by Orly Ravid, Founder, The Film Collaborative

Orly Ravid is an entertainment attorney at Mitchell Silberberg & Knupp (MSK) and the founder of The Film Collaborative with 15-years of film industry experience in acquisitions, festival programming, sales, distribution/business affairs, and blogging and advising. She also contributed to the Sundance Artist Services initiative.

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Filmmakers usually think selling their film to distributors means that they will handle the whole release including theatrical, home video, and of course now digital/VOD. One category of distribution that is often overlooked, or not fully understood, however, is educational distribution. It can be a critical class of distribution for certain films, both in terms of reaching wider audiences and making additional revenue. For a certain type of film, educational distribution can be the biggest source of distribution revenue.

What is it?

When a film screens in a classroom, for campus instruction, or for any educational purpose in schools (K-university), for organizations (civic, religious, etc.), at museums or science centers or other institutions which are usually non-profits but they can be corporations too.

This is different from streaming a film via Netflix or Amazon or renting or buying a commercial DVD. Any film used for classes / campus instruction / educational purposes is a part of educational distribution and must be licensed legally. Simply exhibiting an entire film off of a consumer DVD or streaming it all from a Netflix or Amazon account to a class or group is not lawful without the licensor’s permission unless it meets certain criteria under the Copyright Act.

Initially, this was done via 16mm films, then various forms of video, and now streaming. These days, it can be selling the DVD (physical copy) to the institution/organization to keep in its library/collection, selling the streaming in perpetuity, renting out the film via DVD or streaming for a one-time screening, or exposing the content to view and at some point (certain number of views) it is deemed purchased (a/k/a the “Patron Acquisition Model”).

What type of films do well on the educational market?

In general, best selling films for educational distribution cover topics most relevant to contemporary campus life or evergreen issues such as: multiculturalism, black history, Hispanic studies, race issues, LGBTQ, World War II, women’s studies, sexual assault, and gun violence; in general films that cover social and political issues (international and national); health and disability (e.g. autism); and cinema and the arts. A great title with strong community appeal and solid perception of need in the academic community will do best (and the academic needs are different from typical consumer/commercial tastes).

At The Film Collaborative, we often notice that the films that do the best in this space sometimes do less well via commercial DVD and VOD. This is true of films with a more historic and academic and less commercial bent. Of course, sometimes films break out and do great across the board. Overall, the more exposure via film festivals, theatrical, and/or social media, the better potential for educational bookings though a film speaking directly to particular issues may also do very well in fulfilling academic needs.

Sourcing content

Across the board the companies doing educational distribution get their content from film festivals but also simply direct from the producers. Passion River and Kanopy, for example, note that film festival exhibition, awards, and theatrical help raise awareness of the film so films doing well on that front will generally perform better and faster but that does not mean that films that do not have a good festival run won’t perform well over time. Services such as Kanopy, Alexander Press, and Films Media Group collect libraries and get their films from all rights distributors and those with more of an educational distribution focus as well as direct from producers. These services have created their own platforms allowing librarians etc. to access content directly.

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Windowing & Revenue

There are about 4,000 colleges in the US and about 132,000 schools, just to give you a sense of the breadth of outlets but one is also competing with huge libraries of films. Educational distributors such as ro*co films has a database of 30,000 buyers that have acquired at least one film and ro*co reached beyond its 30,000 base for organizations, institutions, and professors that might be aligned with a film. All rights distributors often take these rights and handle them either directly, through certain educational distribution services such as Alexander Press (publisher and distributor of multimedia content to the libraries worldwide), Films Media Group / Info Base (academic streaming service), or Kanopy (a global on-demand streaming video service for educational institutions), or a combination of both. There are also companies that focus on and are particularly known for educational distribution (even if they in some cases also handle other distribution) such as: Bullfrog Films (with focus on environmental), California Newsreel (African American / Social Justice), Frameline Distribution (LGBTQ), New Day Films (a filmmaker collective), Passion River (range of independent film/documentaries and it also handles consumer VOD and some DVD), roc*co films (educational distributor of several Sundance / high profile documentaries), Third World Newsreel (people of color / social justice), Women Make Movies (cinema by and about women and also covers consumer distribution), and Swank (doing educational/non-theatrical distribution for studios and other larger film distributors). Cinema Guild, First Run Features, Kino Lober, Strand, and Zeitgeist are a few all rights distributors who also focus on educational distribution.

Not every film has the same revenue potential from the same classes of distribution (i.e. some films are bound to do better on Cable VOD (documentaries usually do not do great that way). Some films are likely to do more consumer business via sales than rentals. Some do well theatrically and some not. So it is no surprise that distributors’ windowing decisions are based on where the film’s strongest revenue potential per distribution categories. Sometimes an educational distribution window becomes long and sales in that division will determine the film’s course of marketing. But if a film has a theatrical release, distributors have certain time restrictions relative to digital opportunities, so that often determines the windowing strategy, including how soon the film goes to home video.

The film being commercially available will limit the potential for educational distribution, and at the same time, the SVOD services may pay less for those rights if too much time goes by since the premiere. Hence it is critical to properly evaluate a film’s potential for each rights category.

Revenue ranges widely. On the one hand, some films may make just $1,000 a year or just $10,000 total from the services such as Kanopy and Alexander Street. On the other hand, Kanopy notes that a good film with a lot of awareness and relevance would be offered to stream to over 1,500 institutions in the US alone (totaling over 2,500 globally), retailing at $150/year per institution, over a 3-year period, and that film should be triggering about 25% – 50% of the 1,500 institutions. Licensors get 55% of that revenue. On average, a documentary with a smaller profile and more niche would trigger about 5-10% of the institutions over 3 years.

More extreme in the range, ro*co notes that its highest grossing film reached $1,000,000, but on average ro*co aims to sell about 500 educational licenses.

If the film has global appeal then it will do additional business outside the U.S. All rights and educational distributors comment that on average, good revenue is in the 5-figures range and tops out at $100,000 +/- over the life of the film for the most successful titles. The Film Collaborative, for example, can generate lower to mid 5-figures of revenue through universities as well (not including film festival or theatrical distribution). Bullfrog notes that these days $35,000 in royalties to licensors is the higher end, going down to $10,000 and as low as $3,000. For those with volume content, Alexander Street noted that a library of 100-125 titles could earn $750,000 in 3 years with most of the revenue being attributable to 20% of the content in that library. Tugg (non-theatrical (single screenings) & educational distribution) estimates $0-$10,000 on the low end, $10,000 – $75,000 in the mid-range, and $75,000 and above (can reach and exceed $100,000) on the high end. Factors that help get to the higher end include current topicality, mounting public awareness of the film or its subject(s), and speaking to already existing academic questions and interest. Tugg emphasizes the need for windowing noting the need for at least a 6-month window if exclusivity before the digital / home video release. First Run Features (an all-rights distributor that also handles educational distribution both directly and by licensing to services) had similar revenue estimates with low at below $5,000, mid-range being $25,000 – $50,000, and high also above $75,000.

Back to windowing and its impact on revenue—Bullfrog notes it used to not worry so much about Netflix and iTunes because they “didn’t think that conscientious librarians would consider Netflix a substitute for collection building, or that instructors would require their students to buy Netflix subscriptions, but [they] have been proved wrong. Some films are just so popular that they can withstand that kind of competition, but for many others it can kill the educational market pretty much stone dead.” Yet, theatrical release is usually not a problem, rather a benefit because of the publicity and awareness it generates.

Passion River explains that filmmakers should not be blinded by the sex appeal of VOD / digital distribution—those platforms (Amazon, Hulu, iTunes, Netflix) can and will wait for hotter films on their radar. An example Passion River offers is Race to Nowhere which sold to over 6,000 educational institutions by staying out of the consumer market for at least 3 years. This type of success in the educational space requires having the right contacts lists and doing the marketing. But I would say, consider the film, its revenue potential per rights category, the offers on-hand, and then decide accordingly.

Stay tuned for Parts 2 & 3, which will go into the nitty gritty details of educational distribution.

The legal information provided in this publication is general in nature and should not be construed as advice applicable to any particular individual, entity or situation. Except as otherwise noted, the views expressed in this publication are those of the author(s). This alert may be considered a solicitation for certain purposes.

February 18th, 2016

Posted In: Distribution, education, Legal

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platforms

Always check with your lab or distributor to make sure their deliverable specs adhere to what is outlined below. Especially deliverables outside North America, which are sure to diverge from what is below. Much of this may apply to films who have sold to distributors, but this post is mostly aimed at those doing DIY distribution. The following also mostly applies to TVOD platforms, but may also apply to others. Again, check with your distributor/lab before you produce any deliverables.

  1. Know when not to do iTunes
    iTunes is expensive. It will cost at least $2K to do iTunes/Amazon/GooglePlay. Think of how many people will need to rent your film at $4 (and that’s before the platform’s cut) for you to recoup that money, and then think how many more will have to do so for you to recoup your investment. Are your 1500 Facebook fans going to come through for you? Most probably won’t. A better option might be to do VHX or Vimeo on Demand and spend that money on marketing to drive people to your site. We have handled almost 50 films in the past three years via our DIY Digital Distribution Program, and the bottom line is that if you expecing people to find your film simply because it’s on iTunes while you sit back and move on to your next project, you are probably going to be in for a rude awakening.
  2. Subtitles and Closed Captioning (part 1)
    Pretty much the only way to go nowadays is to submit a textless master, with external subtitles. This can get kind of tricky, so it’s important to understand what is needed and to not expect that the lab you are working with is impervious to mistakes.

    • Your film is in English and has no subtitles
      You will need to produce a Closed Captioning file
    • Your film is 100% not in English
      You will need to produce a subtitle file only (Closed Captioning is not required)
    • Your film is mostly in English but there are a few lines (or more) of dialogue that are not in English
      You will need to produce both a Closed Captioning file and what is called a Forced Narrative Subtitle file.
      This “Forced Narrative” subtitle file is rather a new concept, so when you work with your subtitle lab (if you need suggestions for labs to work with, check out the ‘Subtitling, Closed Captioning and Transcription Services and Solutions’ section on the ResourcePlace tab on our website), make sure they understand that an English language forced narrative file (unlike Closed Captioning or regular subtitles) does not need to be manually turned on for territories where English is the main language, and in fact cannot be turned off in those Territories. Hence, they are forced on the screen. Together with the closed captioning, they make up a complete dialogue of your film, but they should not overlap, or else you’ll be in a situation where the same lines of text are appearing twice on the screen, and your film will be rejected.

    TECH TIP: We recommend watcing your film through before you deliver with all subtitle and CC files. If your film is only in English and you only need to produce closed captioning, these files are pretty much gibberish. So ask the lab to ALSO provide you with a .srt subtitle file of the closed captioning (it’s an easy convert for them). Even though you won’t be submitting this file, you can watch it using, for example, VLC. Just make the filename of your .srt file the same as your .mov or .mp4 file, place it in the same folder, and the subs should automatically come on.
    If your film has a forced narrative, keep track of your non-English dialogue…easy to do especially if your film only has a few lines of non-English. Then change the file extension .srt or .stl temporaily to .txt. This file can then be opened in any text application and eyeballed to ensure that no lines of foreign dialogue are misplaced. If you ask for a .srt conversion of your Closed Captioning file, you can do the same thing with this file to verify that these non-English lines are not repeated in the Closed Captioning.

  3. Subtitles and Closed Captioning (part 2)
    Closed Captioning needs to be in .scc format. Subtitles need to be in either .srt or .stl format. But .srt file do not hold placement, so if you are making a documentary, for example, you will probably want to submit .stl. Because if you have any lower-thirds in your film, lines of closed captioning or subtitled dialogue needs to be moved to the top of the screen when lower thirds are on the screen. .srt files will appear on top of the lower thirds, and your film will be rejected.
    TECH TIP: Again, watch your film back with closed captioning / subtitling to make sure your lower thirds are not blocked.
  4. Dual Mono not allowed
    Make sure the audio in your feature and trailer is stereo. This does not merely mean that there is sound coming out the L & R speakers. It means that these two tracks need to be different…and not where one side gets all the dialogue and the other gets the M&E. Think of how annoying that would be if you were in a theater. L & R tracks need to be mixed properly and outputted as such.
    TECH TIP: Listen to your film before you submit, or at the very least make sure your film is not dual mono…download an applcation such as Audacity, a free program, and open your masters in that program. if the sound waves are identical for both L & R, you need to go back and redo. Don’t assume your sound guy is not infallable.
  5. 720p not allowed
    iTunes is no longer accepting 1280×720 films. In addition, they will not take a 1280×720 that has been up-rezed to 1920×1080. No one should be making movies in 720p and expect the world to cater to their film.

September 16th, 2015

Posted In: Amazon VOD & CreateSpace, Digital Distribution, Distribution Platforms, iTunes, Vimeo

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Some of you may have heard that about a week ago the European Film Commission announced the Digital Single Market Plan (which may also apply to TV licensing). Variety covered the story HERE and HERE.

You can read for yourself what the fuss is all about but essentially, the EU Film Commission’s plan is to combine the 28 European territories into a common market for digital goods, which would eliminate “geo-blocking,” which currently bars viewers from accessing content across borders – and yet purportedly, the plan would preserve the territory by territory sales model. Filmmakers, distributors, the guilds, et al argue that this proposal would only help global players / platforms such Netflix, Amazon and Google, which would benefit from a simpler way to distribute content across Europe.

The IFTA (International Film and Television Alliance) expressed concerns that this would enable only a few multinational companies to control film/tv financing.  Variety noted that although politicians insist the idea of multi-territory licenses won’t be part of the plan, those in the content industry remain concerned about passive sales and portability and the impact on windows and marketing.

In the US, digital distribution is just hitting its stride and is also finally getting anchored properly in Europe.  Now this idea would be one step closer to one-stop-digital shopping, or selling.  Though allegedly that’s not in the plan – but it would sure be a step in that direction.

Cannes Marche du Film

photo credit: movantia

Some are railing against it and warning against eliminating territory sales and windowing, hurting financing, and truncating important local marketing. Well, maybe and maybe not.  I think it depends on the type of film or film industry player involved.  A blockbuster studio hit or indie wide release sensation with international appeal may very likely be big enough to sell many territories, be big enough to warrant spending significant marketing money in each territory’s release, and be culturally malleable enough to lend itself to new marketing vision, materials, and strategies per market. On a related note, I remember hits such as Clueless being translated into different languages not just literally, but also culturally – modified for local appeal.  That’s great, and possible, for some films.

But for most of the films we distribute at TFC and for the great majority on the festival circuit, they’ll be lucky to sell even 10 territories and many won’t sell even half that.  Some sales in Europe are no minimum guarantee or a tiny minimum guarantee, just like it is State-side. Some films are financed per EU territory (government funding often) but that’s on the decline too.

The dilemma here about a digital single market in the  EU recalls another common dilemma about whether to hold out for a worldwide Netflix sale or try to sell European TV or just EU period, one territory at a time. I’m not forgetting Asia or Africa but focusing on the more regular sales for American art house (not that selling Europe is an easy task for most American indies in any case).  Sure, if you can sell the main Western European countries and a few Eastern ones that’s worthwhile taking into account. However, so often one does not sell those territories, or if one does, it’s for a pittance.  Some sales can be for less than 5,000 Euros, or half that, or zero up front and not much more later. It’s not like the release then is career building either or a loss leader.  It’s just buried or a drop in a big bucket.

In cases such as these, it makes little sense to hold off for a day that never comes or a day that really won’t do much for you.  All this to say, I don’t think this proposal is one-size-fits all but I do think it’s worth trying on especially if you are in the petite section of the cinema aisle.  If you are not sure how you measure up, ask around, comparison shop – see what films like yours (genre, style, topic, cast, festival premiere, budget, other names involved and other aspects) have done lately.  Sometimes a worldwide Netflix deal may be the best thing that ever happened and I reckon that similarly, sometimes a plug and play EU digital deal (if this vision comes into fruition) will give you all that you could get in terms of accessing European audiences, while saving you money (in delivery and fees etc.). And then, get this, you can focus on direct-to-audience marketing – something few agents or distributors do much of anyway.

I kept this blog entry short as I stand by for more information out of Cannes and beyond and also await our TFC resident EU digital distribution guru Wendy Bernfeld (Advisory Board Member and co-author of the Selling Your Film Outside the U.S. case study book) to weigh in. In the meantime, I think it would be swell if one Cannes do digital in the EU all at once.

Please email me your thoughts to contactus [at] thefilmcollaborative.org or post them on our Facebook page so we can update this blog. We turned off comments here only because of the amount of spam we received in the past.

May 14th, 2015

Posted In: Digital Distribution, Distribution

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Selling Your Film Outside the U.S.Last May, TFC released the second book in our series called Selling Your Film Outside the US. As with everything in the digital space, we are trying to keep track of a moving target. Netflix has now launched in France, Germany, Austria, Switzerland, Belgium and Luxembourg. iTunes continues its transactional VOD domination by partnering with Middle East film distributor Front Row Filmed Entertainment to give Arabic and Bollywood films a chance to have simultaneous releases in eight countries: UAE, Egypt, Bahrain, Qatar, Oman, Lebanon, Jordan and Kuwait. Amazon has just launched several new original series in the US and UK, including critical darling Transparent, to a line up that includes returning series Alpha House and Betas.

But what does DIY Distribution mean in the context of European territories? The following is an excerpt included in the book:

Here are a few tips for any filmmaker who is thinking about doing digital distribution in general, but especially in multiple territories:

-If your film is showing at an international film festival, ask if they are producing subtitles, and, if so, negotiate that the produced file be part of your festival fee. It may need to be proofed again or adjusted at a subtitling and transcription lab later on, but as a first pass it could prove very valuable down the road. See more about the kind of file you need in this post;

-When you are producing your master, create a textless version of your feature. Apple and probably other platforms will not allow external subtitles on any films that already have burn-ins. If your film, for example, has a few non-English lines of dialogue, instead of burning-in English subtitles into your film, a better method would be to create an external English-language subtitle file (separate from closed captioning) in a proper format and submit it with your master. Different aggregators may require different formats, and if you are going to a Captioning/Transcription/Translation Lab to do your closed captioning and subtitling work, be smart about which questions you ask and negotiate a price for everything, including transcoding from one format to another because you may not know exactly what you will need for all your deals right away.

Subtitles need to be timed to masters, so make sure your time code is consistent. When choosing a lab, ascertain whether they are capable of fulfilling all your current and future closed captioning and subtitling needs by verifying that they can output in the major formats, including (but not limited to) SubRip (.srt), SubViewer 1 & 2 (.sub), SubStation Alpha (.ssa/.ass), Spruce (.stl), Scenarist (.scc) and iTunes Timed Text (.itt);

-You may want to band together with films that are similar in theme or audience and shop your products around as bundled packages. Many digital services, including cable VOD, have thematic channels and your bundle of films may be more attractive as a package rather than just one film;

-Put the time in toward building your brand and your fanbase. Marketing still is the missing piece of the puzzle here. As it gets easier and easier to get onto platforms, so too does it get more difficult for audiences to find the films that are perfectly suited to their interests. This is especially true when talking about marketing one’s film outside one’s home territory. If you are accessing platforms for your film on your own, YOU are the distributor and the responsibility of marketing the film falls entirely to you.

To download a FREE copy of the entire book, complete with case studies of films distributed in Europe, visit sellingyourfilm.com.

October 15th, 2014

Posted In: Amazon VOD & CreateSpace, book, case studies, Digital Distribution, DIY, iTunes, Netflix

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There are many ways a film can reach its audience. While independent filmmakers often lock themselves into the path of securing a festival premiere, signing a sales agent, hoping for a sizable distribution deal that includes a theatrical release and sailing off into the sunset to make another film, they could be overlooking options that make better sense for the type of film they have.

TFC member Michelle Mower knows the indie filmmaker mindset well having worked for many years with Houston based organization Southwest Alternate Media Project (SWAMP). She too thought that her first feature film, The Preacher’s Daughter, would follow that same path.  But after sending TFC’s Orly Ravid the rough cut of the film, advice came that altered her plans.  I spoke with Michelle to find out how her film achieved distribution and succeeded in bringing Lifetime Movie Network its highest ratings for 2012.

Preacher's Daughter DVD art

SC: “Your case study is particularly interesting to me because your initial thought was you wanted to have a festival premiere and tour the circuit. But something totally different happened?”

MM: “Isn’t that normal for independent films? Isn’t the festival circuit what all indies are supposed to do? [laugh]”

SC: “Yes, totally what people think. But other opportunities came up for your film. First let me ask, how did you finance the film?”

MM: “We funded this film in stages. We raised our shooting budget first which was the ultra-low, $50,000 budget. But as we got into preproduction, we were able to attach name talent to the project, so we raised a little more and then as we got into production and post production, we got a few more investors to help us finish the film. It was very typical of most first features where you start with one budget, but end up with another and you struggle to get the film finished. We didn’t really know what would happen with the film, but we did feel like we had a great story, some very strong performances, some things that would definitely attract an audience.”

SC: “How long did it take to shoot and finish the film?”

MM: “We ended up with a total of 43 days for the shoot which is really long and I do not recommend it. We had crew changes and scheduling issues, so it caused us to prolong our production.  Ultimately, it took us over a year to finish the film.

SC: “Was the film shot mainly in Houston, Texas?”

MM: “Yes, the whole film was shot in Houston and the surrounding area. The film is set in a small town in East Texas, so I shot it in the little towns surrounding Houston.”

SC: “Tell me about casting. How did you land Andrea Bowen?”

MM: “It’s a funny story. I sent out a casting notice in LA. Initially, I wasn’t intending to cast there because I didn’t think I could afford it. But I was out there for the Los Angeles Film Festival so I thought if I’m out there I might as well see what would happen. I posted on Breakdown Services, and within 24 hours I had 1400 submissions just for the lead role alone. I narrowed it down to a couple hundred and then my casting director went through those and we invited about 60 women to audition. 36 showed up and one of them was Andrea Bowen, from Desperate Housewives.”

“I had no idea who she was. I had seen Desperate Housewives, but not for years and she was probably around 13 years old when the show started.  To say she nailed that audition was an understatement. She’s an extremely talented actress and it was very apparent that she knew what she was doing. When she left, I turned to the interns working with me and they told me who she was and I had mixed emotions because she was so awesome, but I didn’t think I could afford her. I wasn’t even going to waste either of our time in trying to contact her. But that was my naive reaction and I have learned since that actors do want to work, but they also want good roles.  If you have a good script with a really strong role, they are willing to work with you.”

“Her agent contacted me, we sent over the full script. Andrea loved it and that gave me confidence in my writing because I am sure she reads scripts all the time. So we negotiated with them and were able to get her on board. She was wonderful to work with and I am sure the film would not have gotten nearly as far as it did without her.”

“Our male lead, Adam Mayfield, is from Houston so we had some mutual friends. He is based in LA too, and I was leery about bringing in too many people from other cities because of the budget constraints. But he was in town one weekend and we met for lunch and I just knew he was the right guy. He was just coming off of his role on All My Children and he wanted to work with Andrea so it all worked out.”

SC:”So what happened to change your course on distribution? Was the film premiered anywhere?”

MM: “I met Orly at the annual Business of Film Conference in Houston that is presented by SWAMP when I was in production and she told me to keep her apprised of what we were doing with it. I joined The Film Collaborative and once I had a rough cut, I sent it to Orly and asked her to give me feedback and guidance. I was thinking about festivals until she came back and said it wasn’t a festival film because it was too mainstream, too commercial in feel.  It probably wasn’t going to be programmed by the bigger festivals. She said I needed to think about other options. We had already submitted to some festivals, like SXSW, and it did not get in so it made me rethink what I was doing with the film and look at other options.”

“Orly introduced me to Imagination Worldwide, a sales agency, because they often work in broadcast licensing. I sent them a one sheet and that made them ask to see the film. I sent them my rough cut and they asked to rep it for the cable market. This was November 2011 and they took it to EFM the next February. They always knew that it might be of interest to Lifetime, but I didn’t get my hopes up. I was really still trying to raise more funds to get it absolutely completed.”

“We went ahead and did the world premiere in Houston in April 2012, and in June we sold to Lifetime Movie Network.  I did have to cut down the film because there is certain content that Lifetime won’t air, curse words and nudity and stuff. It premiered on August 31, 2012 on the Lifetime Movie Network, one of Lifetime’s specialty channels.  It was the  highest rated movie on the channel in all of 2012.”

SC: “Were you involved in the promotion of it and do you know what they did?”

MM: “I had been promoting it in my social network for a long time. I always thought it would go into the festivals and I would need my network, so I had a Facebook page for the film and we started our own audience building from the get go.”

“When Lifetime took the film on, their promotion came through TV ads. I expected the promotion on the Lifetime Channel  because they typically do that, but I didn’t expect to see it on OWN, NatGeo and Bravo and all of these other cable channels. I asked my Facebook fans to let me know what channels they were seeing the promotion on and we counted 9 different networks.  So they did a great job promoting it in the broadcast world.”

“I had been told earlier in the post production process that this was not a marketable film. It wasn’t a Christian film because it was too edgy and it wasn’t an indie film because it wasn’t edgy enough. But Lifetime was able to market it well.”

SC: “So in your deal with Lifetime, are you able to still sell internationally? Or sell on your own?”

MM: “My deal with Lifetime is for North American, Latin American and UK broadcast rights. Pretty much every other territory was open, but we have sold to about 7 other territories in the world now.  We will have a DVD/cable VOD release this month in the US [DVD will be available on Amazon April 9). It will be the director’s cut so all the scenes that I had to cut out of the broadcast version will be back in. Per our contract with Lifetime, we cannot do Netflix, iTunes, Hulu streaming until after the license expires in 5 years.”

“If you had told me when I started this process that my movie would reach millions of people, I would have laughed. But things happen the way they do for a reason.”

SC: “I think it is wonderful for a first feature film to sell, repay the investors and air on a network where millions would see it. Not many first timers ever achieve that.”

MM: “I have seen many strong feature films in my former work with SWAMP and I have attended many workshops and conferences so I knew the challenges I faced as a first time feature director.  I know it is very difficult to achieve distribution for indie films and even if you do, often it is for no advance or very low advance. If a theatrical release happens,  it is for a one week run in New York and LA, the two most saturated markets for films. Then on to digital release where very little is done to promote it. In that scenario, it is nearly impossible to make money back for investors or for the filmmaker. My advance did repay my investors.”

“I started out thinking I wanted to go that route, the festival-theatrical-digital route. But when I faced the reality of it and thought about what the Lifetime offer meant, it was really a no brainer. Make your investors’ money back and have millions of people watch your film. Pretty simple decision really. Plus, because of that deal, opportunities come to me that weren’t there before. When I call for meetings, people take the call. I have people interested in what projects I am considering. Not only did I sell to Lifetime, it was a success for them so that helps get more interest from the industry for my work.”

SC: “So what is your parting advice for filmmakers, either new ones or those who are working on their second or third film?”

MM: “I sat on this script for 9 years because I was afraid. What would happen if I made the film? Would I put my family in financial hardship? I made all kinds of excuses for why I shouldn’t make it at that time. My advice is stop making excuses. Make your movie. No one is stopping you and there are opportunities to sell it if you are open to them. Figure it out and make it happen.”

Thanks Michelle, for your candid answers and hopefully there are a few filmmakers out there re-evaluating how they plan to release their films.

 

 

 

 

 

April 4th, 2013

Posted In: Cable, Distribution, International Sales

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Recently I was invited to be on a panel at the International Film Festival Rotterdam (IFFR) and participate in their mentoring sessions and the lab at Cinemart.  Great experience. I am always amazed by the difference between the US and Europe. The whole government funding of films and new media initiatives as our government is about to shut down.  Well, their policies and practices do take their own financial toll too but one I think is worth it.  For all my europhileness I have to note that the Europeans can be just as guilty of not wanting to watch subtitles in fact some countries dub films instead. And of course we know that Hollywood is big business in Europe too. But all in all, art house cinema seems to reach more broadly in Europe and even some parts of Asia than it does in the US.  Films in Cannes and other top fests can sell all over Europe and never in the US or success in opening theatrically only in NY and maybe LA and overall it seems to me box office is generally down for foreign language cinema.

International filmmakers want US distribution and it was painful for me to discuss their prospects at IFFR because for so many, the prospects are slim.  But this one’s for you! (Please note this blog is focused on digital distribution and not healthy categories for foreign language cinema such as Non Theatrical including Museums, Films Festival, Colleges, Educational / Institutional).

Cable VOD was 80% of the digital revenue in the US in 2009 but it’s now declining little by little, now estimated to be in the high 70’s (approx 77%) and may decline further still. The reason for this change, which is expected to continue, is that Internet based platforms are growing.  Regarding FOREIGN LANGUAGE ON CABLE VOD: Distributors and aggregators agree that foreign language cinema is very hard to get onto Cable VOD platforms and slots for non-English cinema are reserved generally for marquee driven films and/or films with a real hook (name cast/director, highly acclaimed, genre hook).   A big independent Cable VOD aggregator notes a real struggle in getting foreign language films to perform on Cable VOD and even Bollywood titles that had wide theatrical distribution and a box office of upwards of $1,000,000 still perform poorly (poorly means 4-figure revenue, 5-figure tops). They have had some success with foreign martial arts films and will continue with those in the foreseeable future. Time Warner Cable (TWC) remains more open to foreign language cinema though it plays the fewest films, a range between 190 – 246 at any given time (with a shelf life usually of 60 days and with 2/3rd of the content seeming to be bigger studio product, and the rest indie).  By comparison Charter and AT&T play about 1,000 and Verizon plays 2,000, and Comcast plays about 4,000.  [See below for the 2010 breakdown of Cable subscription numbers.] Hence, individual titles may perform better on Time Warner Cable for obvious reasons, Comcast may have more subscribers but there’s less competition and TWC is in New York, the best demographic for art house cinema.

Generally speaking, platforms overall are far more receptive to foreign films following the recent success of DRAGON TATTOO, TELL NO ONE, IP MAN, etc.  than they have ever been before.  However as one can see from the titles noted, foreign genre films are preferred because they have the opportunity to reach broader audiences than the usual foreign film.  Genres that reportedly work include:  sci-fi, thriller/crime, action, and sophisticated horror.  Dramas have had limited success, and comedies often don’t translate, nor does most children’s content. In regard to Cable VOD – foreign box office is becoming an important proxy, because the marketing and pr tend to build US awareness on the larger titles prior to being available here.  Many companies have built very successful VOD businesses pursuing a day and date theatrical or DVD strategy.  Again, genre films work best, with horror and sci fi being the top performers.  3 of the top 10 non-studio titles in 2010 were foreign language subtitled releases.  Small art house distributors say that at most it’s a small dependable revenue stream via services such as INDEMAND http://www.indemand.com (iN DEMAND’s owners are and it services Comcast iN DEMAND Holdings, Inc., Cox Communications Holdings, Inc., and Time Warner Entertainment – Advance/Newhouse Partnership.)  Distributors and aggregators all site Time Warner as being far more open to foreign language cinema than Comcast, because it’s urban focused (NY, LA, etc) not heartland focused as Comcast is.

In terms of these titles finding their audiences on Cable VOD, Comcast announced improved search functionality by being able to search by title and Cable VOD is aware of its deficiencies and is said to be improving in terms of marketing to consumers but Cable VOD is still infamous for its lack of recommendation engines and discovery tools. Key aggregators work to have films profiled in several categories and not just the A-Z listing.

Top 25 Multichannel Video Programming Distributors as of Sept. 2010 – Source NCTA (National Cable Television Association)

Rank MSO BasicVideoSubscribers
1 Comcast Corporation 22,937,000
2 DirecTV 18,934,000
3 Dish Network Corporation 14,289,000
4 Time Warner Cable, Inc. 12,551,000
5 Cox Communications, Inc.1 4,968,000
6 Charter Communications, Inc. 4,653,000
7 Verizon Communications, Inc. 3,290,000
8 Cablevision Systems Corporation 3,043,000
9 AT&T, Inc. 2,739,000
10 Bright House Networks LLC1 2,194,000
11 Suddenlink Communications1 1,228,000
12 Mediacom Communications Corporation 1,203,000
13 Insight Communications Company, Inc. 699,000
14 CableOne, Inc. 651,000
15 WideOpenWest Networks, LLC1 391,000
16 RCN Corp. 354,000
17 Bresnan Communications1 297,000
18 Atlantic Broadband Group, LLC 269,000
19 Armstrong Cable Services 245,000
20 Knology Holdings 231,000
21 Service Electric Cable TV Incorporated1 222,000
22 Midcontinent Communications 210,000
23 MetroCast Cablevision 186,000
24 Blue Ridge Communications1 172,000
25 General Communications 148,000

FOREIGN LANGUAGE CINEMA VIA OTHER DIGITAL PLATFORMS and REVENUE MODELS:

DTO (Digital Download to Own (such as Apple’s iTunes which rents and sells films digitally) – this space has been challenging for foreign films in the past, and most services do not have dedicated merchandise sections. Thus, the only promo placement available is on genre pages, so the films need to have compelling art and trailer assets to compete.  iTunes and Vudu (now owned by WALMART – see below) are really interested in upping the ante on foreign films over the next 12 months.  Special consideration will need to be made for the quality of technical materials, as distributors have encountered numerous problems making subtitled content work on these providers.

SVOD (Subscription VOD such as NETFLIX’s WATCH INSTANTLY) – this space is probably the best source of revenue for foreign content because the audience demos skew more sophisticated and also end users are more inclined to experiment with new content niches.  Content in this space should have great assets and superior international profile (awards, box office), and overall should evoke a “premium feel” for the right titles, license fees can be comparable to high end American indies.  Appetite for foreign titles will increase as the price for domestic studio content continues to accelerate.  Genres are a bit broader than VOD/DTO, but thrillers, sci fi and action still will command larger sums ($). Good Festival pedigree (especially Cannes, Berlin, Venice, Sundance, etc.) will also command higher prices.  Overall, it’s a great opportunity as long as platforms keep doing  exclusive deals.  NETFLIX has surpassed 20,000,000 subscribers and a strong stock price and is in a very competitive space and mood again. (See more below).  Hulu expects to soon reach 1,000,000 subscribers  “to approach” half a billion in total revenues (advertising and subscription combined) in 2011, up from $263 million in 2010. That’s from $108 million in 2009. (see more below)

AVOD (Advertising Supported VOD – such as SNAG and HULU) – Another great space for foreign content (as evidenced by the recent exclusive HULU – Criterion deal – (see below) although that deal is actually for HULU’s subscription service (Hulu Plus). These platforms are more willing to experiment with genres and content types and favor art films and documentaries over genre films. Depending on the film, annual revenues can approach low to mid four (4) figures in rev share.  SNAG recently was capitalized to the tune of $10,000,000 but seems to be spending that money on marketing and not on “acquiring” so a film’s revenue is likely to be dependent on performance and rev/share unless one strikes an exclusive deal with SNAG and manages to get an MG.  HULU’s revenues are covered above.  Films report low 4-figures but sometimes 5 and 6 figure revenues but up until now those higher performing films have been English language and appeal to younger males.

TELEVISION / BROADCAST SALES: For foreign language cinema unless one has an Oscar™ winner or nominee, or an output deal, the prospects of a meaningful license fee are slim. Even worse, if you do secure a deal, it will likely preclude participation in Cable VOD, Netflix and any of the ad-supported VOD platforms such as Hulu and Snag.

KEY SPECIFIC TOP SPECIFIC DIGITAL PLATFORMS / RETAILERS:

AMAZON reportedly is readying a service that would stream 5,000 movies and TV shows to members of its $79-per-year Prime free-shipping membership program. Amazon being corporately tied to extremely popular entertainment information service IMDB and the film festival submission service WITHOUTABOX gives it a potential edge in the market, one that has never been fully harvested but easily could be and seems to be looming. And since its inception, Amazon has let film content providers open up shop on their site directly without a middle-man. Middle man aggregators get slightly better terms. Amazon presently offers 75,000 films and television shows combined and plans to soon exceed 100,000. It should be noted Amazon VOD has been US-focused though recently bought Love Films in the UK.

FOCUS FEATURES’ NEW DIGITAL DISTRIBUTION INITIATIVE: There is not much information out on this yet but FOCUS/UNIVERSAL are launching a new digital distribution initiative that may or may not brand their own channel on iTunes etc., but does seem to be focused on niche cinema to some extent and this may speak to foreign language titles. An option to watch out for.

GOOGLE is working on encroaching into the content delivery market with its launch of GOOGLE TV, which unfortunately has not created quite the fanfare the company planned for.  It boasts: The web is now a channel. With Google Chrome and Adobe Flash Player 10.1, Google TV lets you access everything on the web. Watch your favorite web videos, view photos, play games, check fantasy scores, chat with friends, and do everything else you’re accustomed to doing online. GOOGLE TV does come with the Netflix App and others. Google partnered with some of the leading premium content providers to bring thousands of movie and TV titles, on-demand, directly to your television. Amazon Video On Demand offers access to over 75,000 titles for rental or purchase, and Netflix will offer the ability to instantly watch unlimited movies and TV shows, anytime, streaming directly to the TV.

HULU: Hulu’s numbers keep growing for certain films, which has to-date not been foreign language but that may change given the Criterion Collection announcement. Hulu is also now a subscription service (HULU PLUS) and announced the Criterion deal is for that. Criterion of course specializes in classic movies from the canon of great directors–Ingmar Bergman, Jean-Luc Godard, Federico Fellini, etc.–and has about 800 titles digitized so far, many of which are also available via Hulu competitor Netflix. It’s understood that this will be an exclusive deal, and that the Criterion titles that Netflix does offer will expire this year.  Hulu Plus subscribers will initially get access to 150 Criterion films, including “The 400 Blows,” “Rashomon” and “Breathless.” Hulu says the movies will run without ad interruptions, but may feature ads before the films start; the free Hulu.com service will offer a handful of Criterion titles, which will run with ads.  Hulu, owned by Comcast’s NBC, Disney’s ABC and News. Corp.’s Fox introduced the Hulu Plus pay service last year. Hulu CEO Jason Kilar says the $7.99-per-month offering is on track to reach one million subscribers in 2011. Competing for exclusive content seems to be on the rise as platforms compete for household recognition and top market share.

iTunes (APPLE): iTunes dominated consumer spending for movies in 2010 but that may not last long. One can get onto iTunes via one of its chosen aggregators such as New Video, IODA, Tune Core, Quiver…  Home Media Magazine reported the findings of an IHS Screen Digest report that showed that Apple was able to hold off challenges from competitors like Microsoft’s Zune Video (via XBOX Kinect), Sony PlayStation Store, Amazon VOD and Walmart’s VUDU.  Despite the new competition,  the electronic sellthrough and video on demand market rose more than 60% in 2010, Apple iTunes still came out on top, perhaps due in part to the release of the iPad last spring and Apple TV last fall.  Research director of digital media for IHS, Arash Amel, said, “The iTunes online store showed remarkable competitive resilience last year in the U.S. EST/VOD movie business, staving off a growing field of tough challengers while keeping pace with a dramatic expansion for the overall market.”  However, it’s important to note that although iTunes staved off competition, the overall iTunes consumer spending fell almost 10% in 2010 to 64.5%.  It was 74.4% in 2009.  Insiders predict it will not hold its market dominance for long.

Microsoft’s Zune Video was one of Apple’s biggest competitors last year, accounting for 9% of U.S. movie EST/iVOD consumer spending in 2010 but this does not seem a key platform for foreign language cinema.

MUBI:  www.Mubi.com having added Sony Playstation to its platforms reach, MUBI now has reportedly 1,200,000 members worldwide and is finally in a better position to generate revenue.  Still its own figures estimates amount to 4-figures of revenue and that’s for all its territories.  Mubi’s partnership with SONY does not extend into the US.

NETFLIX as reported in Multichannel News “as its subscriber base has swelled, Netflix has become a target for critics complaining that it is disrupting the economics of TV” is now a competitor to Cable and in fact Cable VOD companies won’t take a film if it’s already on NETFLIX’s Watch Instantly service. But Netflix is realizing it erred by losing focus on the independent and is now quietly offering bigger sums that compete with Broadcast offers and that are on par with the 5 and 6 figure revenues generated by Cable VOD for the stronger indie / art house films. Having films exclusively may be the driving force of future monetization in digital, or least in SVOD.  Regarding 2011 outlook, Netflix’s “business is so dynamic that we will be doing less calendar year guidance than in the past,” the execs said.  For the first three months of the year, Netflix expects domestic subscribers to increase to between 21.9 million and 22.8 million, with revenue between $684 million and $704 million and operating income between $98 million and $116 million. Internationally — meaning, for now, Canada — the company expects 750,000 to 900,000 subscribers with revenue of $10 million to $13 million and an operating loss between $10 million and $14 million.

REDBOX: Redbox, whose brick-red DVD vending machines are scattered across the country, is aiming to have a Netflix-like video streaming subscription service up and running by the end of 2011, company executives told investors mid February. Redbox is a wholly owned subsidiary of Coinstar. The Oakbrook Terrace, Ill.-based company claims to have rented more than 1 billion DVDs to date through vending machines at about 24,900 U.S. locations nationwide, including select McDonald’s, Wal-Mart Stores and Walgreens locations. It should be noted though that Redbox is very studio title focused and wide release focused but its streaming service will likely move beyond that.

WAL-MART bought VUDU and is expected to be a major player. Walmart is the world’s largest retailer with $405 billion in sales for the fiscal year ending Jan. 31, 2010. In the U.S., Wal-Mart Stores, Inc. operates more than 4,300 facilities including Walmart supercenters, discount stores, Neighborhood Markets and Sam’s Club warehouses.   VUDU, is Walmart’s recently acquired online media source where consumers can rent or buy movies and TV shows for their internet-ready HDTV, Blu-ray Disc players or PlayStation 3 consoles.  Like iTunes, there are no monthly fees.  Consumers can buy and rent movies when they want, and 2-night rentals are only $2.  It will be interesting to see how VUDU will rise as a contender in 2011 and whether iTunes will suffer as a result of their success.  Wal-Mart advertises that regarding VUDU: “from Internet-ready HDTVs to WiFi enabled Blu-ray players, you’ll find all the VUDU ready electronics you’re looking for at Walmart.com. Whether adding a flat panel TV to your dorm room or upgrading your home entertainment center, our selection of VUDU ready HDTVs has you covered. You’ll also save money on our VUDU ready products when you select items with free shipping to your home. With VUDU, you’ll be able to stream HD movies directly from the Internet to your TV in dynamic surround sound for a great low price. Shop VUDU ready HDTVs and Blu-ray players at Walmart.com — and save. “ And the retail giant makes sure all relevant devices / electronics it carries are VUDU-enabled.  2011 and beyond will be telling.  Wal-Mart caters to the average American so it remains to be seen if there is an appetite for foreign language film via VUDU in the months and years to come. In its inception VUDU was catering to early adaptors of new technology and those eager to watch HD but now it seems to be becoming more generic. New Video is a preferred aggregator to VUDU, among others.

VODO (Free / monetized Torrent): www.VODO.net: This has not been tried in the US by most distributors if any and not for foreign language cinema but it has worked for several projects such as Pioneer One which generated $60,000 USD by having the content made available for free and then getting donations in return.

Other emerging retailers entering the digital space:

Sears and Kmart are the latest over-the-top threats to pay-TV providers’ video-on-demand businesses. Sears launched its online movie download service, Alphaline Entertainment, which will let Sears and Kmart customers rent or purchase movies, including on the same day they are released on DVD and Blu-ray Disc, provided through digital media services firm Sonic Solutions.  Titles currently available to rent or buy from Alphaline include studio and successful TV shows. Under Sonic’s multiyear agreement with Sears, the companies will provide access to Alphaline services through multiple devices including Blu-ray Disc players, HDTVs, portable media players and mobile phones. Sears and Kmart, said in a statement. “We’ll continue to increase the reach and flexibility of the Alphaline Entertainment service by providing consumers on-demand access to the latest entertainment from a range of home and mobile electronics.” Sears, which merged with Kmart in 2005, is the fourth largest retailer in the U.S. The company has about 3,900 department stores and specialty retail stores in the U.S. and Canada.  It remains to be seen if they take on foreign language cinema. New Video is also an aggregator to them.

That’s all she wrote folks. Until the next time.

March 10th, 2011

Posted In: Amazon VOD & CreateSpace, Digital Distribution, Distribution, Distribution Platforms, Hulu, International Sales, iTunes, Netflix, Uncategorized

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I recently posted on our Facebook page a note about the fact that one has to be mindful about when to initiate a NETFLIX VOD window.  Sheri Candler asked to me blog about it.  I do everything she says.

We have heard consistently from Cable VOD operators and aggregators and Broadcasters such as Showtime that the Netflix VOD window is considered a cannibalizer of revenue for Cable VOD and TV so know that before licensing rights and resolving windows.  When it comes to Netflix they have gotten so successful that they are a more selective platform than Amazon. Amazon wants has recently passed the 80,000 titles mark and is racing to aggregate as many as possible. Netflix has over 100,000 titles on DVD and over 17,000 titles on its streaming service but is now getting more and more selective. Netflix SVOD rights are sold for a flat fee, at least for now. To get onto Netflix, first one has to get on their radar and into their system, and then get that demand up in their queue system to get a good fee offer.  One has to then resolve everything else before risking inadvertently killing any chances of a Broadcast sale or Cable VOD distribution. However, depending on the film, you may make more money from Netflix than by selling to let’s say EPIX which will want your Netflix SVOD rights anyway. And you may make more money distributing directly then doing a small Broadcast deal or going with a distributor or aggregator that will take all your digital rights anyway. Though it should be noted most filmmakers cannot get to Netflix directly.

As with anything in film distribution, there is no one rule that applies to all films. This is a case-by-case business. Some films are big enough that one can stagger windows and monetize them all. Some films are better served by being available on all platforms at once or close to it. Some films lend themselves more to rental or ad-supported free-on-demand and others can really generate the transactional (pay per download) business.

The point of this little missive though is just to note the conflation of TV and the Internet is happening. Google TV  is here and retailers, Television and device manufacturers, cable operators and telcos are all competing to aggregate and offer as much content as possible. Even print media companies are following suit wanting channels of content on their websites.  And soon enough it will be less a discussion of rights and more a discussion of PAYMENT METHODS or MONETIZING METHODS and I think that will always depend on the film and its demographic targets.  The options will always be: 1. Ad-Supported / Free on Demand, 2. Subscription 3. Pay Per View 4. Download to Rent, and / or 5. Download to Own. And now instead of focusing on packaged media the focus is is on whether one can play content back on as many devices as one wants and that aspect related to all the various payment methods options. The content providing industries are all racing to aggregate as much content as they can and for it to be playable across as many devices as possible and payment methods vary so far depending on service and distributor choices. Hulu (a platform backed by studios and that was once only ad-supported is now beta testing its Netflix imitation subscription model).

Brands will attract customers just like they always did when video stores were king and just like when you choose which cell phone provider to use or whom to get your Internet connection through, assuming you live in an area with choice.

The other day on a Digital Hollywood Conference panel, I learned a stat from Erik Opeka of New Video: iTunes has 130,000,000 credit cards on file. Some of you are thinking right now, “I’m in the wrong business”.

October 21st, 2010

Posted In: Amazon VOD & CreateSpace, Digital Distribution, iTunes, Netflix, Uncategorized

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Remember that the platforms you use to crowdfund have fees associated with collection and access to the marketing tools they offer.  Kickstarter takes 5% of the money raised and Indiegogo takes 9% (but if you reach your goal by a specified time, they will rebate 5%). On top, there are 3rd party fees such as Amazon payments fee or Paypal fees to receive the money you raised. Then, there are your fulfillment costs associated with the perks you offered (DVD copies, tshirts, etc. & postage for these). Take these into consideration when you are figuring out how much you need to raise so you don’t run short.

August 19th, 2010

Posted In: crowdfunding

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