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sell how to sell an independent film and actually make money.
www.buffalo8.com 9247 Alden Dr. Beverly Hills, CA 90210
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contents. intro.
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define.
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the new reality
distributor acquisitions license sales agent sales agency producer representative sales consultants film markets television markets film festivals buyers sellers VOD four wall service deal roll-out p&a minimum guarantee off-the-top
emerging markets.
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iTunes Netflix Hulu & Crackle Amazon & Microsoft Day & Date Torrent Television Platforms
best practices.
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early discussions relationships stay present
conclusion. an overview & reality
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intro. You’ve completed a feature film - congratulations, it’s a feat and often a miracle that they get done at all. The trouble is - now what? The studios smaller indie divisions are almost non-existent, the international markets are over-saturated, sales agencies are only looking for broad genre content and domestic distributors are few and far between. Relax...it’s not as bad as it sounds. Well...maybe it is, but not exactly. At Buffalo 8 we’ve produced a lot of films, at the time of writing this eBook we’ve collectively produced over 30 feature films and all of them have territorial sales (or at least territorial sales discussions) in place. Granted, we’ve spent a ton of our time, energy and effort developing an ability to sell content - and now wanted to give our clients, colleagues and independent filmmaking community an inside look at the realities of the current distribution system. Similar to our other eBooks, we set out to be bluntly honest and realistic with our readers. The simple truth is that the 90’s film boom of independent cinema is now over and we’re looking at a digital age of production that allows nearly 10,000 feature films to hit the markets internationally every year:
Reality #1.) The days of producing a short-film on a spec concept, submitting to Sundance and securing financing for the feature length version are gone.
Reality #2.) The days of writing an excellent script, attaching name talent and securing domestic distribution without major representation are gone.
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Reality #3.) The days of four-walling an independent film and snowballing it in to a major theatrical roll-out are gone. The current distribution system is broken - and the two factors that lead to its fractured existent are the same as they are in every other stumbling industry: a rapid and continual technology movement and a crumbling financial & private investment system. As technology has eased the production process, lowered film budgets and demolished the barrier of entry to independent filmmaking - so too has it opened the flood gates of content. With more films being produced annually than in full decades during the 50’s & 60’s the release and distribution model has struggled to find its footing. In 2013 Netflix, Hulu, Crackle, iTunes, RedBox, HBOgo and international television & VOD buyers are the life-blood of independent productions. However, none these models have been tested over long enough periods of time to fully rely on one or the other to assure success. Therefore, the scramble of international marketplaces snowball onwards. The goal with this eBook is to define the current system, to set forth definitions of the realities as well as the false-assumptions and to shine a light on where the future of independent distribution is headed. No doubt, there is not one single solution to distributing all films. No doubt, predicting the movement of technology and its impact on film production & distribution is impossible. No doubt, investment and material will continue to intersect to drive the entertainment economy regardless. However, this is an overview of how to sell an independent film & actually make money.
- Buffalo 8
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define. Film, like all industries is full of casually used terms that are often confusing, misleading and frequently mis-used. Below is an outline of the bottom line meaning of the terms as well as many of the misconceptions and misuses of each.
Distributor - Before we even define this term, get it into your head ASAP that there are only a handful of true distributors left in the entire world. No..really, take a moment and beat it into your head that true distributors are few and far between. The entertainment business, the industry itself, Hollywood and all of the film-sellers and buyers would have you believe that there are countless distributors - this is a lie. The reality is that film distributors have it worse than the independent filmmakers. Distributors need to have the ability & infrastructure to acquire (often involving minimum guarantees or outright purchases), license the content (again involving purchasing costs), market content for release whether theatrically, DVD or VOD (heavy costs for labor, personnel, legal and materials), print materials (heavy shipping and creation costs), account for (keep adding it up) and then attempt to recoup this investment in an insanely crowded market. If someone (whether an individual or a company) claims to be a distributor, they must be able to handle the above mentioned tasks - otherwise they are not a distributor. In the early 1990’s Harvey and Bob Weinstein (Miramax) established a brilliant distribution model of taking international films - tweaking them for American audiences - and distributing them domestically. Miramax established itself as arguably the strongest independent distributor in the market place. They took risks, made investments, poured capital into development and built a library of great titles both critically and commercially.
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Today, Miramax’s library has been sold to Disney and the Weinsteins formed The Weinstein Company with a similar model - however, now they’ve adjusted for the current economic climate (purchasing less material, diversifying into television to stabilize their risk based indie model and paying less for overall content). TWC & a handful of others still exist in this realm as domestic distributors capable of carrying content to audiences - however, unless a company can manage all of the above tasks they are not a distributor.
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Acquisitions - similar to distributors, this term is often misused and misrepresented. Simply put, acquiring content means either an MG (minimum guarantee - defined and discussed below) or a P&A campaign (prints & advertising - defined and discussed below) is committed to from a buyer or distributor for an project. Often times sales companies will use the term acquisition when the word they should really be using is license.
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License - when a sales company is interested in a project they often disguise their intentions and capacities by referring to their agreements as acquisitions - but in reality they are licensing agreements. To license, is to take on a piece of material under contract for a defined period of time to shop it around for sales. The licensee (the sales agency) takes a percentage - typically between 15% - 25% of the revenue generated from sales and the licenser (the producer/filmmaking team who own the content) retain the remainder of the rights. Licensing agreements are typically between 3-7 years (sometimes longer for larger films taken on by larger companies). Licensing agreements should always allow the producers/licensor the ability to audit and review all revenue generated by a piece of material.
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Sales Agent - a sales agent is an individual who has the ability to represent content internationally and execute the sales agreements. Sales Agents can work individually, on a consulting basis or for a larger company . The model itself does not determine a good or bad agent - as long as they have a track record of representing material to market and returning revenue to their clients they are worth doing business with. When searching for a sales agent to represent your film - the most efficient method is to research similar films (genre, budget, cast draw, year produced, etc) and determine who represented the film to markets. Approaching agents is best done before you head in to production. Agents can either advise on casting, assist with pre-sales, alert you of emerging or receding market practices and gauge the overall value of the film you’re about to produce. The problem with agents (much like the problem with the current industry model itself) is that their space is crowded with literally hundreds of companies, consulting firms and individuals claiming to be able to return revenue. The reality is that the market itself is the final determining factor for any product - and film is no exception. When a film hits the market, regardless of the agent, the film needs to be be able to carry itself. That said, discounting the value of a good sales agent would be naive and ignorant. A good agent has a large rolodex, the infrastructure to oversee the agreement process and the ability to execute sales. Simply put - the best film in the world could sit on your mantle for eternity without an agent to get it in front of buyers - and vice versa, a terrible film with the best sales agent in the world will sit on your mantle because the market is the final word.
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Sales Agency - Sales Agents often times build companies around their licensed content (which they refer to as their library - however, the distributor is typically the true library owner). Teaming with marketing, accounting and executive branches - sales agencies depend on the revenue generated from international agreements to maintain their overhead. As automation and technology has driven down the overall size of every business sales agencies are a skeleton of what they once were. A typical sales agency consist of 2-7 employees who handle multiple roles and seek to build larger licensing libraries by scouring film development forums/sites, attending markets, festivals and networking with producers. Large and established firms such as Cinetic in New York City regularly represent high quality content with above average results. However, there are many firms who represent lower quality content and whole-sell (package multiple films together) for quick turn over. With such an influx in content it is no surprise that these kinds of engagements have become more frequent, however, it’s a practice not in the best interest of the filmmaker.
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Producers Representatives (Producers Rep) - Producers Reps are similar to sales agents in that they broker sales agreement - however, Producers Reps only deal domestically and do not work internationally. While it may be time-consuming and difficult to breach the early relationships necessary to execute domestic sales - it is also very worth the time and energy. Domestic sales are very different than international sales, in so much that language, format and currency barriers are non-existent. Taking your film and working to find a home for it domestically is a wise choice if you plan to produce/create another film. Once you lay these early foundational relationships with domestic buyers and distributors you’ll have the ability to revisit them with future content. However, a Producers Rep takes 15%-25% of generated revenue from domestic sales and in reality these relationships and sales can be brokered by the producer themselves.
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Sales Consultants - Individuals who have a background in international and domestic sales often times venture out of Sales Agencies and firms to consult clients on their own schedule. These consultants can be used for advice, assistant consulting sessions and also can often directly sell content. The advantage of these individuals is that they don’t have the large overhead that an agency requires. The disadvantage is that these individuals will often have many clients over various areas/genres leading to conflict of interest confusion that can be avoided with an agency. However, it should be stated that consultants are a great solution for many films and producers looking to maintain a close relationship with a single individual who will give them more time, energy and honesty.
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Film Markets - (not to be confused with Film Festivals - defined and discussed below) There are five major markets throughout the year - Berlin, Cannes, Hong Kong, Toronto, and AFM (American Film Market). Markets are, at their most basic, a stock/commodity trading exchange for films. Buyers and sellers attend the market to strike deals, sell content and market upcoming projects. Each market is very different in terms of what is being sought, who is attending and what the protocol looks like. Markets are pricey - typically day and weekly basis range between $250 - $2000, plus travel, lodging, entertainment and marketing that is associated with selling can add up quickly to $10,000 or beyond. Berlin - the first market in the calendar year, this European market is home to some of the best films and biggest early deals each season. Often referred to as the market where deals are set up - Berlin is a great place to launch a project by introducing it as a fresh new product to the market. Being the first major market of the year, buyers have more capital to spend and content libraries need to be filled. Being both a high calibre and a major market - Berlin sees nearly 10,000 completed films available each year. The content genres, production values and buyer draw all vary significantly. Cannes - the second major market of the year in May is the biggest film event in the world. Premieres, a major festival and the largest market gathering of the year culminate into one massive two week get together. Often referred to as the closing market, Cannes is the place where deals set up at Berlin are secured and finalized. Films that have been overlooked are scooped up and introductions to the market are common - but a bit less so than Berlin. Content ranges drastically as the premieres are often high profile Hollywood films and the market contains lower budget genre fair that international buyers consume early in the opening week before the buying slows. Hong Kong - the third and newest market of the group was launched to take advantage of the growing demand and emerging market presence of the Asian territories. While many buyers and sellers attend this is still a newer market that is gaining its footing
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and finding its place. International television and VOD buyers are on hand the content is lower than the prestigious Berlin & Cannes gatherings. Toronto - this September event is on the same level as Cannes & Berlin in so much that the prestige and power house content are everywhere. Big productions are packaged, smaller indie fair is sold and producers introduce new content to the market while premieres reign in the evenings. This past year saw multiple bidding wars, major premieres and several high profile packaging agreements. AFM (The American Film Market) - this Santa Monica, CA (Los Angeles) event takes place in November and closes out the buying season. Often referred to as the clean up market - buyers have tighter wallets, libraries have been filled out for the yearly quotas and most films that have been worth purchasing have been spoken for. There is quite a bit of schlock at this market with heavy genre focus, bundled sales and quick buck films made for turn over very present. There are exceptions and several projects have emerged successfully over the past several years but relatively speaking it closes the year out as buyers wait for the following calendar season to find new material.
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Television Markets - similar to the international film markets, television markets are attended by buyers representing each major territory attend looking for content. These markets are often attended by many of the same buyers and sellers that purchase at film markets (TV buyers looking to purchase film content). MIPCOM is the major yearly market and content is typically presented in the same way that film markets function - buyers seeks specific genre & cast driven material and sellers set up individual booths where buyers can sit, review and strike deals.
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Film Festivals - there are hundreds, probably close to a thousand, international film festivals. The sad truth is - only about 20 of them have any value. The sadder truth is - those 20 have limited value. The saddest truth - festivals alone cannot do anything for a film. Can getting into Sundance breathe life in to the sales value of a film? Of course, but the festival itself is not the reason. Festivals have traditionally been seen as sales platforms for content - that’s no longer the reality. As film has become democratized - so too have festivals become money makers looking to profit off the high volume of content every year. The $20 - $250 application fees go a long way when you consider that 12,000 films submitted to Sundance in 2012. However, the value of a major festival win or acceptance can enable a sale based on the prestige of the establishment. For instance, a mediocre film accepted Sundance has a much better sales opportunity than a mediocre film accepted to Winona Ryder International Film Festival (not real). When mapping out the exit (sales) strategy on your film - it’s important to time it to coincide with major markets and festivals. That way, when you’re completed or in the final stages of post you have the best shopping options moving forward. Major festivals like Sundance, Berlin, Venice, Cannes, Toronto, Telluride, New York, Tribeca and more are politically situated. By definition, they are guarded and screened by board members who are often swayed for outside reasons other than a films exceptional or lack thereof qualities. Connections for festival acceptances are more valuable than star power. Connections for festival acceptances are more valuable than exceptional content. Connections for festival acceptance are everything.
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Is this starting to make sense? Forging strong relationships with programmers, high level producers and festival directors will enable you a better chance to score acceptance. When your film is accepted in to a major festival the best way to truly benefit is to speak with a sales agent about how best to sway the acceptance in your favor. Often times, the laurel wreath on the poster, along with a publicity plug and introduction to the project to all buyers with the leading statement regarding its acceptance will enable higher value. However, festivals cannot guarantee anything specific as they have become a dime a dozen, immensely over saturated with applications and crowded with political scheming. Remember - a festival is a showcase and nothing more. Remember - political maneuvering will enable better results than the greatest picture in the world. Remember - a festival can be used to facilitate a better sales price but a festival alone will not drive results.
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Buyers - this is perhaps the trickiest of all terms. Much like “distributors” buyers are a mysterious and heavily guarded group. It takes lengthy conversations and networking to establish relationships with buyers who can actually pull the trigger and execute a sales agreement. Buyers come in several shapes & sizes. Some buyers work directly for distribution companies, others work for television networks, studios and territories. Even further, there are buyers who represent multiple companies/outlets and buy for specific niches and needs. Finding, connecting with and brokering deals with buyers is one of the most difficult parts of the business. Aside from raising capital - finding buyers and selling content is the most difficult wall to scale and conquer. Again, like many of the outlined terms, buyers are a very misused term. A buyer is only someone who can personally execute a sales agreement and purchase content. Many sales agents consider themselves buyers, acquisitions departments and international distributors but in truth they are merely licensing companies. When you head into production its great to touch base with buyers to alert them of what you’re working on, what you’re hoping to achieve in terms of sales and where you’re currently standing with the sales discussions.
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Sellers - this is one of the more straight forward terms in so much that - everyone is selling. Literally, everyone has content, material and ideas they are selling in this business. Reps, distributors, agencies, and consultants are all trying to sell something. This is where one of the fundamental problems of the business lies. Everyone is essentially working for themselves and the industry continues to crumble under the weight of inefficiency. With so many sellers - it’s not wonder that buyers are so difficult to come by, hard to execute deals with and challenging to establish relationships with. Buyers realize that everyone is selling something to them and therefore remain guarded - seeking out content themselves. Thus, brokering a few good key relationships early on and really developing those connections will enable a much more fruitful outcome.
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VOD - video-on-demand is a booming new marketplace for content delivery and consumption. Consumers now have the ability to screen content where, when and how they want on mobile platforms. Whether VOD through a cable provider, an online source or a larger entity like HBOgo - VOD continues to explode and offer interesting new revenue opportunities. At the moment, the opportunities have yet to establish their place in the market. One thing remains certain with VOD, it is certainly here to stay and theatrical distribution has become too expensive, DVD has become too dated and television has become too crowded. VOD offers a new solution and its growth and maturity will enable unpredictable results.
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Four-Wall & Service Deal - refers to the practice of paying for a self released theatrical run. Often referred to as a producer controlled release, with a service deal, the film producer hires a company to provide distribution services. In essence, renting the distribution system for theatrical release. Service deal companies are predominately headed by seasoned distribution professionals with established relationships with both film marketing companies and theatrical exhibitors. For a flat fee, they assist with every aspect of the release from developing a release strategy to collecting revenues from exhibitors. Depending on the scope of release, these fees are trending between $20,000 - $100,000 plus marketing and advertising expenses. Although a producer is responsible for fees and expenses, control is retained, and a producer continues to have final say in the promotion and costs surrounding release. Some successful examples of service deal releases are Fahrenheit 9/11, Monster, My Big Fat Greek Wedding, The Passion of the Christ, Memento, Silver City, and The Illusionist. Although all of these pictures have varying circumstances that led to self‐release (and varying budgets) the service deal is showing its effectiveness for knowledgeable producers. A good case study is My Big Fat Greek Wedding. Targeted at women, the film was made for 5 million dollars. With a marketing budget of $1 million, the film was released under a service deal with IFC Films. Initially released in just 108 theaters, box office receipts supported the expansion to over 550 theaters before it was widely released 16 weeks later to over a thousand screens. At its peak the film was on 2,016 screens and grossed over $368 million worldwide. When all was said and done, the film was in release for 52 weeks and spent 19 million in P&A. As this was a controlled release, the additional Print & Advertising dollars were supported by sales.
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Roll - out - refers to a film expanding from a specific number of theaters to a multiple market larger lay out release. Roll-outs are typically based on the performance of the initial release. Distributors are taking a risk by laying out a film on a large scale as marketing, printing and shipping for films can add up quickly. Recently, an established film distributor relayed the current financial figures: to roll out a film in just Los Angeles, Chicago and New York on 10 screeners - the cost would be $1M. You’re thinking, “that isn’t too bad, I just need to make back $1M and I’ve profited” but that’s not the case. 1. Distributors typically take 50% of revenue generated (now you need to make $2M to break even). 2. Distributors typically need to recoup costs sunken in to films - in this case $1M (now you need to make $3M to break even). 3. Theaters typically take 10% opening weekend, 20% 2nd weekend, 30% 3rd weekend, 40% 4th weekend and 50% on the 5th weekend before leveling at 50% for the remainder of the run. (Let’s just assume you make the majority of gross receipts within the first 3 weeks which gives the theater an average take of 20%. (now you need to make $3.6M before breaking even). 4. With this roll-out plan on 10 screens you’d be looking at 360,000 audience members attending your screening for an average ticket price of $10 within three weeks of release in order to break even. That’s roughly 36,000 people per screen within each market over three weeks. Or, 1715 people per day per screen. Simply put, this isn’t a reality. Roll-out plans are typically fixed based on supply and demand curves for films that have true explosion potential and the distributors essentially bottle this growing energy just before allowing it to skyrocket. My Big Fat Greek Wedding being the perfect example.
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P&A - Prints and Advertising refer to the physical and non-physical elements created to market and deliver the film. When films used to be delivered on film reels - as opposed to DCP’s (digital cinema projects) as they are now - prints referred to the actual delivery method shipped to theaters. Advertising refers to the materials used to market the film. Whether posters, key art, promos, commercials, online media, events, premieres, trailers, etc... Both of these costs can sky-rocket depending on how a film is planned for roll-out. In the digital age both of these costs have been able to shrink significantly by deploying tech based solutions to solve the filmmakers problems. Using social media, online marketing, direct and SEO (search engine optimization) to reach the potential audience and convert them in to consumers - films have been able to decrease their P&A budgets. However, in recent months filmmakers such as Steven Soderbergh have voiced their concerns and frustration over the difficulty of getting a film made in the current model due to the insanely high costs of marketing. Soderbergh referred to his Oceans 11-13 films which typically spent 50% or above their production budget on P&A. The affect this has is both positive and negative - the positive being that many potential customers convert to consumers through direct advertising. The negative being that other films are held to this standard and the market place becomes increasingly difficult to attract potential customers without the financial means for a large P&A campaign. In time, the solutions for advertising and delivering content will be tech driven as costs are slashed and efficiency through automation is introduced. But for the current time, costs of P&A and a crowded market make it difficult for a traditional campaign to be achievable on a tight budget.
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Pre-Sell - a pre-sales agreement is a film finance term used to refer to territories being pre-sold prior to production in order to off-set the films budget. Distributors & buyers gauge the value of a project given its script, genre, director, attached cast, producers and experience of the filmmaking team. This is a highly speculative engagement and in recent years this market has dried up as the financial crisis has affected banking and financial institutions worldwide. Pre-sales are still arranged to help off-set many budgets - however, successfully achieving these agreements has become very difficult given the banks hesitation to engage in such speculation.
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Minimum Guarantee (MG) - when a film has successfully reached a buyer, sales agent, or distributor the entity will typically offer a minimum guarantee if they feel the film holds significant value. MG’s used to be common practice but as in all things financial they have dried up as the international crisis crushed global economies. If you believe your film has significant value and that the buyer is undervaluing your project - chances are you’re probably right and wrong. You’re right in so much that your project holds value - but MG’s don’t directly reflect that potential value. Rather, MG’s reflect the companies ability to acquire your project. Many buyers and distributors are strapped for cash as their margins are shrinking and must rely on generated revenue from projects to drive returns back to filmmakers. You’re wrong is so much that a buyer truly knows the market better than anyone else. A company in the practice of bringing content to market and returning revenue knows much more about your film than you do. As much as you believe you have a built in audience, a niche market or a unique grab the buyer knows what they can actually return on the product. Buyers work within the market on a yearly basis and have the ability to gauge estimates and trends. Thus, the MG’s they offer reflect both their operating capital capacities as well as their faith in the products long tail revenue stream. Remember though, that of course they are undervaluing the product because they’d love to walk away with a steal.
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Off-the-top - these tricky and often hidden charges are the fees that sales agents, buyers, distributors and consultants take off the products initial returned revenue. For instance, should a sales agent be granted 15% of take AND their expenses off-thetop and the product recoups $100,000 on initial receipts - they will make their 15% after returning their built in off-the-top costs. These costs vary in size and can range from reasonable to ridiculous. The rule of thumb is to clearly define he confines of the contract before agreeing to anything with a representative for sales or purchasing. Often times, the smartest move is to have the contract defined by your legal department/lawyer and then implement your own language and clauses in place of the template the other party uses. Avoiding high off-the-top fees is something that comes with time. For example, our first film sold to an international distributor, and we were ecstatic at the time. The buyer brought us in to their offices in Beverly Hills, schmoozed us with a large library of content and a 10 page agreement that we reviewed briefly before signing. When the film was released it move close to 600 units within the first year - not a huge number but enough to make a dent in the super-low-budget indie space. However, when the annual statement arrived at our offices nearly a year later - we were shocked to realize that the film needed to recoup massive amounts of money before we’d even see a dime. These costs ranged from advertising (which we never saw), digital campaigns (that were priced beyond reason) and the creation of all materials (which was never invoiced, approved and recorded to us). Reviewing the contract we had the ability to audit them on our own dime but at that point we assumed they’d done this many times before and were in the practice of exaggerating these costs effectively. Lesson learned. Review the contract and ensure that you know what you’re getting in to. Off-the-top costs kept our film from every recouping a single penny, let alone profiting.
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emerging markets. Digital mediums have been popping up left and right since the late 1990’s. With the underground and wide-spread success of Napster starting a digital file sharing movement, to the commercialization success of iTunes in the early 2000’s digital delivery is here to stay. The problem is - technology is now moving so quickly that last years brilliant delivery method is no longer relevant next year - unless the system can keep up with shifting trends and progress. So where does your film fit in to this? Below is an overview of the multiple emerging marketplaces and a few other key players in the digital market revolution.
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iTunes Steve Jobs did to the same thing to Napster, Nokia, Palm & Microsoft. He took a blossoming idea and made it mass consumable in a clean & original way. With Napster, the ability to compress music, movies, photos and software into sharable and transferable files created a thundering boom throughout the entertainment business. Steve Jobs and his return to Apple were serendipitously timed to this explosion and the iPod and following iTune Music Store launched an international craze - physical music stores became obsolete. Today - iTunes functions as the worlds leading digital superstore. One click purchasing for movies, television, books, music and games has become a $1B quarterly industry for Apple. The profit sharing model that Apple put in place for these medias to be shared has created a fervor throughout the industry - artists reveling in the sharing model as well as the lowering of overall costs for albums, movies, etc... However, Apple has continually stayed ahead of the curve in terms of online retailing for content even as competitors close in. iTunes is a great way for smaller independent films to reach audiences. It’s a vetted, proven and trusted marketplace that consumers return to again and again. The difficult part is that as films became easier to make and more content hit the marketplace, iTunes in turn put a system in place to approve any content before releasing it live within the store. With your film completed you’ll find it difficult to submit films directly to iTunes. At this time you can still submit directly to iTunes but the majority of the content available in the store came through partner aggregators. Aggregators uniformly encode and submit films to iTunes. A typical aggregator charges an upfront fee and others charge fees based on performance.
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iTunes revenue sharing model has made waves over the past few years as artists try and negotiate alternatives. At this time, Apple takes a 30% cut on all sales made within the store. For independent feature films, the best use for iTunes is to go through a reputable aggregator that has carried strong indie titles in the past and shown results. Once approved within iTunes, using social media and inexpensive means of marketing will drive your audience to the title.
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Netflix The biggest internet streaming service in the world currently surpassed 30M domestic users in 2013. While the audiences are certainly tuning in - the content acceptance process is a totally different story. Netflix has a red-rope policy in place that is much stricter than iTunes. For Netflix to accept your title the best bet is to go through your distributor. If you don’t have a distributor, then using your aggregator is the next best option. Netflix guards its library and is currently looking to accept less films overall and higher quality titles - making it more difficult for small unrepresented films to be accepted. Reed Hastings has the goal to expand Netflix to every internet available territory in the world. Not only is this an ambitious goal but it also will continue to redefine distribution and content consumption worldwide. What this means for you and your indie feature is that you will be able to reach the widest paying audience in history when you’re accepted. What this also means is that other companies will be gunning for Netflix’s spot atop this lucrative market. At the moment Netflix purchases content outright from producers, sales reps and distributors for flat multi-annual terms. Typically these terms range from 2-5 years and call for exclusive domestic digital rights - meaning once you sell these rights to Netflix you cannot sell digital rights anywhere else domestically. The figure for these buy-out rates differ depending on the film, the connection you or your team have with Netflix’s buying entity and also whether or not you have an output deal with the company. An output deal with Netflix works in many ways like the old studio system did in the 50’s-70’s.
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Producers sign deals with Netflix granting them first look rights to their new material in return for a minimum buy out price of $250,000 (this is a confirmed example from multiple producers). This output deal is generally for a 2-5 year period for digital rights domestically. As Netflix continues to expand and build in to new markets - it looks reasonable to assume that international licensing agreements will become par for the course. Meaning that Netflix will purchase the worldwide rights to content for digital distribution and pay one fee. This is a very hopeful goal (from this writers perspective) as it would greatly simplify the tremendously broken distribution system currently in place. So, long story short - Netflix is the top digital outlet for your film, it’s just a difficult process getting it live, generating revenue and strengthening your relationship with the company.
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Hulu & Crackle There are countless start-ups, numerous online subscription & underground streaming sites - but they aren’t Hulu & Crackle. Why? Well, because 20th Century Fox, Disney, NBC Universal and Sony are behind these two platforms. Hulu is perhaps the best known - and dominant member - of the digital subscription service family. With 3 million paid customers and 10 million streaming customers, Hulu has built a strong foot hold in this market space. With parent companies NBC Universal, Disney & Fox - Hulu is a very difficult nut to crack in terms of getting your films on the platform. That said, this is very much an ever changing company. As a joint venture between multiple international entertainment companies, the interest for one thing is common - profitability. And content is what makes this service so valuable. Yet, it should be noted that executives have stated the content that proves most valuable is television content that cord-pulling (non television cable owners) rely on for their content. However, again this is very much an expanding market and as content becomes more and more valuable for Hulu they will presumably break in to the indie feature space to diversify their offerings. At the present time indie features are available on Hulu but they are a lower priority for the majority of their user base. This too can change as we’ve seen with Netflix a demand for specific content changes the curation process. Submitting to Hulu is done directly through your distributor as Hulu does not accept unsolicited material.
Crackle is Sony’s response to the other conglomerates joining forces on the subscription front. Crackle offers lower level content, a messier appearance and an
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easier barrier to entry. While controlled by Sony, this service allows submissions and is also approachable via sales & distribution outlets. Crackle is also expanding as their library needs sway with their audience. For the time being, both Hulu and Crackle are the major players in this market space but it is rumored that Paramount has been developing a digital streaming service for nearly a year and is expected to launch something within the coming fiscal quarter. When submitting to Crackle - the process can be greatly expedited by using an established company to open the door to the acquisition department - however, personal sales are not out of the question as they are with Hulu.
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Amazon & Microsoft Jeff Bezos is an ambitious man - he’s conquered the retail and eCommerce space, ventured into home delivery with great success and now looks to expand into original production and digital delivery of his own content. Amazon Studios was a rumored topic over the past few years and early in 2013 it officially launched. When Amazon announced that they’d be accepting submissions for original programming the indie spec market exploded. Every producer and production company wanted a piece of the action. Submitting hundreds of projects to Amazon - the company used the method made famous by Doritos during the Super Bowl ad frenzy. Tap into a large creative market, offer them exposure and sit back and view the submissions. Essentially, creating the largest creative & production department ever assembled. This sort of crowd sourcing is being used for financing, creative and now production as well. Building a brand and letting the masses flock to it with their resources is an exploding market. Amazon acts as one of the best and most reliable ways for you to get your film out in to the world. As the DVD market has died, companies have stocked Amazon with a limited supply and create more units upon demand - thus decreasing their need to carry higher overhead than absolutely necessary. Submitting to Amazon is similar to the above outlined platforms - however, Amazon can also carry physical units of products. So, either your distributor, aggregator or you directly can approach the company and work to get your content online and in front of audiences. Microsoft is also venturing in to this space but has yet to yield any major results. Putting down their intentions in Los Angeles, Microsoft launched a studio in Burbank to create original content on their own backlot.
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Within the next few years this is expected to explode and staying current (reading, following and engaging with employees) with the company will enable you to take full advantage of this exploding market as soon as it hits the mass market.
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Day & Date - with theatrical distribution becoming more of a difficult nut to crack financially, distributors have turned to new methods to bring audiences to their product. Day & date originated, or so the story goes, with Mark Cubans company Magnolia in New York City. Struggling to reach audience members who would engage with smaller indie fair in non-urban centers, Magnolia decided to try something fresh. By releasing the content both on iTunes, Netflix, VOD and cable networks the company was able to reach its largest audience on several titles. This has now become standard for many small titles (films between $1-$7M) looking to reach as many eyes (wallets) as possible. Day & date shows us several things about the market and where we’re headed. First, it shows that people still want strong and independent content. Studios and $200M+ spectacle films have us believing that the global economy is only interested in massive blockbusters, that’s simply not true. While blockbusters play a key role in driving investment to the indie feature side (investors see, hear and read about the success of these films) they also leave audiences with a lacking of original and smaller content by the end of blockbuster season. Second, it shows the model can be tweaked resulting in financial returns. Day & date releasing is a smart and effective way to find money where previously it was never recouped. Lastly, it shows that technology can directly increase sales figures when used wisely. With sales and agency teams complaining about the tech movement driving away business, it’s instances such as this that relay the opposite the reality. When used effectively, tech can help drive sales more directly lending quick data to producers for future release ideas.
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Torrent - a Hollywood curse word, a Silicon Valley nightmare and a Main Street conundrum. Torrent files are digitally compressed versions of anything and everything that can be shared, seeded (stored and uploaded) and transferred between users. PirateBay took this to a whole new level several years ago when its users began uploading their own created file versions of literally anything you could ever want and films were certainly no exception. Today, as soon as a film is available via iTunes, Netflix, YouTube and the like - it is downloadable on Torrent file sharing platforms. This is because the large user base (which is comprised on several million computer and tech insiders) converts the legitimate versions in to Did I mention that everything is free to download? The government and the entertainment industry refer to this practice as “ripping”. Ripping is a highly illegal practice and Congress makes it a point to keep the issue at the forefront of copyright infringement discussions every year. The truth is, there isn’t much that can be done to stop pirated and ripped content from hitting the internet. With open source software allowing any one with a computer access to the materials and worse yet the capabilities of creating the content - the movement has already swung too far out for the government to reign it in. Indie films are no exception to this rule - browsing the uploaded content on these services you’ll find literally every indie film you could imagine. “Seeds” or available download sources from users libraries, determine the speed at which downloads and uploads are processed. Thus, smaller indie films with less user bases take longer to download from a users library. However users are finding cloud based solutions for issues such as long queue times by having content load directly on to an off site cloud - or server farm. The most interesting thing about torrents is that they’ve yet to reach the public sector in a mass market type way in the manner that Napster did so quickly. Film industry
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leaders continue to assert the opinion that film is actively avoiding the pitfalls of the music business and it’s difficult to disagree to some level. Perhaps its because torrent file sharing seems more complex than basic file sharing did on platforms like Napster, Kazaa and BearShare but the truth is that torrenting files is just as simple. The embedding process, in which the file becomes written to the computers hard drive from another user, has been streamlined and takes literally seconds after the download has been completed - so what’s the hold up on torrents reaching the full consumer population? The answer seems to be that Hollywood is finding ways to shut torrent files out before they become the widespread epidemic that the music industry suffered. By promoting digital avenues of consumption for consumers, torrents seem difficult & distant. Coupling this promotion with a rabid anti-piracy movement lead by MPAA Chris Dodd, entertainment lobbyists and Hollywood executives - the public fear that downloading torrents will result in legal matters. It’s quite a feat to imagine that Hollywood has (for the time being) been able to side step the heavy hit that digital file-sharing has rippled throughout other businesses. While music was the first to fall - software and gaming are likely positioned for similar stumbles. If Hollywood can continue to portray torrenting in negative and shadowy facade, continue to promotionally push digital pay-downloads and team with lawmakers to fight anti-piracy then the final chips may fall in either sides favor. The battle really gets complicated when you remove all emotionality and think on the matter as purely economical. The digital market of today is the ultimate example of the free-market economic system. Anyone with a computer, some free time and a decent intellect can become a successful tech user. Regardless of what lawmakers and executives do economics has taught us that free-market systems prevail. Thus, torrent file-sharing may continue to exist on the fringes of the mainstream attention but in the end something free, simple and easy will prevail over something dated, expensive and forceful. We saw it with VHS, mini-dv, DVD, pay-per-view, indie theatricals and thats only the entertainment business. iTunes & Amazon have excellent offerings in terms of their
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services and available titles - but in the end the free market rewards lower costs, quicker availability and innovation over a sluggish mass conglomerate based system. For you and your independent film these torrent issues are perhaps a long way from causing you to lose your capitalization on recoupment. Torrented files tend to be film of note, Hollywood pictures and cult classics. The smaller indie fair tend to hit iTunes and Amazon but remain off the torrent services for whatever reasons. Yet again though the wisdom of economics would suggest that in time all titles will become torrent based. Perhaps in a few years a service will exist in which all legally uploaded digital content will be instantly transferred into a compressed torrent file and shared across open source platforms. Until then it’s wise for indie filmmakers to be aware, up to date and attentive to these changing landscapes as they will continue to define how people pay (or don’t pay) for your content.
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Television - it’s hard to imagine an independent film being successful without international television deals bolstering the bottom line revenue. That said, the same argument was used in years past for home entertainment units (DVD, VHS, Pay-PerView) and they have all but gone by the way side. Average consumers still purchase DVD’s but in reality the market has a maximum of five years left for the medium. Digital delivery is the future and as younger generations mature into young professionals the landscape will shift once again. This being the case, television has done a decent job keeping up with the shifting trends and tech movement. It’s difficult for television because it is so controlled by major conglomerates that it’s much more difficult to pivot the business model than it is for the younger, sleeker and more agile start-ups who are defining the platform systems. For your indie film to reach a television deal you’ll no doubt need a representative whether a sales agent, agency or rep to carry it to an acquisition department. Television networks and studios are well guarded and buy and acquire content from people they’ve worked with in the past. Striking a deal as a first timer is nearly impossible because its difficult for a acquisition head to do business with someone they have no working history with. Deliverables, schedules, communication and an understanding of the distribution process are essential if you’re going to try and broker your own deal. Television deals are lucrative, very present in the European market and can even lead to bigger deals elsewhere when obtained successfully. Where television has failed is that it still puts too much faith in the age old methods of yesterday year. Meaning, the way your parents and their parents watched television doesn’t really work anymore. There is too much competition for peoples entertainment attention span - computers, social media, digital outlets, film theaters, live theater, sporting events AND ALL OF THESE ARE NOW DELIVERED GLOBALLY (i.e. I can instantly stream a soccer game taking place in Portugal while sitting at my desk).
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Television put too much stock in the idea that you’ll sit down, tune in and wait for your favorite show to come on. The success of DVR’s amongst 30 year olds and below has proven that people now live on their own time tables. Of course every once in a while there will be a show so powerful that people will tune in each week at the screening time the network has arranged. Breaking Bad is a point and case of this however, Vince Gilligan himself noted that the show probably wouldn’t have survived without Netflix. Netflix allowed the show to be watched quickly, in succession and on the consumers time table. It hooked new viewers, drove network ratings up and increased advertising dollars spent on air. Neglecting this model - many high profile shows refuse to screen on Netflix. HBOgo offers a great alternative but AMC has done it right. Mad Men, Hell on Wheels, Breaking Bad and others all stream in their entirety on Netflix. This allows new viewers to join the rush of a great television show. The entertainment business agrees that we’re currently experiencing the golden age of television. Programing is exceptional, the stories are unbelievable and the acting is top notch. The Sopranos and the risks that HBO took in the 90s have laid the groundwork for a swell of phenomenal viewing. The 1990’s boom of indie film is now replaced with this television era. So what does all of this mean for you? Simply - it means there is a future in the television age and the companies in control understand this. They are working to stay ahead of cable-cutters and find new and innovative ways for audiences to sit down and enjoy television. Original programming is proving to be a fascinating market but indie films have always had a place on television internationally. Use a sales agent, form relationships and find a way to get your content in with a television outlet. Television has the ability to reach billions of homes - there is great potential yet to be exploited here.
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Platforms - While there is a burgeoning market for digital delivery platform - below we’ll outline the five key components currently driving the market as the leading players. As mentioned in the above television section, TV has fallen behind in many regards because they are stuck in their ways as traditional companies with a basic model. The problem is that tech has driven the economy out of tradition and forced us all to rethink how do just about everything. Companies large and small have been struggling and seeking ways to monetize this clear market void and a few successful platforms have emerged. 1.) Roku - I’m a bit biased as this is my favorite of the following platforms (I feel I should indicate that now as not to come off too harsh on the others) because I feel like they’ve done things right as a device, company and platform. Roku launched in 2002 and shortly thereafter released its initial product - the Roku Box. A simply designed and quite ugly layout - to be honest - was the initial release. Roku allowed the user to tap in to Netflix and other streaming services before the idea was even conceptualized elsewhere. Roku has since evolved and with it so too has the market they created for themselves. In this day and age of tech driven entrepreneurship, it’s not enough to just create a great idea but to create something that generates a market around the concept itself. This is where Roku succeeded so well. Apple and others have struggled as they’ve worked to try and license content - this is taxing and a lengthy expensive process. Roku tapped into the blossoming brilliance that was Netflix. By allowing Netflix to do the heavy lifting with licensing, Roku scored big by delivering the already obtained content to peoples homes simply and easily. Roku essentially filled a void that Netflix probably would have stumbled upon themselves which was the “cable-cutting device”. This term is being used a lot lately as more and more consumers are opting out of cable and using these devices to deliver their media.
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The major networks have more or less banded together to make sure that there is still a tangible need for television - the reason being live telecasts. Sports, news and programming are all contained content pieces that air live and do not appear on app based delivery platforms via Roku etc. By keeping these broadcasts exclusive it has forced a large portion of the consuming public to remain faithful to their cable providers. Yet, many millennials and young professionals savvy with tech have opted to cut their cable providers out and stream their content via digital download. As this boom has taken off, so too have more channels launched. With an open SDK layout (open SDK allows developers to design and launch their own channels - similar to open source SDK developing for iPhone & iPad app’s) all sorts of channels have begun spring up that service the independent film spectrum. What worries me about these channels is that they are untested, unproven and more often than not fairly poor versions of Netflix & iTunes. While great channels like HBOgo, NHL Center Ice, MLB Now, CNN, Weather and others are great sources of content delivery - there are few options outside of Netflix that truly deliver great content. Small indies (sub $500k budgets) are strewn about on multiple app platforms that often never take off and tend to fade away before disappearing from the Roku store for download. These app’s are the issue that Roku has in delivering great indie content no one can develop an app that competes with Netflix and drives consumer viewing. There is an overload of film content, as we’ve established above but what does that mean in terms of app development for platforms like Roku? The answer seems to be that the overload of content makes app development more difficult. With a more selective process Netflix has been able to launch beyond Reed Hastings wildest imagination. Similarly, iTunes curates it’s offerings and marketing pushes for specific content and thus the audiences flock. For Roku the problem is that an open SDK development standard allows the free market to win - yet this time it’s a problem.
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With such a heavy emphasis on freedom and tech innovation, Roku has shot itself in the foot in many ways by allowing app’s to pop up and disappear as the market demands. Films will continue being produced in the multiple thousands every year (nearly 10,000 feature films produced in 2013 alone) and the ability to harness this content and properly market it to reach audiences will also continue to be Roku’s major problem. In the long run - Roku offers so many great opportunities and unforetold possibilities for indie films and filmmakers. A filmmaker with a sense of tech entrepreneurship has the ability to curate his/her own channel --- essentially play DJ for their content. That said, driving revenue is another story all together. From the perspective we’ve worked with Roku - the best solution is to go through one the major app outlets that already has an established and paying audience base. If driving revenue isn’t your main focus then launching your own channel, building in a niche market on a smaller app or anything along these lines will enable you to at least begin marketing yourself and your content. Roku has enabled filmmakers to build their personal brands. It is a great tool for testing the waters and seeing if the market has any demand for what you’re offering. In the long run however, it is up to you to make the proper decisions to drive revnue as opposed to just exposure. Roku is a great solution for cable-cutters as it offers the best options on the app side and also allows users to pull from the best large scale systems like Netflix, Hulu and HBO. Also, Roku has a USB input enabling the user to pull from personal libraries of media content on an open sourced scale. For your film - Roku has both immediate and unforeseen potentials from a revenue and exposure standpoint. The best advice for using Roku is to tap into the existent marketplaces, curate your own selections through the SDK program and work to anticipate the most explosive new marketplaces available on the platform. Using technology to your advantage is nothing new and exploiting the capabilities of Roku is a no brainer.
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2.) Apple TV - Apple TV has all the elements to be a great device. It’s a phenomenal design, the lay-out of the user interface is exceptional and outperforms its competitors and it’s directly linked to iTunes store. This all sounds great but - as are all things Apple - this is a “walled-garden” interface. Apple has long defined media libraries and consumption with iTunes and the host of products that launched upon its success. Applying the notion that Jobs coined “consumers don’t know what they want until you show it to them” has hurt them within the TV space for multiple reasons. The SDK is closed off on Apple TV - meaning that the only way for you to expose your content on this platform is through Netflix and iTunes. Further, the device itself doesn’t allow for ripped, downloaded or outside sourced material to stream. There are rumors at the time of writing this that Apple is expanding on its streaming capabilities to allow users to stream content from WiFi enabled devices wirelessly. Apple hasn’t posted tremendous results with this product and it’s often whispered throughout the company that the product has been a step-child like flop. Never devoting major resources or energy (at least not publicly) to the product - Apple TV has remained fairly stagnant in the market space it was once poised to control. Surprisingly, the start-ups of Roku & Boxee have actually been able to maintain some market share within the space that you’d assume Apple would shine in. The reasons are simple: 1. The SDK is locked and only allows Apple approved content and app’s to exist onboard. 2. Users are fairly savvy and have opted for devices that allow them to hone in on their personal libraries on content on media servers, hard drives and cloud based solutions. 3. Apple has has tried too much to control the experience and in turn has lost users. For you - Apple TV is a great resource because like all things Apple works on - this is poised to explode when the timing is right. Rumors are fluttering about that Apple is
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working on major licensing deals with studios, networks and independent companies to have first option rights for digital streaming. If Apple is successful in building themselves into a one-stop delivery system, then the wheels will drastically shift. Tim Cook and the team at Apple are positioning themselves in an interesting way that echoes the models of past. By this I mean, that if Apple is successful they will essentially re-establish the studio model on a slimmed down scale. Further clarification would detail that content is only valuable with an output model and yet output models are few and far between due to the changes in the entertainment business, tech business and financial industries. Yet, if Apple is able to strike these deals (and assuming they are lucrative for both parties - Apple & the filmmakers) then they have taken the studio output model digital (!). It’s quite a feat if they’re able to pull this off and will open all sorts of doors of opportunity for companies big and small to prosper. Speculation aside, Apple TV is a decent device that offers simple and effective solutions to specific consumers. For filmmakers it has 75% of the appeal that a Roku offers - losing only in open source, marketing capabilities and potential for exposure. Getting your content on to Apple TV is only as challenging as getting your film into iTunes & Netflix. Once on board these platforms you’ll be able to have audiences stream your content via Apple TV internationally. The revenue sharing options are set up via Netflix & iTunes and have nothing to do with Apple TV itself. Apple TV will continue to become more integrated in to the way people watch television. The traditional model is clearly not going to survive much longer as content migrates over to the digital platforms of new. Discussions of an actual Apple flat-panel television have been long discussed and at the moment seem very likely within the next fiscal year. Do your homework, stay current and use this platform to your advantage - it’s going to be around for awhile.
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3.) Boxee - similar to Roku & Apple TV, Boxee offers nearly the same solutions with yet a small twist. Boxee allows the user to stream live television - which you’d think would make it the go-to device for cable cutters and yet it simply doesn’t. Boxee has struggled to grasp a strong market share and it can blame a sloppy interface, ineffective management and poor marketing decisions. Many people have never heard of Boxee and the solutions it offers are often found to be difficult and confusing. Having used a Boxee multiple times the advantages are the open source abilities for hard drives, cloud based media and outside data. The negatives are a sloppy UI (user interface) and an even worse offering in terms of layout. If you plan on getting your film up on iTunes, Netflix, Hulu and the like then Boxee will be a device that enables the audience to view it - other than that putting much stock into its expansion, explosion and exploitation would be better spent on the other devices. Boxee has the ability to become a great device but at this time its struggling to find its footing. Where Boxee fails is in its ability to innovate. It really exists on a plane somewhere between the old and hopeful new in the digital delivery game. The reality is that devices like Apple TV and Roku are truly innovative in the sense that they were the first of their kind - Apple TV coming before Roku and then Roku really evolved the concept into something grander. Boxee on the other hand took the traditional television model and tries to expand upon the offerings.
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The issue is that a lot of cable cutters truly want to break away from the medium entirely (both from an offering and fee stand point) and yet Boxee keeps the uders tied to this source. For your independent film Boxee really doesn't serve much of a purpose outside of Netflix and the other platforms where uploading your content is already possible. As AppleTV looks like it has major potential for explosion and Roku has the ability to help with major exposure as well as generate immediate revenue - Boxee exists somewhere in the middle in a limbo like state. It should be stated that Boxee is not necessary useless because it's it has the ability to grow into something larger as television redefines itself. If Boxee finds a way to manage itself more effectively and efficiently as this upswing curves then Boxee becomes a valuable asset for independent feature films. In the meantime however it makes much more sense to go through the mediums of Roku and AppleTV as the chance is much greater to try to explode your content wider audience base. In the immediate term there's no reason to discount Boxee’s value. Whereas the current positioning doesn’t really have the ability to become Apple TV or Roku - it certainly fills a void for some consumers and thus enables itself to maintain a basic value for indie filmmakers in so much that an audience (albeit smaller than the other platforms) exists.
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4.) Cable Companies - it's interesting to see that the trend of cable-cutting has led us to an era where TV-Studios, networks and large companies alike are vying to be in this space of digital distribution and delivery. It's interesting because cable-cutting itself evolved out of the idea that the companies and traditional models of delivering content are now obsolete as the digital companies, start ups and serial entrepreneur's continue investing into media solutions that destroy the models of yesterday. The goal for these companies, which was seen early on with TiVo and later we with widespread DVR (digital video recording - the ability to save content directly onto hardware) is to simplify and allow the consumer to be in charge of viewing process. What’s even more fascinating and telling is that by these large cable companies acknowledging the threat to their businesses they accept (and confirm) that this is not merely a trend but rather the future of distribution and content consumption. The recognition and then the movement to be in this space helps and also harms the start-up movement that has spurred this onwards. The fact that is that cable as we knew it in the 1990s era (and into the early HBO success days) is over.
People now insist on watching content depending on their
schedules. So what does this mean for you? Well at the moment it's difficult to say for sure but the one hard truth is that the international sales of a film rely on television deals in order to recoup fully.
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That said - domestic television is becoming more and more difficult as viewers are opting for newer methods to find, consume and decide on content. While less content is being picked up today than in previous years - this doesn’t signal the end of domestic television deals but rather an alteration in the marketplace. More films are being produced, the international economic climate has wildly reshaped the landscape for spending and thus operating capital (the cash needed to purchase content) has shrunk. The emerging markets of India, Brazil and China offer great new potential for television deals and this exploitation is an exciting new revenue stream for indie features. As television markets in these emerging territories boom so too will revenue follow. The truly good news is that television (let's call it home entertainment) - however you find the content - whether it's a DVR, AppleTV, Boxee or Roku is here to stay and audiences become much more in control of the experience both from a viewing, searching and consuming perspective. The truly bad news is that it's an undefined marketplace with potential for growth but at the same time potential for shrinking margins. By “shrinking margins” this refers to the notion that audiences now have a direct inclination to consume specifically what they set out for when they sit down to watch a piece of entertainment. For instance, channel surfing and browsing programs is slowly dying as viewers attentions are being fought for by so many outlets. With this fight - producer, filmmakers, entrepreneurs and the larger powers that be are vying to sway their eyes to their content.
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As this struggle continues the audiences now remain in total control. You can watch what you want, when you want and how you want (and the scariest part is that a lot of it free). Television offers real potential in that you have the ability to reach the largest audience possible. This is simply because more people have televisions (or screens whether CPU or mobile) to consume content than ever before and this will continue to grow. As we outlined above, getting your content into a television outlet is typically done through a sales agent, an agency rep or produced with a domestic deal already in place. The way things are trending currently - costs will continue to be slashed and operating capital for purchases will continue to shrink. Thus, projects will need to be produced for less money with similar production values of the past. Technology, negotiations and strong producer maneuvers will be required to gain traction. For the time being let's assume television will continue to play a very crucial role in the development both of what startups and larger companies are doing. Thought and industry leaders continue to insist that television will always remain a strong hold for content viewing. Traditional analog delivery has been replaced by digital delivery methods and in doing so television has remained relevant. In this writers opinion, CPUs or open source data storage centers are the future of the entertainment business. People who disagree with this people are the same people who would ave argued that Napster was a fading trend - the reality is that consumers will generationally become
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more adept with technology and in doing so it will become more difficult to collect payments from them. The take away from the television market for indie filmmakers, producers and investors is that there is still money to be made here. The time slots are becoming less occupied with traditionally indie content and calling for new and innovative productions - but that doesn’t mean money cannot be found. Using the right sales agent for your project and timing your content wisely with what the market wants versus what your passion project may be - can result in the best possible outcome from a sales perspective.
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best practices. 1.) Early Discussions - one of the most commonly made mistakes in indie filmmaking is that things remain dormant. Scripts sit on shelves, films never get made and projects sit idly while producers, filmmakers and new-comers do their best to figure out what steps to take to get it done. As with all businesses, you just have to get out in the market and get your hands dirty. If you’ve ever heard the adage “no one wants a first timer” then assure your team and investors that you aren’t a first timer. Get out in to the market and make something happen with your film. Email addresses, physical addresses and phone numbers are all public information. Get your hands on this information and do some research. Start by finding out who is distributing, purchasing and licensing the kind of content you are attempting to make. If you love Paramount Pictures but you’re making a $250k feature about rock climbing - chances are this isn’t the right fit. However, it’s important to get in front of decision makers. Find out who has the power and ability to pull the trigger on a major decision and get them on the phone. People love to feel like they’re offering wisdom - so make them feel that way. Cold call a distributor and let them know you’re a filmmaker - with a film company currently developing and producing several features (even if this is an exaggeration it establishes your presence in the space). Discussions early on can shed light on who to cast, where to shoot, how to adjust a genre to be more fruitful financially and investment return wise. Also, it always helps to have advice from those with their fingers most closely on the pulse of the industry. Sales agents are much the same way - get them on the phone, submit emails and don’t be upset if you don’t hear back from them!
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Too often people take things personally in indie filmmaking - perhaps because it wrongly signifies that their creative efforts are unwanted, unrewarded or unnoticed. The truth is, everyone in the indie feature business is wildly busy ALL YEAR ROUND. You need to establish yourself in the minds and memories of people who are dealing with countless projects and the only way to do that is by getting in touch before you head in to production. Advice on production, feedback on material and guidance for future sales - whether with their firm or another - are all benefits from having these discussions. Often times filmmakers wait until a film is completely wrapped before speaking with buyers and distributors - this is a huge mistake for several reasons. When a film is completed buyers assume that by this time its been seen and discussed by purchasing entities. If a film arrives at multiple markets years after it was produced and released - the film will be looked over. This is likened to a piece of fruit at a market that turns up day after day - and even if the piece of fruit is fine - the buyers come to believe that the fruit is rotten.The reality is that the markets turn over so quickly now that if materials has been presented at previous markets and screenings it is viewed as less valuable than fresh materials. This is another reason that getting the ball rolling early, presenting concepts & script to buyers and agents before production will help test the waters for when the film will need to be sold. A good sales agent can take a packaged film and concept to the market and test its pricing. Pre-sales and purchasing deals can be done before a film is even made in rare instances and thus summarizes the point that a strong sale, a strong film and the strongest chance at recouping investment stems from getting conversations going early. People (more specifically those with power to drive returns) need to be aware and excited about your project before you head in to production - otherwise the odds just continue stacking up and you face an uphill battle.
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2.) Relationships - you’ll hear this again and again - “relationships are everything in this business”. And, there’s a reason that it is so often muttered - it’s the truth. Getting your foot in the door with a financier, buyer, seller or larger established company of any level is highly contingent upon who you know and who they know. We often hear people say that they get frustrated with the internal politics at work in so much of the business and the reality is that you’ll never be able to change this dynamic - so use what you have and what you can build to your advantage. If your own personal network feels small in terms of it reach to the bigger and better then utilize those around you for their networks. The town, the business and the industry are heavily shrinking and in doing so everyone knows everyone else from one project or another. Find a common denominator and make that connection. The number of inroads you can make with new people the better. Typically, producers and agents are the individuals with the most well curated and valuable rolodexes - but that’s not to say the DP on your last project doesn’t know an executive who can bring your film to the next level. Make it apparent to your circle of colleagues that you’re actively looking to expand your network. Letting people know that you’re serious about making money in entertainment and not just in it for the fun, quick thrill and gamble of it - will give them confidence to open up new doors for you. It always amazes me who my colleagues know either directly or indirectly - there’s an old game in Hollywood in which people connect themselves to Steven Spielberg through various degrees of separation and whichever person has the fewest degrees wins.
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It’s quite astonishing how far connections will take you as getting in the door, on the phone or even a response to an email can typically only happen when an introduction has been made. While you’re working to lay the early foundation for your film - reach out to everyone with mass emails and let them know what you’re doing. In the modern world we live in people are so often tasking so many activities simultaneously that an old colleagues may be engaged in precisely the opportunities we’re hoping to expand in to - we just haven’t spoken with them in a while. Staying on top of a large network of colleagues can be tasking - but building a social media presence on the major platforms along with building an email contact list will enable you to quickly stay on top of your full network. Keep your colleagues and close friends within the same network and mailing lists is reasonable - you’ll want positive feedback on your social media pages and again you never truly know what everyone is up to - so keeping them looped in is a positive. When first starting out you’ll want to build as big of a network as possible to reach the broadest opportunities. Colleagues may connect you to the right sales agent but chances are you’re going to have to network for a while before finding the perfect fit. And that’s okay - it takes time to develop the relationships you want, need and will thrive on to succeed. As time goes on you’ll shrink down your network to more key contacts who hold the key to decisions. Sorting through buyers (and the perils we’ve outlined in previous sections) can be difficult but so too can it be rewarding. Relationships you forge in this business will be your own - regardless of how you came across them you will have to do everything in your power to control, obtain and harness them. Remember that connecting people yourself is a good way for the favors to be reciprocated. Typically we like to connect a few different people every week - even if it doesn’t drive immediate business to you and your present work it will at least engage you into creating new circles and and synergies. In the end, stay focused on your goals and remember that you need others and other companies to get there!
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3.) Stay Present - We say this a lot throughout this eBook but this time it’s very true the biggest mistake people make is that they neglect to stay on top of their projects progress. We don’t mean to suggest that people purposefully let their projects go by the way side - but that they get dissuaded when they are rejected. Let’s clear something up again here - rejection is inevitable in this business and any business requiring you to take a risk. For every yes we hear we’ve probably gotten twenty no’s and fifty no responses at all. The truth is that everyone is busy, active and overwhelmed with the amount of work and content being thrust in front of them. Just because someone doesn’t get back to you within a small time window doesn’t mean they aren’t interested - it simply means they haven’t gotten back to you. A very established producer once shared a valuable piece of advice with us when we first started out - “Continue to pester until someone tells you to stop.” Thats what it takes to let people know you’re serious - if you want to accomplish anything in this business you need to stay in front of people all the time and make sure they are aware you’re here to stay. The same goes for your project - if you haven’t heard back from a buyer, distributor, seller, agent or financier then contact them. You’ve got the right - having not heard back - to connect and follow up. Taking things personally will only lead you to disastrous results. This is now a business of incredible noise and overcrowding - realize this and be aware that people are trying to handle large work loads in a changing landscape. When emails don’t work try making a phone call. When a phone call isn’t returned try talking with someone else at the office about setting up an appointment. At the very least - people will remember you as persistent and outgoing enough to take the leap. When someone finally does get back to you with a negative response - whether they don’t want your content, don’t want to discuss financing or generally don’t connect with the work --- DO NOT BE DISSUADED.
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Be mature enough to ask questions, probe in to why the material didn’t connect and what they are looking at on their end that makes your work a rejection and other work a connection. Sometimes you’ll be delighted to find out that people in fact liked your work but that they are only seeking genre based content. Other times you’ll be enlightened into a side of the business you hadn’t ventured before. More than anything - be respectful. Buyers have reasons they purchase certain content, it’s called money. Sales agent have reasons they represent certain content, it’s called money. And distributors have reasons why they put Print & Advertising budgets behind certain content - I don’t have to finish that sentence... In the long run you’ll become a skilled and experienced member of the filmmaking, digital entertainment and world wide distribution system if you keep your attitude positive, work ethic strong and realize that a lot of things stand in your way before you’re going to get what you want. However difficult it may be - keep going back to people who have rejected you before with new ideas, content and projects. They’ll realize you weren’t some one-off investor, filmmaker or amateur but rather a developing talent and emerging company. Representing yourself with honor and respect to these professionals will lead to a fruitful relationship and a strong outcome for business success. More than anything - stay on top of your network in full. Check in with real updates instead of just shooting out every piece on nonsense to make yourself seem busy. Be patient, be present and be consistent in your scheduled check ins - people will take notice and remember.
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conclusion. When pitching investors filmmakers typically reference a very small handful of films. Beasts of the Southern Wild, Sex/Lies/& Video Tape, Clerks, Pulp Fiction...we all know this list and yet we also continue to pretend this is the reality of film distribution. Referencing these films is quite silly because the landscape has changed so vastly since the early 1990’s when the majority of these kinds of films were relevant for financing purposes regarding distribution discussions. It’s tough to look at successful films like these with any clarity because they’ve become so engrained in the mythic story telling that is Hollywood folklore. For instance, Beasts was a major hit that rocketed to the Academy Awards and caused fervor throughout the indie world. First off, it’s an incredible film and no one can ever take that away from it - it’s brilliant, beautiful and original. Yet - the story and narrative woven behind it are quite different from the reality. For investors not savvy with the film business this kind of picture can be portrayed as a small time investment that made a larger return in a relatively short period of time and also rose to critical acclaim. The truth however is that this film was a Sundance Lab developed project and that major financing was placed behind the film to allow it such success. When people look at box-office figures they assume that the producers, filmmakers and studio/distributor did tremendously well. Well - that’s not exactly true. The pie is cut in to so many pieces when a film blows up like this that the slices are often smaller than one would hope for. The pie gets divvied up between so many parties that by the time all is said and done - the film makes a minimal profit but a large splash in the market causing new projects and investors to see potential and hope for their own aspirations.
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You’ll remember from sections we covered above that distributors need to front the cost of marketing, shipping, printing, collecting, accounting and pay-rolling all the necessary elements of your film. Well - where do you think they recoup that investment? From the film itself of course and unless they are very well established in the market then chances are they have limited operating capital and are hurting because most distributors are (at the time of writing this). Beasts sends the message that highly-profitable and quick turn-around projects are very present --- which isn’t entirely true and yet not entirely untrue either. The reason we find this necessary to discuss is that these films are the lifeblood of the indie filmmaking community. Investors and producers alike maneuver in every way possible to bring these films to audiences every year - yet, hardly does anyone mention that these films are produced and marketed through a system on its last leg. Simply put - we need these films to keep investment coming in to indie films but at the same time we need to ensure a model that is more effective and efficient than that which currently presides. For your film and the films of others to be successful - we need a new model of marketing and distribution. As theatrical has all but died for small independents - we’ll need to find new ways for these films to successfully influence the amount and size of projects that we all collectively get to make, enjoy and work on. For the business to become sustainable again so many steps need to be taken in raising awareness over the realities of the business and how we can work to fix the issues. As films like Beasts show us - there is a market out there for these projects and people want to see them. In fact, audiences and critics alike love these productions but if we are to build a new and sustainable model for these projects to be distributed then we need to find a way to cut costs even further in the marketing and exhibiting business. Filmmakers, producers and investors worldwide are becoming more and more in tune with these realities but we need to build a more transparent straight forward approach to how films are developed, financed and released. Ted Hope is a great thought leader in this space and for further reading that will prove both valuable and up to date - his
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blogs and Twitter offer first hand accounts of the struggles facing the industry at the moment. In a time when costs for nearly everything are shrinking due to digital technology - the cost of distributing films is becoming more expensive than ever before. If we can solve the output model, assist in the financing stages by mitigating risk even further and find sustainable solutions to rising union demands --- we will address the major issues facing entertainment. With an uphill battle in front of you with your own project it’s best to take on one struggle at a time. Network, be realistic and stay on top of your contacts. In the end - you’ll gain valuable insight in to a business continually changing and opening up new opportunities.
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