DISTRIBUTION TRANSFORMED

BusinessWeek posted an illuminating feature, “Indie Filmmakers Hit Their Target,” analyzing how independents are taking control of their own marketing and distribution. The article explores “the transformation of the film industry” and documents how filmmakers are “skipping [conventional] deals and using the Internet to get their stories in front of people who want to hear them.” The website also includes a useful slideshow with commentary.

My inclusion in the article was serendipitous. BusinessWeek’s reporter John Tozzi emailed me just after I’d given a presentation at the Cannes Film Festival on “cutting edge distribution” and shortly before I delivered a keynote in Hungary on the future of distribution. Tozzi and I managed to do an interview via Skype, and discovered that he happened to be writing about the same innovative models I was speaking about.

Tozzi’s article highlights several clients I’ve worked closely with to design and execute customized distribution strategies. Curt Ellis and Ian Cheney co-produced and starred in KING CORN (directed by Aaron Woolf) about “two friends, one acre of corn, and the subsidized crop that drives our fast-food nation.” They effectively implemented a hybrid strategy, utilizing the best of traditional and direct distribution routes. Instead of making an overall deal, the KING CORN team split up their rights, choosing reliable partners for theatrical (Balcony Releasing), television (PBS’s Independent Lens), retail home video (New Video), and educational distribution (Bullfrog Films). They also sold DVDs directly from their website before and after they were in theaters.

The article also spotlights the success of another one of my most unstoppable clients. Ben Niles produced and directed NOTE BY NOTE, the critically acclaimed documentary about the making of a Steinway concert grand piano. Ben launched his hybrid distribution strategy with a remarkable theatrical and semi-theatrical run featuring appearances and performances by the film’s star, Steinway L1037, in select theaters. Working with a tiny budget, Jim Browne of Argot Pictures has already booked NOTE BY NOTE in 75 cities and is expecting to do the impossible: make a profit on the theatrical release. DVDs are also selling like hotcakes at screenings, whenever Ben is able to make them available.

We are living in revolutionary times. Every day filmmakers are blazing new hybrid distribution trails to maximize revenues, audience, and impact.

TRUE FANS AND TRUE FILMS

Every independent filmmaker should be building and nurturing a core personal audience. The bigger and more loyal the audience, the greater the revenues and creative freedom for the filmmaker.

“True Fans” can enable creators to earn a living from their work, according to Kevin Kelly, the former editor of Wired and all-round provocative thinker. His recent article, “1,000 True Fans,” has become an online sensation. Kelly conjures up a model in which committed fans make enough purchases directly from an artist’s website to allow the artist to continue making music, writing books, creating videos, etc.

If revenues from direct sales to True Fans are sufficient to cover artists' living costs and production expenses, they will be free to devote themselves to their art, rather than having to work dreaded day jobs. For example, a painter or a photographer who averages $100 in direct sales from 1,000 True Fans grosses $100,000 annually.

Most independent filmmakers, given higher production costs and lower price points, will need more True Fans (as well as Lesser Fans who make occasional purchases), and will have to supplement direct sales with other revenue streams (retail video, television, non-theatrical, educational, and foreign). But Kelly’s compelling essay shows the importance of building a fan base and keeping fans engaged through direct communication. Filmmakers consulting with me make up to nine times as much profit per sale on the DVDs they sell directly from their websites compared to those they sell through retail outlets. And, as Kelly points out, “You also benefit from the direct feedback and love.”

Kelly also discusses "micro-patronage," which enables creators to help fund new productions by attracting contributions from “True Fans.”

Don’t miss the wealth of useful comments and valuable examples posted by readers.

While you’re at his website, download a free copy of Kelly’s book, “True Films: 200 Documentaries You Must See Before You Die”. This guide contains rave reviews of Kelly’s favorite “True Films.” It is notable as an example of the latest in digital book distribution. While Kelly sold earlier editions, he is making this version available for free as an experiment to test whether he can generate sufficient revenue from ads. Every reader who uses the latest version of Adobe Acrobat can choose to see the ads or turn them off. Kelly earns money every time a reader clicks through an ad, and gains more True Fans by making his book freely available.

LEARNING FROM RADIOHEAD

After liberating themselves from a traditional record deal, Radiohead took control of their distribution. They are now gleefully reinventing it. They launched their new album, IN RAINBOWS, online, selling it exclusively from their website for the first two months. Anyone anywhere in the world could download the album and pay whatever he or she wanted. It is estimated that Radiohead netted almost $3 million from digital downloads off their site. Radiohead received 100% of these revenues (rather than a 10-15% royalty) and had the opportunity to collect buyers' email addresses for future marketing and sales.

Following this first stage of distribution, Radiohead made IN RAINBOWS widely available on CD through traditional retailers. Radiohead had greater control of retail distribution than if they were tied to a major record company and most likely got a bigger piece of retail revenues. IN RAINBOWS shot to #1 in album sales during its first week in stores.

What lessons can emerging filmmakers learn from one of the world’s leading bands?

• Retain overall control of your distribution.
• Design a hybrid strategy combining traditional and self-distribution.
• Focus initially on your core audience.
• Sell exclusively from your website first.
• Then expand into traditional retail to supplement direct sales.

The music business leads the film industry in both the collapse of old distribution models and the launch of new ones. Check out two revealing pieces in the latest issue of WIRED. David Byrne (of Talking Heads fame) interviews Radiohead’s Thom Yorke and other music industry mavericks. In “The Fall and Rise of Music,” Byrne incisively analyzes the six primary music distribution models. They run the gamut from pure self-distribution to the equity deal, in which “the artist becomes a brand owned and operated by the label.” After examining each of these approaches, Byrne concludes that “with all the ways to reach an audience, there have never been more opportunities for artists.”

Filmmakers also have an unprecedented number of distribution opportunities and they're just getting started.

CREATIVE DISTRIBUTION

Filmmakers who control their distribution can be as creative bringing their films into the world as they are making them. Arin Crumley and Susan Buice are the poster couple for distribution as a creative act.

They have been blazing new trails with their film FOUR EYED MONSTERS for more than two years. The film is an irresistible portrait of their romance, starring themselves: “We met online, started a relationship, & turned our lives into this project.”



Learning to “disregard any preconceived notions of how things needed to be done,” Arin and Susan got FOUR EYED MONSTERS featured on the MySpace home page while the film was still playing festivals. A few months later they launched a series of video podcasts on their website. Fresh, charming, and smartly made, the podcasts complement the film perfectly. Watched together, the eight episodes are nearly as long as the feature.

The podcasts helped them build a core audience for the film, which they then activated online. They screened their film in theaters every Thursday for a month in cities where a critical mass of fans requested showings. Building on this experience, they screened the film in 31 cities on Valentine’s Day.

This summer FOUR EYED MONSTERS became the first full-length feature to be shown on YouTube. By September 1, 2007, more than 820,000 people had watched some or all of the film. In addition to sharing ad revenues as YouTube “content partners,” Arin and Susan have earned almost $45,000 so far from Spout.com sign-ups. The filmmakers also persuaded MySpace to let them show their entire 73-minute movie on their MySpace page.

The FOUR EYED MONSTERS website is a model every filmmaker can learn from. The site is personal, with Arin and Susan’s characters at its center. It has rich content, expanding beyond a promotional vehicle into a DIY filmmaking resource. Regular updates and additions keep the site dynamic, giving visitors reasons to bookmark the site and return. It features user contributed content, including over 70 video responses to the film. Users can easily subscribe to Arin and Susan’s podcasts via iTunes, MySpace, and YouTube. The tutorials are particularly valuable including: “making a deal to sell your film," a public database of movie theaters, and “dealing with massive amounts of footage.”

Visit the site, watch their movie, take a tutorial, and liberate Arin and Susan from credit card debt.

BUILDING A PERSONAL AUDIENCE

Aspiring to be a superstar? Trying to connect with your fans? Determined to build a core audience? Make it happen online. Create direct relationships with viewers around the world and turn them into loyal supporters of your work.

Filmmakers have a lot to learn from their musical brethren. Hoping to succeed as a singer-songwriter, Jonathan Coulton quit his day job as a computer programmer. As portrayed in Clive Thompon’s terrific New York Times Magazine piece, “Sex, Drugs, & Updating Your Blog” (5/13/07), Jonathan committed himself to writing and recording a “Thing A Week” for one year and making these songs available from his website. The most popular were downloaded half a million times, and now more than 3,000 people visit his site daily.

His loyal fans buy CDs and digital downloads, create illustrations and inspired music videos for his songs, enthusiastically create “virtual word-of-mouth,” and support him in a variety of ways, from hosting a website to reformatting his music for karaoke. They also send him a steady barrage of email that he spends hours answering. Thanks to his comprehensive database of fans, Jonathan is able to target his touring--arranging concerts in localities where he has a critical mass of supporters and then inviting all of his fans by email.

Rather than devoting energy to pursuing agents and record deals, he spends his time writing and recording songs. Rather than relying on a music company to launch his career, he launched himself online. Rather than selling his music through retail stores, he sells it online directly and through CD Baby and iTunes. Rather than hiring a publicist, he updates his blog and his MySpace page. Rather than relying on focus groups, he hears from his fans morning, noon and night. For Clive Thompson, Jonathan Coulton is a harbinger of a new breed--“Artist 2.0.”

HARNESSING USER CONTRIBUTED CONTENT

It’s not a secret weapon. It’s so powerful that sites ranging from Wikipedia to Ebay couldn’t exist without it. I emphasize its importance every time I do a presentation and talk about it with all of my clients. But “user contributed content” is hard to define and harder to understand. Read More...

LONG LIVE DIGIMART!

I want to devote my first mailing to Digimart, the remarkable global summit that brought together digital distribution leaders from around the world. They came from China, South Africa, Australia, Peru, Brazil, as well as across Europe and North America, to share the lessons learned on the cutting edge of film and video distribution. Read More...