The New Definition of Theatrical Release

Indie filmmaker John Reiss talks at DIY Days about changing the definition of “Theatrical Release”.  While Jon acknowledges alternative forms of distribution, he speaks candidly about the emotional importance of the theatrical release.

Reiss’ talking points include:

• Why theatrical is important
• Week long vs short runs
• Rethinking film festivals
• Alternative distribution models

Happy Turkey Day to all - I hope everyone ate 10 pounds and gained 20  !!

Is Smart Money Targeting Broadway?

During a difficult economy, the weak dollar and star talent has fueled a successful year on Broadway. Signs point to a bright year ahead.

Broadway:

• Contributes $5 billion a year to the New York economy
• Supports over 44,000 jobs
• Ticket sales for the first 6 months of this season are steady at $481 million
• Attendance is expected to surpass last year’s 12 million people

Disney Reports Earnings: Iger’s Crystal Ball

Disney reported earnings after the bell last Thursday, beating Wall Street’s expectations with Net income up 18% on 4% higher revenue.  Most interestingly on the Q3 conference call is that it was Disney’s media networks that drove growth.  While a secular ratings decline is occurring across all of the major networks, Disney was able to grow operating income for the media division by 26% during the third quarter of 2009.  Though Disney CEO Bob Iger is quick to point out that advertising revenues will continue to decline, Disney will still invest heavily in content creation.  Iger believes that the Company is on the right path toward developing alternative revenue streams.

Social Media Distilled for Business

I have been traveling over the past week and haven’t had much time to blog.  However, I come across a piece that I would like to quickly share.

Much has been written about social media – what it is, how to use it, etc.  Still, most businesses have a difficult time deciding how much time and resources to put in to social media.  This is because social media lacks a broadly accepted set of metrics to measure return on capital.  Though in my opinion the real reason has nothing to do with metrics, rather a lack of understanding about what social media is.  Social media is simply word of mouth – that’s it!  If more businesses understood this, they would be far less reticent to shift marketing dollars towards it.

The folks over at HubSpot published a great piece yesterday about why businesses should use social media.

The three main benefits businesses get from social media:

1. Listening

   Every company needs to listen.  Doesn’t matter if you sell solder paste, CRM software or fencing supplies.  You need to listen to your competitors, your customers, your prospects – your community.  Social media sites like Twitter, LinkedIn and Facebook make this easier.

2. Reach

   Reach is important to any marketer.  It’s the number of people you can communicate with directly via email, telephone, or any other channel.  You need this whether you’re selling to consumers or businesses.  Social media tools media it easier to build.

3. Nurturing

   Nurturing is another critical marketing task for all companies.  Regardless of what you sell, you need to build trust with potential customers and educate them about your company and your products.  Social media facilitates the development of personal relationships at scale.  This makes it an ideal tool for nurturing in any business.

Read the entire post on why businesses should use social media from HubSpot.

Filmmakers Should Keep An Eye On Netflix

Since its founding in 1997, Netflix has stayed on the leading edge of market trends.  Over the last 22 years, Reed Hastings has taken the concept of movies by mail from nothing to about 36% of the movie rental market.  Netflix has driven subscriber growth and changed distribution by providing customers the convenience of never having to leave their home.

In recent years, the Company has identified emerging distribution channels and partnered with brands including Vizio, LG Electronics, Samsung, Microsoft and Sony, making it easier for subscribers to access Netflix content.   This month Netflix streaming service comes to the PS3 and in early 2010 Netflix will bring streaming service to the upcoming Wii HD unit as well.

So, what does this mean for filmmakers?

This means that filmmakers should keep a close eye on Netflix as it becomes an increasingly powerful distributor.  Traditional movie rental stores are dead.  And unlike the kiosk market, Netflix has built an engaged community.  The Company has detailed personal information including user preferences and viewing patterns that will allow it to uncover new opportunities that its competition simply cannot.

Netflix currently has 11.1 million subscribers.  According to Wedbush Morgan analyst Michael Pachter,  the Xbox deal has contributed about one million new subscribers to Netflix.  That equates to 7% of the 15 million Xbox units sold.  Assuming the same 7% conversion rate on PS3′s 9 million household units, Netflix will grow its subscriber base by 630,000 (roughly 6%) from the deal.

Netflix’s move to leverage the broad adoption of next-gen gaming consoles and use them as a distribution channel furthers the Company’s competitive advantage.  Though many complain about the lack of content available for instant viewing, as Hastings points out in the New York Times, “Our ability to license more content is based on what checks we can write… If getting on the PS3 [and Wii HD] helps our subscriber base grow, that helps us write bigger checks.”

Because licensing makes up nearly the entire cost of streaming, Netflix has resisted newer and more expensive content.  To date, I believe most of the deals have been bulk licensing and unlimited use agreements.  Going forward, Netflix can accelerate the growth of its instant viewing library if it is better able to directly offset the licensing costs of streaming content.  Because of this, Netflix would be smart to tweak the current subscription model and introduce streaming-0nly plans.

One thing is certain, as grows Netflix’s reach, so grows its power within the film industry.

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