Film Distribution & Identifying Strong Markets

There are a number of viable strategies to use when seeking distribution financing.  The most attractive packages are built around the fundamental elements of a great script, strong cast and talented filmmakers.  However, the one critical element that is often overlooked by filmmakers but never by distributors is the strength of the market.  Generally, distributors would rather take a good film supported by a strong market, than a great film and in a choppy market.  So how do you find identify the strong markets? Use the past, present, future approach.

• Past:  Take a stroll to the video store and see what films are getting the most shelf space.  Note which distributors are putting them out.
• Present:  Mind the numbers, they never lie.  Keep a record of which films are making money over a six-month period.
• Future:  Look at the production pipelines of the MPAA studios.  Studios are like mutual funds, they seek and exploit strong markets and are easy to follow.

In-Theater Advertising Growth Decelerating

New data from the Cinema Advertising Council shows domestic in-theater ad growth decelerating. In-theater advertising grew 5.8% to $571 million in 2008, down sharply from the 5-year historical average of 24.5%. This is the slowest gain reported since in-theater advertising statistics started being recorded in 2002. So why the drop? Though I do not have the exact figures, I do know that domestic theater growth is no where near 24.5% annually. Historically, in-theater ad spending has grown disproportionately to new theater growth. This can only happen for so long until we reach the equilibrium where in-theater advertising maintains a grow rate closer to that of the theaters’. Though there is no question that in-theater advertising is one of the best ways to raise film awareness (CAC president and chairman David Kupiec says the recall rate is as much as 5 times greater), I believe that in-theater ad growth will continue to decelerate.

Download the Cinema Advertising Council’s 2009 Cinema Advertising Revenue Report

Below are the figures as reported by the Cinema Advertising Council

 

Jeff Zucker Speaks On The Business

NBC Universal CEO Jeff Zucker continues to express an ambiguous outlook regarding NBC Universal’s digital initiative at the All Things Digital conference.  It would give me some piece of mind if Mr. Zucker and other network executives just came out and said that they have no idea what Television’s future business model is, nor how to monetize new media on a relevant scale.

Top 3 points that Jeff Zucker made in the All Things Digital interview:

1. NBC has no idea what the television business will look like in 5 years.
2. NBC moved Jay Leno to prime time because they cannot come up with scripted programming to confidently compete with the three networks ahead of them.
3. NBC is spending a ton of time and money on Hulu without any idea of how it will ultimately grow their bottom line.

Top Five Film Financing Problems

New York City filmmaker Ted Hope posted a fantastic blog (or utterly depressing depending on how you look at it) last month titled 30 American Independent Film Problems/Concerns.  The list below contains the top five as they relate to independent film financing.

1. Too many films available and being distributed to allow films to stay in one theater for very long, making it more difficult to develop a word of mouth audience.
2. Reliance on large marketing spend release model restricts content to broad subjects (which decreases films’ distinction in marketplace) and reduces ability to focus on pre-aggregated niche audiences.
3. Collapse of International sales markets requires reduced budgets for filmmakers, and thus resulting in limiting content.
4. Collapse of US acquisition market requires reduced budgets for filmmakers, and thus resulting in limiting content.
5. Bootleggers have developed a platform that allows audiences to simply download whatever they want where ever they want whenever they want — something that the film industry has yet to do.  (This is a contributing factor in the demise of the DVD market – something that pushed many independent films in the black.)

Web-TV Convergence Panel Discussion

Great panel discussion on Web-TV convergence at the Streaming Media East Conference held a few weeks ago.

• Boxee Founder and CEO Avner Ronen talks about his business and the Hulu situation
• ESPN360.com VP Damon Phillips talks about the sports network’s new media business model
• Doug Ferguson of Sling Media talks about Echostar’s acquisition of Slingbox as well as the new sling.com
• Michael Rosen of Babelgum talks about professionally produced content on their niche platform
• Plus a great Q&A session toward the end!