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Digital: The Smart Choice

Nic Wistreich, co-founder of Netribution, explains why those filmmakers and distributors taking full advantage of digital opportunities have the most to gain…

During a keynote speech at the 2007 Cannes Film Festival, social-media expert Danah Boyd made a smart observation. “While teens are in love with indie rock, they are not that familiar with indie film—most have little to no access to it, since it doesn’t play in the Megaplex in their town.” This compounded something one of Radiohead’s managers had told me that year: the band made 70 per cent of its income from touring. So not only was independent music far more popular amongst young people, it was also better-insulated from the effects of the digital transition and uncertainty about business models.

Outside the Box Office
Sensing that the battle for online distribution would—like the delays over the launch of DVD, Blu-ray and other technologies—be stalled as each studio fought to give themselves the best position in the market, it seemed that public screenings were the sweet spot for filmmakers to focus on. You can’t pirate a live experience and people seem happy to pay for one as well; cinema famously does better in a recession as people look for cheaper nights out. Netribution made an application to the Technology Strategy Board and got funding for a feasibility R&D study called Living Cinema, looking at methods and models for enhancing the social experience around watching film. But rather than just look at how indie films could get into cinemas through, say, the Digital Screen Network, we looked at alternative venues, formats and events.

Secret Cinema from Future Shorts had shown a public demand for ‘cinema as event’—thousands of people were paying over £20 for tickets to an event that crossed over music, film, art direction and performance, without even knowing the name of the film before they arrived. During our research, we tested events in South London and Newcastle which combined live music, food, discussion, live-generated and audience-responsive visuals, seating at tables rather than in rows, and super-wide screen projection to fill much of the field of vision. The audiences seemed to respond very warmly; 100 per cent said they would come to such an event again, and would pay up to double the price of a normal cinema ticket (both events took place in poor neighbourhoods).

Around the same time, as part of a groundbreaking campaign, documentary Age of Stupid was distributing outside of cinemas to schools, community centres, bars, workplaces and conferences, using a website (indiescreenings.net) to sell licenses. Dogwoof, who handled conventional exhibition for the film, took no commission from these sales, which made over £140,000 from several thousand non-traditional screenings. The earnings were far in excess of most activist documentaries and, while dependent on producers Spanner Films’ excellent marketing campaign, empowered each organiser to promote their event independently.

Alternative exhibition campaigns go back further. In 2003, Iraq for Sale created and used the website bravenewtheaters.com to organise 3,000 screenings across the US on its opening weekend, having previously been the first feature film to crowd-source $280k of its budget. The site continues to be used to mobilise and promote non-traditional public screenings of independent documentaries.

Four Eyed Monsters—famous for being the first feature to screen for free on YouTube—invited fans of their online video-podcasts to request a screening in their local town. These were plotted on a Google map and when enough people in a region had requested one, they would phone cinemas in that area to arrange. Their screen averages far outstripped industry figures for that period, and the project led to the formation of websites openindie.com and crowdcontrols.cc, which both support audience-powered screenings.

When the study finished in 2009, our focus shifted to the tools that would help with public screenings and this summer we created a first working demo of the Big Open Playlister, or BOP, funded by Creative Scotland. BOP is a digital screen-management framework that lets venue owners and even organisers locate (and license) content digitally from around the world, arrange it into a programme and manage its playback across a venue. The system has integration with second devices like phones and iPads that people can use to pay for a film, with it only starting after a target amount has been raised, as well as provide feedback.

The Digital Revolution is On Hold
Four years after Danah Boyd’s speech, however, and digital distribution is still not really delivering for filmmakers or audiences. With a few notable exceptions—such as the Polish Brothers’ micro-budget film For Lovers Only which made $200k on iTunes in its first few weeks—even the most popular services such as LoveFilm and iTunes have relatively few indie titles, with a number of distributors still not offering any of their titles to download or stream.

In the course of developing BOP, we learnt that there are two major stumbling blocks for comprehensive online distribution: lingering concerns over increased piracy, and the challenge of securing digital rights from owners flooded with requests.

The head of digital distribution at a major studio explained to me that, with a limited budget, their department is only able to work with a fraction of the companies asking them each day for digital rights and partnerships, focusing on those with the largest possible market (such as BT’s five-million existing broadband subscribers). A distributor of one of the UK’s largest archives of film rights backed this up, explaining they only have time to work with a very small minority of requests. And, the head of international business affairs at a music major took this one step further, explaining how, in a market where countless online services are bidding for rights, they will work with the services offering the highest sales advance. Given that many services won’t survive more than a year or two, unless it is felt there is genuine innovation—such as with Spotify—they will simply try to get as much money from these services as possible and work only with those able to pay the most, knowing that when they go bust, another digital service would take their place.

The conclusion was clear that two fundamental structural problems are holding back the digital film-distribution space:
1) Rights owners have not yet established the internal infrastructure to scale digital distribution to multiple platforms easily.
2) With online revenues uncertain, cherry-picking particular services offers a way for large rights owners to make money through pre-sales from those well-financed by VCs regardless of their success or market potential, as well as to favour companies whose success they may profit from (such as Spotify, where each of the labels have a small shareholding).

For new and innovative online services this creates a vicious circle; without content they struggle to get audiences, and without audiences they struggle to get content. It’s a market which rewards both the best-financed video services and illegal file-sharing sites—and the lawyers who take them to court. Ironically, even for the self-distributing and independent sector, the fear of piracy is still holding filmmakers back from selling their work online; co-founder of openindie.com, Kieran Masterton, explained that only six per cent of the micro-budget and ultra-indie films on their service were available to download because of concerns, despite the ease of breaking DVD rights management or finding the same films for free on pirate networks.

At the same time, however, a digital network of good-quality high-definition film available to sell and showcase publicly offers great potential for filmmakers, venues and events to profit from. The Leeds-based production company Human Film recently told the Telegraph of user-managed screenings of their work not only giving them juicy license fees, but making profit for the community groups organising the events. And with phones letting people vote on programming, pay for tickets, read subtitles or even interact with the content, an open digital 21st century cinema offers much promise.

For more information, visit www.netribution.co.uk / @netribution

Nic is also the co-author of industry bible The Film Finance Handbook: How to Fund Your Film, which can be found at www.fundyourfilm.info

Taken from movieScope magazine, Issue 24 (September/October 2011)

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One Response to Digital: The Smart Choice

  1. Pingback: Carla, Esquire, and Tell Tale | The Cinephile

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