Case Study #2: California Newsreel
California Newsreel, a media arts center and nonprofit distributor of films on African-American themes, created the Library of African Cinema in 1991 to bring feature films by Africans to American audiences. Beginning with 8 titles, Newsreel expanded the collection over several years to 40 titles, which they market to public and academic libraries. Although the films are not well known in this country, and often require contextualization for audiences. Newsreel has been able to sell an average of 400 to 500 copies of each title to the educational market.
By 1994, when sales of the first eight releases had begun to slow, Newsreel decided to investigate whether they had home video potential and, if so, what was the best way to get them out. The fact that the films were features was a plus, but none of them had any commercial release with the attendant publicity that is crucial to home video sales. And the Newsreel staff knew that the home video track record of subtitled foreign features in this country was grim.
Working with Steve Savage of New Video on an NVR grant, Newsreel assessed possible plans. One scenario called for Newsreel itself to launch the collection, do direct mail marketing to consumers of similar products (e.g., African-American book-club members), place it with a large number of catalogs and subdistributors and fulfill orders; in other words, become a full-scale home video distributor. Another option was to give the collection to a home video distributor, attempting to retain some control over the educational market. A third was to do limited home video distribution by launching the collection and trying to sell it through catalogs that carried books and videos of a similar nature. None of these options guaranteed earning back Newsreel's investment of time and money. Based on their research, Newsreel estimated they could sell about 300 units of each title at $29.95—$49.95. These would probably go to libraries and to the approximately 200 retail outlets that traditionally buy independent/alternative titles. Whether sales went beyond this would depend on public interest; it was possible that an audience of African Americans and cineastes might buy the videos, but this was by no means certain. Therefore, even with Newsreel's initial launch of 4 to 8 titles and the introduction of additional titles every year, a realistic appraisal by the company showed that there was a strong possibility of losing money unless the projects were subsidized. The home video distributors that Newsreel interviewed seconded this analysis; none was initially willing to take on the collection. Newsreel investigated existing catalogs but did not turn up any that would carry the titles except Facets, the nation's largest distributor of foreign and independent film on video. To become a full-scale home video distributor while continuing to operate the educational business seemed unwise, especially for titles that did not appear to have great market potential.
Then two things happened. In exploring 35mm distribution options to help their newer African titles get better domestic theatrical releases, Newsreel came to an agreement with Kino, a New York-based theatrical and home video distributor. Newsreel then received a grant from NVR to help subsidize home video distribution of the Library of African Cinema. With this in place, Kino agreed to launch four of the older African titles in home video as well as take on the 35mm rights to some of the Library's more promising newer titles.
The NVR funds would be used to create glossy brochures, do special mailings to video stores and hire a publicist for the series launch.
If this initial offering were successful, Kino hoped it would pave the way for a continuing line of African films for which the expense of 35mm release and promotion could be compensated by the profits from home video sales.
With Don Krirn of Kino, Newsreel chose four titles to start the series. They picked films that had al ready saturated the educational market but had some quality that might make them more accessible to a general audience, such as music or an appeal to children. The films chosen were Quarrier Mozart (Cameroon), Touki Bouki (Senegal), La vie est belle (Congo) and Wend Kuuni (Burki na Faso).
Based on their experience, Kino determined that the films would probably not do well in sell-through. Rather, the company decided to price them higher and focus on sales to video rental stores, as well as to libraries and museums. Kino set the retail price at $59 per video, with a small discount for purchasing the set. The Library of African Cinema, re-labeled "New African Cinema" was launched for home video in May 1996.
Even with the help of an expert, the publicity that accompanied the launch did not generate much notice—there was simply no hook to catch the attention of the American public. Initially, about 250 units of each of the four titles sold to video stores and public libraries, half as the four title set, and half individually. Virgin and Tower Video each ordered ten full sets to stock in specified stores. An expected number of these initial orders were returned. Thus, sales went according to Newsreel's expectations.
That August, however, Kino decided to approach Blockbuster, with whom they had a previous relationship. Blockbuster bought 500 copies of the set for rental in 500 of their outlets. With this single acquisition, the sales increased to 750 units per title, surpassing Newsreel's expectations for the series.
Six months after the deal, however, Blockbuster reported to Kino that rentals were disappointing. From Blockbuster's perspective, the experiment was not a success; they would not be interested in buying more of these titles in the future. In light of this, Kino decided that it would not be economically feasible to distribute additional African films.
What lessons did Newsreel learn from their foray into home video? Lawrence Daressa, co-director, believes that the options for African cinema (and probably most foreign features) are currently limited in the consumer market. Non-mainstream films sell today only if "they have a handle, some hook to draw a special-interest audience (gay or lesbian, Jewish, twenty somethings)." The only group interested in cinema per se is cineastes, and they do not exist as a big enough market for home video. Without a large consumer base, the primary market for this kind of title will be institutional.
Despite the lack of incentive, Newsreel will continue to market its African titles in home video on a limited basis, because it is part of the company's mission to get the films to as wide an audience as possible. Based on what Newsreel learned with Kino, they expect to price these for rental in video stores. They have recently mailed a second offer to 1,500 video rental stores and 1,500 public libraries and are awaiting response.
In addition, Newsreel will continue to sell to consumers through two other channels: off-air offers and bookstores. Although no African film has been carried nationally on public television, KCET, KQED and WNET have broadcast work locally during Black History month. As a nonprofit, Newsreel could make on-air offers through an 800-number following these broadcasts. They have sold only ten (two per broadcast at $34.95) which they attribute to late-night time slots and the subtitles, never an incentive to American viewers.
Black bookstores also provide a limited but consistent sales channel. Eso Won, a bookstore in Los Angeles, bought some of Newsreel's African-American videos (biographies especially sell consistently) and expressed interest in the African features. The store has since sold about 20 copies of 10 features over time. Newsreel sells to bookstores at a 40% discount with a no-return policy; the features sell at retail for $30. The distributors have also approached other independent black booksellers, but so far these have not been willing to take on videos because they consider them high-priced items that take up too much shelf space and require special handling.
The good news, according to Daressa, is that Newsreel "managed to take an entire body of cinema and get it into college libraries, where it should be." Because of the focused educational distribution and the home video experiment, African cinema is now available at 400 colleges, as well as in hundreds of public libraries and home video stores for individual use.
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