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September 29 at 8:30am

The New Independent Film Distributors’ Business Model (Pt. 1 of 2)

By Ted Hope

Guest post by Sheri Candler.

In this second post, I want to focus on how to rehabilitate the film distribution entities so that they may continue to exist. I know what you are thinking “What’s she on about? We’re fine. We survived the latest shake out and are all the stronger for having less competition.” I am here to tell you that is fallacy. The old ways of bringing films to market are fading fast and it is time to reinvent your business. I want to acknowledge my gurus Gerd Leonhard, Seth Godin and Clay Shirky (though he is more my go to guy on all things having to do with immersive storytelling and audience collaboration) for being a constant source of inspiration for me in looking toward the future of media.

When Ted announced on his Facebook page that he would take part in a panel discussion at the upcoming Woodstock Film Festival concerning the new distribution paradigms, I had to look at who would be involved in this discussion. What people and companies would be taking part who are practicing radically changed business models for film distribution? It was as I thought; none. I posted a link on his page (http://www.techdirt.com/articles/20100326/1452138737.shtml) asking all involved in the discussion to read it and then talk about how they see the new paradigms. I don’t know if anyone did, but I did get a response from Dylan Marchetti from Variance Films explaining to me how his company functions to actively engage audiences for films they’ve booked in the theater. It was a lengthy exchange that resulted in my writing this post. I don’t think he read the article before he spoke because the point of that piece was to inform on how businesses need to form ecosystems around their companies, not continue only to sell copies of the content they distribute. Distribution companies should not be focused on selling copies, either for viewing or for owning. They should be selling access, creating networks of devoted fans around their brand and developing customized experiences instead. In other words, selling things that cannot be copied. This means they must first gather and cultivate a community of engaged followers and then develop, acquire, produce, and source material with only these people in mind.

Of the companies taking part in the Woodstock panel, I would say only Cinetic with their Film Buff organization has started with the potential to do this, but rather than building an engagement platform, they have merely built another online distribution portal (like so many others in existence that consumers have never heard of) to put copies out on the internet. Actually you can’t see any of the films on the site, it just directs you to their existence on VOD channels. Their “community” engagement is only a call for an email address so that they may send marketing messages. What is communal about that? What connection would a consumer have to the company itself besides advertising? None. Cinetic has no idea who these people are, what drives them, motivates them, interests them. It is not fair to pick only on Cinetic, I can’t think of a single distributor currently connecting directly with audience who can answer those questions. Troma comes to mind as a distributor with a very clear brand identity but even they are not directly in dialog with their audience. All current distributors are far too dependent on push marketing, usually hired from outside the company, and sourcing films purely on guesses based on audience reactions at festivals , favorable press or from hottest trends in market research. Every investment prospectus will tell you future earnings are not indicative of past performance, so why is that how decisions are continually being made?

What would I suggest for these companies? First, a total rethink of what business they’re in. Distribution of goods is no longer needed from you. You should not think of yourselves in the film distribution business because distribution has become easy to access by anyone online. (I know Dylan, you’re not online, but art house theater days are numbered too). Attention getting is now your main role. But from whom? If you don’t have a following as a company, a deep relationship with a community, how will you get attention and keep it? By building a tribe around the people in your company and, in turn, the company brand itself. This starts by identifying what kind of group you appeal to or want to appeal to, actively seeking them out and forging those deep connections. At first, this will mean attracting people through outside means, appealing through media and various outside groups to introduce yourself. Eventually the effort to enlarge the circle will be done by the community members, but until you have one, you must do that work.

Often, in a rush to monetize, companies jump right over the relationship building. The dismal failure of paywalls in newspaper circles only serves to prove my point. They did not build up an engaged community first, and then ask for payment. They falsely thought that their paper subscribers would be willing to continue the previous paid relationship even after it was possible to get most of the news stories from aggregators for free online. There is a great video from Jeff Jarvis explaining the new business models for newpapers here (http://www.youtube.com/watch?v=Jsb9NfJmqPY&) and lots can be gleaned from it for all corporate endeavors.

The reinvention
“The future leaders in business will be connectors, not directors”-Gerd Leonhard
The new model will be to build and foster a community around the brand as a company and to be in the entertainment fulfillment business. This community will have interests that the company can fulfill and that is the company’s ONLY function. To try and serve a well balanced diet of wide ranging content is to spread too thin and attract no one. Mass is not your target.
You will be a resource to your community not only in entertainment but in anything that interests them. This means you MUST know what “that” is. Is it books, is it music, events, clothes, games, causes, other similar tribes? These will be your other revenue sources as you create a network of interconnection with other companies who have their own niches, their own tribes. Also, consider enabling community members to profit in what you have sourced, to be affiliates and to create networks of their own. The network will feed each other spreading the brand even further.

A key part of your site will be to connect your community to each other. Some companies have sites where they connect to the user, but they don’t allow for intraconnection and some networking platforms are merely housed on a company website but members are never engaged by the company, merely left to use the tools as they see fit. Listening and collaboration will be cornerstones for this model to work. This isn’t work to be left to interns, by the way, but by those in power within the company.

You will also partner with other tribes of like minded individuals. Through these interactions, you tribe influence grows. There is no need for shouting out messages, gaining favorable PR placement, buying media for attention or forcing members to spread the word. If you are fulfilling their needs admirably, they will do it. You will however, generously reward those members in your community who do enlarge your circle. Instead of paying large amounts of money to outside companies to get “buzz” and “traffic,” you will invest that money in building experiences tailor made for your community. Development of experiences can only be done from active participation in the community and collaboration with them.

This model is far simpler to run as you won’t be going for masses, you will only cultivate your community. It will be labor intensive work, but not prohibitively expensive. You will need to develop tools so that the tribe members can speak to each other and so that they can spread the word to their friends easily. You should be facilitating sharability at all times, not closing it off and being insular.

The filmmaker/artist whose content you will source (not acquire as creators will have an equal partnership in your tribe) will be encouraged to participate with the community. In fact, if they will not, then their work is not very attractive to your community. Engagement at all times is key, this is no place for egos.

Tomorrow: How To Make Money With The New Model!

Sheri Candler is an inbound marketing strategist who helps independent filmmakers build identities for themselves and their films. Through the use of online tools such as social networking, podcasts, blogs, online media publications and radio, she assists filmmakers in building an engaged and robust online community for their work that can be used to monetize effectively.

She can be found online at www.shericandler.com, on Twitter @shericandler and on Facebook at Sheri Candler Marketing and Publicity.

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  1. Dylan / Sep 29 at 8:30am

    Sheri, you know I love you, and I'll have a longer response to this at some point in the future. And what you're saying here intrigues me (even if I'm pretty sure that you're missing that not only do we do a more tailored version of this, we do it as a starting point, not as an end result, and that I couldn't disagree more that theaters are going away).

    What I think would be helpful is to see an example of the above from you (hopefully a real-life one, but definitely no Lipsky-style science fiction where we watch movies on our laser headsets in the park while our proximity sensors guard against intruders!). You seem very confident in this model- show us why- our business model changes on an hourly basis to stay ahead of trends, and I'm sure I speak for several people who would like to see exactly how, and if, this works.

  2. Learn film online / Sep 29 at 8:30am

    It's all about using the Internet as a distribution system.

  3. nwrann / Sep 29 at 8:30am

    I agree. I'd like to see an example (A real-life, successful one would be nice) or even a business plan of how this would generate revenue.

    What was described in this article is nothing more than a merchandise selling fan-club. Which still has the same demands placed on it for initially gathering those fans.

    I think one of the main factors missing from this article is that it seems that there is this huge assumption that consumers WANT to interact with filmmakers. There's no evidence of that. Looking at Ted Hope's resume clearly shows him as one of the most prominent independent filmmakers of the last 20 years, yet he has less than 7,000 twitter followers and 1,000 Facebook fans (and I would bet that most of those are other independent filmmakers). If Ted chose to forgo traditional distribution with Super and instead decided to create a community around it, would it REALLY make its budget back? Would people REALLY pay to become part of that community? Would people REALLY pay for access to Ted? Nothing against Ted of course, but I don't think they would.

    Indie film isn't suffering because people are downloading instead of buying, Indie film is suffering because for too many years, too many people forked over too much cash for sub-par movies. Now people don't know about the current indie films and don't care.

  4. Scilla Andreen / Sep 29 at 8:30am

    I agree. Companies must create customized experiences for their community or face living in obscurity.

    I think IndieFlix is a good example of a company that is cultivating a devoted fan base that is a huge part of our brand and who we are.

    I have been growing IndieFlix since 2005 and have seen dist models change dramatically in that period of time. I used to think I had no idea what I was doing because nothing seemed to work – filmmakers weren't making tons of money. Actually, I still don't think I know what I am doing but I will say I have learned to do a lot of experimentation and I listen to the audience. I used to only listen to the industry but that didn't get me very far.

    I am a filmmaker hence IndieFlix has always been very filmmaker centric. We launched with 36 titles and we now have over 2000 independent films and filmmakers from all over the world. They're not all happy. They're not all rolling in dough but they are engaged and we are a strong community working together to figure things out.

    I will say there are 2 key ingredients I have found to move the needle just a little bit. 1) marketing 2) off line community building. When I say marketing I'm talking engaging your fan base in authentic and real, conversation (clever helps too). This includes being a good listener and to respond accordingly, this takes time and is a much bigger and separate post.

    Getting off the internet and out of the office to grow our off line community has been critical for IndieFlix. It has been the quickest and most efficient way to connect and get feedback. If we are ever going to figure out how to monetize our art in a free culture we need support and valid information from our community and you can't get that online. We've got to bring film to the people. The internet and the multitude of platforms to access content is inundating so we need to go off line and personalize our social interaction.

    After of a few years of experimentation we are finding some success with our Rogue Screenings. This is our way of building the audience and encouraging them to discover film in unexpected ways. It's always free and hopefully fun but not always easy. We've played hotels, coffee shops, bars, parks and last Sunday we played our new movie game Film Festival in a Box (which is basically distribution in a box) in Times Square. It was a lot of fun and I am glad we did it but I prefer smaller venues to connect off line. Sunday was a such a whirlwind. I can't remember much and I it was more about the venue and less about the films which was not my intent. So, I still have much to learn about building offline community experiences. Of course each one is very different but the end game is the same, to connect people through movies and to get them watching.

    I got really tired of going to festivals and listening to myself talk about what is not working and poking my peers to see what is working. I felt like I would return home empty handed. I like experimenting in the world and trying new things. They don't have to cost a lot of money. It does require a certain amount of fearlessness but ultimately the payoff is worth it. In the end each film has it's own journey. I don't think we are going to find a system of distribution that is cookie cutter and will work for the masses. It's small community that is a good starting point and has that grows so does the brand.

  5. milesmaker / Sep 29 at 8:30am

    Perhaps the title for this post should be, “A New Independent Film Distributors’ Business Model” instead of “THE New Independent Film Distributors’ Business Model” as there is no single business solution or savior model every filmmaker can simply adopt to be successful. Having said that, there are compelling suggestions with promising implications we can consider as personal brands moving forward–despite the fact we are not all built to conduct business this way. We're also not all built to produce good movies either, and so it is.

    This model suits ME because I already do this. I'm a pillar of reputation, a provider of information and resource destination in my creative community. I'm a sought-after producing consultant and I curate content via social platforms because it's what I enjoy doing–without taking a single step out of my way to BE this brand personality. After a recent trip to Los Angeles I found myself feeling somewhat of an anomaly; at a crossroads about not only WHAT to do next but HOW to go about executing my seemingly unique approach to this business. I promptly I decided to invest in my own centralized audience engagement platform instead of the next movie, and wouldn't you know–my first meeting secured a seed investor who had already been quietly observing my activities from afar and thinks it's a wonderful idea. Go figure! He never gave me a dime to make a movie.

    If you are indeed built for the above–GO FOR IT. You'll find revenue streams abound in addition to moviemaking and a loyal audience base to reduce your investment risk, or you can smack your head against the wall repeatedly like everybody else.

  6. Jon / Sep 29 at 8:30am

    Ted may not have a lot of fans. But how many do you suppose are fans of 21 Grams? it's not people that we need to build a community around. It's not companies. It's not even actors or “stars”. It's good films that people love. Make good films and they will come. Sorry. I know a lot of people here say that's a crock. But it's not. It's only a crock if you are peddling your snake oil that nobody really wants.

  7. Jon / Sep 29 at 8:30am

    You don't build the community. You find the community.

    Too many people make lousy films and expect to see results. They think there is some kind of business model that they need, or marketing strategy. That's all business world bullshit for people who can only sell a product with gimmicks and by shoving them down people's throats. You want to build a community around your film. But is your film worthy or do you have to force feed it to people?

    Which brings to mind another thought. Maybe you do make good films. But no one knows because you are so caught up in marketing strategies that you haven't had enough people see your work to spread the word about how great it is. Marketing can turn people off. I often avoid films just because I don't like the title and years later I see the film and love it. Does you title tell us what your film is? Do your trailers? Or are you misleading people with marketing gimmicks? Why must communities be BUILT? Why don't people just come together and rally around the things they want? How successful can a community building effort be if people aren't SELF motivated to join them; if people don't seek them out on their own free will? And if they do seek them out, how strong, sustained, and real would that be? What are we doing here? Building propaganda models? Are we trying so hard to market that we lose sight of the the product? Why would someone want to see our film? Isn't that the real question to be addressed instead of why can't we make people join our community?

    Make a good film and get it seen, even if it's for free at first, online somewhere. Get it seen by the right people. By the movers in your target audience. Distributors want films that people want. Do people want your film? If not and if distributors don't want it then the problem isn't your marketing strategy. The problem is that your film sucks in terms of what people want.

    Do you have a target audience? A niche audience? If you have this and if your films hits their nerve then they will come. Build a better mouse trap and the world will beat a path to your door. Otherwise, if you want to make money, get into the money making business. Work for a bank. It's that simple and that hard.

    But of course only truly good and great work can do this. Not everyone is Coppola or Spielberg and yet everyone seems to think they deserve to be just because they make movies. Make a film as good as Saving Private Ryan or The Conversation. Then you'll have reason to complain about marketing. But don't you think if you made films that good, we wouldn't even have this conversation or this blog.

    Four Eyed Monsters is a good film. Maybe it's not for everyone. But it garnered an audience on it's own merit. People rallied around the film and the making of it. It had a community built around it. It was a bit of a success. But not as much as I think it could be or deserves. I think it hasn't been seen by enough of the right people. In this case I'd say that target audience is young people discovering their sexuality. It would be a perfect film to show in high schools (or some parallel youth market). But I doubt Arin Crumley has tried to sell it to schools. The thinking is wrong. You don't build the community. You find the community and they buy your film or they don't.

  8. Nwrann / Sep 29 at 8:30am


  9. zahra / Sep 29 at 8:30am

    But Jon, surely that's the point. Four Eyed Monsters is a good film, but nobody wanted it UNTIL Arin and Susan had built the community around it. Maybe if they hadn't bothered or just waited for the audience to find it then they'd still be waiting and we would never have heard of it – let alone seen it. I too get turned off by marketing – I think we all do, which is why the idea of tribes and true fans appeals to me, it's a way to “connect” with my film's audience without feeling like a huckster. And don't forget that if our films do get picked up by a distributor then they sure as hell will market it to the audience – because they realise that the only way to get people to “hear” about it is through marketing.

  10. Annagodas / Sep 29 at 8:30am

    Hi Sheri, reading what you write it feels like I could've written it myself – I'm the CEO @ Dogwoof, probably the only UK distributor who's following pretty much the business model you describe above – happy to chat etc take care

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