American Cinematheque Panel - Unraveling Independent Film Distribution - Dec 4, 2007

Unraveling Independent Film Distribution

American Cinematheque - Aero Theatre

Los Angeles

December 4, 2007

Panelists:

(BA) Bob Aaronson (Red Envelope Entertainment (REE), a Netflix Company)

(GG) Gary Garfinkel (Senior Vice President - Content Strategy & Acquisition, Showtime Networks)

(BS) Barry Schuler (Managing Director, DFJ Growth, Former Chairman & CEO, AOL, Inc.)

(DS) David Shultz (President, Vitagraph Films LLC (Theatrical)

(TS) Ted Sarandos (Chief Content Officer, Netflix)

(MC) Mike McClellan (VP Film Buyer for Landmark Theaters Corp)

Moderator:

(MG) Margot Gerber (American Cinematheque PR Director)

(MG) How do you decide which festivals to attend, what you watch and what you distribute?

(GG) – I attend Sundance, Toronto, Cannes, and AFM primarily. Showtime is generally more likely to buy from AFM as this market provides more genre driven films. We attend film festivals to get out there and meet the filmmakers and network but these festivals are not really where we acquire films.

(BS) I am not so much in the biz of acquisitions. My background is tech based and so driven by a move for change. My interest is in looking at how to make films that embrace new technology. The arena of distribution has ‘devolved’ as it is not taking advantage of new distribution opportunities and connecting with online communities out there. We need to take advantage of the rich ways currently available to build audiences.

(TS) – We go to Sundance, Toronto Cannes etc. We view the catalogues and decide beforehand what to watch. We feel that film festivals have become similar to the TV pilot system – where a pilot is shown to 16 people and if they don’t like it, the pilot is tossed. When I started Red Envelope it was not to continue the old distribution model but to change it. When we go to festivals we are unlikely to be involved in the bidding for a film. Mostly we are there to network and to buy and sell some films but mainly it is about meeting the filmmaker.

(BA) – Half of the films acquired by Red Envelope will be docs or a third foreign language. We go to the right festival for us – Hot Docs, Silverdocs etc. The festival is used as a filter to know that film has been seen and liked by an audience. A filmmaker should not just hold out for Sundance there are a lot more specific smaller festivals that will help you better find an audience.

(MM) - The big three – Cannes, Sundance and Toronto as well as AFM. We go to preview films and see how they do. We are also are there somewhat as consultants to say if we think the film will have an audience and how it will view. We may also help a film get distribution if we feel that it can. We have different entities and so avenues to engage on this level including Magnolia Pictures.

(DS) – Cannes, Sundance, Berlin and Toronto. We buy film rights including foreign films. We have also picked up films prior to their big debut at festivals like Sundance.

(MG) – What order should a filmmaker sell the rights to their project and how long should they wait to do so?

(GG) – Film festivals can be circus like and we tend to come into the picture after. Today if there are 100 films playing at a film festival maybe 10% get distributed theatrically and maybe another 10 get an alternative/non-theatrical release. So some of the ones that didn’t make it, may down the road and we may be one of the companies that pick it up. One thing very important, try and find a sales agent. – It is or can be hard to deal with a filmmaker as a sales agent knows the lingo and legal terms needed to make a deal. We are doing 200 deals a year and we often have worked with the same agents.

(TS) – If you made a film – try to get it out there. Don’t wait till you are behind all the other thousands applying to Sundance or attending film festivals.

(BA) – Don’t hold out for the big film festivals at the risk of losing out on a bigger premier at another one. Film festivals have become alternative distributors and Yes – it is important to get a Producers Rep/Sales Agent – you should look for a rep even before you start your film. However they are not there to do the job for you – no one is gong to sell your film like you can. Right now is a great time to take advantage of all the different platforms being created for indie films.

(TS) – If you are going to raise $35,000 to make your film, you should then raise $36,000 to help with distribution.

(MM) – There are more and more films being made and we have now entered into “micro distribution” particularly in cities like NYC. We at Landmark still prefer to work with distributors and I do recommend some form of outsource for distribution as this is who we are accustomed to dealing with.

(MG) – If you are a filmmaker what does it cost to get your film out there?

(DS) – First off - do you have a film print? If not all theaters have a digital projector – film prints cost approximately, and you will also need to make a trailer that is on film. Flat & scope trailers, posters mini one-sheets, postcards, art that can be transferred to any media – this all costs money and can be very expensive. The costs can be off-set by creating campaigns that work virally and online as well as creating html email blasts.

(MG) – What are the ad costs?

(MM) – We are a traditional outlet, so we still work with traditional methods – film reviews go a long way… It is important to know who your audience is – targeted audiences – niche audiences – based on the subject of your film. If you have a budget absolutely have a reserve for marketing. For films playing at the Landmark newspaper ads are target our main audience.

(DS) – We have spent 5 times more on advertising than we have paid for a film… To screen one weekend in NYC - $30,000 - $60,000 minimum, including a publicist. Sometimes you may need 2 or 3 publicists depending on the subjects and layers of the film.

(BS) – Let’s look at what is changing and happening. What fundamentally is happening is the new ways to get to audiences. So if you have a following on Myspace then you have an outlook – look at Netflix they have changed the landscape for proving there is an audience that are willing to search for what they want. Now theatrical is important in terms of getting your film reviewed but money can be made without ever going to a theater.

(MG) – What can a filmmaker expect to get for their film in the traditional marketplace?

(TS) – The real cost is marketing – you have to get people to go to the theater. What I would like to do is to have this amazing interactive audience – so any filmmaker can upload a film and if enough people watch it then it gets put into the mix. Why should there be any one gate keeper – when there are multiple channels to give filmmakers direct access to audiences.

(BS) – Well there are about 10 companies doing that now…

(TS) - Well now we aren't expecting to make money.

(BA) – Now a days filmmakers can sell their film directly off their site and keep their rights and as long as you can maintain and self-distribute, you could actually sell thousands of DVDs yourself.

(MG) – What are the ballpark figures on what it costs to get an indie film out there, and what can be expected for the returns?

(DS) – We talk about NYC a lot as there are multiple indie venues to introduce your film – so easier to get a venue to screen BUT you have to commit in NYC at least $30,000 to advertising and mainly on traditional print. There’s not an Internet equivalent yet.

(MG) – What if you are from Texas or other states and want to open there?

(TS) – Well for an example we launched The Puffy Chair first in other states like Texas before NYC or LA. We did it in partnership with Roadside and together through our networks drew audiences in on a local level first.

(GG) – I saw Puffy Chair and tried to get distributors to take a look but they were slow to bite and eventually Ted through Red Envelope came to the rescue.

(BA) – I am looking for those films that are being released through smaller no-name distribution companies because I know that there is a shot at getting DVD rights that would have otherwise been snapped up by the bigger theatrical distributors.

(TS) – Never Been Thawed is an example of how to work a local market, this film had an 8 week run in Phoenix were it was found it and picked it up to bring it to a larger audience. The film This is England beat The Queen as the most popular indie film in the UK at the time. The film did not due so well theatrically in the US but did phenomenally well on DOD and VOD. I Want Someone To Eat Cheese With has done over 1 million in revenue by releasing it through video-on-demand at the same time as limited theater distribution. This is a good example of day and date marketing and the way to go to capitalize and maximize marketing.

(MG) – What is a decent gross expected for an indie film that has a week theatrical run?

(DS) – $20,000 would be above average and is around the amount needed to get other theater bookings.

(TS) – It gets so competitive – it’s all about making enough to get the 2^nd week…

Audience Q & A –

Q- What is the revenue for short films?

(TS) – I have not found a way to make shorts on DVD make money.

(BS) – It’s online – sites like http://www.podshow.com/. 5-10 years form now your internet carrier will plug into your television and all these fledglings around now will be the heavy hitters later. The question is how can bring all films to all mediums.

(GG) – We take shorts but the cost to put short films on does not support what it costs to air. The real way to go is InDemand and HD – 2 years ago we would have asked if a film is available on HD as an after thought now we require it a s it is a driving force in TV today.