I think we can stand one more post on the current state of turmoil in the indie film world, following up on these posts here, here, here, and here. This article is well worth the read.
Penned by Peter Broderick, who used to head up IFC’s Next Wave Films, he now has his own company Paradigm Consulting and by the looks of it, a service any indie filmmaker should explore. In the article, Broderick analyzes the current state of affairs this way:
Welcome to the New World of Distribution. Many filmmakers are emigrating from the Old World, where they have little chance of succeeding. They are attracted by unprecedented opportunities and the freedom to shape their own destiny. Life in the New World requires them to work harder, be more tenacious, and take more risks. There are daunting challenges and no guarantees of success. But this hasn’t stopped more and more intrepid filmmakers from exploring uncharted territory and staking claims.
Before the discovery of the New World, the Old World of Distribution reigned supreme. It is a hierarchical realm where filmmakers must petition the powers that be to grant them distribution. Independents who are able to make overall deals are required to give distributors total control of the marketing and distribution of their films. The terms of these deals have gotten worse and few filmmakers end up satisfied.
This makes sense as the old paradigm is changing. And it also makes sense that people like Broderick would find a niche in providing consulting services. His company covers the following:
• Financing—crafting distribution strategies that can be incorporated in business plans and used to pitch potential investors
• Festivals—strategizing about which festivals to apply to, ways to maximize your chances of acceptance, and how to work the festivals that you attend
• Distribution—developing hybrid approaches, securing the right domestic and foreign partners, and creating a comprehensive release plan
• Outreach—building awareness within target audiences, developing institutional partnerships, and organizing house parties and grassroots screenings
• Online—creating a dynamic website, partnering with allied websites and mailing lists, and reaching your core audiences effectively
• Direct sales—maximizing e-commerce from your website, selling multiple versions of your film plus additional products, and handling DVD replication and fulfillment cost-effectively
The big thing is that he promotes himself as a “distribution strategist” which is key. Making an independent movie is hard, but it’s the distribution where filmmakers get killed — as in not getting a distributor. With the demise of major studio specialty divisions, what it appears Broderick is saying is that this presents an opening for filmmakers who are willing to take a risk and being personally committed to working as a partner with an outfit like Paradigm Consulting to promote their movie. Or as Broderick says in the article:
Here are ten guiding principles of New World distribution:
1. GREATER CONTROL – Filmmakers retain overall control of their distribution, choosing which rights to give distribution partners and which to retain. If filmmakers hire a service deal company or a booker to arrange a theatrical run, they control the marketing campaign, spending, and the timing of their release. In the OW (Old World), a distributor that acquires all rights has total control of distribution. Filmmakers usually have little or no influence on key marketing and distribution decisions.
2. HYBRID DISTRIBUTION – Filmmakers split up their rights, working with distribution partners in certain sectors and keeping the right to make direct sales. They can make separate deals for: retail home video, television, educational, nontheatrical, and VOD, as well as splitting up their digital rights. They also sell DVDs from their websites and at screenings, and may make digital downloads available directly from their sites. In the OW, filmmakers make overall deals, giving one company all their rights (now known or ever to be dreamed up) for as long as 25 years.
3. CUSTOMIZED STRATEGIES – Filmmakers design creative distribution strategies customized to their film’s content and target audiences. They can begin outreach to audiences and potential organizational partners before or during production. They often ignore traditional windows, selling DVDs from their websites before they are available in stores, sometimes during their theatrical release, and even at festivals. Filmmakers are able to test their strategies step-by-step, and modify them as needed. In the OW, distribution plans are much more formulaic and rigid.
4. CORE AUDIENCES – Filmmakers target core audiences. Their priority is to reach them effectively, and then hopefully cross over to a wider public. They reach core audiences directly both online and offline, through websites, mailing lists, organizations, and publications. In the OW, many distributors market to a general audience, which is highly inefficient and more and more expensive.
Notable exceptions, Fox Searchlight and Bob Berney, have demonstrated how effective highly targeted marketing can be. “Napoleon Dynamite” first targeted nerds, “Passion of the Christ” began with evangelicals, and “My Big Fat Greek Wedding” started with Greek Americans. Building on their original base, each of these films was then able to significantly expand and diversify their audiences.
5. REDUCING COSTS – Filmmakers reduce costs by using the internet and by spending less on traditional print, television, and radio advertising. While four years ago a five-city theatrical service deal cost $250,000 – $300,000, today comparable service deals can cost half that or even less. In the OW, marketing costs have risen dramatically.
6. DIRECT ACCESS TO VIEWERS – Filmmakers use the internet to reach audiences directly. The makers of the motorcycle-racing documentary, “Faster,” used the web to quickly and inexpensively reach motorcycle fans around the world. They pulled off an inspired stunt at the Cannes Film Festival, which generated international coverage and widespread awareness among fans. This sparked lucrative DVD sales first from the website and then in retail stores. In the OW, filmmakers only have indirect access to audiences through distributors.
7. DIRECT SALES – Filmmakers make much higher margins on direct sales from their websites and at screenings than they do through retail sales. They can make as much as $23 profit on a $24.95 website sale (plus $4.95 for shipping and handling). A retail sale of the same DVD only nets $2.50 via a typical 20% royalty video deal. If filmmakers sell an educational copy from their websites to a college or university for $250 (an average educational price), they can net $240. Direct sales to consumers provide valuable customer data, which enables filmmakers to make future sales to these buyers. They can sell other versions of a film, the soundtrack, books, posters, and t-shirts. In the OW, filmmakers are not permitted to make direct sales, have no access to customer data, and have no merchandising rights.
8. GLOBAL DISTRIBUTION – Filmmakers are now making their films available to viewers anywhere in the world. Supplementing their deals with distributors in other countries, they sell their films to consumers in unsold territories via DVD or digital download directly from their websites. For the first time, filmmakers are aggregating audiences across national boundaries. In the OW, distribution is territory by territory, and most independent films have little or no foreign distribution.
9. SEPARATE REVENUE STREAMS – Filmmakers limit cross-collateralization and accounting problems by splitting up their distribution rights. All revenues from sales on their websites come directly to them or through the fulfillment company they’ve hired to store and ship DVDs. By separating the revenues from each distribution partner, filmmakers prevent expenses from one distribution channel being charged against revenues from another. This makes accounting simpler and more transparent. In an OW overall deal, all revenues and all expenses are combined, making monitoring revenues much more difficult.
10. TRUE FANS – Filmmakers connect with viewers online and at screenings, establish direct relationships with them, and build core personal audiences. They ask for their support, making it clear that DVD purchases from the website will help them break even and make more movies. Every filmmaker with a website has the chance to turn visitors into subscribers, subscribers into purchasers, and purchasers into true fans who can contribute to new productions. In the OW, filmmakers do not have direct access to viewers.
There have been people who have done something similar in the past to what Broderick proposes, mostly entertainment lawyers who have worked as go-betweens with talent, festivals, studios, and distributors. But this strikes me one bigger step outside what Broderick calls the “Old World” approach.
