Most of you probably have begun to realize that Facebook is not working quite as well as it used to. Just a few years back (as little as 3 years ago), you could post regularly on your professional page and expect to see Fan numbers going up (they changed Fans to Likes in 2010), comments being posted, and fans posting to your Wall (if you allowed it) on a regular basis. Then Facebook started filtering the News Feed for everyone in 2012, ostensibly to make it easier to see news their account holders cared about, but in reality it was to sell access to the fanbase that business pages had amassed. Now it seems that if you run a business page (as opposed to a personal profile), Facebook really just wants you to pay. Pay to gain a following for your page AND pay to have that following see your posts. It’s probably time to make some new decisions about whether this social network is worth your time and effort.
This article in the DigiDay newsletter really brought this question home for me. I have realized more and more over the last 2 years of running multiple Facebook pages that without a promotional budget, only a very limited amount of growth and interaction would happen on a page. I am not the only one to realize this. Big digital agencies are now starting to question whether Facebook is a good investment for their clients too.
Agency execs are seeing brand posts reach a smaller percentage of their page’s followers on Facebook, meaning organic reach for the standard brand post is down. After telling brands and their agencies that accumulating followers and creating viral posts were key to giving good Facebook, Facebook has adopted a more traditional, pay-to-play advertising model, and it has caused some strain between Facebook and agencies.
Of course, there are other Facebook marketers who dismiss this citing that by using more images, videos and kittens (?), engagement can be found. But after investing in Facebook advertising to grow a page then investing either copious amounts of personal creativity and/or money in a creative and technical team to implement the perfect posts…that still need paid promotion in order to reach those same fans… it doesn’t seem worth the effort to build that base on a site that can change the rules at any time and to mainly to their benefit.
I’m still a fan of the Facebook ad targeting capabilities though. I can’t think of any other advertising tool that can tell me, based on keyword interests, location, demographics, your personal email list and similar pages, how many people an ad is likely to reach BEFORE I even place it. I have even found the Facebook Ad Manager tool terrific in letting me gauge the size of an audience for films that have yet to be made. Facebook has over a billion accounts from people all over the world who give all kinds of personal preference information. That’s a brilliant likely audience indicator. Where else can you find that information for free? No other social site allows an audience search at such a granular level and that really allows you to be very economical and efficient with your ad spend.
But I would rather use the ad tool to drive traffic to a client website or my own than to build up a following that I have to keep feeding money to Facebook in order to access. Perhaps if I were working with clients who had untold amounts of budget to devote on a regular basis, things might be different. To be sure, Facebook has become an every day destination for consumers to talk with their friends and acquaintances and keep up the with latest meme/news/viral video. But I am not sure they would miss it if a company page disappeared. Indeed, if you aren’t paying to access their feed, your business page already has.
I have started a transition of my own to Google Plus and I like it so far. I haven’t closed my own Facebook page yet, but I have started telling my clients to consider it, or not start a new page. Not everyone is on board, most people like something they’ve grown accustomed to even when it stops working. Ad tools can be used by individual accounts so they could still run ad campaigns to their websites if they wanted to do that.
One thing is true about the online space. It is ever changing. There is no “mastery,” only constant learning, experimenting, and diving in. Facebook is only one tool of many that can keep you connected to your long term fan base. Long term connection is your goal, not your Facebook number.
Recently, I was introduced to a podcast series on the business of film from the folks over at Craft Truck. While perusing the episodes, I found one covering the creative accounting practices of studios and distributors and thought I would share some of the material here. You may be surprised at what is lurking in your distribution contracts regarding royalties and how payments are reported to you, probably unpleasantly surprised. Steven Sills, co author of Movie Money: Understanding Hollywood’s (Creative) Accounting Practices, reminds us repeatedly in his interview, “Get as much money up front as you can.”
Sills also explains that even though he is a CPA, his work in the industry has nothing to do with the generally accepted accounting principles (GAAP) found in financial statements prepared for companies in other industries. In film, accounting is done according to the language of the contract that was signed and the ones drawing up the contracts are the studios and distributors. Obviously, they are drafting contracts that benefit themselves and their only requirement after the contract is signed is to report to the participant in exactly the way the contract says. Sills simply ensures that reporting and payments are being made in accordance with the signed contract. If you are about to sign a contract that you expect to see revenues from, you better understand exactly what you are signing!
If I am a producer about to finalize my distribution contract from a distributor, what are the 2 or 3 things I should do to help insure I am treated fairly as a profit participant?
SS: “Everyone has different reasons for engaging in contracts. If you are a successful producer, you may be looking to make money. If you are a new producer, you may simply be looking for credits for your resume. A lot has to do with what you want to accomplish, but let’s assume you want to get your fair share.
First, get a very good entertainment lawyer and have that lawyer negotiate on your behalf. It is going to cost you money upfront, but it could save you a fortune on the backend. Next, get as much money upfront as you possibly can because you don’t control how you will be reported to in the future. The distributor controls that whole process, how they record information, how they report information, how they interpret the contract. The more money you can get upfront, the better off you will be financially. Then, keep an eye on what happens in the reporting. Review your statements, get good consultation on reading the statements to see if anything inaccurate jumps out. Your lawyer may want to consult with an auditor before any contract is signed to see if any changes could be made that could benefit you in the future.
Certain things can be negotiated if you have good representation. When we sit down for an audit, first we read the contract and see if it differs from what we would normally see from that studio. If the lawyer was able to get certain provisions changed, chances are the studio will screw it up because they are huge multinational corporations who have certain ways of doing things, accounting systems that do the same thing over and over. If you change the language in your contract, chances are it won’t be changed in their system. This is why we audit.”
Do you find there is a habitual practice to misinterpret the contract on the part of studios or distributors? What is the state of practice when it comes to contract accounting?
SS: “Studios and distributors write the contracts to be beneficial for themselves. They interpret things for their own best interests. Unless a participant has a lot of leverage, he has very little ability to negotiate significant changes within those contracts. People in business expect that if you are writing an agreement, you will write it in such a way that it will benefit you. These agreements are written with a certain end result in mind. That result is to give a reasonable amount of money to the profit participant, but also to cover the studio’s or distributor’s own costs and that includes the whole business. However, to a profit participant who believes they are a contributor to the success of a movie, they want their fair share of that success.
There is a very famous litigation out there about the Buchwald case. It has to do with the movie Coming to America, the Eddie Murphy film. In that case, there is testimony from a former studio executive that shed a light on how this process works. He said the reason we [studios] do the practices we do is because the winners have to pay for the losers. For every successful film we make, we have 9 unsuccessful ones and we have to cover the cost of those unsuccessful movies. If we give away all the profits for the successful ones, then we lose money on the unsuccessful ones so we need everyone to participate in that. Well, a profit participant doesn’t feel that way. If they contributed to the successful movie, they want their share of that success and that’s where the tension is. So in your contract, you will need to determine if you are involved in the business of the studio, or whether you are a participant only in the profit of the film in which you were an actor/writer/director/producer.”
Do you see a major shift in where money is coming from in terms of revenues and how that impacts contract terms?
SS: “There’s definitely a major shift. The DVD market is diminishing very rapidly and the VOD market is increasing, but not at the same rate as the decline in DVD sales so there is a definite decline in overall revenue and that has to do with how people get their content.
But to understand this, it requires a little history. Go back to the early 1980s when the home video business first started. It started with the Sony Betamax machine in Japan.
The Sony equipment allowed Japanese businessmen and women to record onto tape TV shows during the day and watch a tape of the programs at night. And then a company called Magnetic Video worked with Sony to market that machine in the United States. At the same time, Magnetic Video negotiated a deal with 20th Century Fox to license their films and put them on tapes and sell them in boxes to consumers, the VHS tape. It was the beginning of the home video industry.
In negotiating with Fox, all parties figured out how much they should get out of this product. They figured that the cost to revenue ratio back in the early 80s was about 60%; 60 cents of every dollar went to buy the tape, design and make the case, market the VHS copy, market the machine just to get this product out to the public. So the 40% that was left over was split. Magnetic got 20% royalty for creating the concept and Fox got a 20% royalty for licensing their films. So that is where the 20% royalty rate comes from and persists to this day. It was the basis for this entire home video industry.
Now the cost to revenue ratio for DVDs is more like 25-30% range for cost, but making a 65% profit, but still only paying a 20% revenue share to the profit participant. That takes us into the VOD realm, which will soon become the dominant source of revenue for distribution. Most studios have decided to classify VOD as home video revenue subject to the 20% royalty even though they don’t have the same cost structure involved as in DVD. In a digital file, there is no cost to manufacture a disc and ship it anywhere, no packaging to make, marketing costs are reduced because much is done by the entity that is selling the product, but they still only pay 20% royalty to the profit participant. Why they are keeping royalties the same? Their response is they need more profits to offset the losses they incur from the decline in DVD sales. They need to maintain their profit margins.
Let’s say the distributor charged the consumer $10 for a download copy of a movie, one the consumer can keep, not just rent. Let’s say the download came from iTunes, so they keep 30% of the transaction or $3 and pass $7 back to the distributor. The distributor will report 20% of that $7 on your statement. That’s $1.40 and if you get a 10% profit participation, you get $.14.
Certain types of downloads will only receive a 20% royalty on the revenues received. When negotiating your deal, you need to find out how they treat downloads; as home video purchases subject to the 20% royalty or as rentals because those are more like the licensing fees received from broadcast deals.
We’re dealing with an oligopoly here. 90% of the films are being distributed by a handful of major distributors and they set the terms. If you don’t like their deal, they will tell you to go down the street, but often you will find the exact same terms everywhere else. You have to hope to get your movie made, it becomes a huge success and you will get something out of it.”
To listen to the whole podcast, jump on over to the Craft Truck site HERE I will be recording a podcast for their Business of Film show next week. I’ll post the link to it here when it is available.
Last week, I was interviewed on the BlogTalk Radio show The Art of Film Funding with Carole Dean. I usually prepare for such interviews by taking notes on what we will cover and I tend to over prepare. Often, most of what I want to say will not be covered due to time constraints. While you may listen to the full 45 minute interview here
I have also pulled out a few notes for emphasis that I think weren’t included or that I wasn’t able to go into detail as much as I would have liked.
What do you think are the best uses of social media for marketing? Example, how best can you use Facebook to help fund your film?
Sheri: “To me, social media is a non negotiable part of every professional person’s work. You don’t just jump on it because you have something to promote, you are creating and perpetuating your identity and your work EVERY DAY. You are forming relationships, expanding your professional network, learning new information to help you do your work and sharing that information with others EVERY DAY. It is a marketing tool, but it is really a life tool now. Stop viewing it as a time suck or procrastination because those are cop outs. It is essential to be able to navigate social channels as a professional, at any level. The same with being able to network in the physical world.
I don’t see social media as a campaign and I want that statement to soak in for a moment. A campaign is a short term effort to push people to do something. We very much live in a world where consumers, all of us, are resisting anything that is trying to push us to fit into someone else’s timeline. We want to do what we want, when we want, wherever we want, on whatever device we want. We are all selfish people. So companies and individuals that are still in that corral –the- people- to- do- what- the- company- wants mentality are going to lose in this new world. Think of these channels as a way to storytell what you are about, what your company is about, what your product is about, how consumers may accomplish something for their own lives whether is it physical accomplishment or gaining knowledge or well being. It isn’t about YOU, it is about THEM. Pull them to you rather than push messages out. And you have to commit to storytelling on an infinite timeframe, not for a short period.
What other social networks do you consider to be worth the time?
Sheri: “Choose a social channel you can learn and be comfortable using. If you don’t, it will be a drudge for you and you won’t have success there. If you are hiring someone to handle your social channels for your projects, choose places where the audience (again, you have to know who they are) hangs out the most and where that person has the most experience. In my case, I don’t use Tumblr, Instagram, Vine, Snapchat or Youtube because I have my own blog and I don’t take regular photos or edit together video and I don’t create short term offers. So while I may set up an account just to get a better look at it, I don’t spend my personal time there. But if I find that the audience for a certain project dictates that I use those sites, I would find someone to help me create content for them.
Storytelling on each platform is different so if you think you can use automated programs to blast out one piece of content on multiple sites, you are doing it wrong. Each site has a different format (Twitter 140 characters, Instagram photos, Pinterest photos) and a different reason people use it. For instance, Pinterest is a place people go to show what they intend to buy, what they aspire to buy, what shows off their personalities. But Instagram, also an image based social channel, is more about the immediate. What the lunch I am eating looks like, what my travel is like, what I saw on the way to work, what my friends and I are doing right now. Putting out one image to all the sites is a mistake because you won’t be tapping into the reason people are on those sites.
Don’t get too used to a particular social channel. They change often and not always for the better, they fall out of fashion, they get absorbed into other companies that are not always interested in seeing them grow. Plan your strategy around reaching the audience wherever they are and build your email list instead. That is where you truly have communication control because you own the contact details.”
Do you suggest filmmakers trade hours of social networking time for credits or other things? Or what do you think is an average hourly wage to offer someone to post and tweet for you?
Sheri: “I think we need to get away from this mentality that marketing is just posting online and tweeting. This is the voice of your company and your work presented to the global public. If you wouldn’t trust someone to speak for you at a press conference or go on TV as your representative speaking about your work, you shouldn’t let them be in charge of your Twitter account. And you should never allow someone to post or tweet as you personally, you are basically allowing them to BE you and I don’t think you should be comfortable with that. If you have a team of people using your social channels according to your business strategy and goals, then let the public know it is a team effort, put a face on it.
Again, marketing is way more than an ad or a poster or a tweet or a status update. There should be strategic thinking behind what you are doing and professional people help figure out how to achieve goals. Generally, they aren’t paid an hourly wage, they are paid a salary or a retainer fee and they had better be doing more than updating your Twitter feed every day.
Personally, I charge a monthly retainer fee with a minimum time frame or I charge an hourly fee for consultation and guidance. But with the retainer, I had better have a marketing plan and budget in place to work with. That fee is just for my time and experience, a labor cost. My work includes influencer outreach, blogger outreach, community management, advertising placement, content creation and curation, and measurement analysis. I also charge to research and write a marketing and distribution plan if that isn’t already in place or those plans may be implemented by others, so if you already have people in place to implement the plan, but you are unsure of how to start, I can help figure that out and work to train those people. I wouldn’t advise skipping over the marketing strategy and just let people post on your behalf.”
Have you seen films with good marketing plans be successful especially because of the marketing plan?
Sheri: ”Define success. Did they make all of their money back? No, usually independent films don’t. Did the filmmakers go on to get other work or have a much more significant release because they were prepared and able to give their film the release they wanted? Yes, and that was a success for them. Remember, not everyone’s goal is money. In fact, let’s be very upfront and say that money is rarely going to be made by the original investors of an independent film. If that is the main reason for making a film, stop now. Find another avenue for your talent. Invest in some other industry.
But if you are interested in expressing your storytelling talent, showcasing the talent of others (because films are made in collaboration with others), putting your voice into the world that only a film could help you do, investing in something that can last and may even change minds, hearts, bring people closer together or create a cultural dialog, then filmmaking is a great medium for that. Humans invest in things all the time that do not financially recoup. We put our names on buildings, we buy yachts, we take vacations. None of those things will have financial rewards, but they do reward emotionally and that is valid.
It isn’t ultimately the marketing plan that makes a film successful. It is the film! Failure is less often on the execution of the marketing plan and more often on the failure of the film. It isn’t hard to get word of mouth to spread on a stellar film; people love to talk about stellar. It is sooo hard to make a mediocre or bad film succeed. What constitutes good and bad is debatable of course, but if the people you have identified as the ones who should be the most excited by your story aren’t talking about it, then you are going to be in big trouble. They HAVE to like it or your story failed. And that happens in studio films as well as indies and TV shows.
I am not going to say that a good film will just naturally be found. I’ve heard many filmmakers say such nonsense. A great film in your hard drive isn’t going to be found. Someone has to see it and you have to get it in front of them, and that’s marketing (to get their initial attention) and distribution (getting it onto a screen for the public). But once you get that attention and an audience does see it, and their reaction is MEH, uh…you can’t just throw more marketing at it and make it successful. And that is why you see distributors pull the plug early on films. They know the return on the film won’t justify more expense and they can take that money and throw it behind the next film in the slate.
Now, it is possible to have poorly identified who the audience was and tried to attract the wrong audience and the film didn’t take off, but if you do the proper nurturing ahead of time and you really feel like you nailed the story based on early feedback from the right core audience, you may give more time and more expense to letting the word of mouth spread and slowly build. Unfortunately, this is not done enough in the industry, everyone wants a quick hit. There are very few entities that have the patience to let a film sink in with an audience once it has been released. It is much better to deeply cultivate the audience for a film early so that when it is released, it will flower sooner. That cultivation is only going to happen if the production does it. Distribution entities have far too many films to release. They can’t give a lot of time to each one in advance of a release.
No one that I know of is posting their marketing plan and budget online and even if they did, it wouldn’t help your film unless you are making one exactly like it. Plans are unique to the film, they are organic in that they do shift and change according to what is learned in the field and new tools cropping up that weren’t there when the plan was written or tools that changed or fell away. Some event may happen in the news that is unforeseen and you have to be able to take advantage of the opportunity.
It is not wise to copy, but it is useful to read a lot of material of what others are doing and see if you might incorporate something similar. That information might even come from another industry like gaming, or software, or apps, not just film. If you don’t want or like to keep up with the trends, you should hire someone who does! I don’t keep up with happenings in editing software or cameras or audio recording because I don’t make films. I keep up with marketing trends and tools and tactics, that’s my professional work and that is why you hire someone like me for that job. I am not merely your tweeter or your facebooker, so if you think that is all there is to marketing, you are seriously mistaken and all the tweeting and facebooking in the world isn’t going to help you.
There are many blogs and industry publications and videos from panels at film fests where the filmmakers all talk about how they marketed and distributed their films. If you want to spend lots of time studying this, Google is your friend and get used to using a search engine regularly. There is absolutely no excuse not to know how to do something if you really want to handle it on your own. But if you don’t, then you need a budget to pay someone who has expertise in the field and has handled releasing films or may just be starting out doing that (as you probably have in making films) and you need to get that person on your team. Simple as that.”
You say you want transparency in the entertainment industry? Many of us say we do, from Ted Hope to John Sloss to Liesl Copeland. But you know who is REALLY serving up some transparency in the way his company operates? Joseph Gordon-Levitt and HitRecord!
I must admit, I was intrigued when Gordon-Levitt launched HitRecord at Sundance 2010 and I had dropped in on the site a few times since then to see what was happening. I just didn’t get it. It seemed to be a site for collaboration much like Wreck a Movie or Talenthouse. A fine concept for those who want to do projects with like minded people for fun, but not a place where anyone would get a project out in the world and certainly not be paid to do it. To my knowledge, most are built on donating talent with no compensation promised. But now that HitRecord has a TV show on Pivot, I went back to have a look at what that entails and how an open, collaborative community could pull it off without devolving into one big “he’s stealing our work and making money off of it” fiasco.
The show itself revolves around one main theme each episode. For its inaugural episode, also on Youtube, the theme was ONE. 426 contributing artists were part of the first episode. Pretty amazing to think of the complicated process that went into choosing from thousands of submissions and keeping track of how much each artist contributed. Now, why does it matter how much they contributed? Because that is how they get paid. There is no flat fee system with HitRecord.
Their payment terms and conditions can be read in entirety HERE, but this is a synopsis:
-If you have contributed a RECord and it is selected by the Operating Committee as a Production to be commercialized in accordance with the rights granted in the TOS, you will be deemed a “Contributing Artist” for such Production;
-Each Contributing Artist to a Production shall share in an applicable Contributing Artists Profit Pool;
-The Contributing Artists Profit Pool is 50% of the Profits from a Production and any pre-determined amount allocated for productions sold or licensed to third parties for distribution on any form of linear or on-demand television or amounts negotiated by hitRECord.org for allocation to Contributing Artists as part of a line item in an approved budget for any programming incorporating the Production;
-Profit allocation is at the discretion of The Operating Committee and based on feedback from the hitRECord.org community of users through the use of a comment system.
In other words, the company publishes a FULL profit statement online for everyone to see with preliminary allocations to each contributing artist of the project. These are called profit proposals drawn up by the community director, the software engineer and the financial comptroller and they can be changed based on feedback from the HitRecord community. Have you ever heard of such a business model in the entertainment industry?? If you know of an open, collaborative community for artists that is actually paying the artists, please speak up because we need to hear WAY more about this than any lip service about reporting on VOD numbers! Business models that take into account how to deal with intellectual property and revenues need a lot more coverage than they are currently getting in the industry press. That could be because of the lack of real researching journalists in the current media landscape. Apparently, it is so much more attractive to report on the glamorous actor Joseph Gordon-Levitt rather than his complicated business model for HitRecord.
The other thing I find extremely refreshing in this approach is the truth he tells on revenue in his model. Right upfront on the home page, he explains that HitRecord is primarily not about making money. It is a for profit company, but that doesn’t mean it is making millions nor does it exist for that purpose. This is a good thing to acknowledge because far too many independent filmmakers and film investors have unrealistic expectations of what working in the arts really means. As is mentioned on the site, you make money to make more movies, not the other way around.
Anyone with a modicum of business knowledge will know it is extremely rare for a company to show much profit in its early years. The trick is to make enough to get to the next year, and the next, until finally (or never) sustainability is found. In 2010, HitRecord paid out $39, 651 to contributors. In 2011, that amount had climbed to $109, 695. In 2012, they paid out $399, 289. It is a remarkable year over year jump! Then comes the process of calculating the pay outs and I don’t know of ANY company that would go to this kind of tedious work. They go frame by frame in each episode and breakdown the contributions and decide amongst themselves on the percentage allocations first, then send it out to the community to give feedback as to its fairness.
If you would like to know more on how the payment process for HitRecord on TV works, check out this video
Big props to the whole team at HitRecord and I hope they get a lot more worldwide attention for the work they are doing and compensating contributing artists. Getting artists paid fairly should be paramount!
During the 2013 Sheffield Doc Festival, an international panel of documentary producers spoke about the different methods they use to find funding for their work. While 3 of the panelists were fortunate enough to come from countries that provide tax payer funded initiatives for filmmakers, producer Julie Goldman of Motto Pictures was the representative from the US. We do have some government funded programs for documentaries, but only for films that meet a certain criteria (ie, largely social good topics). I summarized some of the points Goldman brought up during the panel, a video of which has been posted on Youtube and runs about an hour and a half (link below if you have time to watch all of it).
-Goldman’s company, Motto Pictures, has helped produce a wide range of award winning documentaries such as A Place at the Table, Buck, Ai WeiWei: Never Sorry and God Loves Uganda. The company was founded in 2009.
-Every film has a different funding model; from cobbling together multiple grants over years to commissions from major broadcasters. Buck was already fully financed from private investors when it came to the company. This is a rare occurrence.
-One of her biggest pieces of advice is about striking at the right funding moment. You have to be ready, agile and go for opportunities when they open up. If there is suddenly a new channel buying documentaries for their new programming initiative, you have to be there from day one because in a short time, they could be out of business, but you will have gotten some presale money at least. Be on the lookout for new funds opening up all the time.
-The projects she spoke most about were God Loves Uganda and Buck. God Loves Uganda was a labor of love project which took 3 years to piece together full financing. First, they applied and received money from Sundance Documentary Fund, Tribeca Gucci Documentary Fund, Tribeca All Access, Open Society (George Soros), tons of little bits of money, but still had a huge gap in the budget. They proceeded production in stages with the small tranches of money and everyone was deferring and thinking they were never going to get paid. Finally, the project received money from ITVS Open Call, but it was complicated. ITVS is the funding body for independent films for public television in the US and they go to different strands such as POV and Independent Lens. They can become an equity investor and license the TV rights for 4 years. Because they are funded by the Corporation for Public Broadcasting, there are some things they are intransigent about and others where you can find flexibility. They take an equity position in the project and they have that going forward from any means of income the film has, not money from festival prizes, but any sales the film gets. While the God Loves Uganda made it through to the final round of the vetting process, they didn’t end up getting the money at first. But at that time, one of the strands, Independent Lens, had discretionary funding for projects they were interested in and they gave some funding. It was still an ITVS project, but Independent Lens had an option for it, a first look. But Goldman thinks now that funding isn’t available anymore. Again, look for those funding moments and be ready to strike. The final funding piece came from the Ford Foundation. They fund projects and you do not have to be a US citizen to apply for them. They have an incredibly helpful website and an initiative called Just Films which funds $10mil for films of a social justice nature each year for the next 5 years. It may or may not be renewed in future.
-In all grant inquiry letters, don’t just explain how your film fits into a broad funding initiative. If it is a big organization, chances are they have branches that are concerned with specific issues and if your film touches on more than one of those (say, LGBT AND freedom of expression or minority rights), it helps the organization fulfill more than one mission and is more likely to receive funding because those divisions can work together and often share the funding resources. It could even result in getting more money.
-God Loves Uganda was an example of the miserable-while-you’re-doing-it-but-happy-in-the-end funding model. The model for Buck was much happier. The film centers around Buck Brannaman who is the original horse whisperer. He runs well regarded training sessions and he is a really popular and loved figure in the horse owning world. People wanted to give money to have this film made about him when the director decided she was going to do it so the film was funded by all private money by the time it came to Motto Pictures. Buck was released theatrically in the US in 2011 with revenue of over $4 million, which is a big hit for a documentary. But the exhibitors took 65% of that. Out of the 35% that goes back to the distributor, IFC Films, they took 25% out of that plus their costs for marketing and prints. And then the sales agent takes their cut. Basically, the film was in the red for a long time even though over 200,000 DVDs were sold. While DVDs rarely sell in this volume, the audience for the film was older and it was a really good DVD audience. It is only now (2013) that money is starting to come in to the producer.
-However, director Cindy Meehl had another source of revenue planned and it is VERY important to consider this. She planned these 3 camera shoots on beautiful Montana ranches of the horse clinics Brannaman holds annually to be used as footage in the film. It was very professionally captured footage. She then released extra footage as a 7 part DVD (at $30 a pop) for people who can’t go to the clinics or want an introduction before they go. Those DVDs that she produced are selling like CRAZY and she is making a lot of money on them. It was very smart and her investors are getting their money back more quickly that way. If you have a subject matter that could have ancillary value to a lucrative niche market, it is very clever to plan for monetizing it outside of the feature film during development and while in production. Said Goldman, “At the time, we shrugged and thought, whatever. We weren’t horse people so we didn’t understand or have faith in it. She had total faith in it and she was right.”
-The final model, if you’re lucky enough to win it, is commissioning. A big entity like HBO or Participant Media will pay you a fee to make a film for them and they own the film. You will never see another penny other than your fee and you had better not go over budget. This model is almost exclusively for the well established documentary filmmaker.
-The panel only briefly touched on a new model, crowdfunding. Only the producers from Canada and the US had any experience with it and felt that the amount of work involved in running a campaign is grossly underestimated. But the point was raised that funding and distribution are moving from the institutional to the social and increasingly audiences are taking their recommendations from friends and those they trust. It stands to reason they will also pay, either to create or to see films that are made by filmmakers they like and trust. For now, crowdfunding of documentary is mainly working for those who don’t have big production budgets, but do have either name recognition or issue recognition to tap into an existing audience.
Other funding bodies that documentary makers should be aware of include:
For the full Sheffield DocFest panel including explanations from producers from Canada, UK and Netherlands, watch the video
One night event screenings can be organized directly with a theater, but the newest way to go about setting up a tour in the US is through sites like Tugg and Gathr. If there is enough demand in a city to warrant a screening, these sites help to facilitate it through their network of cinemas. Filmmakers may request cities they would like to screen in or a local promoter can request a screening. Either way, a certain number of tickets needs to be presold in order to make a screening happen. This financially protects the exhibitor as they won’t be giving up a screen to accommodate a very small audience and it protects a filmmaker against having to pay thousands of dollars upfront to 4 wall the screening. But how successful is this method of screening your film? As with most things self financed, it all depends on how much work you have put into gathering an audience.
-Their initial plan of going to festivals and receiving distribution offers did not work out. They realized that Tugg would offer the chance to have their own screenings and make money, rather than spend money attending festivals and receiving no revenue.
-Since the production had run a successful crowdfunding campaign in 2011, they did have supporters that they could call on to help set up and promote screenings. This is CRUCIAL in order to tip presales of tickets. Remember, if a minimum ticket threshold isn’t met, the screening won’t happen.
-The narrative film’s story was centered around a grandson who returns to his hometown to care for his last living relative suffering from Alzheimer’s Disease. The story is set in Cass, West Virginia. Knowing that their MOST CORE audience was in West Virginia, that is where the film started its screening tour (not New York, not LA, West Virginia!). The production also looked at where their Kickstarter supporters were in order to map out other cities where they would have an enthusiastic reception. They also partnered early on with the Alzheimer’s Association as technical advisors on their script and as fiscal sponsors so were able to solicit their help in reaching local chapters to either host screenings or encourage members to attend screenings. NOTE: if your film does not have a core audience AND organizations committed to helping you, you will find filling screenings to be extremely challenging. This film is not a documentary (which naturally lend themselves to organizations) and it did not have name actors. The producers admitted if they did not have this Alzheimer’s angle, they could not have pulled off this screening tour. Think hard about that when creating your film. In fact, if you are working with a low budget and you will not have a clear niche audience for your story, don’t make that film. I’m serious.
-The producers had budgeted $38,000 to promote and arrange this screening tour. They spent all of it and more. One big area for spending was travel because they needed to be at the screenings in order to sell merchandise and collect email addresses for later digital/DVD release communication. It is terrific that they included merchandise as an extra revenue stream! But some cinema chains (*cough AMC cough*) did not allow any merchandise sales to be conducted in the theater. Also, $11,000 was used to pay for Kimberly to run this tour full time. It is an incredible amount of work to set up, organize and promote a screening tour. No one should be asked to do it for free, especially not for 10 months of their life (yes, that’s how long they’ve been preparing and running this tour). The rest of the money was spent on manufacturing the merch (DVDs & tshirts), printing and shipping posters/flyers, and Facebook ads (which they did not think helped with sales).
-The producers did have screenings scheduled that did not meet the minimum ticket threshold. Consumers are not completely clear on how this system works because they are used to showing up to the box office and paying for a ticket right before the screening time. On a Tugg or Gathr screening, they MUST preorder or the screening won’t happen. A bit of education for the consumer will be needed when using this method.
-Also, when some screenings had sold tickets, but not enough to meet the minimum, the production did spend to buy out the rest of the tickets in order to make the screening happen.
-Even if others are hosting screenings of your film, you still have to support their promotional efforts. They will need images, press releases, posters, postcards and maybe support their media efforts by being available for interviews or actually traveling to the screenings. Don’t think this is on autopilot or that promoters necessarily have the skills to publicize a local screening.
-Press for one night event screenings is difficult to obtain. While they received press attention in West Virginia because the film is set there and it is very relevant to the local media, they did not receive a lot of press attention for screenings elsewhere. Most newspapers have a policy to only review films that play for a week or longer. The biggest outlets only want to cover nationwide theatrical releases. While you can certainly try sending out press releases to local and national press on your own, you may find they go unanswered. Also, Kimberly said she didn’t see a direct correlation between the amount of press coverage and the number of ticket sales. This means word of mouth played a much bigger role in the success of the tour than any press coverage. Caveat to this, distribution partners definitely search for press coverage on a film to decide whether to pick it up. You will need press coverage even if it doesn’t put butts in seats. Also, regarding reviews–reviews that result in low Rotten Tomatoes scores can hurt your digital film sales because those scores are highlighted on many digital platforms like iTunes, Vudu etc. It is better to have no critical reviews, but great audience reviews, than to have poor critical reviews.
-Don’t let the time lag between the theatrical tour and the ancillary sales. While momentum is going- people are talking about the film and attending screenings- is the best time to arrange for your ancillary deals early in the lead up to the screenings or after a little momentum has started. VOD transactional and DVD distributors will see the promotion and want to launch off of it so don’t let all of the attention fall to the ground again by waiting too long to solicit ancillary deals.
-Between the merchandise sales and the independent theater bookings the production made on their own (aside from the Tugg screenings), the revenue they saw was $18,500. With the 50 Tugg screenings, they are due an additional $6500. At the time of the podcast, they had another 25 screenings scheduled through Tugg. They are hoping that the screening tour will put the film in a better position to see more revenue in the home video phase of the release.
All useful information when considering a one night event screening tour as the way to have a theatrical release. If you want to catch the whole podcast (55 minutes), jump on over to the Film Specific site.
It means the production is PAYING to market and release their own film. It doesn’t mean those involved in production are working all by themselves like DIY (Do It Yourself) has come to be understood. And it doesn’t mean DIWO (Do It With Others) because that sounds a bit like everyone is working together for free or back end revenue. Self financing means your production has budgeted money to pay for the marketing and release of the film which could include working with vendors outside of the production or hiring experts to come on board early in the production process to help conceptualize and prepare for the eventual release of the film.
It is the same concept as preparing a production budget to pay all involved in the physical making of the film; the legal help, the post facilities, the equipment rentals, the cast, the crew, permits, location rentals, catering, transportation, accommodation, insurance, music licensing. Most all of these are expected costs to making a film. There is no dispute that these are required line items in a production budget. Making a film is expensive! Even spending $50,000 for production is a lot compared to what most filmmakers have in their personal savings accounts. Please don’t spend your savings account.
It is a costly mistake to think that these are the only line items in a budget for film financing. In fact, there is almost no point in incurring the cost of making a film if there is no budget and concrete plan as to how it will be released. Fewer and fewer films are bought by a distributor for a price that will recoup a higher production budget, even low six figures. This path used to be the tried and true method for release, but it is just not true anymore. Even if a film does get picked up, it is likely that the marketing costs and fees to distribute the film will eat up any back end revenue due to the production by the series of entities used to release a film (exhibitor, digital platform, online retailer, in store retailer, distributor, sales agent). The whole chain takes their expenses and fees FIRST.
Of course, it should be said that it is especially difficult to fully recoup the cost of making and releasing a film that is self financed. While I have encountered and worked with films that have managed to recoup the cost of their self financed marketing and distribution for a theatrical release (which helped propel their ancillary sales), I have not encountered any that have even come close to recouping the production budget during that phase of distribution, not to mention profited by it. Crowdfunding either the production budget or the marketing and distribution budget, from donors who do not expect recoupment, would go a long way to bringing a production into the black. However, crowdfunding is NOT for everyone.
Let’s dispel the myth that distribution is 1) assumed to be handled by some other entity that will put in their money to do it; 2) assumed to be an endeavor performed with no money by the production on its own; or 3) assumed that “collaborators” will be found who will offer their services, connections and expertise for no money upfront in exchange for back end revenue.
Budget for your self financed film release!