May 28, 2009

Weaving a Web of Distribution

With indie film distributors imploding left and right, the economy smarting, the theatrical audience for films shrinking and the fight to garner the attention of viewers in a completely saturated marketplace becoming increasingly bloody, it’s no wonder that there are no more rules or boxes for documentary filmmakers to follow or fit into when seeking to distribute their work. The future for capturing audiences and revenue for documentary films is wide open, needs to be multidisciplinary in its approach and must include the burgeoning new model of online distribution.

Many independent producers and filmmakers are wary of cutting their profits by moving online; their unease has been building since the advent of VHS. As a result, the distribution of independent, professionally produced films online has been slower than it could be. Revenue is a bugaboo, but while there are genuine concerns, technology can create opportunity—particularly for documentaries, where niche marketing can be achieved with research and the click of a mouse, and a wider audience is open to the independent and offbeat.

Within the last year alone, several Web entities have launched and existing sites have expanded their online distribution operations. Nearly all sites use proprietary software, while most of the big-box companies also use proprietary hardware. Many of the sites also utilize and promote social networking elements. The bigger content providers, such as Amazon, Apple, Microsoft, iTunes and Netflix, focus on large-scale distribution, the bulk of which is studio product or films from known distributors. Hulu, Joost, Blip.TV and YouTube are best known for their television catalogues, user-generated content and film clips. Despite the dense and ever-evolving marketplace, sites featuring independent and/or documentary film fare are relatively scarce. SnagFilms, Jaman, MovieFlix, FilmOn and EZTakes are a few that work with individual filmmakers and small distributors.

Ted Leonsis, former AOL vice chairman turned entrepreneur and producer of Nanking and Kicking It, launched his latest venture, SnagFilms last summer, and it appears to have tremendous potential in helping documentary filmmakers connect with their audience.

The premise is simple: Films––including household names like Super Size Me and lesser known, highly regarded films like Paper Clips, as well as docs from the National Geographic and PBS catalogues and much more––can all be watched for free online. The caveat and potential for profit are the brief commercial breaks in all of the films. The more clicks to the films, the more ad revenue generated. Filmmakers can also make money from DVD sales that are generated from the site, paying SnagFilms an 8.5 percent commission.

The real genius of the service is the ability to “snag” a film and place a widget on a blog, Facebook, MySpace page, website, etc., opening up a virtual theater wherever the viewer wants and exposing the film to a wider audience, with each transmission of the widget. In an interview with Variety, Leonsis said, “Content wants to be distributed. There is a long tail of docs out there with avid supporters and a significant level of interest that just can’t succeed through traditional distribution channels.”

Veteran documentary producer/director Steven Rosenbaum’s feature Inside the Bubble, which follows the 2004 US Presidential campaign of Senator John Kerry, is on SnagFilms. In his vlog, Rosenbaum talks about the advantages of the Snag model. “They’re not only reinventing the distribution piece, but the revenue generation piece as well,” he says. “If you look at my film, you’ll see that a commercial plays about every eight minutes. This may not seem like a big deal, but there really is no other distributor that’s currently finding a way to take documentary films and build a CPM [cost per thousand] based video ad model into them. There’s real revenue associated with [commercials], and that’s going to come back to Snag and me; we’re going to be profit participants. It’s a really new idea.”

At its launch last July, SnagFilms had 250 titles; by December, that number had more than doubled to 510. While SnagFilms has approached distributors and filmmakers about their catalogues and films, individual filmmakers can submit their work by sending an e-mail to submissions@snagfilms.com. The company does have a selection process, and not all films will make it online. But according to the guidelines, SnagFilms is “actively seeking to offer differing viewpoints.”

SnagFilms CEO Rick Allen has seen substantial gains since the launch. “We were delighted during Thanksgiving week to provide our first set of checks to every one of our distribution partners,” he says. “Given our launch in late July, this first series only represented about two months of a start-up effort, and we look forward to future periods, as the online audience for great documentaries increases. We are seeing conditions that remind me of the early days of cable television, with two important differences: First, on the Web—and especially with our “snaggable” widgets that allow any film to be embedded on any webpage—there is no gatekeeper between a filmmaker and his or her audience. Second, while it took 30 years for cable to achieve ad pricing parity with their competitor (broadcast), we are already seeing ad rates roughly comparable to what cable now enjoys. That means that the business model is in place; we now need to keep scaling the audience.”

Gaurav Dhillon, founder and chief executive officer of Jaman was most recently CEO of Informatica Corporation, a Silicon Valley company that he co-founded in 1992. He also loves film. During a 2006 visit to Argentina, Dhillon saw some exceptional films, but when he returned home, he wasn’t able to share them with anyone because he couldn’t find them anywhere. He founded Jaman to showcase independent films from around the world, for global content users. Viewers can select films from the site’s library and download them directly onto their PCs, Macs, televisions, TiVos, etc.

Jaman has over 3,500 films on site, and while its films are sourced mainly from distributors, Dhillon says that on several occasions he and his staff have been so moved by a film that they went directly to the filmmaker. According to Dhillon, the Jaman team attends festivals around the world, are all avid filmgoers and track buzz in the film community. Filmmakers can contact Jaman directly through the site, and members of the site’s social network are encouraged to recommend new finds.

Most rentals are $1.99 and most purchases are $4.99. Filmmakers are paid the first dollar gross—an adjusted gross participation, payable from the first dollar of receipts. Dhillon recently said that the majority of the films will soon include advertising, making them free to viewers, although users can opt out and pay the full rental or purchase price.

MovieFlix

is one of the oldest online distributors. In business since 1999, the site was developed as a place for independent filmmakers to showcase their work. MovieFlix maintains a library of over 4,000 full-length movies, short films, independent films and television shows in over 30 categories.

The site has a $9.95 per month membership fee that allows for unlimited streaming, as well as downloading-to-own. The site also offers over 1,500 free films. Spokesperson Robert Moskovits says the films come from both distributors and filmmakers. MovieFlix is open to submissions from independent filmmakers. As to criteria, while Moskovits was not available for interview, he has stated, “It depends, really; we just have to like it.” MovieFlix usually does a revenue share, and each agreement is different.

Actor, filmmaker, entrepreneur and child of privilege Alki David began developing the UK-based FilmOn.com in 2006, after numerous difficulties with distributors. David’s bio claims that by 2008, the site had earned £7 million (approximately $10.1 million) in profit. FilmOn has 2,500 films available to stream or download, with another 38,000 premium titles aggregated. Cost to the consumer is between $2 and $4 for most films.

According to David, FilmOn makes deals with both filmmakers and distributors. The split is a 50 percent revenue share on sales. Like many of the sites, FilmOn has a large social networking element, and David notes that filmmakers can build an individual following through their upload service at http://moviebuffs.filmon.com . For films with wider commercial potential, programmers can be contacted at info@filmon.com.

EZTakes has about 4,000 films online. While EZTakes programmers prefer to avoid titles easily found at big-box discount stores, they do tend to look for the most marketable material. Currently, most of their product is from distributors. Filmmakers of Michael Moore-sized recognition might find a home here, but all is not lost. According to the site’s marketing team, they will soon be offering a self-service publishing option that will give smaller filmmakers an opportunity for an audience and revenue.

Downloads cost anywhere from free to $20; most are in the $6-to-$7 range, and DVDs are also sold. The film’s rights holder gets two thirds of the revenue and EZTakes gives a 50 percent split on ad revenue.

Monetizing content—the act of financial validation online, the revenue stream that any filmmaker needs—is still up in the air for independents. “It could potentially fill the void where the DVD market has collapsed,” says Udy Epstein, president of 7th Art Releasing. “But the big question that looms over this particular distribution model is: How will it monetize for the filmmaker or investors?”

7th Art Releasing, which distributes independent feature, documentary and educational films, has content on both iTunes and SnagFilms. “Online distribution makes perfect sense,” Epstein continues. “It doesn’t matter if the film streams or is downloaded on demand, either to own, or rent. It’s all the same delivery of content, via electronic means, to an end user.”

Epstein says that SnagFilms has told him that the first revenue checks will soon be cut. In addition, 7th Art Releasing has received requests for DVDs, after titles have been made available online—a financial perk that has been evidenced by many online distributors.

Independent filmmakers will have to be creative and selective when deciding to distribute via the Web and carefully research the best portal for their product. There are many potential ways a filmmaker can generate profit, from the heavy marketing of select clips to drive traffic to the film’s site, or DVD purchase, to creating different versions of the film for different models of distribution. A myriad of possibilities exists on the Internet.

As rapidly as things have changed, however, there may be stagnation. Epstein asks, “Are the numbers of online viewers there for documentaries? In regard to other genres, will viewers be willing to pay, or do they want it all for free because it’s on the Web? Like it is with other corporate concerns, will most of the money stay somewhere else and not trickle down to where it should be?”

The jury may be out and the future a little uncertain, but to not pursue online distribution as an element in any film’s release campaign would be folly.

 

Elisabeth Greenbaum Kasson is a writer and marketing/communications professional, who spent many years in the trenches as a publicist for documentary and independent feature films. She resides in Los Angeles with her family.

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