Last week, I happened across a story online about a new VOD service starting up with an interestingly niche twist. The service is called Brooklyn On Demand. Below is an interview with Joseph Shahadi, Executive Director of The Art of Brooklyn Film Festival, who has co created the service.
What is Brooklyn On Demand?
“Brooklyn On Demand is a new pay-per-view hub designed to bring Brooklyn independent films to worldwide audiences. Presented and curated by the Art of Brooklyn Film Festival, BKOD showcases award-winning Brooklyn indies on a dedicated channel powered by Vimeo.”
What inspired you to start a VOD site for Brooklyn based artists/audiences?
“We run the Art of Brooklyn Film Festival, the only international fest dedicated to Brooklyn indie film —so every year we get to see the best new independents coming out of this scene. Sadly, most indies, no matter how great they are, languish after their festival runs are complete. At the same time we are in the midst of a revolution in on-demand viewing that is changing what distribution means for independent filmmakers. VOD is a powerful tool but a single film can easily be lost in a sea of online content. We wanted to create a branded hub to introduce Brooklyn indies to global audiences and generate revenue for their makers. There are online resources featuring everything from Brooklyn-made small-batch pickles to handmade furniture, but there hasn’t been a central location to stream Brooklyn independent film — until now.”
What is Art of Brooklyn Film Festival and how is this tied in to AoBFF?
“We founded AoBFF in 2011 because Brooklyn needed a major film festival that focused on its vibrant, diverse independent film scene. For the launch of Brooklyn on Demand we featured award-winning AoBFF past selections. Going forward, anyone submitting to the Art of Brooklyn Film Festival will automatically also be considered for BKOD. But we are happy to announce open submissions directly to Brooklyn On Demand for any film that meets our criteria.”
What are the rules about how “Brooklyn” the film needs to be? You say on your site “Brooklyn-born, Brooklyn-based and Brooklyn-centric” filmmakers. What does that mean?
“Although the films on Brooklyn On Demand don’t need to have screened at our festival the criteria are the same: If you are a filmmaker who can demonstrate a connection between your film and Brooklyn, you are welcome to submit. For example:
-Your film was shot in Brooklyn;
-You live and/or work in Brooklyn or have spent formative time here;
-You are from Brooklyn, but now you live elsewhere;
-Your cast, crew or production staff is from Brooklyn;
-Brooklyn is a key inspiration in the creation of your film.
Anyone with questions about eligibility can see the FAQs on our website.”
How is the revenue split? You use Vimeo on Demand so they take 10%, then how is it split? I assume the filmmaker must have the rights to distribute via Vimeo globally?
“After the small fees deducted by Vimeo and PayPal respectively, we split all revenue with the filmmakers 50/50. Filmmakers must have rights to all elements of their films including music in order to participate in Brooklyn On Demand.”
Just so I am clear this isn’t a subscription service, it is transactional?
“Yes. We wanted it to be simple and straightforward to use. Audiences visit the site, browse films and rent or buy whatever they like.”
What is the plan for letting audiences know about the platform? Are you specifically targeting Brooklyn dwellers or globally?
“We are definitely reaching for a global audience. We have already gotten press on BKOD from USA Today and the NY Daily News for our launch. We will continue to promote the platform to national and international press and showcase BKOD films and filmmakers on our blog and social media networks.
One of the advantages of being powered by Vimeo is that our films are also discoverable by their users worldwide.”
Is there curation by your staff or will any film be uploaded? Features, docs and shorts?
“The Art of Brooklyn Film Festival curates BKOD. Films in all genres are welcome to submit.”
How do you submit a film? How much does it cost?
“Filmmakers should use the submissions tab on the Art of Brooklyn site or directly at BrooklynOnDemand.com. Please note that early bird submissions are open for the 2015 AoBFF starting October 1st, so anyone with a film that fits our criteria should send it our way and we will also consider it for BKOD for no additional fee.
But films that meet the criteria and just want to be considered for Brooklyn On Demand can enjoy a discounted submission rate of $15 until December 31st.”
Got a film with a Brooklyn connection? Check out this service
JOSEPH SHAHADI BIO
Joseph Shahadi (Executive Director) has had a long nonprofit career, notably at the W.T. Grant Foundation, The Green Circle Program and the World Game Institute. Most recently he was Festival Coordinator for the DUMBO Dance Festival, where he curated and produced its first ever site-specific works, staged along the Brooklyn waterfront.
Joseph also served on the DUMBO Dance Festival Board of Directors. He earned a Ph.D. in Performance Studies from New York University where he was awarded the Corrigan Doctoral Fellowship and the Performance Studies Award. He contributed a chapter to the book Doomed By Hope: Essays on the Theatre and his scholarship appears in TDR (The Drama Review), the Journal of Dramatic Theory and Criticism—in a special section he also co-edited—and the Journal of the Hemispheric Institute of Performance and Politics. Joseph is also a Brooklyn-based interdisciplinary artist, director and dramaturg. He makes video, photographs, installations, live art and works on paper. His work appears in several private collections and has been exhibited in New York, regionally in the United States and internationally in Europe.
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.
This is a guest post from director Nick Lawrence who wanted to share his experience in releasing his film Time Expired on Youtube so that all might benefit from it. If his numbers seem low to you, think about how much money a typical filmmaker receives from a no advance distribution deal with little marketing efforts put behind it where the filmmaker has relinquished all rights to her film. That is the most common distribution scenario of most low budget, no prestige festival, no name cast independent films.
YouTube isn’t just a spot to share short videos. It’s also a surprisingly strong platform for releasing your feature-length film. My producing partner (Rachel Tucker) and I released our 93-minute comedy film Time Expired on YouTube in late 2011. Since then, the film has been viewed almost 700,000 times, with 2,000-3,000 people watching it every day. We’ve earned $3400 in ad revenue in the last year, and the numbers keep growing: $339 in April, $442 in May, $652 in June.
In fact, YouTube has become our most lucrative platform, far outperforming VOD and DVD sales. Since Time Expired was made for a very low budget, we are actually looking at recouping our entire investment in five to ten years — almost completely thanks to YouTube revenue.
Decision to Release on YouTube
If you’re like me, you might initially find the idea of putting your film on YouTube a hint distasteful. YouTube started out as a place to share short amateur videos, and that’s still how many see the site. Putting your film on YouTube doesn’t fit the old narrative of being chosen and embraced by the system.
I suggest you get over it. YouTube is the third most popular website in the world, the film and TV arm of Google. YouTube is familiar, easy to use, and available on mobile devices, smart TVs, and even gaming consoles. The site is expected to earn 4 billion dollars this year, growing to 20 billion by 2020.
That said, YouTube is best used as part of a comprehensive release strategy. Ideally, you’d start off releasing on VOD platforms like iTunes and Amazon, and then move to YouTube and other free/subscription platforms (Netflix and Hulu) once VOD sales have slowed to a trickle. But for many smaller films like ours, access to these platforms is not guaranteed. YouTube offers the chance to circumvent these barriers and reach a worldwide audience of thousands, even millions, while earning not insubstantial sums of money.
Since Time Expired lacked name actors and marketing hooks, our chances of finding a distributor were basically nonexistent. Rachel and I decided to release our film using a “freemium” strategy — making it available for free on various platforms and hoping it would spread virally on its own. Unfortunately, the viral part didn’t happen. We learned the hard way that most people just aren’t that interested in discovering new films. YouTube, however, proved to be an exception. Four months after release, we were averaging about 100 views a day. Six months after release, the film was up to 1,000 views a day. What happened? Did the film finally catch on and go viral?
Who’s Watching and Why
The data from YouTube Analytics reveals something else is happing. The number one reason people click on Time Expired is as a suggested video. YouTube suggests our film to people who have been watching other feature-length films, often of questionable copyright status. These films don’t always have much in common with Time Expired, but they tend to be newish features with a mainstream sensibility. In other words, YouTube’s algorithms are connecting us with a global audience channel-surfing for movies. Our second biggest traffic source is searches with strings like “Hollywood”, “full movies”, and “comedy”. Most viewers aren’t searching for our film by name. They’re just looking for a movie to watch.
One of the interesting things is who these people are. According to YouTube Analytics, 80% of views come from outside the US, including unexpected places like the Philippines (35,000 views), Saudi Arabia (26,000 views), and Malaysia (20,000 views). The film has been watched in 218 countries and territories, ranging from Afghanistan (151 views) to Zimbabwe (471 views). Also surprising is the age range: two thirds (66%) of viewers are 45 or older, defying the stereotype of the typical YouTube user. This probably reflects the subject matter of our film, which is a comedy about dying. A full third of viewers watch the film on a non-computer screen, such as a phone (17.6%), tablet (10.2%), or TV (1.6%).
Uploading and Monetizing Your Film
Uploading your film is pretty much the same as uploading any other YouTube video. Guidelines for best encoding quality are here. Although YouTube started out only accepting short SD videos, those days are long gone. The site now supports 4K resolution films of any length.
You’ll need to become a YouTube partner in order to monetize your film, but this is no longer difficult. You’ll also need to provide proof that you own the rights to the film. In our case, we emailed scanned copies of the music licenses and a document that certified we owned the film’s copyright and controlled our YouTube channel.
Once the film has been accepted for monetization, you can choose the type of ads you’re willing to allow using the monetization tab. TrueView in-stream ads are basic commercial breaks and can appear before, during, or after the film. You can choose the act breaks (spots for commercials) by adding minute and second values into the mid-roll field. Overlay in-video ads appear as little text boxes directly over your film. We opted out of overlay ads because I believe they diminish the viewing experience, but it’s your choice. Text ads also display by default on the sides of the view page.
Tips for Success
Pay close attention to how you present your film on its YouTube page, including the description, key words, and title. Don’t expect most potential viewers to be searching for your film by name. We titled our film “Time Expired (full movie)”, which I believe is an important factor in its success. When entering key words, try to cover the obvious, keeping in mind that people are searching for things like “full movie 2011″, “english movies”, and “Hollywood movie”. Cover the basics and as many variants as you can think of. I’d also recommend looking at popular movies on YouTube in your genre. How are they titled? What key words are they using?
Another issue to consider is the snowball effect. Like a snowball rolling down a hill, your film becomes more popular the more times it’s viewed. YouTube tends to connect people with popular videos, which only reinforces their popularity. That’s why you want to give it a nice strong push down the snowy slope. I’d recommend doing everything you can to help your film in the first weeks/months it’s up on the site. In our case, the film really started to build momentum after three or four months, but I’m not sure this would have happened if we hadn’t worked hard promoting it early on. We held screenings in Oklahoma (where we shot the film and where most cast and crew lived). We sent out press releases. We contacted everyone on our mailing list and posted on our Facebook page. We mailed out cast and crew DVDs (about 100 total) with a letter asking for help “spreading the word” and some cards that people could share with their friends/family. We never paid for YouTube promotion, although this might not be a bad idea at the critical stage when you’re getting started. I can also see paying for some advertising on Facebook to help drive traffic.
YouTube also supports captions and subtitles in multiple languages, which will make your film more attractive to some viewers.
What About Vimeo?
Many filmmakers prefer Vimeo to YouTube. Vimeo has a reputation for quality and aesthetics (and, if we’re honest, “coolness”) and has tended to do well with filmmakers and other artsy types. They’ve even added a VOD service, which is an intriguing, if expensive option requiring an upfront fee for a PRO account. So why not just post your film on Vimeo instead of YouTube? Several reasons:
1. Vimeo has no advertising, which means you can’t make money the same way.
2. TIME EXPIRED has 680,000 views on YouTube versus 745 on Vimeo. This isn’t because we promoted YouTube any more than Vimeo. We started out promoting both sites equally, but it quickly became clear that most people were choosing YouTube over Vimeo.
3. YouTube can deliver a global, channel-surfing audience in a way that Vimeo cannot. In the case of our film, it’s not just a little bigger — it’s a thousand times bigger.
So post your film on Vimeo by all means — but don’t skip YouTube. YouTube is a strong and underrated platform for releasing your feature film. Once the film is up and running, you can earn hundreds of dollars a month while being discovered by a global audience of thousands or even millions.
Unfortunately, a great number of key digital platforms must be accessed through the use of an aggregator. Of course there are always exceptions, but the general rule is that to get your films onto Cable VOD, iTunes, Netflix, Hulu, Sony Playstation and other device oriented options and retailer digital platforms , you will have to go through an aggregator or a distributor. We either directly or via partners offer both a commission or a flat fee option (range depends on platforms).
However, you can get onto Amazon directly. Also, you can access DIY oriented ones such as Mubi, Fans of Film and other platforms like them. To the best of our knowledge, more money is made on the key high trafficked platforms, if one can get on them.
Once again we remind you, MARKETING, MARKETING, MARKETING is key to your film’s success no matter what distribution outlet you use.
Every filmmaker wants a theatrical exhibition for their film because of the prestige and the classic appeal. Key, in our opinion, is to know what’s possible and what you’re paying for. There are lots of services that charge big fees to book your film. Be knowledgeable about when you can book yourself (Landmark, Film Forum, Quad, Laemmle Theatres, Cinema Village, lots of others), or spend less on theatrical.
Publicity is the most important part of theatrical and that’s what you should spend money and time on. A New York Times review is usually a key goal, and it won’t come from having just a NYC release (that’s new NYT policy). A Theatrical release is important to directors for the obvious reasons and it is a very useful marketing component, but the operative word is “useful”. It’s useful only if it does not cost you more than you’ll make back from it and ancillaries that are enhanced by it.
According to one of our VOD partners, Comcast and InDemand have said, off-the-record, that they will start insisting on a 10-city day & date release for films to have access to their service. This policy would be implemented to help sift through the glut of the content in supply. We caution, before filmmakers rush into that spend, to think whether their film is likely to make it onto key Cable VOD platforms. Will the spend on theatrical likely be recouped on VOD? Also, cable VOD wants day and date releases, but theatres don’t so be cautious when planning your distribution route.
Are you a filmmaker who has worked with a distributor or service company for theatrical exhibition? Tell us about them in our Distributor Report Card.
Cable VOD likes films with a theatrical profile. VOD is very marquee (name) driven and genre driven. Its marketing effort is limited, hence the need to have films with a recognizable name in the marketplace or with recognizable “stars”. Regarding Day and Date, cable operators like to note that the film is in theatres while it’s on VOD. In the past, Comcast had asked for a 90 – 120 day window ahead of all digital distribution, but is now sometimes doing Day and Date releases. It depends on the film, the platform, the distributor, and the campaign.
Windows are a reference to release windows, the prescribed time gaps between which films are released in different media. Make windowing deliberate rather than confusing the customer with scattered pricing in different formats and releases.
The preferred release schedule should be: Cable & Satellite VOD; then Transactional; then Rental; then Ad-Supported platforms; then Mobile/Wireless. In the next tidbits, there will be examples of each of these platforms.