Thoughts on "Free" From The Conversation: NYC Edition

Today's guest post is from producer Smriti Mundhra.  I confess I have been slow in my posting and should have run this last week! If the sun came out in New York City this past Saturday, I didn’t see it. Instead, I spent the day in Columbia University’s Uris Hall with about two hundred fellow filmmakers participating in The Conversation, an all-day conference about the future of independent film funding, marketing and distribution. There was a lot to talk about.

The program for The Conversation consisted of panels, discussion groups and breakout sessions, each featuring both indie fllm stalwarts (Eugene Hernandez, Scott Macaulay, Bob Hawk) and new media trailblazers (Lance Weiler, Arin Crumley). But it was Ira Deutchman, CEO of Emerging Pictures and professor at the university’s graduate school of film, who dropped the first bomb in his opening remarks when he quoted a businessman with whom he recently had lunch: “Film? That’s not a business, that’s a hobby.”

Though the folks behind Avatar might disagree, the conversations that followed Deutchman’s speech had me wondering if this cold-hearted suit had a point when it comes to the independent film industry. If one could have extracted a theme from the day’s panels and discussions, it would have been this: you want to get your independent film out there? Chances are you’re going to have to give it away for free.

As Michael Barnard pointed out in his two-parter “Free is Not Worth the Price” a few posts back, this principle of “free” does not a business make. I was alarmed by the number of filmmakers I met on Saturday who have willfully resorted to giving the milk away—either to distributors by accepting zero-advance deals with virtually no hope of profit participation, or directly to the consumer via online platforms. Equally distressing is Eugene Hernandez’s case study of the upcoming film Breaking Upward, which reveals that the filmmakers took their generous-by-comparison $40,000 advance from IFC Films and reinvested it into their own marketing (thereby doubling the advertising budget for the film), and yet do not seem to have an increased participation in the film’s upside should it succeed.

Most vocal of these “free mavens” was panelist Nina Paley, director of the charming and deeply personal animated feature Sita Sings the Blues. Paley, who was road-blocked into a selling no more than five thousand DVDs of her film because of a complicated music licensing deal, decided instead to give it away for free, in all digital formats and in perpetuity, to anyone who wants to screen or sell it. She then crafted a “creator-endorsed” logo available to anyone who shares part of the profits with her. Paley spent years making her film and took out loans to pay the $50,000 music licensing fee, and now relies on the kindness of strangers—who voluntarily pay screening fees or share profits, and buy Sita-inspired merchandise from her website—to see profits from her work. This suits her just fine.

Though Paley has become the poster child for Free Method, not everyone shares her enthusiasm. The filmmaker came to a head with distribution consultant Peter Broderick during his dealmaking seminar, when she announced to all and sundry that by guiding filmmakers into selling of exclusive rights to their films, Broderick was perpetuating a monopolistic system that killed free trade. She informed Broderick that she was “the only filmmaker in the world who is happy with her distributor,” to which he curtly replied, peering at her over his eyeglasses, “I doubt you know every filmmaker I work with, Nina.”

Throughout the day, my thoughts kept drifting back to the “film is a hobby” statement. The dictionary defines hobby as “an activity or interest pursued for pleasure or relaxation and not as a main occupation.” As anyone who has made or distributed a film recently knows, it is not relaxing and is very much a main occupation. In fact, it was made clear during The Conversation that filmmakers are having to work harder than ever for increasingly smaller pieces of pie (crumbs, really). However, as condescending and arrogant as it is to refer to independent filmmaking as a hobby, for most of us it’s not exactly a business either. As panelist Richard Lorber, CEO of distributor Kino Lorber, put it, “everything’s possible but nothing’s working.”

Though no distributors seem to be willing to reveal numbers or metrics, I would have liked to hear more from companies such as Oscilloscope Laboratories and Palm Pictures (who released a feature I produced called Bomb the System with some success) that at least seem to be making money selling independent films to consumers, as opposed to the myriad companies selling distribution platforms to filmmakers.

Ryan Werner of IFC Films—the lone voice of semi-traditional distribution at the conference, bless his heart—offered some candid insight into what sells and what doesn’t: no-name personal indies and romantic comedies are the toughest sells, genre material and anything laced with controversy are the easiest. Anybody surprised? Probably not. And yet, the majority of us independent filmmakers work doggedly to make films that have virtually no chance in the marketplace, only to have to jump through hoops to get people to watch even as we give them away for free. Clearly, we on the content-production side have some reassessing to do.

Just as everyone was getting ready to collectively throw up their hands in despair and looked for the nearest exit, The Conversation co-host Scott Kirsner reminded us that when the film business started over a hundred years ago, when somebody started charging people to watch thirty-second reels in a kinetoscope parlor on Fifth Avenue, the average weekend box office was $120.

“I think if you were in Manhattan back then, you would have said ‘this isn’t really storytelling, this isn’t an art form, and this certainly isn’t a business,’” Kirsner said from behind his podium. “I think we’re in a similar moment right now. It doesn’t feel like a business yet, but those of us in this room are the early pioneers, ignoring the warning signals that eventually won’t mean anything.”

In the mean time, events like The Conversation are helping bring like-minded pioneers together to share and experiment so that one day, the independent film business can truly be a business again.

LINKS:

The Conversation:

http://www.theconversationspot.com/home.html

Eugene Hernandez’s case study: http://www.indiewire.com/article/eugene_hernandez_breaking_upwards._breaking_even/

Sita Sings the Blues:

http://www.sitasingstheblues.com/

Free Is Not Worth The Price (And Neither is $1.00!) Part 2 of 2

Today's guest post, like yesterday's, is from filmmaker Michael Barnard.  Yesterday, he covered how we slipped into our embrace of "free".  Today, he writes of the deadly results. I used to read Daily Variety online religiously. Now I don't. When I click on my fifth article (or whatever the tipping point is) and am denied access, I resent it. Yet, I know that if Daily Variety does not succeed somehow, I am either going to have to become my own journalist (“JOURNALIST”, not merely an observer or repeater) or I am going to have to rely on agenda-laden, word-of-mouth bloggers.

This situation is also affecting indie filmmakers. Indie filmmakers have to deal with the very worst form of free: theft by piracy. They have to deal with distribution outlets that want their films for free. Even REDBOX, with their $1 DVD rental kiosks, a pet peeve of mine, is an enemy of the indie filmmaker.

The success of REDBOX comes from ripping off filmmakers. In fact, you have to admire REDBOX for achieving something few ever have: they have even ripped off the studios! By circumventing the sales requirements for rental DVDs (REDBOX bought their DVDs from big box stores like Wal-Mart at discounts rather than at “rental” pricing from wholesalers), they stripped the potential profit from rental fees and kept all the income for themselves. They single-handedly killed the perceived value of DVDs by pricing them at only $1. Yes, they are successful, but because, of course, EVERYONE WANTS FREE. $1 is “free” as far as the film business is concerned, since there was no return of any of that income to the filmmakers. (The studios have since coerced REDBOX to start playing on a more level playing field.)

Bear in mind: McDonald’s will offer you a $1 burger. Why? They know that’s as good as free to you. But the difference between REDBOX $1 DVD rentals and McDonald’s occasional $1 burger is that McDonald’s still has its full-value menu for you, and will up-sell you with sodas and French fries. They sell $1 burgers with the full intention of making a profit and without killing the perceived value of a standard McDonald’s meal.

When REDBOX rents you a DVD for $1, that’s it. End of story. There’s no more income stream possible, there’s no up-sell, there’s no method to establish the realistic value of the product.

And the most hostile effect for indie filmmakers: the kiosk only displays a couple dozen titles, so indie filmmakers can no longer compete for viewers’ attention as they used to when people wandered the aisles of their local Blockbuster.

$1 DVDs from a REDBOX kiosk are the same as “free” and the impact is just as profound on filmmakers as the free online content has been on the news publishers.

The impact of “free” is beginning to cripple journalism and filmmaking.

At some point soon, it will sink in to me, and others, that FREE IS NOT WORTH THE PRICE.

Michael R. Barnard is a filmmaker and marketeer living in Hollywood. He is rushing towards pre-production on his indie feature film A FATHER AND SON (http://AFatherAndSon.com)

FREE IS NOT WORTH THE PRICE, Pt 1 of 2

Today's guest post is from filmmaker Michael R. Barnard.  Michael had written to me on Facebook after I had tweeted about the end of film industry trade papers.  I felt he had some interesting thoughts on the subject, and the bigger issue for filmmakers on the "free" economy.  Today's post is 1 of 2, with tomorrow's set to look at the inevitable end from the culture's embrace of "free". The New York Times reports on the malaise hitting the very-important-to-Hollywood trade papers, especially Daily Variety. (See online at http://www.nytimes.com/2010/03/15/business/media/15variety.html?src=twt&twt=nytimesmovies)

Daily Variety is suffering the fate of many news publishers (even the New York Times), but attracts attention because of its reactions to its problems. This important trade paper recently fired staff critics, now favoring freelance critics. The paper is also one of the first to duck behind a paywall. You can no longer read the entire paper online free.

Everyone, including me, chafes at this. The news publishers themselves established their value, and the public always perceives value to be the very least it can be. And for years, the news publishers valued their content as “free.”

So how did news publishers like Daily Variety end up in the non-business of giving away their content?

In the mid-‘90s, I had a routine. I would spend 75¢ on a print copy of DAILY VARIETY from a newsstand, spend a buck on coffee, and sit at the Coffee Bean & Tea Leaf on Sunset Plaza studying the industry in Daily Variety and then pounding out a mediocre script, a thriller set in the time of the Northridge earthquake of a couple years earlier.

I liked that life.

But a few years later, the paper and the coffee cost about four times that much. I stopped my routine.

Thankfully, during that same time, the Internet was beginning to blossom into the “Electronic Super-highway.” The Internet existed before those days, but it was populated by geek-esthetes, academics, and government wonks married to the text-based exchange of statistics, data, and reports.

As the World Wide Web began to overlay the Internet, the denizens were outraged by the commercialism. As the first wave of newcomers arrived on the World Wide Web--using their exciting new Mosaic browsers and 14.4 Kb dial-up modems--they settled in to a new and attractive overlay on the free exchange of information that existed on the Internet.

Soon, the original settlers and the newcomers together had something to rage about: paid content. There was a backlash to any attempt to sell information; there was even a backlash to the very appearance of advertising on the early ‘net.

There had been attempts back in earlier days to offer subscriptions via text online. The L.A. Times and the Wall Street Journal offered simple plain-text versions of their papers online for a subscription fee. But they didn’t work. The explosion of the World Wide Web swept those efforts out the door, in favor of “free.”

And people stopped thinking logically. The appearance of cyber-space clouded the minds of many people, leading them to the conclusion that the entire world had become new. It is proven repeatedly that many people cannot discern the difference between cyber-space and reality. (Case in point: several years ago, cyber-space was convinced that Howard Dean was the next President of the United States. Once Dean stepped out into reality, however, the harsh glare of reality immediately shot him down and dismissed him.)

The new netizens and entrepreneurs were swayed by cyber-space, rejecting reality. They conjured up the “we'll somehow monetize eyeballs” mentality of the Millennial flip, the illogic that had investors pouring millions and millions of dollars into every site that claimed it could “get eyeballs.” They eschewed business plans for generating income, instead chanting the mantra of “We’ll monetize eyeballs!”

And they offered everything for FREE.

News publishers like Daily Variety started with “free” in this environment.

During the Millennial flip, the belief was that, somehow, everyone would get rich. Many did...temporarily, and from investors' money, not from value. Until reality stuck its ugly nose under the tent and started sniffing around. The Internet bubble burst and its “somehow we will monetize eyeballs” mentality collapsed.

But FREE stuck around. Why? BECAUSE EVERYBODY LOVES FREE. Of course!

We are now feeling the impact of that un-analyzed, self-serving desire, “I want it FREE.”

Yes, the Internet itself must be free. This past week’s announcement by the FCC that it is switching its official support from the old era of broadcasting to the current era of Internet access is welcome and profound news. The Internet needs to be freely available for the exercise of democracy.

But content is a challenge. We want it free, but it cannot be sustained when free.

The Internet has become the dominant distribution system in the world and obliterates the profit streams generated by old-school “analog” distribution systems and old-school “gate-keeper” systems. Those are crumbling quickly, faster than old-world companies can grasp, much less react to.

The mind-set of the consumer must evolve, too.

Of course, we all want everything for free. Of course!

But we must grasp, and are slowly grasping, the old truism, “You get what you pay for.”

If we do not step up and recognize the true value of quality--again, a value that had been set by the news publishers themselves as “free”--then we will eventually, and sadly, recognize that FREE IS WORTHLESS.

End of Part One.  Part Two continues tomorrow with a look at how $1 is still virtually free, and one entity's good business is a culture's eventual demise.

Michael R. Barnard is a filmmaker and marketeer living in Hollywood. He is rushing towards pre-production on his indie feature film A FATHER AND SON (http://AFatherAndSon.com)

Map Making: Thoughts On Thinking "Free"

I should have known Free would be the mantra of the weekend. We were going to take Hope The Younger to freeload at Vanessa's Dad's pad by the beach for the 4th, but before we left, we had the op to share a cab back from celebrating Strand's 20th with Indiewire's Eugene Hernadez; under his arm, still in it's protective wrapper, was Chris Anderson's "Free". Eugene had shelled out the $27 bucks for the wisdom of the nothing economy. Meanwhile, I was still hoping that Anderson would still take me up on my offer to send copies to the 4 most influential people I know, and thus provide with a copy for the price of the title. I guess heads of Hollywood and Indiewood studios don't rank in his book. Back from the sea, sand still between my toes, I still haven't read the meme of the moment, and now must live vicariously.

I once had a friend who said he preferred reading criticism than seeing or reading the real deal. I just may have to settle for that experience myself on this one, but luckily we all have the pleasure of both Malcolm Gladwell and Janet Maslin chiming in on Anderson's book so we can still participate in the daily chatter.
Just so it's clear -- if it isn't already -- Anderson's "free" is not the same "FREE" of this blog's inspiration (and title). Here on TFF, free is used in terms of thought, execution, and means of distribution. Here I mean FREE in terms of content, not economy. Granted there is a lot of overlap, but basically I am hoping that by changing our economic model to adapt to the reality of our times, what once was mistakingly called Indie Film can be a far more diverse and participatory culture. But more on that later. Back to that other Free...
Generally the question everyone seems to want to know is how do you make money, let alone recoup your time and money, when you are giving the product away for free?
“The way to compete with Free is to move past the abundance to find the adjacent scarcity,” states Chris Anderson in his book. What does that mean for you the filmmaker?

Scott Macauley on FilmmakerMagBlog tipped me to Brian Newman's powerpoint on moving beyond Free, and actually how to make a living with Free. Brian answers that question quite clearly & concisely.

Brian, borrowing from Kevin Kelly's "Better Than Free", points out where the added value comes in:
  • Immediacy: Give them something now
  • Personalization: To their needs
  • Interpretation: with study guide, or commentary
  • Authenticity: From you directly, signed by you
  • Embodiment: Speaking Fees
  • Patronage: Support the artist; Radiohead model
  • Accessibility: Make it easy to get
  • Findability: Work with partners who make you findable
The powerpoint is without audio, but pretty easy to follow if you have been following this blog.

To further answer this Question-Of-The-Moment, Janet Maslin points out in her review:

Mr. Anderson sees that consumers think not only about money but also about intangibles like convenience, access, quality and time.

Maslin, in contrasting Anderson's "Free" with Shell's book "Cheap", also hits upon one of the plagues that runs amok in Indie Filmland:

Ms. Shell’s intangibles are different; she argues that moral accountability and responsibility are often sacrificed for the sake of cheap pricing.
They didn't write a book on that because it would require two words: Bad Behavior. I find that even the filmmakers who adopt the "film-is-war" approach to production (more Bad Behavior), still struggle over these principles. People don't like to exploit others, although sometimes they allow themselves to get distracted to the point such exploitation becomes a tad too convenient. Those that do have started to lose some of those human qualities. Generally I find the creative brigade would love to find ways to get their work made and seen without having to ransom moral accountability and responsibility. People will adopt good behavior if they are reminded or given the opportunity or have a gun held to their head (daily).
I think the gun is there along with the opportunity and the daily reminders.
Yet, the fear of there be no real business model there too, leads a lot to indulge in a less rigid sense of effects. It's funny how survival leads many to cannibalize themselves. And as clearly as Gladwell deconstructs Anderson's model, he too finds it difficult to unearth the money-generating Free model:
There are four strands of argument here: a technological claim (digital infrastructure is effectively Free), a psychological claim (consumers love Free), a procedural claim (Free means never having to make a judgment), and a commercial claim (the market created by the technological Free and the psychological Free can make you a lot of money). The only problem is that in the middle of laying out what he sees as the new business model of the digital age Anderson is forced to admit that one of his main case studies, YouTube, “has so far failed to make any money for Google.”

To makes matter worse, providing for Free, isn't free to YouTube. As Gladwell points out "A recent report by Credit Suisse estimates that YouTube’s bandwidth costs in 2009 will be three hundred and sixty million dollars." And then it gets even worse from there:

...in order to make money, YouTube has been obliged to pay for programs that aren’t crap. To recap: YouTube is a great example of Free, except that Free technology ends up not being Free because of the way consumers respond to Free, fatally compromising YouTube’s ability to make money around Free, and forcing it to retreat from the “abundance thinking” that lies at the heart of Free. Credit Suisse estimates that YouTube will lose close to half a billion dollars this year.

So where does all this leave us? Indie films been losing approximately two billion a year (guesstimate: 4000 features @ $500K avg. budget; all not distributed or recouping).Gladwell's summation essentially comes down to that there are no easy answers -- but that easy answers do sell books (or at least get you a publishing deal, and the 4th of July meme of the moment).

But talented artists still want to make movies. And to make good movies, we all need to focus on the movies first and foremost. But good movies aren't enough in this world to get seen.
  1. A good first step is to work harder to make your film better and more distinct.
  2. The second step is team up and start to truly collaborate.
  3. Try following Kevin Kelly's 8 Generatives for step #3.
  4. I think the fourth step is follow those rules via some of the methods we've relayed here.
  5. Let's call the fifth step sharing your knowledge with each other in hopes that we will find a way.
Step by step we will get there. Let's make this map together.
As Joe Tripitican commented below, the musicians are dealing with this all straight on. There's a lively debate he tipped us to over on Jonathan Taplin's blog too. Check it out.
And Mark Cuban wants to encourage all business-minded to avoid the freemium model as he believes any successful free-ium play will grow until it becomes to large, expensive, and retro. There will always be a Facebook to replace MySpace, and a MySpace to replace Friendster, a Google to kick Yahoo's ass. Personally speaking I think all companies should plan to make themselves obsolete within five years, or they are not doing the public good.

Zwaggle: Parent Exchange

Now that would be a good idea that I am sure a lot of children would like.  In fact I think there already is a few reality shows mining that topic.

Zwaggle is another sort of parent exchange.  I have been intrigued with the general Free movement -- I mean why not just give it away?  Imagine what it would be like if you had a close group in your area that freely exchanged hand-me-downs without any need to barter for what you get back in exchange.  Just give in good faith.  After awhile doesn't everyone out-grow everything (other than their loved ones, family, and friends that is).

Something To Think About: Data Portability

I posted today at InfoWantsToBeFree on what should be one of the top concerns of all Truly Free Filmmakers in this coming year.  

Data Portability (and access) is something that should be built into contracts, particularly when the license fees are as low as they are these days.  It's the same question as owning what you generate.  It's a question of what is really free in a free market.  
There's a lot more to say on the subject and this will be a big topic for discussion here and elsewhere.

Data Portability: The Free Market Should Swing Both Ways

I hear a lot of anxiety from other newcomers to social networks.  Most of the folks in the film biz I know seem to initially join a network like MyFace for the promotional possibilities and professional networking.  Some get seduced by the actual social functions.  The anxiety often comes from what will be seen and shared and by whom.  Is it good or bad to friend all those who reach out to you even when you don't know them?  Will anyone tag you in photos from the past that you would prefer to remain forgotten?  That sort of thing.

But there are things that we should be concerned about, things we should ask for, push for, fight for.  Businesses talk about their investment in the technology, but little is said about the user/consumer's investment.  You create connections.  You tag information.  You provide data, but none of it is yours.  Your life in MyFace is life in a prison cell.  If you leave the network, you leave behind all of your work you created there.  You think you have a 1000 friends but how do you take them to another planet with you when you want to travel.
If 2008 was many things (the year of change, the year of hope, the year unregulated capitalism and greed revealed its true demonic ways), 2009 may well be the year that freedom starts to go both ways, that people push for equal rights for what they create, that we move from impulse to choice.   One can hope at least.
Bill Thompson has a good post on the BBC site "The net and the real cost of free" precisely about data portability.  This issue is central to all media makers.  We need to own and or at least have unlimited access to the data we generate: our friends, our tags, who watches, what they watch, when they watch, where they watch.  Read Bill's piece and started thinking about what really is yours.

Major Magazines For Free

As you know, "the future of everything is free".  Certainly in the digital world, if you want anyone to read anything, you have to give it away.  It brightens my day to be able to get any major publication for nothing, even when they are magazines I wouldn't normally read.  Now if someone will only give me the time it takes it look at them.

Fortunately, the device I found allows me to look at magazines on my iPhone, so the next time I am stuck with nothing to do (when was the last time that happened?), I can browse NME, Technology Today, or even Playboy.  Check out:   .  It's very simple to set up when you do it directly from your iPhone.
Digital Inspiration also has a neat simple hack to be able to do it from your computer if you like a bigger screen.