As DVD pie crumbles, is VOD sweet? [VARIETY 5.712]

VOD is a growing component of domestic distribution deals but unlike boffo box office figures, such success adds no value for the international market. Indeed, releasing a film day-and-date on VOD and theatrical in the U.S. may diminish its appeal to foreign distributors, who still regard that as a sign of inferior quality. Plus, the secrecy surrounding VOD revenues undermines any positive reports regarding any business a film has done.

Full article: http://www.variety.com/article/VR1118053065

Chris Jones on how to navigate digital distribution

Some interesting insights and ideas for how filmmakers should be thinking about the new economics of digital distribution to build an audience. http://www.chrisjonesblog.com/2012/04/12-ways-film-distribution-must-change-for-distributors-and-filmmakers-to-survive-a-manifesto-for-change.html

Tribeca 2011

Tribeca Film Festival event programmers talk about the factors that influenced this year's competition pics. Among them: 1 - Smaller budgets 2- Kickstarter 3- The recession

http://www.hollywoodreporter.com/news/tribeca-film-festival-opening-robert-deniro-313698

What The Film Industry Needs: Transparency

My project in a nutshell... http://www.tribecafilm.com/tribecaonline/future-of-film/What-The-Film-Industry-Needs-Transparency.html#.T4MYedX4JX4

By Orly Ravid | 0 Comments | April 09, 2012 11:00AM EDT In today’s digital distribution market, which ranges from VOD, to iTunes and other smaller online outlets, the numbers are hard to find or verify.

Recently I was helping a friend with a business plan related to publishing. So naturally I needed to reference revenues in the publishing space. There was plenty of revenue data available.

However, when one reads film business plans one knows that data is often unreliable, unverifiable, or misleading. In my dealings with people from other professions and others in business, it always seemed to me that sharing real information was considered good business and led companies to learn from others.

I’m sure there are plenty of business that do not function transparently, but after 13 years in this one, I can say I know why people hide real information and why it’s bad for the film industry as a whole.

Box office grosses can be verified to a great extent but P&A expenses cannot and now with VOD revenues it’s anybody’s guess what really happened except for those seeing the actual reporting (and even then…). When DVD was a key revenue generator one could at least get a lot of the main sales data via VideoScan. It covered the retail brick & mortar sales numbers and Rentrak covered the rental business as well.

In today’s digital distribution market, which ranges from VOD, to iTunes and other smaller online outlets, the numbers are hard to find or verify.

Most of us probably criticized the mysterious banking practices that led to the economic downturn within which we are still presently mired. Yet the film industry perpetuates a system that hides information and makes the data mysterious when it should not be.

This mystery and obfuscation leads to incomplete or inaccurate business plans, an uninformed investor pool and an excess of supply that creates a glut. In the end no one benefits.

What and why people hide:

• Filmmakers will hide the fact that their distribution deal was a service deal because they want it to seem as if their film was “acquired”. Why does that matter to them? Part of it is ego and part of it is the desire to attract future investment. Even though a DIY model can actually generate more revenue, there is a stigma associated with it. Filmmakers often hide their revenues overall for the same reasons.

• Distributors try to hide or not make public their fees or the specific revenues from VOD. Why do they do this? Simply, it’s harder to analyze and compare options. When one can do this properly, you quickly realize how excessive fees are for certain rights categories and that there are extra middlemen who often serve no benefit to the licensor. Further you realize how little is done to justify the fees. When I write “excessive” I mean that one can get the same job done for a lower fee or smaller overall cost. I commend the distributors and the filmmakers who have been transparent but these are few and far between.

• Studios are less transparent and public about data because their dealings with Cable MSOs and key digital platforms are required to be secret (I am told this is a condition of the platforms and the MSOs). So we understand that their splits / terms (with MSOs and some platforms) are better but we do not always get the exact data.

• Platforms such as Netflix also do not like to publicize how they arrive at the fees they offer as their deals vary with various suppliers.

So where does this leave us?

• With a pool of often revolving investors who know little about distribution and rely on business plans that contain little statistical backup. My sense has been that many investors do not get their money back and are therefore not repeat investors.

• With filmmakers who struggle just to create and have a career. They usually prefer not to focus on distribution and either take bad deals or have to spend money on consultants to help them have access and make decisions. In short, filmmakers are losing money and often making poor decisions because of the lack of information. Digital distribution does afford more access to filmmakers but not as much as it could and one day may do.

• With a glut of films, many made by wide-eyed newcomers who don’t know the realities of just how competitive it is and how tough their odds are. This lack of transparency and real data perpetuates a mystique around the industry that increases the supply. It also feeds an economy of middlemen and consultants and hell, even us.

The choice by filmmakers to hide their real experience in distribution is a disservice to future filmmakers and investors as well as in some cases to the filmmakers themselves. It only encourages competition and thus increases the odds of future struggle and disillusionment.

The choice by distributors to not be transparent is obvious in its motivation. Personally I think this industry would be well served by a market correction and a drastic adjustment of industry standards in reporting and transparency. Obviously with a book such as ours, and business practices such as ours, we hope to be a catalyst in that direction.

I have said from the day I founded our organization that I would be delighted if we facilitated our uselessness. It would show that an industry change for the better had taken place.

What would be the benefit of greater transparency?

1. We could all learn from others’ mistakes and successes a lot more easily and with greater certainty.

2. Filmmakers and industry folk could spend less on business-to-business transactions and more on direct-to-audience marketing and community engagement.

3. We might actually see greater quality and less quantity--which would also positively impact audiences and create a more sustainable career for those who are the more talented.

4. We might see more innovative thinking around marketing for a change instead of having everyone rest on their laurels because no one can really evaluate what has or has not worked.

10 Producers Who Will Change Hollywood in 2012

http://www.thewrap.com/movies/column-post/ten-producers-who-will-change-hollywood-in-2012-36606

Film Schools Turn To Television, Digital Shorts To Stay Relevant

http://www.thewrap.com/movies/article/film-schools-grow-more-digital-tv-focused-hollywood-job-market-tightens-36448 Published: April 01, 2012 @ 6:22 pm Twenty-seven-year-old Teddy Diefenbach switched from a graduate film and television production concentration at the University of Southern California’s School of Cinematic Arts to the interactive media division, in part because he hoped he'd be more employable.

“I want to do creative work, but I also want to have a professional plan,” he told TheWrap. “I wanted to work on a skill that I could find work doing.”

Diefenbach (left) is not alone. Increasingly at American film schools, the usable skill is something other than film.

Also read: The Jobs Crisis: USC Screenwriting Grad Works at Best Buy to Pay His Bills [1]

Since top film schools can cost upwards of $40,000 a year [2], many students enter the workforce with substantial loans. That makes the need to find gainful employment all the more pressing.

In the digital age, institutions including New York University, the University of California, Los Angeles and Boston University have torn down the old barriers between teaching television and film production, and merged film and interactive departments.

The internet age has led film schools to encourage students to think about narrative in different ways than their predecessors did.

“Twenty years ago, people went to film school to become the best filmmaker they could become so they could go out and make films,” said Bob Bassett, dean of Chapman University’s Dodge College of Film and Media Arts, told TheWrap. “Today, they have to be much more calculating about developing their skills, because those skills are what lead to paying jobs.”

Also read: Lucas, Spielberg Honor Katzenberg at USC Animation Center Dedication [3]

In all cases, there is an increased emphasis on crafting films that can be viewed on YouTube, Funny or Die, or other digital platforms.

“It’s not just learning to work on a mini-budget or simply recycling a television episode and putting it on the web,” Paul Schneider, chair of Boston University’s film and television department, told TheWrap. "It has to be content that really is outside the box."

Both BU and Chapman University, for instance, now routinely encourage students to create shorter and more interactive film projects.

At NYU, the most cinephile of all the American film schools, the emphasis has turned increasingly to television.

“Television has become a more viable path for many students,” said Joe Pichirallo, chair of New York University’s undergraduate film and television program, told TheWrap.

No longer is NYU the rarified province of the heir to Spike Lee. Now the message is: you may be able to do your best work on the small screen.

Said Pichirallo: “From ‘Breaking Bad’ to ‘Mad Men’ to ‘Boardwalk Empire,’ some of the most creatively exciting stuff is on television. Those kind of stories are hard to get made in the feature film world, but there is more of a willingness to take risks on television.”

There are also more jobs. Cable is booming and with Netflix and Hulu crowding into the field, a rising appetite for original programming is trickling down into more opportunities for directors, cinematographers and editors who are starting out.

The same is true in the world of gaming.

Credit the University of Southern California for helping to shake things up with the launch of its interactive media department in 2002. Tracy Fullerton, chair of the department, said the past decade has been one of explosive growth for the program, with enrollment swelling to 100 graduate and undergraduate students and a new building scheduled to open next year.

“We’re really thinking about what it means for our students to become media makers in this new world,” Fullerton said. “Our students are actually in demand by companies, in the sense that they do internships and sign letters of intent to come back. These companies are looking for a fresh way of thinking.”

Also read: YouTube Sensation Freddie Wong: 'Hollywood Is Out of Date' [4]

To that end, Fullerton said that USC has begun teaching a class that brings together students from its animation and interactive media divisions with those from its more traditional disciplines with the goal of giving them more experience with gaming and other emerging platforms.

Taking that class could end up being a sound business decision for many USC students. Students from the interactive media division have skills that allow them to more easily navigate the shifting job market.

Of course some things at the nation’s leading film schools remain the same, school administrators say.

“The emergence of digital technology demands a new approach to the educational enterprise, one that is fluid, dynamic and more interconnected, but great storytelling has to be the driver,” Teri Schwartz, dean of the UCLA School of Theater, Film and Television, told TheWrap.

It's just that those great stories may unspool on YouTube rather than the multiplex.

Prescreen

One of the more interesting new startups in the film space, Prescreen has the mission of "making signal out of noise." They offer a curated VOD experience, promoting one film a day (skewing towards award winning festival films and niche documentaries) to its audience of subscribers. For emerging filmmakers, the service offers the opportunity for flash exposure to a community of engaged film lovers. Great, worthwhile service. Check em out at prescreen.com.

Interview with YouTube boss Salar Kamangar on the 800M user/month platform's content strategy

Take aways: YouTube is taking on cable.  With 800 M regular users, they are able to solve  the "what do I want to watch today" problem by programming for niches in a way that cable cannot.  But to invest in content, they need to keep user numbers level while dramatically boosting time spent per user.  Guess we just have to wait and see...

Full article and video HERE