Over at Filmmaker Magazine, Jake Abraham, writer/producer of “Lovely by Surprise”, wrote yesterday about his troubles with Twitter and file sharing. I know he’s not the only one, so it seemed a good opportunity to share a few points on how to turn these tricky points to your advantage.
Twitter in particular has proven to be a great device for communication amongst our followers. It has also become a tool for evil, I’ve discovered. On Saturday, August 8th, one month after our official release date, there was a spike in tweets related to LBS. We wondered why and took a look. It appeared that people were tweeting and re-tweeting a URL that linked to a pirated version of the film.
Remember the pink slime from “Ghostbusters II”? For most of the film, it was also a “tool for evil.” But Dr. Spengler et al. sprayed it all over the inside of the Statue of Liberty, and then it made everybody hug. (Ok, it represents a slightly different kind of “free,” but I think the analogy holds.)
I don’t need to spend a lot of time on how to compete with free, since it’s a well-covered topic. Kevin Kelly’s essay “Better Than Free” lists a number of factors that you can build into your film/story/product to give it value that make it worth paying for, even when it’s available for free. Brian Newman has a blog post and video on it, which is worth watching.
What this is really about is taking advantage of Twitter and other communication tools to play a major part in the global conversation about your work. (If there isn’t one, you need to start it.) Piracy on Canal St. happened before the Internet, and illegal downloading happened before Twitter. As Abraham acknowledged, you can’t stop it. Beyond pointers to free downloads, people are going to be saying lots of things about your film that you don’t like, including bad reviews, off-brand descriptions of your work and possibly even lies or personal attacks. The power of the Internet is that you can be in on it. You can know it’s happening, you can respond to it and you can preempt it.
As a filmmaker, you are at a tremendous advantage in owning your brand’s online story. Presumably, you know all about your film before anyone else does, so you can start putting your message out there before anyone else gets to it. You own the domain name, twitter account, etc. for the name of your film. (You don’t? Get on it!) And the people who love the film are probably the most vocal about it, and they’ll link back to you. You have to work real hard to piss people off enough that the haters will shout more loudly than the fans. If you keep the conversation going, those tweets and blog posts about torrent links and other nastiness will drift off the front pages and into obscurity. There are a few tiny things about me personally from way back that I’d rather not have out there (nothing too juicy, sorry), but you have to dig pretty deep to find it, because I’ve put myself out there with Twitter, an open Facebook account, my blog, etc.. But if you keep quiet, the nasties will fill the void for you.
Of course, it’s much harder to take advantage of this when you’ve got $1 million or more at stake and you address the matter after your film is already out. I think it’s wise to keep budgets low for now, as the details are still being worked out, but they will be worked out, since these are not entirely new business principles. Mercedes-Benz doesn’t go out of business just because it’s cheaper to get to work in a Hyundai. And Coach is still profitable, even though their belts are being knocked off everywhere. That’s because Mercedes and Coach are premium brands, and it’s not about a cheap ride to the office or keeping your pants from falling down. Their advertising messages reflect that, which is why Mercedes ads have Janis Joplin and vintage cars instead of some announcer shouting about seasonal discounts.
Most independent films are also premium brands. Your film is probably not about killing 90 minutes. It’s not about catching a glimpse of Megan Fox bent over, and it’s not about keeping the kids quiet in the back of the minivan. You can’t compete with “free” on price any more than Mercedes can compete on price with Hyundai. So don’t. Your film is about a deeper story, and the ability to create that is your sustainable competitive advantage. Twitter and other digital media are your opportunity to demonstrate that.
I’m writing a film right now, and even before the script is finished, I’m planning some cool stuff for screenings, merchandise and other payment points to add value along the lines of Kevin Kelly’s article. When I release the film, I will probably put it online for free. By putting it out there myself, I can beat the pirates to it and make sure free copies are burned with a URL to my online store, and I can track how many people are watching it. But it also tells the story that my film is a full experience and more than just a few hundred megabytes of pixels. After all, as a filmmaker, I should know how to tell a story, right?
Sure the Internet is a double-edged sword. But if you know where to swing it, you don’t have to cut your face off.
Here at SXSW, I’ve met a number of cool, smart, ambitious filmmakers, some of whom even have great films. Even as I attend premieres and parties that fit the fantasy, the sad reality of distribution prospects for the films is all too evident. That’s why I’m working with the From Here to Awesome team to build a strong case for DIY distribution. Maybe, rather than drag filmmakers kicking and screaming, we can see a DIY distribution as a positive opportunity.
Inspired by our roundtable discussion, I pulled out a couple of old distribution contracts I had and took them apart to look for the value that the distributors brought to the table in exchange for the rights granted. A typical distribution deal will offer the following:
- Physical distribution
- Cutting the deal
- Cash advance and/or minimum guarantee
If we can understand what this value is, we can evaluate whether these distribution deals are the best option. Here is a look at what each of those means and which rights and costs to the filmmaker are associated with each service.
Getting your film (and soundtrack, posters, t-shirts, etc.) to an audience is a clearly necessary and valuable service. It includes replicating and shipping DVDs and placing them in stores (online and offline); theaters and film prints or digital cinema; and digital download or streaming services. Most of the above services are commodities, in that there are many competitive companies from which a filmmaker or distributor can choose, so prices tend to be reasonably close to the actual cost of time and materials. For physical distribution, the filmmaker often pays either a fixed fee or a small percentage of revenues. Exclusivity is almost never required, and contract terms are for short periods of time.
DVD replication is a great example. Depending on volume, you can pay about a dollar or two per DVD. Shipping costs are fixed, as is the amount per unit that a retailer will usually pay. Download services are not quite there yet as far as deal terms. ITunes is pretty good, passing along 70% of gross revenues, though you have to go through an aggregator, who will take their own small cut. (See the next section.) Other download services have yet to come on board with reasonable terms. It is fair for a download contract to lock you in for a certain amount of time to cover encoding costs, but those costs are always falling and terms should become shorter. (The term should be somewhere from zero to no more than three years, but about one year is fair.)
Cutting the deal
Unfortunately, many distribution platforms won’t work directly with filmmakers, so you need someone to close the deal for you. This could include a lawyer to double-check your contracts. Again, iTunes is one such example; they require that you go through an aggregator, though it’s very possible that they’ll eventually drop that requirement as they learn how to scale the acquisition process. Think of these people as agents, whose services might be worth about 10%.
Promotion is perhaps the most elusive and tricky of all the value points distributors will claim to offer. They will often incur costs for advertising, though incurring cost is not the same as providing value. Unless you have the kind of movie that is well represented by newspaper ads, billboards and trailers on television, a distributor is not likely going to know better how to promote your movie than you do. To look at it another way, you can spend $30,000 (guesstimate) on a quarter page ad in the New York Times. For a truly independent film, that might bring ten or twenty people to a screening. (For Four Eyed Monsters, it brought one.) Now, imagine what you could do spending the same $30k on a web video series, where your audience can subscribe and interact repeatedly directly on your website.
Promotion is particularly nasty because it’s the primary reason for someone to demand exclusivity. The idea is that if a theatrical distributor pays for a newspaper ad, someone might see that ad and then buy a DVD instead of going to the theater. So they need to not only get a cut of that DVD but also determine how and when you can sell that DVD. You can get around exclusivity by working with companies that don’t do much or any promotion, though there are many that will claim that they promote your work but don’t really. A buried listing on a website or in a catalogue is not sufficient promotion to justify exclusivity. You may want to offer very limited exclusivity (e.g. on a given platform for 30 days) in exchange for a great promotion or placement opportunity.
At the point that a film is picture locked and ready to screen, filmmakers often find themselves desperate to make a deal that will cover their budget. Such desperation gives any source of said cash undue negotiating power, and the whole situation should be preventable by preparing distribution funding in advance. Consider that a distributor’s advance/minimum guarantee is simply time-shifting of money and sharing of risk. It happens that these are the exact services that financial institutions and equity investors provide. So why would you go to a movie company for financial services instead of to a financial services provider?
Typically, before shooting a single frame, a filmmaker will raise money from one or more investors – perhaps private equity (like a dentist uncle), from a production company or by credit card. At that point, the investor is taking on a great deal of risk and will expect an accordingly high share of the profits. Maybe the film will stink; maybe the production will go catastrophically over budget; or maybe the director will get hit by a bus. But once the film is completed, much of that risk has dissipated. The movie has been delivered, and maybe it’s even pretty good. Any further investment from then on should take significantly less ownership, corresponding to the lower risk.
Given an investor-filmmaker relationship that has been successful enough to make it to picture lock, a filmmaker might be best served to return to the original investor(s) to fund delivery and distribution until revenues start coming in from box office, retail, etc. Better yet, one might prepare a business plan to receive a first round of production funding with a high-risk return, followed by a second round of distribution funding at a pre-determined lower return rate once the picture lock milestone has been reached. This is no different from how start-up companies prepare for venture funding.
Build vs. Buy
Whatever resources I need for a film project, I’m always asking myself whether to build or to buy. I look at the costs and benefits of hiring another company provide a service for me, compared with the costs and benefits of putting together the resources to do it myself. Once you break down the real costs and added value of any distribution or other deal, you can determine at each step whether you really need someone else to do it for you. Depending on what you find out, a distributor may be the best way to go, or maybe it’s just better to DIY.
Last week, at Sundance, I managed to squeeze in a quick meeting with Scott Kirsner, who writes one of my favorite blogs, Cinematech. Scott was in Park City to a panel called Digital Opportunities for Creatives, which I missed because it was after I left town. But we had a few minutes to talk about said opportunities, and Scott interviewed me on video for his blog.
Brian’s a smart guy… we mostly talked about the importance of collecting information about your fans (and who’s a super-fan versus someone who’s just mildly interested in your movie). We also touched on the deal that ‘Four Eyed Monsters’ did with YouTube and Spout, where YouTube offered the full movie for free, and Spout served as a sponsor, paying the filmmakers a buck for every new member who joined after watching the movie on YouTube.
Check out Scott’s original post and take a minute to look at some of the other posts on his site.
On the technical side of things, I want to discuss one very important feature of web hosting for filmmakers or anyone else. Frequently, a program running on a server will access other web sites behind the scenes (often using cURL). A major innovation of the vaguely defined Web 2.0 is that web applications can share data via XML (as in RSS) and other machine-readable formats. Previously, everything on the web was mostly stored in HTML, which ties the information to the layout, making it readable only by humans, making data-sharing tedious.
I’m working on some custom software that will use cross-site data sharing. But even WordPress, the blogging software that powers this site needs it to fully function. WordPress will certainly run without it, but here are some key features that require it:
- Comment spam filtering. WordPress uses the Akismet plugin. To check incoming blog comments against a database of known spammers. It doesn’t work if your site can’t access the Akismet server.
- Trackbacks and pingbacks allow your blog to automatically post a comment on other blogs that your posts reference. This is a great way to encourage cross-site discussion and make other bloggers aware that you’re writing about them. It’s also great for driving traffic to your site by creating a link on another site.
- Update services such as Pingomatic notify blog directories every time you update your site. Certain plug-ins can also directly ping Google and other search engines so your search listings are as up-to-date as possible. Great for driving search traffic to your site
- Feed Syndication. You may want to have on your site a list of links or posts from other services such as Flickr, Twitter or del.icio.us. There are WordPress plugins that will use RSS or Atom feeds to automatically update these lists.
Even if you’re hosting service does support cross-server connections, it’s not a bad idea to make sure the above features are enabled and working correctly.
Unbelievably, my current hosting service, aplus.net, does not allow this kind of intra-server data sharing. They claim that it’s a security problem, which I understand. But it’s so important that I have to switch to a different service and question the viability of their business. So I will be switching to Site5, which was recommended to me by Lance Weiler, who uses it to host the Workbook Project. So we’ll see how it turns out. (The fact that this site has been intermittently unavailable today has me more confident that this is the right decision.)
It can take two or three days to fully move a web site to a different hosting service, so don’t be surprised if you encounter some problems with this site. For starters, I’m going to disable comments on the old server to avoid synchronization issues. If there’s anything else that’s surprising or persists more than a few days, please do let me know.
A few bloggers have noticed a post that Netscape founder Marc Andreessen posted last week. He proposes that, given the precarious state of Hollywood’s control over…just about everything, the WGA strike could serve as a tipping point at which the structure of Hollywood changes to one similar to Silicon Valley, where the artists become entrepreneurs and each film is its own independent start-up company. Yet another blockquote:
But here we are, living in a world in which the bottlenecks have suddenly become irrelevant.
I don’t think there’s any question that this is the logical model to pursue in the age of the Internet — the age of free distribution and marketing.
Suppose the writers’ strike continues for months to come — and even beyond that, suppose the actors or the directors also go on strike. In such a scenario, it is hard to see how many companies based on this new model won’t be created extremely quickly — after all, if you really can’t work for the Man, why not start your own company, if you can?
Read the rest of this entry »
More and more frequently, filmmakers ask me for feedback on their film websites, and I keep seeing the same thing: heavy, multimedia sites built on Flash. I keep seeing site navigation all in a full-screen image representing some iconic place in the film; animations of design elements flying or fading in on every page; music playing automatically; long loading screens; and the dreaded splash pages. This seems to have become the standard. Hollywood does it. (See: Beowulf, Lions for Lambs, American Gangster.) The indies do it. (e.g. Margot at the Wedding, Eagle vs. Shark, Weirdsville). It’s awful, and it’s so Web 1.0.
We are well beyond denying that a film website is the most effective and often the only entry point to discovery of your film. The audience has to jump an increasingly absurd number of hurdles to see your movie in the theater. The website is an opportunity to introduce the film as quickly as possible, provide the detailed information your audience and the media are looking for, to engage your audience repeatedly, and to make it ridiculously easy for fans to promote your film for you.
Below, I’m going to explain why this ancient model fails and suggest a few starting points for an alternative approach.
Read the rest of this entry »