Uncertain state of distribution
At the recent Toronto International Film Festival, veteran independent film distributor Bob Berney gave a state of the industry address on distribution. TIFF was kind enough to make his keynote video available on Youtube (you can find it below), but here are some of the highlights if you don’t have 30 minutes to spare watching it.
-We’re in a chaotic, disruptive state right now with bigger studios making fewer, but massively budgeted films that involve huge risk.
-On the flip side, there are many more outlets now available to get a film into the market. The challenge as a producer is how to get revenue from these outlets in order to fund your next work.
-There are now well funded entities coming to major festivals and buying films without any real plan about how to release them.
-Open Road and Relativity Media are now distributing wide release theatrical films, sometimes as service deals (the production pays them to release, instead of the distribution company paying for rights).
-But platform release films, ones that start with opening in only 2-4 cities and then keep expanding their theatrical runs, are starting to have a tougher time finding a home, a company that will take them on. Fewer distributors are taking the traditional theatrical route and there are now more companies taking the day and date or VOD first route. Films that want a traditional release far outweigh the distribution companies that are willing to take on films for that kind of release.
-Berney believes that a theatrical release is the only way for a film to truly break out in the market in a big way.
-The bar for films that warrant having a large theatrical release has really been raised. The expense to release those films, even if using digital marketing, is big and the market is very competitive. Distributors who fund the marketing and distribution costs for those films are very wary about the ability to recoup.
-This summer there were many indie films that played in theaters against the studio blockbusters and did well. Boyhood, Magic in the Moonlight, Chef, Belle, Begin Again all surpassed expectations about how they would fare against the studio films. Berney believes it was because there was nothing else to see. Either superhero films or these and nothing in between. He guesses that the market could have taken even 4-5 more indie films this summer. People went to see some of those successful titles 2-3 times because there wasn’t much to choose from. Theatrical companies could have picked up more. The Fall season is crowded, but the summer could have used a few more releases.
-Because the deals are so different and the numbers come in sporadically, releasing VOD numbers is still not common.Also there aren’t very many success stories being reported from day and date or VOD only releases.
-Many European companies or smaller indie division within the studio units are not finding deals on their films very viable now. P&Ls for sales coming domestically (US) often have a 0 in the profit column. Sales can’t be counted on any more. Budgets have had to shrink accordingly because large deals aren’t happening so much any more.
Many of the newer players in the digital and VOD arena are constantly looking for content to fill their channels. Those films can play for a while until the audience gets more discerning.
-For any avenue chosen for distribution, the release has to create the feeling of an event to catch an audience’s attention. There is just too much in the market.
There is no one size fits all marketing and distribution plan. Each film needs to have its own plan handcrafted.
-Given the risk and expense, distributors are going to be much more discerning about what films they are passionate about and believe in before offering a deal.They want to be very sure there is an audience for a theatrical release before committing to such a deal.
-The Blu Ray market is still huge for certain types of films. Genre including family, horror, sci fi still do business on disc for Walmart and Redbox.
-Certain theaters are catching onto the idea of making the cinema an experience. Food, bigger seats, more varied showtimes, 4D seats are all increasing the feeling of an event in the cinema.
-Theaters are still resisting the idea of day and date. Regal and Cinemark chains are adamant about preserving the theatrical window. But AMC is more open to experimentation as long as the distributor will pay a 4 wall fee to rent their theaters. IFC and Magnolia own their own theater chains so they have been the most aggressive about trying Ultra VOD and day and date release. IFC buys about 50 films a year that they run though VOD and day and date releases.
-Due to regulation, Canada has not been able to experiment with this kind of releasing model yet.
-Berney still believes in the power of the theatrical release to affect an audience and that it is the best way to make a film break out.
-Netflix has been the savior for films that may not get a pay TV deal. Essentially, subscription VOD is on par with selling to HBO or Showtime. But Netflix takes far more films than those broadcasters.
-Social media advertising is allowing a more targeted and lower cost alternative to traditional advertising, plus providing much needed data on which to base strategic marketing decisions. Also these tools allow filmmakers to get clips, trailers, images etc to get out more widely for a lower cost and build pre release awareness that wasn’t even possible 10 years ago.
-There are just so many more opportunities now to get a film out, but it will take some time for the business side, the money making side, to catch up. That’s the uncertainty we are dealing with now.
Sheri Candler September 19th, 2014