Typing Faster

March 22, 2010

The Future of Indie Distribution

Filed under: Features, Kvetch, Marketing, Movies, Stuff I Like, the biz — petertypingfaster @ 11:12 am

The indie feature world has been nothing but doom and gloom for a number of years. Sure there have been some recent Cinderella stories (The Hurt Locker anyone?), but for the most part the news has been dominated by people getting out of the business, indie studios shutting their doors, and everyone going on about just how little hope there actually is.

Everyone except for Jeff Lipsky, co-founder of one time October Films, whose decided to get back into the distribution business.

And when we say distribution, we’re talking old school, independent feature film, theatrical distribution. None of this New Media crap for him!

On New Media:

N.B. Although I’ve been following, studying, and doing a bit of research about the potential of independent films in the marketplace for over thirty years, I feel I have carte blanche to throw out any facts and figures I want and not have to prove it, since New Media numbers —as well as DVD revenue figures—are as classified and protected from public view as nuclear launch codes…in N. Korea! Yet New Media acolytes and zealots are trying to persuade people that the future is now. Okay, I want to know just how much an independent filmmaker receives from his or her distributor from the amount the distributor receives from Redbox for a $ .99 rental of his or her film. What, you don’t know? Shocking. And that’s just for starters. What is the solution? How can we encourage more transparency about New Media numbers, from operators and filmmakers alike? One way is to continue to embrace theatrical.

One of my biggest beefs with a lot of New Media is just how fuzzy the numbers are. How do you count page views? Online advertising views? Does someone have to watch all the pre-roll to count? What if they minimize banners?

All the numbers I’ve seen for online advertising / distribution reporting have been wildly inconsistent. I have no idea what’s actually going on, and I don’t think a lot of other people do either. Unfortunately traditional distribution reporting fares little better in this country…

Anyways, moving on.

1) My number one job as a distributor-for-hire is to run a collection agency.

My job is to return as much theatrical film rental, gross film rental, that is, to the filmmaker/producer/investor as possible. It’s not to attend film festivals where your film appears, it is not to host premieres (nor should independent films squander limited resources on such vanity cash-sucks), and it is especially not to vacate the premises after your film moves on to DVD and I move onto another film. It is to be a bag man. It’s not glamorous but I pride myself at recognizing the need to return your money with great alacrity, especially when it sometimes takes years to receive your share of the pie from DVD companies, from MSOs, and from VOD and PPV revenues, from legal downloads and streaming scheming. Theatrical money comes first, it comes without third party deductions (at least when you deal with me), and you should be able to bank it as soon as possible. Should there (ever) be any debate about that?

I’ve been amazed at a few distributors who place more importance on the gala premiere than on actually getting returns for the films they’re distributing. Thankfully it hasn’t happened all that often, but even once is too much.

2) All new distribution platforms (with the possible quirky exception of movie downloads to laptops and PDAs) fall under the heading of “home entertainment.”

And, one after another, they all tend to cannibalize each other. Only one unique, specific form of viewing filmed entertainment has proven immune (at least since the introduction of broadcast television)—going out to see a movie in a movie theatre.

Lately we’ve seen the collapse of the output deal as cable channels realize they need less content to hold onto their subscribers. Digital rentals through places like iTunes have helped gut the home video rental market. Pretty hard to argue with the fact that new distribution platforms cannibalize the old ones.

And I think we can all agree that going to the theater is hardly dead, especially given the monster box office of the last year, and the success of features like Avatar.

3) According to an article in Reuters, in 2009 combined theatrical and DVD sales/rentals in the US yielded $26 billion.

It is widely (conservatively) estimated that independent films represent 1.5% of the total (not including the megahits distributed by major studio boutiques). That’s almost $400 million. And I predict the first quarter of 2010 will emerge more successful than first quarter 2009. Tasty. Furthermore, in the year of “Avatar,” in the same year that AMPAS doubled the number of Best Picture nomination slots at the behest of the major studios, the two distributors that tied for the most number of Academy Award nominations were Sony Pictures Classics and the Weinstein Company. Equally tasty.

The important thing to come away with from this bit is the success of Sony Pictures Classics and the Weinstein Company. That’s impressive.

4) We should be talking about how to capture the attention of a film’s potential theatrical audience (which is hungrier than ever) while being able to reduce the marketing spend.

I know, we’ve been talking about how to do that for decades and all we’ve figured out how to do is shift numbers from off-line advertising to on-line advertising. And yet, every now and again, a pure independent film, such as “The Passion of the Christ,” “Paranormal Activity,” “What the #$*! Do We (K)now!?,” even “Sweet Land,” an independent film I distributed on a service basis three years ago, which broke records in the places where its target audience resided, proves it’s possible. If your film’s target audience resides in the Texas panhandle is it really necessary to open it in New York or Los Angeles…ever? Retain revenues, don’t share the wealth. We can also learn occasionally from independently distributed foreign language film successes – Magnolia should publish a case study on their brilliant low-cost theatrical marketing of 2008’s best film, “Let the Right One In.”

This is where Lipsky starts to differentiate himself from the pack. Most distributors follow a typical pattern. Premiere in two or three huge markets (New York and LA in the states, Toronto and Vancouver in Canada), and then open broader if the film does well. Does that really make sense anymore? Why wouldn’t you target your film more specifically and by doing so reduce your costs?

5) Approach domestic film festivals with great caution.

Film festivals often siphon off potential audiences for independent films. Most pay little or nothing to a filmmaker. Playing in multiple regional film festivals can (further) ghetto-ize your so-called independent film. (In the late 60’s and early 70’s independent films – films like Robert Downey, Sr.’s “Putney Swope” and Frank & Eleanor Perry’s “Last Summer” – opened in the very same theatres where “A Clockwork Orange” and “The Exorcist” opened, and that was when almost every theatre contained but a single screen. Why do anything to aid and abet the ghetto-ization of your independent film today, especially at a time when screen counts in most theatres range from six to twenty.) And if your film plays at one of the biggies (Sundance, Toronto) and isn’t snapped up for distribution it’s often considered damaged goods, even if it may well have been one of the best films to play the festival.

(Full disclosure: my own experience having “Flannel Pajamas” play in Official Competition at the 2006 Sundance Film Festival was one of the grandest experiences of my life. But what would it have meant if the film hadn’t gone on to play at the Angelika Film Center in New York for six weeks – and theatrically in forty other cities – and been named to several film critics’ ten best lists?)

What film festivals can do for a complete unknown filmmaker who makes a small, unheralded film is get you an agent. It doesn’t happen often but when it does it’s worth its weight in gold.

Another tid bit of wisdom that diverges hugely from the accepted norm. Most producers are tempted to enter their films willy nilly into every festival above a certain level (TIFF, VIFF, the Atlantic Film Festival, Yorkton, etc). Festivals and independent films share the same audience, there’s a good chance that, if given the opportunity, the people who would pay to see your film in a theater would pay less to see it at a festival. Why give them the opportunity?

6) From the Everything Old is New Again Department:

When I was on the board of the IFP I threw down a gauntlet to my fellow board members: Let the IFP curate a nationwide educational program whereby we might addict the next generation of filmgoers with a heady passion for independent film. To wit – 35mm prints of films are either destroyed or stored at considerable expense by distributors within months of their initial theatrical release. Select fifty-two great independent films, both classics and of fairly recent vintage. Have their distributors donate one print of each to the program. Have exhibitors in fifty-two cities across the country (and they don’t necessarily have to be independent exhibitors) open their doors for free on one screen every Saturday and Sunday morning to junior high school students. The theatres are likely already open for business at that hour and with the additional concession sales they’ll make out like bandits. Sign on Federal Express as a sponsor and each film can be shipped and delivered to a different city and a different theatre each week at no cost to the program. (Fred Smith and his family are already film lovers and investors so how difficult would it be to sign them up.)

A local film professor or scholar would be engaged to introduce each film in each city and answer questions afterwards. Perhaps a corporate sponsor could be induced to come on board to underwrite the cost of producing study guides for each film, a takeaway the teens might enjoy. Addict teens, get them into the habit of going to see independent films, to debate them, to spread word-of-mouth, to love them. I would opine then, and still do now, that by one’s high school years viewing habits, entertainment fixations are already set in stone. We must grow the next generation of audiences for independent filmgoing by inexpensively imbuing them with a sense of history, year-by-year, step-by-step (and each generation thereafter). Their new “habit” is easily fed, even now, for only about ten dollars a hit! We didn’t do it and, as a Board member, I failed to pick up my own gauntlet and run with it so I’m guiltier than anyone. But this is still a program that can and should be activated and, long term, can help reap great financial rewards for independent American filmmakers of the present and the future.

Just a flat out fabulous idea in my opinion.

7) What do I make of the state of film criticism today and how do I assess its role in the distribution of movies right now?

The role and, especially, the influence of film critics on independent films is becoming increasingly difficult to define and to gauge. The Village Voice/LA Weekly has demonstrated great vision in hiring, first, Scott Foundas, and, more recently, Katrina Longworth as critics/editors. It proves that it’s not only the lingering genius of critic/writers, like the New Yorker’s David Denby and New York Press’s Armond White (he’s a great writer who inspires emotional film discussion and robust viewing, the hallmarks of any great critic) who are still capable of motivating moviegoing. It proves there are new, young Pauline Kaels and Andrew Sarrises (sic).

Two thoughts: what is missing, where once they were found, are great regional film voices. It’s all well and good that the New York Times first became a national newspaper, guaranteeing home delivery from coast-to-coast, and that now subscribers can read Scott, Dargis, and Holden on-line…in-flight even(!)…but people in Des Moines, Little Rock and Amarillo want to hear from local sages and, somehow, we must help make that happen. These regional and local voices must be heard again. It’s critical in order to maximize local success, local revenues.

The influence of “foreigners” can’t compare with the immediate response to a rave from a trusted local. I’m not sure how to accomplish it without persuading Superman to reverse the Earth’s spin and go back in time, but there’s got to be a way and I’m going to try to help find it. There are good regional writers on-line everywhere but the very fact that the net is universal makes their local expertise elusive and even forbidding in their own home towns. (Even today, I feel that every “home town” deserves its own identity.) Being an independent filmmaker tales courage. So does being a quality, sagacious film critic.

Another of my problems with the emergence of new social media is it gives every yahoo with a megaphone the chance to shout his (idiotic) opinion to the world. We all know the signal-to-noise ratio is crap on the internet.

Personally I still have a few trusted critics I go to for reviews of film and television, Roger Ebert being at the top of the list. God help me when he stops reviewing movies.

2) All new distribution platforms (with the possible quirky exception of movie downloads to laptops and PDAs) fall under the heading of “home entertainment.”

And, one after another, they all tend to cannibalize each other. Only one unique, specific form of viewing filmed entertainment has proven immune (at least since the introduction of broadcast television)—going out to see a movie in a movie theatre.

3) According to an article in Reuters, in 2009 combined theatrical and DVD sales/rentals in the US yielded $26 billion.

It is widely (conservatively) estimated that independent films represent 1.5% of the total (not including the megahits distributed by major studio boutiques). That’s almost $400 million. And I predict the first quarter of 2010 will emerge more successful than first quarter 2009. Tasty. Furthermore, in the year of “Avatar,” in the same year that AMPAS doubled the number of Best Picture nomination slots at the behest of the major studios, the two distributors that tied for the most number of Academy Award nominations were Sony Pictures Classics and the Weinstein Company. Equally tasty.

4) We should be talking about how to capture the attention of a film’s potential theatrical audience (which is hungrier than ever) while being able to reduce the marketing spend.

I know, we’ve been talking about how to do that for decades and all we’ve figured out how to do is shift numbers from off-line advertising to on-line advertising. And yet, every now and again, a pure independent film, such as “The Passion of the Christ,” “Paranormal Activity,” “What the #$*! Do We (K)now!?,” even “Sweet Land,” an independent film I distributed on a service basis three years ago, which broke records in the places where its target audience resided, proves it’s possible. If your film’s target audience resides in the Texas panhandle is it really necessary to open it in New York or Los Angeles…ever? Retain revenues, don’t share the wealth. We can also learn occasionally from independently distributed foreign language film successes – Magnolia should publish a case study on their brilliant low-cost theatrical marketing of 2008’s best film, “Let the Right One In.”

5) Approach domestic film festivals with great caution.

Film festivals often siphon off potential audiences for independent films. Most pay little or nothing to a filmmaker. Playing in multiple regional film festivals can (further) ghetto-ize your so-called independent film. (In the late 60’s and early 70’s independent films – films like Robert Downey, Sr.’s “Putney Swope” and Frank & Eleanor Perry’s “Last Summer” – opened in the very same theatres where “A Clockwork Orange” and “The Exorcist” opened, and that was when almost every theatre contained but a single screen. Why do anything to aid and abet the ghetto-ization of your independent film today, especially at a time when screen counts in most theatres range from six to twenty.) And if your film plays at one of the biggies (Sundance, Toronto) and isn’t snapped up for distribution it’s often considered damaged goods, even if it may well have been one of the best films to play the festival.

(Full disclosure: my own experience having “Flannel Pajamas” play in Official Competition at the 2006 Sundance Film Festival was one of the grandest experiences of my life. But what would it have meant if the film hadn’t gone on to play at the Angelika Film Center in New York for six weeks – and theatrically in forty other cities – and been named to several film critics’ ten best lists?)

What film festivals can do for a complete unknown filmmaker who makes a small, unheralded film is get you an agent. It doesn’t happen often but when it does it’s worth its weight in gold.

6) From the Everything Old is New Again Department:

When I was on the board of the IFP I threw down a gauntlet to my fellow board members: Let the IFP curate a nationwide educational program whereby we might addict the next generation of filmgoers with a heady passion for independent film. To wit – 35mm prints of films are either destroyed or stored at considerable expense by distributors within months of their initial theatrical release. Select fifty-two great independent films, both classics and of fairly recent vintage. Have their distributors donate one print of each to the program. Have exhibitors in fifty-two cities across the country (and they don’t necessarily have to be independent exhibitors) open their doors for free on one screen every Saturday and Sunday morning to junior high school students. The theatres are likely already open for business at that hour and with the additional concession sales they’ll make out like bandits. Sign on Federal Express as a sponsor and each film can be shipped and delivered to a different city and a different theatre each week at no cost to the program. (Fred Smith and his family are already film lovers and investors so how difficult would it be to sign them up.)

A local film professor or scholar would be engaged to introduce each film in each city and answer questions afterwards. Perhaps a corporate sponsor could be induced to come on board to underwrite the cost of producing study guides for each film, a takeaway the teens might enjoy. Addict teens, get them into the habit of going to see independent films, to debate them, to spread word-of-mouth, to love them. I would opine then, and still do now, that by one’s high school years viewing habits, entertainment fixations are already set in stone. We must grow the next generation of audiences for independent filmgoing by inexpensively imbuing them with a sense of history, year-by-year, step-by-step (and each generation thereafter). Their new “habit” is easily fed, even now, for only about ten dollars a hit! We didn’t do it and, as a Board member, I failed to pick up my own gauntlet and run with it so I’m guiltier than anyone. But this is still a program that can and should be activated and, long term, can help reap great financial rewards for independent American filmmakers of the present and the future.

7) What do I make of the state of film criticism today and how do I assess its role in the distribution of movies right now?

The role and, especially, the influence of film critics on independent films is becoming increasingly difficult to define and to gauge. The Village Voice/LA Weekly has demonstrated great vision in hiring, first, Scott Foundas, and, more recently, Katrina Longworth as critics/editors. It proves that it’s not only the lingering genius of critic/writers, like the New Yorker’s David Denby and New York Press’s Armond White (he’s a great writer who inspires emotional film discussion and robust viewing, the hallmarks of any great critic) who are still capable of motivating moviegoing. It proves there are new, young Pauline Kaels and Andrew Sarrises (sic).

Two thoughts: what is missing, where once they were found, are great regional film voices. It’s all well and good that the New York Times first became a national newspaper, guaranteeing home delivery from coast-to-coast, and that now subscribers can read Scott, Dargis, and Holden on-line…in-flight even(!)…but people in Des Moines, Little Rock and Amarillo want to hear from local sages and, somehow, we must help make that happen. These regional and local voices must be heard again. It’s critical in order to maximize local success, local revenues.

The influence of “foreigners” can’t compare with the immediate response to a rave from a trusted local. I’m not sure how to accomplish it without persuading Superman to reverse the Earth’s spin and go back in time, but there’s got to be a way and I’m going to try to help find it. There are good regional writers on-line everywhere but the very fact that the net is universal makes their local expertise elusive and even forbidding in their own home towns. (Even today, I feel that every “home town” deserves its own identity.) Being an independent filmmaker tales courage. So does being a quality, sagacious film critic.

8) What about the state and role of trade media?

Do we need a trade media at all? I’m certain there are still good reporters toiling away at Variety and the Hollywood Reporter but their best writers work for cyberspace pioneers like Nikki Finke. Anne Thompson works, well, right here. Plus, I’ve felt for some time now that the demystification of the filmmaking process has made the activity of watching movies less personal, less involving, less thrilling. I’ve never understood why someone who doesn’t have to read a screenplay, except for specific professional reasons, would want to ruin an essential part of the great discovery of watching a movie for the first time.

The trades contribute to this, many bloggers are notorious for this, and even “bloopers” at the end of some, generally rancid, comedies are equally to blame. We still go to the movies in grand numbers for a variety (no pun intended) of sometimes singular, equally valid reasons: to be entertained, to escape a humdrum day, to be validated, to make-out and grope, to be left alone, to enjoy a communal experience, to be awed, to laugh, to cry. The best films achieve this for the best people. Frankly (and this personal uncertainly fills me with great sadness), I’m not certain where a trade press fits in anymore. Even less so now that movie theatre grosses appear first thing each Monday morning in the Chattanooga Times Free Press.

When I was 26 years old and heading up theatrical distribution at New Yorker Films I would begin every Wednesday at 6:30 AM by walking to West 46th Street, just east of Broadway, to pick up the new copy of Weekly Variety at their offices so I could check the grosses. I wanted to be there first, at the very moment the trucks dropped off the first copies from the printer. The same copies that would be shortly delivered to executives at ABC, NBC, CBS, Paramount, etc. I would pay the very decent man with a limp, the only employee manning the office at that time of morning, my seventy-five cents, buy myself a cup of coffee, and luxuriate at my desk, soaking in the only place trade news was available – and I was in the business! – and I would do it before anyone else, the first one on my block. That was in 1979. Do we need a trade media at all?

It’s undeniable that the traditional trades like Variety and the Hollywood Reporter have been struggling of late. Couple that with the rise of folks like Nikki Finke and I think their days are numbered, and I’m honestly not sure it’ll be that big a loss.

9) I’m not in denial about technology.

We’ll all soon have the ability and the technical means at home to instantly download almost any film ever made onto our HD monitors without commercial interruption and free of censorship. But, even when that becomes, for most Americans, an affordable reality, will there then be a reasonable, honest, immediate, or suitable answer to the filmmakers/producers/investors demand: Show me the money!? I’m not a technophobe. I simply want to benefit independent filmmakers now, today, through theatrical means, to the best of my ability.

I’d also add that even when the above’s a reality I don’t think that people will stop going to the theaters. There’s just something about the communal experience that touches us in our lizard brains. It’s not going anywhere.

10) I do believe in social networking…

I do believe in online advertising. I do believe in viral marketing. I do believe that we live in a dazzlingly impressive digital world. But I also believe that these tools are still in their infancy and that everyone is jumping on a teetering and expensive bandwagon that just may topple over at any moment. I believe that originality, especially when it comes to low-cost marketing, will always rule the day. And it’s just that sort of originality that we ultimately drive profits.

The important thing to remember about New Media is that you’re only hitting a very select group of people. The vast majority of Americans (and Canadians for that matter) still don’t use Twitter. Or Facebook. Will that change? Who knows. But for now hinging an entire marketing campaign solely on those mediums is bound for disaster.

11) I want to continue to distribute films theatrically because I still love movies.

Seeing a movie in a theatre can still be the most entertaining vacation from reality imaginable, it can profoundly impact one’s life (which, for a filmmaker, is the greatest achievement), and it can inspire young people as completely and utterly as can any other august art form, more so, I believe.

Amen Mr. Lipsky. Amen.

I started out with the intention of only excerpting selections, but decided to just reproduce the whole thing with my comments because I found it ridiculously interesting.

Thank you Mr. Lipsky for providing some food for thought.

And thanks to The Legion of Decency where I stumbled across it first.

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