By Stacey Parks
This is an excerpt of the interview Stacey Parks did with our own Orly Ravid regarding digital distribution. Stacey’s book is now available in paperback and kindle versions at www.FilmSpecific.com/Book.
What To Expect From A Distribution Deal: Interview With Orly Ravid from The Film Collaborative
Q: What’s it like for filmmakers these days in terms of getting traditional theatrical, broadcast, and DVD distribution deals for their films?
A: I think that film like any business, is affected by market forces. There’s more supply than there has ever been. The means of production have become less expensive and more accessible and film has gotten even more and more popular as evidenced by the proliferation of film festivals and film schools and corporate brands who have initiatives relating to film (contests and such). There are thousands of films for sale in markets such as Cannes & AFM each year and that’s not counting the projects in development, also for sale.
So the bottom line is that there’s simply an excess of supply over demand. And the other factor that has changed is the attrition, if not the collapse, of the middle B2B infrastructure that did emerge and sustain with VHS & DVD, but that does not maintain with digital distribution. The reason being is that when there were many DVD stores (and VHS before that) the businesses were in competition and they all needed product and weren’t always sure of what would sell or rent well so they actually stocked up, which gave the distributors a huge upside and that potential upside lead to healthy competition, which lead to a healthier business. These days, many video stores are out of business and the ones that still exist (such as Walmart) buy cheap and then return what does not sell (not that that did not happen before, but to a lesser extent), and so the traditional distributors proceed with greater caution when it comes to acquiring new films for the pipeline.
Then there’s the other issue of piracy which leads to less consumption overall and now over 20,000,000 subscribers wait for a film to be available on Netflix which can be healthy business for smaller films that otherwise could not sell well, BUT it’s not great for films that could or would sell otherwise.
The theatrical business is also hurt by both over-supply and by the ‘Netflixing’ of the U.S market. Digital distribution is there, but again the oversupply makes things competitive and the price points are different so volume is critical, hence the middle man aggregator can do well if it has a breadth of content, but individual producers need to have a film that competes very well in order to be made whole.
And then lastly there’s the Broadcast market. Well, as TV and the Internet become one, TV buying is less of a reliable source of revenue, prices have come down considerably and more rights / revenue streams are impacted when prices are higher such that the net is affected. Of course, bigger films can be exceptions and studios have their deals. But for the independents and smaller films, Broadcast deals are harder to get and worth less when one gets them. And nothing but a change in supply can change any of this because technology is certainly not going backwards.
Q: I know you’ve been a champion of ‘newer’ distribution platforms like Video On Demand (VOD), but what’s in it for the filmmakers?
A: I don’t champion them as much as I address that Cable VOD is responsible for 80% of the revenue in the digital space, which is not the same as all VOD. Films that do well in VOD can make 5 and 6 figures in revenue. By contrast, films that don’t do well make much less and sometimes almost nothing. The truth is VOD is not some magic pill; it’s simply a new delivery mechanism, with some advantages over physical media in terms of accessibility and with some disadvantages in terms of even greater glut and not always great recommendation engines or as easy of time to market (images are smaller, you don’t have as much real estate to market the film). The proliferation of the iPad is expected to increase the transactional rental business (ex: Netflix) and that interface is also seemingly more filmmaker / film consumption friendly. In any case, no one in distribution thinks DVD and physical media is going up; it’s only going down so for home entertainment or entertainment on the go (e.g. mobile), digital is here, we have to make the most of it.
Q: In your opinion, do film festivals still play a key role in helping filmmakers find distribution for their films? Or have you seen cases where skipping the festival route and going straight to distribution is OK too?
A: If your film is festival-worthy or festival-appropriate going that route can never hurt and in fact, often helps. The better the festivals are, the better the film can succeed in terms of sales and also often in terms of audience awareness and interest. Skipping festivals makes sense for non-festival-type films. For example, genre films normally don’t need festivals although sometimes they can be helped by a good festival strategy. I think now more than ever festivals play a key role in helping audiences find films and filmmakers find audiences. AND, since at least 5 years ago I have been championing festivals getting involved more in distribution. I expressed that enthusiastically to the folks at Sundance starting in 2009 and also to other niche festivals too. I truly believe that a more distribution-centric strategy makes sense for both filmmakers and festivals, though only for festivals with a strong brand or niche appeal.
Q: What about foreign distribution? In your experience is this still a major revenue stream for the filmmakers you’re working with?
A: Only for some of our filmmakers – for example, genre filmmakers, niche filmmakers, and some of the more commercial documentaries. For the others, it’s not really a viable option. The money for foreign distribution deals is so small for most films so we end up licensing the films when possible for a good enough deal and otherwise invoke a direct digital distribution and DIY strategy.
Q: What are some things filmmakers need to look out for when making any distribution deal? In other words, what are some of the biggest mistakes you see filmmakers making in regards to negotiating distribution deals?
A: I covered this a bit in my recent blog post and I do encourage filmmakers to read the blog when the topic relates to them because it covers a lot. Some of the key mistakes in short are:
1. Not getting references and checking on those in order to evaluate the verity of the distributor’s claims.
2. Not knowing enough and analyzing enough the degree of middlemen between the distributor and each key revenue stream.
3. Not having enough protection for material breach.
4. Not defining and also capping recoupable costs properly.
5. Giving up too many rights for too little reason.
6. Having blind faith and being too passive in one’s own responsibility to know the film’s audience and how to reach it.
7. Not having good photography or images to help market the film.
8. On the pro distributor side, sometimes filmmakers think they know better and can do a better trailer for example. They may be right but they can be wrong too and be too close to the film to know how to “sell it”.
Stacey Parks is a Producer and film distribution expert with over 15 years experience working with independent filmmakers. As a Foreign Sales Agent for several years, she secured distribution for hundreds of independent worldwide. Stacey currently specializes in coaching independent filmmakers on financing and distribution strategies for their projects, and works with them both one-on-one and through her online training site www.FilmSpecific.com The 2nd edition of her best selling film book “Insiders Guide To Independent Film Distribution” (Focal) is now available at www.FilmSpecific.com/Book.
Orly Ravid May 1st, 2012
Tags: analyze middlemen, book, cap marketing expenses, check references, DVD distribution, Film Festivals, foreign sales, Insider's Guide to Independent Film Distribution, Netflix, Orly Ravid, Stacey Parks, The Film Collaborative, theatrical distribution, VOD distribution