courtesy of Truly Free Film
Posted: 29 Sep 2010 05:30 AM PDT
Guest post by Sheri Candler.
In this second post, I want to focus on how to rehabilitate the film distribution entities so that they may continue to exist. I know what you are thinking “What’s she on about? We’re fine. We survived the latest shake out and are all the stronger for having less competition.” I am here to tell you that is fallacy. The old ways of bringing films to market are fading fast and it is time to reinvent your business. I want to acknowledge my gurus Gerd Leonhard, Seth Godin and Clay Shirky (though he is more my go to guy on all things having to do with immersive storytelling and audience collaboration) for being a constant source of inspiration for me in looking toward the future of media.
When Ted announced on his Facebook page that he would take part in a panel discussion at the upcoming Woodstock Film Festival concerning the new distribution paradigms, I had to look at who would be involved in this discussion. What people and companies would be taking part who are practicing radically changed business models for film distribution? It was as I thought; none. I posted a link on his page (http://www.techdirt.com/articles/20100326/1452138737.shtml) asking all involved in the discussion to read it and then talk about how they see the new paradigms. I don’t know if anyone did, but I did get a response from Dylan Marchetti from Variance Films explaining to me how his company functions to actively engage audiences for films they’ve booked in the theater. It was a lengthy exchange that resulted in my writing this post. I don’t think he read the article before he spoke because the point of that piece was to inform on how businesses need to form ecosystems around their companies, not continue only to sell copies of the content they distribute. Distribution companies should not be focused on selling copies, either for viewing or for owning. They should be selling access, creating networks of devoted fans around their brand and developing customized experiences instead. In other words, selling things that cannot be copied. This means they must first gather and cultivate a community of engaged followers and then develop, acquire, produce, and source material with only these people in mind.
Of the companies taking part in the Woodstock panel, I would say only Cinetic with their Film Buff organization has started with the potential to do this, but rather than building an engagement platform, they have merely built another online distribution portal (like so many others in existence that consumers have never heard of) to put copies out on the internet. Actually you can’t see any of the films on the site, it just directs you to their existence on VOD channels. Their “community” engagement is only a call for an email address so that they may send marketing messages. What is communal about that? What connection would a consumer have to the company itself besides advertising? None. Cinetic has no idea who these people are, what drives them, motivates them, interests them. It is not fair to pick only on Cinetic, I can’t think of a single distributor currently connecting directly with audience who can answer those questions. Troma comes to mind as a distributor with a very clear brand identity but even they are not directly in dialog with their audience. All current distributors are far too dependent on push marketing, usually hired from outside the company, and sourcing films purely on guesses based on audience reactions at festivals , favorable press or from hottest trends in market research. Every investment prospectus will tell you future earnings are not indicative of past performance, so why is that how decisions are continually being made?
What would I suggest for these companies? First, a total rethink of what business they’re in. Distribution of goods is no longer needed from you. You should not think of yourselves in the film distribution business because distribution has become easy to access by anyone online. (I know Dylan, you’re not online, but art house theater days are numbered too). Attention getting is now your main role. But from whom? If you don’t have a following as a company, a deep relationship with a community, how will you get attention and keep it? By building a tribe around the people in your company and, in turn, the company brand itself. This starts by identifying what kind of group you appeal to or want to appeal to, actively seeking them out and forging those deep connections. At first, this will mean attracting people through outside means, appealing through media and various outside groups to introduce yourself. Eventually the effort to enlarge the circle will be done by the community members, but until you have one, you must do that work.
Often, in a rush to monetize, companies jump right over the relationship building. The dismal failure of paywalls in newspaper circles only serves to prove my point. They did not build up an engaged community first, and then ask for payment. They falsely thought that their paper subscribers would be willing to continue the previous paid relationship even after it was possible to get most of the news stories from aggregators for free online. There is a great video from Jeff Jarvis explaining the new business models for newpapers here (http://www.youtube.com/watch?v=Jsb9NfJmqPY&) and lots can be gleaned from it for all corporate endeavors.
“The future leaders in business will be connectors, not directors”-Gerd Leonhard
The new model will be to build and foster a community around the brand as a company and to be in the entertainment fulfillment business. This community will have interests that the company can fulfill and that is the company’s ONLY function. To try and serve a well balanced diet of wide ranging content is to spread too thin and attract no one. Mass is not your target.
You will be a resource to your community not only in entertainment but in anything that interests them. This means you MUST know what “that” is. Is it books, is it music, events, clothes, games, causes, other similar tribes? These will be your other revenue sources as you create a network of interconnection with other companies who have their own niches, their own tribes. Also, consider enabling community members to profit in what you have sourced, to be affiliates and to create networks of their own. The network will feed each other spreading the brand even further.
A key part of your site will be to connect your community to each other. Some companies have sites where they connect to the user, but they don’t allow for intraconnection and some networking platforms are merely housed on a company website but members are never engaged by the company, merely left to use the tools as they see fit. Listening and collaboration will be cornerstones for this model to work. This isn’t work to be left to interns, by the way, but by those in power within the company.
You will also partner with other tribes of like minded individuals. Through these interactions, you tribe influence grows. There is no need for shouting out messages, gaining favorable PR placement, buying media for attention or forcing members to spread the word. If you are fulfilling their needs admirably, they will do it. You will however, generously reward those members in your community who do enlarge your circle. Instead of paying large amounts of money to outside companies to get “buzz” and “traffic,” you will invest that money in building experiences tailor made for your community. Development of experiences can only be done from active participation in the community and collaboration with them.
This model is far simpler to run as you won’t be going for masses, you will only cultivate your community. It will be labor intensive work, but not prohibitively expensive. You will need to develop tools so that the tribe members can speak to each other and so that they can spread the word to their friends easily. You should be facilitating sharability at all times, not closing it off and being insular.
The filmmaker/artist whose content you will source (not acquire as creators will have an equal partnership in your tribe) will be encouraged to participate with the community. In fact, if they will not, then their work is not very attractive to your community. Engagement at all times is key, this is no place for egos.
Tomorrow: How To Make Money With The New Model!
Sheri Candler is an inbound marketing strategist who helps independent filmmakers build identities for themselves and their films. Through the use of online tools such as social networking, podcasts, blogs, online media publications and radio, she assists filmmakers in building an engaged and robust online community for their work that can be used to monetize effectively.
She can be found online at www.shericandler.com, on Twitter @shericandler and on Facebook at Sheri Candler Marketing and Publicity.
Orly Ravid September 30th, 2010
Posted In: Uncategorized
We have been slowly communicating about our GLOBAL SHORTS INITIATIVE. There are companies such as Ouat Media and Shorts International and consultants whose business it is to focus on short films. When shorts filmmakers approach us we do the best we can to educate them about any deals they’ve been presented with and otherwise we refer them onward to shorts specialists. We at The Film Collaborative focus on shorts to the extent that certain niches that fulfill our mission but leave much of the more commercial work to the shorts experts. We are fulfilling our mission of serving under-served audiences and of helping filmmakers not get screwed. We also encourage filmmakers to organize and aggregate themselves and follow our example if one wishes.
We do have a GLOBAL SHORTS INITIATIVE and it starts with an LGBT program. Here is how it works:
1. It’s non-exclusive and we do not take rights, as you all know by now.
We’re also the most transparent distributor I know of. Wait till we start publishing numbers and posting a graph on our site about revenues and allocations, with filmmakers permission only though of course.
2. First window of the Global Shorts Initiative is a 6-month exclusive window with our mobile / IFOD partner BABELGUM
Babelgum. The revenue is via an ad-supported model (ad and sponsor driven). Babelgum has been a great platform for some of the films we have worked with. They pay 50% of net revenues (very modest expenses and capped) and we will take a 15% fee for marketing and putting this together. Festivals are not a factor in the exclusivity and we are timing everything to accord with each filmmaker’s overall distribution strategy. Lastly, Geo-Filtering is possible if necessary except for in US. This will start end of this year / beginning of next (we are just coordinating festival windows for our filmmakers)
3. Then we are doing a few other components all at once (May 2011):
An iPhone App. It will be worldwide to the extent that iTunes is. If a short film needs to be geo-filtered it can be. The App will be free. Each short can be priced at say $1.99 (less or more if a filmmaker wants that). We receive 55% of the gross revenues (after Apple and the developer take their fees). We are taking a maximum of 10% of this revenue and that is to cover our time in servicing this and marketing too (5% Fee & 5% max for marketing).
We will also have an HD-Rental Channel on YOUTUBE and the details of that will be resolved soon but filmmakers can select their own pricing.
4. DVD release in US & Canada through our esteemed home video (till its dead) partner First Run Features . As is quite typical, they will remit 25% of the Gross revenues to the filmmakers on a pro-rated basis, no deductions. The DVD would be made available on Netflix and Amazon etc.
5. We do not compete with Ouat Media or Shorts International or anyone else for that matter, meaning other companies license shorts to television stations in Europe and to airlines and we do not do any of that and do not intend to. We do recommend one get several references before signing with any shorts distributor.
The initiative however is meant to be a supplement to anything one may doing with your short yourself or via another company. There are fewer buyers buying shorts (though we also for free connect shorts filmmakers to our buyers who do buy shorts) and for the ones that are, the revenues seem to be fewer than once was the case. We are doing the best we can to offer a supplementary solution at least for some.
We are doing what we can to support shorts filmmakers and enhance their opportunities to connect with audiences and of course to recoup their investments. We’ll keep everyone posted on the success of this initiative. Our newsletter has showcased most of the films that will be part of the initial initiative launch.
We are thrilled to have added Kim Adelman to our our Advisory Board so we can be sure to be doing this rights, and of course we invite feedback from all.
Kim Adelman is the author of Making it Big in Shorts: The Ultimate Filmmaker’s Guide to Short Films, the 2nd edition of was published July 2009. She also reports on short films for indieWIRE and co-programs the American Cinematheque’s Focus on Female Directors screening series. Ms. Adelman currently teaches Making and Marketing the Short Film and Low Budget Filmmaking at UCLA Extension and has conducted short filmmaking workshops throughout the United States, Canada, New Zealand. She also produced 14 DVD compilations of short films released by Warner Home Video under the series titles Short 1 – 11 and International Release 1 -3. Previously, Ms. Adelman launched the Fox Movie Channel’s short film program. The 19 short films she produced for Fox won 30+ awards and played over 150 film festivals worldwide, including the Sundance Film Festival four years in a row.
Stay tuned folks!
Orly Ravid September 27th, 2010
Our friend and beloved social network marketing guru Sheri Candler posed a question to me today. She noted that filmmakers are often confused by this issue of “what is the difference between a sales agent or distributor selling a license to your film or selling your film outright for 15 – 20 years?”. She posited a real estate metaphor. So here I go: Sales agents are *not* like Re-Max brokers who only have the right to sell your house for you, if you approve. Following the metaphor still: They usually take your land and then resell it and its territorial clones all over the world, or as much as they can. Meaning, they first take the rights and take delivery (at least usually that is the way they do it) and then they license those rights territory by territory for a term, a minimum guarantee, and usually a royalty split. Sometimes all rights deals are done and sometimes rights are split.
I just did a redline to a sales agent’s deal/contract for a documentary we are consulting on. We do our best to protect filmmakers in these deals. We also do foreign sales so we do both the contracts with the filmmakers to handle their sales and we help them do contracts with other companies handling their sales. Here’s how it shakes down usually:
Many foreign sales companies do deals as if they were actual distributors in that they take rights. One is actually licensing them rights full on, in all media usually, for a very long time which is yes, sometimes as much as 15- 20 years. This is very much the old standard and I started in foreign sales twelve (12) years ago and saw it shake down even on napkins in Cannes. The sales company gets the rights to the film for a long time (though to be fair to them, often they pay producers up front for that though less and less these days). The sales companies also spend money shopping the films, but they also recoup expenses against any income that comes in and those expenses are not always actual and even when they are, they are not always sensible to put it mildly. It may be a bunch of films that are all paying for the same expenses, over and over again if you get what I mean. Not all companies are that way of course but we have seen statements from sales companies that will make your hair curl if it’s straight and straighten if it’s curly.
So, those companies like to take ALL your rights for a big fat TERM of 10, 12, 15, 20, 25 years and they will usually just resell those rights to a distributor who takes all rights for a particular territory (e.g. Germany and German Speaking Europe, or Korea, Japan, Greece.. you get the idea) in a market or via phone / email. They may also use those rights directly let’s say for Broadcast deals or DIGITAL platform deals (for example MUBI, or Content Republic or Love). Once the sales agent or sales company has those rights the rights are THEIRS to do what they want, unless you are contractually resolved otherwise.
The Film Collaborative does foreign sales in house and also with its partner Ariel Veneziano or Recreation Media. We do NOT take rights, our deals are done directly between BUYER and FILMMAKER almost all the time (exceptions only when buyer insists because they only want to work with companies). We are even offering a low fee program to have films positioned for sale at markets, again, no rights taken and filmmaker makes all decisions. TFC also helps filmmakers do deals with other sales companies / sales agents as I said above. Not all companies are quite as transparent and filmmaker friendly but they can still be worth doing business with because they have certain relationships that you don’t and they are going to markets that you aren’t and they have leverage with buyers to get paid because they have a steady stream of ‘product’. So we don’t say not to all those options. We do however say this:
Do not do a deal for such a long term as 15 or 20 years or even 10 for that matter. Put in performance clauses and of course there are loads of other needed protections that should be part of any deal that are beyond the scope of this blog post. You can let them enter into longer deals if necessary and for the right price but there is no reason they should have such a long deal. Also try to let them have buyers pay you directly, though most won’t do that. At least get approval rights for deals and get complete accounting. Approve and CAP (i.e. limit) expenses. Get references before you get into a deal to see if you have some hope of seeing any revenues. Do not give or license rights to them if you can help it but rather give them the right to enter into deals licensing rights and have you be a party to those deals (if you can do that). Many sales companies won’t play ball this way but we do and we recommend you try hard to do it this way so that you don’t live in regret watching your sales agent travel the world and eating well at film festivals while you get tiny checks, if any at all. I heard an amazing story of a sales agent who called a filmmaker and thanked her for making her (the sales agent) millions, so many that she was now retiring in the South of Spain. The filmmaker never made a dime over the advance. That’s the other thing, if possible, get an advance, always, that may be all you see. Of course that may not be possible so you have got to do your best in negotiating and being protected. In any case, save the direct distribution for yourself if you can unless there’s a great deal your sales agent can get you that you cannot do yourself but have the right at least to approve that. And as technology changes, you will able to do more and more yourself. The pirates manage to do it all, including subtitling and getting film seen around the world so surely, so can we.
TAKE HOME: Do a deal with a sales agent as close to the real estate model as you can, because if you don’t, you may end up as just a part of their library being monetized for their sake, and not yours.
Orly Ravid September 16th, 2010