Will digital distribution be the savior of the independent film market? Steve Zeitchik sets out to explore this question, using indie producer Seth Caplan as a case study.  Caplan has produced numerous award-winning, festival screened features, but his only real financial success barely left the internet. “Flatland – The Movie,” a thirty minute animated featurette sold mainly via web streams, generated more profit than any of his other films due principally to a well-placed Google Ad.

With the advent of YouTube, distribution was democratized to the average Joe, but now its success is “trickling up.” Industry professionals, the big fish and the small, are increasingly taking advantage of all-access digital mediums.  But it’s those with limited resources, the indie players, who stand to gain the most. Where else but online could they reach so many people at so little cost?

Of course, this supposed Promised Land comes with a catch or two.  Many fear that, like in the digital music space, an “increased dependence on digital will mean similarly small profits and expectations.”  This has been the case so far for most films released digitally. However, theatrical avenues are drying up, and films are coming out of festivals without theatrical distribution, leaving filmmakers little choice but to turn to online.

Still, there are promising signs for those that take a strategic approach to digital. Major portals, including Amazon, Hulu, iTunes, and YouTube, now have their own indie businesses. Though the sites have yet to garner much revenue for filmmakers, they can cut out the middle-man, like they did for Seth Caplan. IndiePix president Bob Alexander elaborates:

“The problem with streaming is you need millions of views for what’s essentially a niche product…what streaming can do, however, is provide the visibility and platform to lead to transaction-based sales [i.e., dvd’s].”

[Disclaimer: Filmmakers Beware! To turn a profit this way, you can’t let your budget get away from you.  It’s more essential than ever to contain costs when margins are so low.]

As the way we consume media continues to evolve, streams and other online viewing have the potential to capture greater market share, so early adopters are well-positioned to benefit. But for now, caution is advised.

*Source: The Hollywood Reporter, “Clicking and Screaming”, pp 10-11, March 20, 2009, by Steven Zeitchik

To read the entire article, click here. (available only in plain text for non-subscribers)

Twitter has officially transcended its humble origins as a medium where you let family, friends and willing strangers in on the most minute details of your life. Among other things, it’s now a forum where professionals can give advice to those who seek it.

At least that’s the case for Basil Tsiokos, the Programming Assistant for Documentary Features at the acclaimed Sundance Film Festival. He is using the popular networking site to “both gripe about (and occasionally even celebrate)” the little things documentary filmmakers do that tend to irk him, resulting in many snide comments and some useful tips in his series, “Dear Documentary Filmmakers.” Below are the “tweets” taken directly from Tsiokos’ feature on Documentary Do’s and Don’ts, which he contributed for IndieWire. Our input is mixed in, minus the snark.

“Dear Documentary Filmmakers” on Twitter: @1basil1

• Sprinkling a dozen still photos amidst three dozen talking head shots does not make for an interesting film.
  • Film, if nothing else, is a visual medium. Utilize what can be shown, and don’t just focus on what people have to say.
• Your incessant narration is driving me to drink. Shut up already and let the images tell the story.
• Having ponderous voiceover narration = bad idea. Having it delivered by inarticulate children = worse idea.
  • The key mantra in filmmaking is “show it rather than say it.” While it is sometimes necessary to convey information via spoken word, this is best used sparingly. A helpful hint: use titles instead. People are more inclined to believe what they see rather than what they hear. If you do use voice, make sure it’s clear and engaging.
• Please use subtitles instead of dubbing foreign languages with fake accents and emphatic “acting.” Please…
  • Dubbing is distracting in documentaries. Let your interview subjects tell their own stories in their own language, and then translate it with subtitles. This helps to eliminate “performance” of voice dubbers. Also consider subtitling inarticulate subjects for the sake of clarity no matter what language is being spoken.
• Next time, hire a good sound person so that I won’t have to hear background noise or dead air in every scene.
  • As emphasized above: we want to hear what your subjects are saying. Bad sound is the most tell-tale feature of an amateur film. Also, don’t forget to prioritize other technical considerations like lighting and cinematography. The most compelling subjects can be rendered ineffective by poor technique.
• Picking the right subjects to follow is so important.
  • Don’t feature too many subjects speaking about the same issue. One or two strong subjects are more effective than ten or twelve weaker voices.
• Two films in a row about the same exact topic? Really? Sigh.
• Next time, please try to have a point before making your film. Filming your search for one is not new or fun.
  • Ask yourself “Has anyone made a film about the same or similar topic already?” If so, bring something different to the topic—do your homework. Also avoid meta-films— it’s been done.

Many of these points apply to narratives as well as documentary films. Indeed, the undesirable qualities noted above are found in many conventional, high-budget, high-grossing ‘blockbusters’—but that’s a topic for another day.

For the full article in IndieWire, click HERE.

I came across a very insightful blog post from Tanuj Garg on the international box office performance of Bollywood films in 2008.

One nice tidbit is his quick list of the key markets for Bollywood product:

In terms of the market size, the UK, US & Middle East lead the way, followed by Australia, Mauritius and South Africa. Select films have had a day-and-date release in East & West Africa, Malaysia, Thailand, Singapore, Hong Kong, Germany, Netherlands and Scandinavia. Indonesia, once lucrative, has collapsed, while Pakistan, which successfully opened only a year and a half back, seems to have closed down pre-maturely (starting Rab Ne Bana Di Jodi) in the light of the attacks in Mumbai.

Read his full post here

To close, we describe End-User Financing and Completion Funds Financing. Based on How to Fund Your Film by Robert C. DiGregorio, Jr. imageMATTE Executive Producer

Part III:

End-User Financing occurs when a theater, cable network, or television station contributes money for a project in exchange for an equity percentage in the film’s profit stream. The greatest advantage is that you are in the best position to generate profits because the end-user is creating revenue in its own familiar territory.

Lastly, Completion Funds provide partial financing based on a couple of requirements:

1. completion of principle photography,
2. entire project complete with the exception of post-production, or
3. everything complete except lab fees.

The financiers can have the upper hand in terms of negotiating a better deal for themselves because without them, production may never finish. The advantage to you is that you are able to spread some of the risk to the completion financier.

These are only some of the basic and popular ways of financing your film. There are a limitless number of ways to fund your film.

To get even more detailed descriptions on these financing methods, continue to the link below:

Download the .pdf file

Contributed by Christina Chen,
UC Berkeley student

The Associated Press is reporting that the Sundance Film Festival is concerned about the slow pace of corporate sponsorships and is requesting funding from the State of Utah.

Read a brief report in the Salt Lake Tribune.

I’ve also heard that there are a lot of open condos & rooms to rent in Park City for 2009.

Sundance 2009

by Toni Casala

Born Lauren Keyana Palmer, you may remember Keke from her performance in the critically acclaimed, award-winning film Akeelah and the Bee, but Keke was far from wet behind the ears when she starred in her role as Akeelah Anderson.

As a small child growing up in Robbins, Illinois, Keke showed her parents Laurence and Sharon Palmer that her performance skills packed a lot of power when she belted out “Jesus Loves Me” in her church choir.

In their home recording studio, Keke’s mother Sharon helped Keke harness her vocal abilities, and both parents were dedicated to taking her on auditions and helping her to perfect her acting skills. In 2004 Keke landed her first big role in Barbershop 2: Back in Business playing the part of Queen Latifah’s niece. At this point, it was more than apparent that Keke had star-potential, so the family left behind their newly purchased home and their secure jobs to head to California.

Keke’s accomplished resume includes a role on the CBS series Cold Case, a national K-Mart commercial, and even a Screen Actors Guild Award nomination for her role in Wool Cap. She is currently the youngest actress to ever receive a nomination in a Lead Actress category. She has also won the 2007 NAACP Image Award for Outstanding Actress in a Motion Picture for her role in Akeelah and the Bee. She also co-starred in the highly-rated Disney Channel Original movie Jump In.

Though her acting career has blossomed, Keke considers music her first love and has signed with Atlantic Records. Her newest album “So Uncool” includes an ode to her Chicago roots. The Palmer’s decision to leave the Chicago area in pursuit of Keke’s dreams turned out to be a good one, but they were definitely challenging times.

In his interview with Children In Film, Laurence Palmer talks about the challenges of being a Power Parent.

[Read more]

The terms Gap Financing and SuperGap financing have been getting a lot of play lately. As these concepts are sometimes hard to succinctly define, I was impressed by this pithy description from the Wikipedia:

Gap/SuperGap Financing

 

In motion pictures, Gap/Supergap financing is a form of mezzanine debt financing where the producer wishes to complete their film finance package by procuring a loan that is secured against the film’s unsold territories and rights. Most gap financiers will only lend against the value of unsold foreign (non North American) rights, as domestic (North American: USA & Canadian) rights are seen as a “performance” risk, as opposed to more quantifiable risk that is the foreign market. In short, this means that the foreign value of a film can be ascertained by a Foreign Sales Company/Agent by evaluating the blended value of the quality of the script, its genre, cast, director, producer, as well as whether it has theatrical distribution in the US from a major film studio; all of this is taken into consideration and applied against the historical and current market tastes, trends, and needs of each foreign territory of country. Surprisingly, this is fairly predictable to a certain degree of certainty. Domestic distribution, on the other hand, is very unpredictable and far from ever a sure thing (e.g. just because a film has a big budget and a commercial genre and cast, it could still be unwatchable and thus never receive a theatrical or television release in the US, thus being relegated to being a big budget, direct-to-video film.) So, in as much as there can ever be any certainty in the entertainment business, lending against foreign value estimates is almost always going to be a much better bet than banking on domestic success (comedies and urban films being two notable exceptions: they’re referred to a “domestic pieces” or “domestic plays”.)

 

True to its mezzanine nature, in the pecking order of recoupment of investment, generally, gap (or supergap) loans are subordinate to (recoup after) the senior/bank production loan, but in turn, the gap/supergap loan will be senior to (recoup before) equity financiers.

A gap loan becomes a supergap loan when it extends beyond 10-15% of 100% of the production loan required to shoot the film (or in other words, when the percentage of the gap required to complete the film’s financing package becomes greater than a bank is willing to bear, which is traditionally 10-15%, but can sometime be a flat dollar threshold like USD$1,000,000.)

Gap/Supergap lending is a very risky form of capital investment and accordingly the fees and interest charged reflect that level of risk. But at the same time it’s not unlike buying a house: nobody pays 100% of the purchase price with cash; they pay about 20% in cash and borrow the rest. Supergap financing works by the same principal: put down 20-30% cash/equity and borrow the rest.

Over the years, because of the high risk nature, many supergap companies have come and gone, but a few established players have survived the ups and downs of the markets: Screen Capital International is arguably the gold standard in the industry, with Grosvenor Park, Blue Rider, Newmarket Capital, and 120db also being significant “players” in the debt financing space.

[All text is available under the terms of the GNU Free Documentation License. (See Copyrights for details.) ]

You can also find some useful reference books at the Writer’s Store: film funding

A few worthy additions to your bookshelf:

The Filmmaker`s Handbook, 2008

Edward Pincus|Steven Ascher

The authoritative guide to funding, preparing, shooting, lighting, editing, finishing and distributing your film or video Widely acknowledged as the “bible” of film and video production and used in courses around the world, this indispensable guide to making movies is now updated with the latest advances in high- definition formats. For students and teachers, the professional and the novice filmmaker, this clear and comprehensive handbook remains the reliable reference to all aspects of moviemaking.

Find it at an independent bookseller: Filmmakers Handbook

Don’t Try This At Home!: The Physics of Hollywood Movies

Adam Weiner

A fresh look at the basics of physics through the filmmaker’s lens. It will deconstruct, demystify, and debunk popular Hollywood films through the scientific explanations of the action genre’s most dynamic and unforgettable scenes. Sample movie sequence and related physics concepts: In “Speed,” a city bus going over 50 mph jumps over a 50-foot chasm–successfully. An examination of force, acceleration, Newton’s Laws, impulse, momentum, and projectile motion follows…

Find it at an independent bookseller:Physics of the Movies

[Read more]

I recently came across Jim Hill’s blog about the Walt Disney Company (DIS).

Jim’s blog covers all aspects of the company, with additional perspective on the entertainment business.

Take a look at his most recent posts:

[kqf=1]

Readers of the Film Funding Blog often ask, “are studios and distributors spending marketing money wildly?” This really speaks to an underlying question, is theatrical distribution unprofitable for independent films?

To address this issue, I thought it might be helpful for me to contribute some perspective on the forces that can shape the P&A budget. My analysis is based on my years as a film distribution executive at Fox, Warner Bros., and New Line Cinema. I mention my background so that you can judge circumstances for yourself, without any undue spin.

(Photo by atp_tyreseus)

When a national theater chain decides to buy a picture, we usually consider that to be a good thing. But, one of two things may happen. First possibility is that the picture opens wide. This means that P&A is needed to support a large release (more prints, local newspapers, radio/TV, etc) and, before a single ticket is purchased, potentially millions of marketing dollars have been spent. If the film does not open well, the marketing spend will look hugely out of proportion to the results. Unfortunately, the final outcome is only knowable after most of the money has been spent.

Alternatively, it is possible to “platform” a film release. However, this usually works best in cases where you think the word of mouth will be very strong. Problem with a platform release is that you may never get a chance to open wider. Your theatrical distribution costs are lower, and your theatrical release may be profitable on a percentage basis, but you could wind up leaving millions in profit on the table.

Given the chance to open on say 500 screens (still far from a mega release), and a platform (2-20 screens), most people will choose to open wider because the revenue and profit tend to be higher (higher risk/higher return). Also, if a theater chain offers a wider release, if you suggest a smaller one you may be signaling a lack of faith in the motion picture.

Usually, as a producer/financier, you have almost no control over how the picture rolls out. Even if you pay the P&A cost, you are at the whims of the marketplace (actually, you are just facing more powerful players with stronger leverage). This means that your distribution strategy faces a complex set of dynamics, and you are forced to play the hand you are dealt.

As a footnote, the advertising for domestic releases is also tracked by the video retailers. They know that if the film did not have much market support, there is unlikely to be much awareness. This can limit the DVD sales.

There can be more upward pressure on a film’s marketing spend. Other ancillary markets (like airline sales) are frequently pegged to the US Box Office. It can often pay to buy a larger box office opening by spending more on theatrical marketing. Theatrical will run at a loss, but the goal is to build profit from DVD, television, and other distribution channels.

I would say that the typical film does not break even from theatrical. Even the most successful independent releases make only a very small profit from theaters. Could the marketing money be better spent? There is always the old adage that half the marketing budget fails to produce the desired result. It just isn’t that easy to figure out which half. Theatrical is not always a money loser, but it does tend to be a loss-leader.