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April 20 at 10:04am

Determining Foreign Sales Fees

The question came up over one of last weeks posts, why foreign buyers base license fees on budget percentages.  I have accepted this for so long, I had stopped questioning it — but it is one of those things worth questioning, so I am glad it was raised.  Thanks.

It made me feel we should have an ongoing “ASK THE EXPERTS” section over here at Truly Free.  For this one I went to the legend of Glen Basner, a graduate of the Good Machine School of Everything, and the man behind the founding of the new sales powerhouse FILM NATION.  The Baz explains:
There are many factors in determining what a territorial license fee should be – a percentage of the budget is only one. These are standard amounts that are “typical” for an individual territory based on what distributors have paid historically (Yes, the world has changed quite a bit recently!). I don’t believe that they apply in singular fashion unless you are contemplating some form of output deal. 
On a single picture license, a distributor will want to know what the budget level is so that: a) they understand what the production value will be; and b) they can feel comfortable that they are not paying an excessive amount in relation to the cost of the film. These are valid points but what people forget is that ultimately the budget of the film does not necessarily have a correlation with its success at the box office (Blair Witch etc). 
Our approach is to think like a distributor and run estimates – both revenue and expense – for a film in all media to determine a low, base and high value a film is likely to have in any given territory. With these estimates we can back into a license fee figure that would allow for a distributor to make money should the film turn out well. The budget comes into play if the sum total of our international estimates do not raise enough money to finance a film.
Curiously enough, the WSJ has chimed in today on the issue of value of foreign licenses, albeit the lack thereof.  Check it out here.

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April 17 at 10:17am

It’s All One Big Continuum…

My post on “Is There A “Too Many” When It Comes To Playing Film Festivals” generated some good questions and points in the comments.  I hope to get to them all in the days and weeks ahead.

One thing that truly resonated for me though was Jon Jost’s dismissal of the box office performance of Ramin Bahrani’s, Lance Hammer’s, and Kelly Reichardt’s recent films.  These artists, along with a few others, represent some of the great hope for American Art Film in the near future (and Jon probably raises them precisely for that reason).  
It’s a mistake to take the theatrical results of their most recent films as the criteria for their financial success.  No one can think about a single film anymore as the litmus test.  When all filmmakers still dwelled in the world of acquisitions, that way of thinking was understandable; people felt you were only as successful as your last film.  What your film sold for and how it performed was all that seemed to matter.  In a world where it makes less and less sense to license your film for all media in exchange for a paltry sum (should you even be so fortunate to have such offers), new ways to evaluate success are emerging.
Bahrani and Reichardt licensed each of their last films to quality art-house distributors.  Hammer took another approach.  Yet, Bahrani and Reichardt built on their audience from the prior film, as you can be assured that Hammer will too.  These are what the music business would see as catalogue artists.  Their fan base will grow with each new release.  The more they are able to maintain an ongoing dialogue with their audience, the richer a dialogue they can offer, the more that audience will support them.  It is not about the one-off film anymore — nor that film’s results.  It is all about the community of support that artists can develop for their work.  That community will only flourish to the degree that there is both dialogue within the community, and well-maintained flow of content.
Artists who maintain a rich dialogue with their community will benefit in many ways from what they have built.  Some of it will be directly financial, both in terms of amount of that reward but also predictability thereof.  Other ways will include increased access to audience (which has a wide and varied group of benefits), decreased marketing & distribution costs, and new streams of revenue.
The more filmmakers can think of how to maintain and deepen the on-going dialogue with their supporters the better off they will be.
P.S.  I disagree strongly with Jon’s comment that the aforementioned films and filmmakers don’t do anything “aesthetically daring or difficult” — but this isn’t where I chose to look at such issues.   But since it was raised, dare I say that whereas no one is reinventing cinema, that compared to the norms, each one went out a limb without a net — and they flew pretty damn high when they jumped.  And man that ain’t easy  – and it is extremely brave is this world of ours.

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April 15 at 10:15am

Is Art Sabotaged By Thinking About An Audience From The Start?

I have been falling behind on my blogging; I admit it.  Luckily, information never goes away. Nor is there anything like a shortage of things that need to be said.  We have so many hurdles to jump in the indie film world.  Or is it walls to break down?  Even after we made it through once, the same challenges face us again.  Even when one or two lead the way, the path gets overgrown immediately, and the rest seem to be lost all over again.  So here’s to the better late, than never camp, a post on some old but still relevant news…

There is a good post from several weeks back on Spout “Five Thoughts on Independent Filmmaking from SXSW”.  There’s a lot in it that merits further discussion, but one thing said by indie distrib Richard Abramowitz leapt out at me: “It’s always a delicate situation to talk to filmmakers about finding their audience beforehand,” Abramowitz said on a panel about self-distribution. “Presumably, you’re making art. To think about the end user in that particular way is kind of a corruption of the process. It’s the producer’s responsibility to work off the director and understand who the audience may be.”
This could be considered a nicely condensed version of Brent Chesanek’s post(s) here several months back, and certainly captures the thoughts and attitudes of many I know and have heard. I get it.  It makes some sense to leave art to the artists, business to the business types, marketing and distribution to the relevant experts, right?
I don’t feel this attitude captures the realities of the time.  In my humble opinion, and particularly for the independent filmmaker, you are not being responsible or realistic if you keep thinking your job is simply to build it (and then to trust that they will come).  You need to build the paths and bridges to get the people there.  You need to have the pen to keep them there once they have entered the field.  You need to have the apparatus to help them tell their friends and family to join them.
You don’t need to do it alone though.  You just need to find the right people to collaborate with and a plan on how to get them to work with you (money helps).  Sure it would be great to find a producer who knows all of this already (and yes this is what they should be teaching in producing programs at the “film schools”), but I have always found there to be far fewer producers than there are writers and directors who are looking for the help.  Presumably all filmmakers work a very long time prepping their films.  Unless they are working in the studio world, all filmmakers invest a tremendous amount of time without any promise of financial return.  With all that energy and effort, doesn’t it make sense to figure out how the work may actually reach an audience?
I am not a marketing expert, but my thoughts on marketing have helped get many of my films made.  Before pitching the financiers, we try to come up with the different handles on how we will get an audience in to see our film.  This effort is for naught if they don’t respond to the script in the first place, but once they want to meet, I better have an answer to those standard questions of who is the audience and how do we reach them.  If I can come up with ten or fifteen decent approaches, the financiers assume their marketing team can up with a host of even better strategies.  
Every step in filmmaking and marketing is a collaborative effort; it is our responsibility to help our collaborators do their jobs better.

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April 7 at 11:51am

Is There A "Too Many" (When It Comes To Film Festivals)?

I moderated a panel at New York Women In Film two weeks back on “prepping for film festivals”.  One of the panelists, Ryan Werner of IFC Films, said something that resonated with me.  Ryan said that there are films that play so many festivals that they diminish his company’s appetite for acquisition.

That raises the question then: Can an undistributed film play too many film festivals?
Ryan’s answer is essentially yes — that is if the filmmakers are looking for acquisition.  The bigger question is whether anyone should be looking for acquisition these days, and if so, are film festivals still the best way to do it?
It sounds like it should be obvious, but I think it’s worth asking what is so appealing about acquisition by a distributor these days.  Until very recently, the money you received for licensing film was the dominant factor.  We all have to recoup our budgets (and our marketing costs), right? But in this day and age, less than a handful of a films are receiving advances of seven figures or more.  Unless you are making your films for very low budgets, how do you expect to get your investment back?  If you don’t get your investment back, why should anyone give you money for your next film?  If you don’t get your money back, why should others invest in similarly themed films?  
Maybe it’s no longer about theatrical, but we have yet to hear the success stories of films that receive significant amounts on the back end of VOD or increased video sales due to ad-supported free streaming either; that may come, but I wouldn’t hold my breath waiting.  Sure, if you make your film cheap enough it may seem tempting to surrender your rights across all media for twenty long years for $75K and significant cut of future revenue, if any.  But without a theatrical release stateside, will there be any foreign value to it?  I have been getting reports that foreign acquisition prices have dropped 40% in recent times — so where does that leave average foreign value for a US Indie?  36% of costs (that is assuming, foreign value was only at 60% of costs, which is pretty conservative on what hand, but probably generous for most indie filmmakers)?  Eek!
The problem is that most filmmakers still think of festivals as a step towards acquisition.  As Ryan’s comment points out, that is only true for your first two or three festivals.  After those, if you haven’t secured distribution, your chances of acquisition are diminishing with each festival play.
Festivals have an increasingly vital role to play in independent film.  They are one of the critical steps in delivering a Truly Free Film Culture.  As has been said here many times before (and I anticipate saying many more times in the future), festivals must be looked at as the launch in audience-building, marketing, and distribution.  
If you do not have distribution, you are not ready to play film festivals if:
  • you do not have your trailer made and up on the web;
  • you do not have clips selected and up on the web;
  • you have not been writing a blog regarding the film for a significant length of time;
  • you do not have a plan on how to keep that blog interesting for the next year;
  • you do not have a website for the film up on the web;
  • you do not have a simple way to collect email addresses for fans;
  • you have not set up a way for fans to subscribe to updates about the film;
  • you have not joined multiple social networks, both as an individual and as the film;
  • you have not created a press kit with press notes for the film;
  • you have not identified the blogs and critics you think will help promote your film;
  • you have not built a study guide for the film for film clubs;
  • you have not mapped out a festival strategy that builds to local releases;
  • you have not made several versions of a poster, and have enough to sell & give away;
  • you have not made additional promotional items for your film;
  • you have not manufactured the dvd, and made great packaging for it;
and there are probably more to add this list, but….
I look forward to a time when film festivals actually make such things a requirement.  I would love to see a film festival that was only about films that were prepared for self-distribution if necessary.  Film festivals are currently selling the dream and not confronting the reality.  Filmmakers keep buying that dream.  It is all a downward cycle as the business side of it is being neglected.  Distributors, both corporate and personal, need festivals to launch the film to their core audiences.  If filmmakers aren’t prepped to do that, they squander that opportunity and diminish their chances of reaching that audience.  Sure there are other methods out there, but why not use your best tools in the way they have been most proven to work?

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April 1 at 11:27am

Why I Started Blogging

Yesterday, Matt Dentler fired five questions at me on his blog.  A couple were on ADVENTURELAND (opening Friday!).  Another was one what to consider on your first feature.  And yet another was on what gave me the initiative to embrace the worlds of social networking and the blogosphere.  Check out the whole interview, but here’s what I had to say yesterday about the latter.

I have always been a bit of an internet junkie, but have an aversion to personal information and for that reasons had steered clear of social networking; I don’t have enough time for my friends as it is. Meanwhile, I had been growing restless watching the indie infrastructure wither away, but had frankly felt comfortable in my seat of privilege—i.e. we were getting our movies made.

When Mark Gill made his “Sky Falling” speech, it was clear to me that no one was speaking for the filmmakers, for the real indie community. I had read and met with a slew of good thinkers and innovators and felt the picture Gill painted was only for the business side of the establishment. Someone needed to get the word out about the new model that was emerging for filmmakers. When Dawn Hudson asked me to speak at Film Independent last fall, I felt I need to put up or shut up.

The state of things needs not be looked at only with despair. We are at a major time of transition and the possibilities are huge. Collaboration has always been what has improved our movies and enhanced our potential and the tools for collaboration have never been better. Social networking and an open source attitude offers filmmakers the freedom from an entertainment economy structured around scarcity and gatekeepers. We are all owners but we have been acting as slaves. We allow ourselves to corrupted by wealth and ego instead of strengthened by the wisdom of the community. The pursuit of instant gratification and success leads most to foolish choices that sacrifice opportunity for all along the way. Greater participation & focus on building a better system will greatly increase everyone’s power and improve their art and process. That is, in my humble opinion, and the social networking blogging open source stuff is the means.

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