMAN and win Sundance with it. It feels as fresh today as it did when it came out -- which is both a testament to the quality of the film and condemnation of our current culture. We haven't exactly moved forward in terms of our art forms and storytelling. One thing that has reinforced my conviction that remakes could be the freshest thing on the planet, is Eddie Burns' series of "homage" trailers he's done around his latest film NICE GUY JOHNNY. If I saw this trailer without the context of what Eddie is up to, I would run to the theater to catch the feature. Even knowing that this is the third in a series of trailers that Eddie has done, it still makes me want to see what he's been up to lately. Clearly he's been inspired, and is having a lot of fun.

Okay, so this homage is not to the french new wave, but it is to a film that was heavily informed by all that those folks were up to, and filtered it through a big Hollywood lens. Did you name it? Got it after the jump.

The Next Big Thing? Homage Trailers

Yesterday, I posted how Edward Burns has found inspiration in the classics, or at least in the classics' trailers.  I get a huge kick from his "remakes"  that he has created around his new film NICE GUY JOHNNY.  "Homages" to the greats are both funny to watch and a great discovery tool.  So if you had a jones for more after yesterday's serving of Antonioni's L'AVVENTURA, why stop there?  Here's Eddie's remake of Godard's CONTEMPT:

And of course, the original:

NICE GUY JOHNNY opens everywhere on all platforms October 26th.

Let's Remake The Greatest Movies Of All Time!

Okay, let's let the the great movies be the great movies (at least for now), but who says we can't have fun with their various extensions?  Eddie Burns is on a role.  He's always gotten a great deal of inspiration from the greats.  THE BROTHERS McMULLEN had a bit of Woody Allen -- in Irish drag -- as it's patron saint.  He's found new inspiration and energy from an embrace of DIY and social media, and as much as he's looking forward, he's drawing on the past.  To get us all ready for his new film NICE GUY JOHNNY (opening on all platforms Oct. 26), Eddie has looked at  the greatest movies ever made, but hey he's a busy guy, so he doesn't have time to watch the whole feature and has settled on the trailers. Does this trailer remind you of anything you've seen before? It should, because it is L'Avventura.  Eddie won't leave it there either; he's got more to remake.  This sort of inspired homage, playful and accessible, is a great example of the sort of innovative approaches filmmakers embrace when there is no corporate overlord lurching above.  You can picture that soon, we will be able to see the entire Criterion collection's trailers remade by Indie filmmakers having fun as they seek new ways to aid audiences in discovering their work.  And hey and if it brings a few fans back to the classics as a result of recognizing the originals..., that ain't so bad either.

Here's the trailer for Antonioni's original:

Co-Production Studies: Strategic Partners Forum

Guest post by Yael Bergman A few days at Strategic Partners, Halifax, Canada and a crash course at International Co-Production Financing.

I saw Ted in Toronto a few days before heading to Strategic Partners in Halifax, Nova Scotia, Canada. He suggested I write on his blog with what went on there. I am reporting back now...

I write this as an Australian producer who recently produced a romantic comedy in Australia called I Love You Too.  It was completely financed within Australia, largely with Australian and state government investment, and the tax rebate (up to 40 per cent of Australian spend). We are fortunate in Australia to have this public funding as a resource, and whilst it is perpetually competitive, it is the way most film and television is made in Australia. It sustains the industry and ensures we continue to tell Australian stories.

My producing partner, Laura Waters, who is originally from Colorado but has lived in Australia for almost 20 years, regularly comments that she can't believe governments actually give you money to develop and make stuff here. Well, it's true!

To some independent American producers, this must sound like the gold pot at the end of the rainbow, but the reality is it's a limited pool and the funding bodies (and consequently, the producers) are always trying to work out a way to make it stretch further.

One good way is via co-producing, i.e. we split the cost of making a project over two or more countries that has a vested interest, and then we can each claim it as our own as a “national film”. Arguably, the project should be culturally relevant to each producing country and there needs to be a fair split between creative elements and financial contribution, but on the whole, with a bit of juggling, it can work very well if the project calls for it.  (NB: This applies for international producers entering into an official co-production with Australia, the project becomes automatically entitled to the Producer Offset rebate as an Australian project, up to 40% of Australian spend.)

Australia has official co-production treaties or Memorandums Of Understanding (MOU) with countries such as Canada, China, Singapore, Israel, NZ, UK and most European countries. Canada has treaties with more than 50. Unfortunately for the American independent producer community, no official treaties exist with the US. If you are an American independent producer and "that sucks" has just crossed your mind, be aware that its not all upside - dealing with bureaucracies to make films is often slow and time-consuming, which is time and energy that could otherwise go into the creative process… but nonetheless, we are absolutely grateful it exists.

The state of play is, however, changing. As the marketplace gets tighter and more competitive, there is a general appreciation, certainly within Australia anyhow, that we need to open up to wider markets, including the US. We just need to be creative in how we do it.

So, it was with much curiosity that I noticed the organizers of Strategic Partners, the international co-production market in Halifax, Nova Scotia, Canada, from Sept 16-19 (which I attended thanks to support from my local state funding body, Film Victoria…) decided to spotlight the USA, as well as Germany, as potential co-production partners. Despite having no official treaty, is there a way international producers can partner up with US producers? Apparently yes. While the spirit of traditional co-productions is to align the interests of international producers whose domestic markets are too small to compete with the US in the global marketplace, it appears that unofficial alliances between US and other countries, are becoming more accepted, especially via co-development and co-financing. (Note: in Australia, Screen Australia has launched a development program where they will match development funds up to $50,000 with funds from a third party with marketplace credibility i.e. financier, sales agents, distributors, broadcaster, etc. who can be from any country).

So within this context, over 3 and a half days at Strategic Partners in Halifax, 180 international producers, financiers, distributors, TV executives, sales agents, and representatives from national and state Canadian funding agencies were matched in 30 minute meeting blocks at tiny tables in a large hotel ballroom to talk about projects, possible collaborations, exchange information and hopefully find some common ground. These sessions were interspersed with inspiring guest speakers who generously shared their war stories and views on the current state of play. Christine Vachon spoke about the challenges of working with first time filmmakers in this risk averse environment, the downward pressure on budgets, and the opportunities opening up within the digital age, but her overarching message was that its always been tough and we keep getting used to the changes, so we just need to keep producing creatively (Christine is now producing a TV series for the first time for HBO with Todd Haynes directing, based on the original book of Mildred Pierce.)

Other keynote speakers included Toronto-based producer Laszlo Barna (whose company Barna-Alper Productions was acquired by E1 Entertainment in 2008) who was big on the message that Canada’s potential as a co-production partner is still underexploited.

Another Canadian producer and EP, co-production treaty expert and former law professor, Martin Katz, also shared his experiences, and among his many anecdotes, he shared how financing on Hotel Rwanda came together just days before cameras rolled with the last piece from Italy conditional upon casting at least one Italian role, so the writers wrote in an Italian Priest. Katz admitted they chose not to finance Hotel Rwanda as an official Canadian co-production because European casting rules are more flexible than Canadian.

There was a session on how to wrangle money from private investors. Essentially, the panelists concluded that money is still around and wealthy investors who have been waiting out the GFC, are poised to come back in given the right sort of project compatible with their philosophical and/or risk profiles. One panelist remarked investors like to feel good about projects they invest in, so it isn’t always about a financial return. There was also talk about how to creatively finance today by breaking down the rights, and assigning values to rights such as digital, soundtrack and itunes rights which traditionally haven’t offered much value.

Continuing the idea of rights, there was a fascinating session tightly facilitated by Janet Brown of Cinetic Rights Management on the current state of digital revenue, especially cable and broadband VOD, game outlets such as X-Box, Wii and Playstation, and mobile rights. Whilst this space is becoming increasingly significant as a potential content revenue stream, and the major companies are aggressively entering it, the golden goose example of how everybody will benefit over the traditional model is still elusive.  When it finally happens, and it is close, the landscape is destined to change…

By the end of the few days at SP, I felt as though my own personal landscape had changed in view of financing, producing and collaborating on film and television projects with global partners.  It’s a big world and partnering can open up creative choices. Can co-producing help us tell bigger stories to more people?

Of course, there are a million questions some of which are technical, and many of which are creative,

(…is there a place for local stories in global partnerships? How do we make sure bureaucratic box ticking doesn’t get in the way of creative decisions?) but like all aspects of producing, naturally it comes down to whatever works best for the project.

Personally, I love the idea of potentially reaching bigger audiences by working with talented storytellers from around the world with something in common to say. It seems, today at least, that it has never been easier to do it.

Yael Bergman has been working with Melbourne-based production company Princess Pictures ("Summer Heights High", "We Can Be Heroes", romantic comedy "I Love You Too"), developing and producing projects for film and television since 2004. She also co-wrote and co-produced the low budget feature film "Love and Other Catastrophes" which sold to Fox Searchlight.

Filmmakers vs. Aggregators: Distribber speaks of Win, Win!

Today's guest post is from Distribber founder Adam Chapnick responding to the question of just what IS Distribber and how can it make the world safer for filmmakers. Distribber was recently acquired by IndieGoGo, and in the wake of the publicity surrounding the announcement, we received a tremendous outpouring of enthusiasm and interest in Distribber's service.  As is inevitable, there's been some confusion around what Distribber does and doesn't do.  

Distribber was created to help rights holders maximize the payback from their work and investment.

More specifically, Distribber was conceived as a solution to several persistent complaints from filmmakers and other creative rights holders about distributors in general and aggregators in particular.  ("Aggregator" is the term used for a company that acts as a gatekeeper between a rights holder and a retail platform, such as iTunes, Netflix, Hulu or Cable VOD operators like Comcast, Time Warner, etc.)  

The complaints surrounded 3 specific pain points: 

Complaint #1.  Eternal revenue-share for finite service
Aggregators (other than Distribber) work on a revenue-share basis, meaning that they make money by keeping between 15% and 50% of your revenue that they collect from the retail platforms on your behalf.  They take this portion of revenue for the entire term of your deal with them.  The complaint from filmmakers was that while aggregators take this money "forever," they didn't seem to be working forever.  To many, it seemed that aggregators placed their film on the platforms and then moved on. 

This situation was even more frustrating for larger rights holders -- production companies, sales reps, etc. -- who controlled the rights to several (often dozens) of titles, and who engaged in significant marketing and grassroots outreach but lacked access to iTunes, except through revenue share entities.  The shared-revenue structure has continued to frustrate these larger companies as they have been the core demand-drivers.

Now, in defense of aggregators, encoding a film, ushering it through Quality Control "QC" and having the access to place it on iTunes or Netflix or Hulu or Cable VOD or anywhere else is indeed a valuable service -- and often a time-consuming one.  

However, it seemed that one could put a fair price on that service that accounted for the work and value of relationships, and offer it to filmmakers cleanly, without the burden of a revenue-share.  This would enable a filmmaker, production company or other rights holder to know their cash outflow in advance, and enjoy 100% of the benefit of their film's success.  So, Distribber adopted a flat-fee-for-service model.

Complaint #2.  Large deducted expenses, often including fees for marketing services that seemed unhelpful or nonexistent
Filmmakers complained that distributors and aggregators deducted expenses that seemed unreasonable, like $1500 for encoding, or an array of costs for marketing services that the filmmaker wasn't sure had actually been done.  

Here, the opportunity was again to charge a fair price, once.  So, Distribber adopted a fair price.  The $1295 one-time fee for iTunes placement was less than some rev-share companies charged for the encoding alone, and after only 185 sales at $9.99 on iTunes, rights holders have been entirely in profit.

Without putting too fine a point on it, it bears emphasizing:  after 185 iTunes sales at $9.99, a rights holder is in profit for the rest of the film's life on iTunes. Going forward, Distribber charges $79 per year for account access, collection and sales stats.  

The best evidence that we were on the right track came when the Age of Stupid production team chose to use Distribber -- they have been incredibly successful trailblazers in the hybrid distribution movement, and their endorsement told us that our service is providing its intended benefits for its ideal users.

To compare Distribber's model with revenue-share models, consider the illustration below.  At 1000 iTunes sales (retail price $9.99), rights holders give up 174% more money under a 15% rev-share than they pay to Distribber ($3,550 compared to $1295).  Under a 25% rev-share, rights holders pay 228% more ($4,250).  At 10,000 sales, Distribber's one-time fee doesn't change, but a 15% rev-share deal now costs ten times the Distribber fee ($13,000), while a 25% rev-share deal costs over fifteen times more ($20,000).  Obviously, at 20,000 sales, the disparity only increases.

Looking at revenue, with Distribber's flat fee, at 1000 iTunes sales, rights holders are paid 65% more than they would be with a 15% rev-share deal ($5,705 vs. $3,450), and they're paid more than twice what they'd get from a 25% deal ($5,626 vs. $2,750).  At 10,000 sales, Distribber clients keep $11,705 more than they would under a 15% rev-share, and  $18,705 more than they would under a 25% rev-share.  And again, at 20,000 sales, a rights holder does even better.


What A Filmmaker Is Charged, With:                     What A Filmmaker Keeps, With:

Distribber 15% Rev-Share 25% Rev-Share Distribber 15% Rev-Share 25% Rev-Share
At 1000 iTunes sales -$1,295 -$3,550 -$4,250 $5,705 $3,450 $2,750
At 10000 iTunes sales -$1,295 -$13,000 -$20,000 $68,705 $57,000 $50,000
At 20000 iTunes sales -$1,295 -$23,500 -$37,500 $138,705 $116,500 $102,500

(The chart assumes Rev-share companies deduct from filmmaker's revenue $2500 for encoding and/or marketing.)

And now, with Distribber's addition of Amazon VOD and Netflix's streaming service, we decided that as a limited-time promotion, for the same $1295, Distribber clients could have our Amazon and Netflix service for free. This of course only makes the above comparison even more lopsided in Distribber clients' favor, since it adds revenue without adding any expense.

Complaint #3.  Late payments, and sometimes no payment

Filmmakers complained that even after resigning themselves to a rev-share deal, and agreeing to the small payout left after expenses and revenue share deductions, they had to chase distributors and aggregators for reports and checks, and sometimes with none being sent at all.

So, Distribber has decided to do away with reports and checks, and instead employ a user account system, whereby clients login with a username and password.  Here they gain access to collection stats by platform, and see their collected funds balance.  Clients withdraw their own money on demand, with the click of a button.  Having all sales stats and collection in one account removed a major, time-consuming headache from our clients lives for $79 a year.

Next: More Pain, More Answers

Even a casual follower of the distribution business knows that there are plenty of areas it can be improved, and in plenty of ways.  Distribber is continuing to actively developing new methods and models to serve rights holders across a variety of platforms, from internet to cable to mobile. 

With the proliferation of tools like Wordpress, Facebook, Twitter and all the plugins and apps that support those services, it's more possible than ever for innovative companies, teams -- or even individuals -- to disrupt old marketing models and connect with audiences.  Filmmaker/marketers like Gary Hustwit, Lance Weiler, Tiffany Shlain and others have shown the way to create demand via their own efforts and investment. Peter Broderick is shepherding rights holders through a hybrid strategy that teaches careful allocation of specific rights to companies that are highly specialized, with the goal of maximizing the revenue a filmmaker keeps.

The key thing to understand about Distribber is that it's a powerful tool to help enterprising rights holders keep the most of their own money.  The more skilled you are at connecting with audience, the more buzz that you've built, the better Distribber's deal works for you.  

ADAM CHAPNICK is CEO of Distribber.com, an IndieGoGo company that places film and TV content on digital sales platforms such as iTunes, Netflix and Amazon for a flat fee while allowing filmmakers to keep 100% of their revenue. Adam can be reached at adam@distribber.com .