IFP - Alternative Models of Distribution - March 14, 2008

On Friday, IFP organized an event in conjunction with the Consulate General of Canada in New York for Canadian producers and directors whose work is screening at MoMA as part of their Canadian Front series. I attended a panel discussion on Alternative Models of Distribution during this event. Below are my notes. Once again, Jason Guerrasio proved to be a stalwart moderator asking very on-topic questions, and getting some pretty meaty answers from the panelists. This was a very well programmed panel.

IFP’s US Industry Immersion
Consulate General of Canada in New York
Alternative Models of Distribution
March 14, 2008

(L to R: Jason Guerrasio, Arianna Bocco, Tom Quinn, Slava Rubin and Lance Weiler)

Moderator:
Jason Guerrasio, Managing Editor, Filmmaker Magazine

Panelists:
Arianna Bocco – Vice President, Acquisitions and Productions, IFC Entertainment
Tom Quinn – Senior Vice President, Magnolia Pictures & Magnet Releasing
Slava Rubin – Founder & Chief of Strategy and Marketing, IndieGoGo.com
Lance Weiler – Partner, Seize the Media & Co-Founder, From Here to Awesome

Opening Remarks

John McNab (Deputy Consul General, Consulate General of Canada in New York):
This was the first occasion I had to participate in this, the fifth anniversary of coming together of the Canadian film community. It’s maturing into quite an event. Last night at MoMA, I saw Poor Boy’s Game. It was an edgy film. There was a discussion after with Canadians and Americans talking about distribution and financing.

Michelle Byrd (Executive Director, IFP):
The program is based on the relationship and success of the International Alliance, a new IFP program. Last week, we did a program with Unifrance. In November, we’ll do one with the Indo-American Arts Council Film Festival. We feel New York City is the capital of independent film. Today’s event was inspired by four years of working with the Consulate General of Canada.

Susan Boehm (Managing Director, International Programs, IFP):
Poor Boys Game participated in IFP’s No Borders program in 2004. Those participating in today’s event will become digital members of IFP.

The Discussion

Before asking questions to the panel, Guerrasio said that the film The Lilliput, which is featured on IndieGoGo.com (founded by panelist Slava Rubin) has raised approximately $10,000 through IndieGoGo.

Guerrasio: Are traditional models of distribution going to the wayside?

Bocco: I look at it on a sliding scale. I don’t think it’s dead, but crippled severely. I don’t think distribution can survive on just traditional models. There’s more films out there, more competition for screens and rising costs.

Quinn: I feel crippled, handicapped and screwed. For the last eight years of theatrical distribution, there are at least twice as many prints. Ticket prices have raised approximately 30%. The price to produce a movie has raised approx. 40%. The million dollar theatrical gross was attainable three to four years ago, and now is only attainable to about $300K-$400K.

Rubin: When does distribution really start? Do you think about strategy from the start of making your film? Is online distribution an option? The challenge is the capacity of distribution and the cost to make film is still a hurdle. The risk is slowly coming out of that process. What medium do you want to have your film distributed? Folks coming to IndieGoGo.com are not taking for granted their film has to get theatrical distribution.

Guerrasio: How do you get your films out there?

Weiler: The Democratization of tools has created a surplus of films. When I released my film on DVD, it performed well at retail stores like Best Buy, but there is shrinking retail space. The excitement is with the direct connection to your audience. I start early in the process. I got my audience to help me to amplify my message. You see this mostly in the music industry, ie. artists trying to get control of their work such as Radiohead.

Guerrasio: Magnolia Pictures and IFC Films are successfully using the day-and-date model. How has the model worked for you?

Quinn: It always comes back to the content. Unless it’s tailored for a particular release, it doesn’t make much of a difference. Look at the figures and numbers of what day-and-date are doing. Magnolia is pushing 40 million households on VOD. The benefit is we also own Landmark Theatres, a chain dedicated to specialized film in the top 21 markets. This enables us to flex our muscles in the day-and-date model. Our showing of the Oscar short films was very successful surpassing $500K. It was simultaneously released on iTunes. Theatrical money always jumps from there.

Bocco: The key is prints & advertising (P&A). The whole notion of the amount of money spent on traditional distribution has really changed. IFC releases about two films per month or 24 films per year. You have to be conscious of P&A spent. Our day-and-date model (IFC FirstTake) has worked incredibly well. It has evolved. We release films theatrically and on VOD simultaneously, ie. Paranoid Park. There’s certain reciprocity with theatrical releases and VOD. It actually helps your box office. Word of mouth really spreads. With 4 Months, 3 Weeks, and 2 Days, we projected low VOD numbers, but probably quadrupled our expectations. It’s also about to go to $1M at the box office.

Quinn: It’s an ever evolving thing as far as content goes.

Guerrasio: Is the FirstTake model being used for every IFC film now?

Bocco: Yes. We’re now in 50 million homes for VOD. We just made a deal with Blockbuster. It’s been really successful. Why go backwards to a traditional model? We have a lot of these ‘Mumblecore’ movies. They embrace this model. I see a generational difference in filmmakers. Even someone like Gus Van Sant is all for it.

Rubin: Robert Greenwald’s Iraq for Sale was a successful and controversial film. My point is that he needed to raise approximate $750K, but could only get about $350K. He sent an email to people who saw his other films and raised around $250K from them. He already had an embedded audience. Instead of Do-It-Yourself (DIY), we call it Do It With Others. How do you create a multi-platform universe where your project can exist?

Weiler: For Head Trauma, I had a VOD release through Warner Bros. I knew they wouldn’t promote the movie, so I created an alternative reality game (ARG). The storyline ran in tandem with Head Trauma called Hope is Missing. I released it through a variety of outlets. I saw 2.5 million people play the game spending many hours with it. I also did guerilla drive-in screenings. People found out about them through the game. I also used this to promote the DVD release. Day-and-date sees consumers driving the way the market is going. The game experience created this whole world. A perfect example is World Without Oil where uses created content. It’s a form that’s emerging and has a lot of possibilities. If it’s compelling, people will engage in it. They’re interested in something that’s easily accessible.

Guerrasio: Do filmmaker realize that their films may not play theatrically?

Rubin: The challenge is that there is an emotional tie being in a theater. The data proves that theatrical distribution may not be as successful on its own. The concept of not getting theatrical distribution is okay. There’s more of a mind shift of what is acceptable.

Guerrasio: Where are we with watching films online? Is this the next step?

Weiler: There are a number of issues starting with the ease for the audience to be able to view films online. There’s also politics and policy, ie. bandwidth allocation. Another is traditional windows of release and SAG-related contracts that go with that. But there are a lot of people stepping into this space to aggregate it. BestBuy and iTunes don’t want thousands of filmmakers knocking on their doors. There’s not a lot of foot traffic outside of something like iTunes. Jaman, for example, only gives creators 30% of the profits, while they take 70%. Then there are some aggregators that make a service deal taking only 20% and giving the filmmaker 80%. Also issues with piracy. Day-and-date allows you to get it anyway you want it.

Guerrasio: Will there be web-based divisions in your companies?

Bocco: Not in the near future. There are so many platforms. I agree with everything Lance said. It all comes down to technology and the ease of consumers. The ability to expand in all these other platforms is great. Day-and-date gives films an opportunity to have lives they wouldn’t have had before.

Quinn: Everyone said TV was going to kill film and that video was going to kill TV. Essentially, it created content. I started meeting people in the past two years that don’t watch movies anymore. There’s still a business that’s based on theatrical models. Embrace the Democratization of distribution. My background is live theater. It’s better than anything else out there. There’s no better way to see a movie than at the Alamo Drafthouse in Austin, Texas. I do not think there are certain things that will go away completely.

Bocco: As a business, my company is part of a larger corporation. The challenge is to find ways to buy these films. We stopped producing films. Our goal is to continue to bring these movies to life, but we have to make money.

Quinn: I’m wrestling with the question, has the Democratization of film production and equity dramatically improved the quality of content? No. The percentage of films I’m excited about is less and less.

Bocco: I don’t think it’s changed. Perceptions and tastes have changed, but not the quality.

Audience Q&A:

Q: What’s the main demographic for customers at Alamo Drafthouse?

Quinn: College students under 30. I feel that consumers are very lazy. Familiarity of use is the key. I know exactly what I want to order and what’s going to be in the pre-show. IFC is another example that has a built-in audience that wants a certain kind of movie. I want there to be an Alamo Drafthouse in New York City, but not sure you’d get the same kind of service here that you’d get in Austin. The Alamo owner has gone way out of his way to trump mall movie theaters. They’ve figured out a way to serve food without interrupting the movie.

Q: Do you think producers will now be also producing games and events or will they look for people to produce these for them?

Weiler: It will become a natural extension of the production and distribution. Right now, everything is so fragmented and new. Distributors will always have some role, but more people are realizing they can go directly to their own audience. I think it starts at the beginning.