“Just gave a dollar to a Filmmaker crowdfunding on the subway. He sold about a dozen demo dvds and a toy on one car.”
It made me wonder: what is the line between begging and crowd-sourcing?
I have a mental rule about giving money on the street (or on the subway): I don’t give to anyone begging. I never buy anything from someone selling trinkets on a subway car. I will sometimes give to musicians or other entertainers, but only if they haven’t trapped you in a space. For example, I give to a good musician on a subway platform, but I don’t give to someone who leaps onto my subway car and plays between stops. I think the dividing line is whether I can choose to move away if I don’t like the performance: if I can’t then I consider it an invasion of my personal space and it is unwelcome. I would make an exception for spontaneous performance groups like Improv Everywhere as they are there to create and experience and leave, but are not then trying to get money out of you before the doors open.
So what then, is the dividing line between begging and crowd sourcing?
This filmmaker was selling trinkets, thus my ruleset says I should not buy. However, he is (or is claiming he will be) using the proceeds to make a film, something I tend to support. I did, after all, support the guys making the One Second Film (I’m a “producer”). Despite my thinking that they are probably 99% about getting enough cash to cruise the film festival circuit, they were entertaining and ambitious and I rewarded that. But what if they had come to me on a subway car, and not in a pavilion at Cannes? I likely would not have bought in, I suppose, but I have a hard time saying why. I suppose that context is everything.
As a filmmaker one part of our job is to find money and, in so doing, we beg. Yes we come up with business plans, financial models, marketing schemes and the like, but we are, in a way, begging. When we turn to our audience and say to them, please finance my work so I can make another we are, in a way, begging. We are ok with that because the cause is film, it is noble and we feel justified in making that request. Why then would any other type of begging be less noble? I don’t really have an answer but I’m interested in your thoughts.
What is the difference between being a beggar and being a crowd-sourcer?
Here is the panel discussion I participated in during DIY DAYS in Philadelphia this summer. As always, kudos to Lance Weiler for putting this amazing event together.
TALK – FROM HERE TO AWESOME: Production has become democratized while digital distribution is quickly becoming commoditized thus fragmenting the marketplace and resulting in little to no revenue. The problems that the independent film industry faces are well documented but where do we go from here? What are the new models of discovery and distribution? How are storytellers going to fund, create, distribute and sustain from their work? ARIN CRUMLEY (Four Eyed Monster, As the Dust Settles) SCOTT MACAULAY (film producer & editor of FILMMAKER MAGAZINE) NOAH HARLAN (film producer & mobile app developer), SCOTT KIRSNER (journalist and author), DON ARGOTT (ROCK SCHOOL)
This is a great time to make a movie.
There, I said it. I’ve been thinking it for a while but somehow hadn’t gotten around to putting it on paper (or in bits & bytes, as it were). Those of you who know me have heard my argument but I think it’s a good thing to say out loud, so say it with me:
This is a great time to make a movie!
I am not talking about creatively – though it is certainly a great moment creatively. Political and economic turmoil, changing technology, further democratization of the tools, declining costs of equipment (hello: RED, D90, GH1) all contribute to a fertile landscape and there are some tremendous advocates for the new models and methods of connecting to your audience. In particular I recommend following the smart work and writings of Ted Hope, Lance Weiler, Scott Kirsner and others.
But this piece is not a rah-rah, buck up and smile argument for creators (Ted’s been doing a great job of that). This is drawn out of conversations I’ve been having with people about why it is a great time to invest in media and content creation. While I believe this to be the case for all media and I am developing a number of cross-platform and transmedia projects, I am going to focus largely on film here. I believe the arguments I am laying out extend to other forms of content.
Let me also note that, though films can be made for virtually nothing, not all films should be made for virtually nothing. I love and admire amazing ultra-low-budget work like Shane Carruth’s PRIMER and Jake Mahaffy’s WELLNESS, however, like your choice of equipment & location, the method needs to match the intention (WELLNESS on IMAX is as absurd as BATMAN on DV).
Those films succeeded because they were coherently conceived to work at the budgets they were using and because of the intelligence, guile and creativity of their directors. That being said, sometimes you have to raise more money and when you do, you have to convince those you’re talking to why it’s a good investment. This piece is trying to address the question of why film is a better investment right now than it has been in some years.
It’s All About Timing
For the past twenty years we’ve seen an increasing number of films being produced and, more importantly, released. This has created an over-saturation of the marketplace that raises the hurdle for each individual film to succeed.
Most businesses have a saturation point for incoming capital. If you have a McDonald’s on three corners of an intersection then the law of supply & demand will likely not sustain all of those businesses. You have over-saturated the marketplace and a Darwinian contraction will take place. If you were to approach investors about opening a fourth McDonalds you would likely find it hard to explain the rationale for the investment. (Starbucks is a great example of oversaturation and contraction as elucidated by Lewis Black).
In a business plan for a traditional company you will have sections that deal with barriers to entry for your competitors, market demand and a void in the market that needs filling. Recently I was talking with an executive at a cosmetics company about a new line of products they were launching. She explained in remarkable detail each part of the market that was currently being served and then showed the specific niche that they were looking to step into. She laid out the rising demand in the segment, the other products that existed and what her company would bring that was different and compelling to the consumer. In essence, she explained how many people wanted her product and how FEW other people were providing it.
In film, our business plans have tended to put forward a nearly opposite argument. We have tried to show our investors how MANY films that are like ours exist and make money. We try to make our product seem as similar to other products in the market as possible (while maintaining that we’re unique enough to be marketed). If you’re making a small horror film you’re going to cite SAW and BLAIR WITCH and others to say to potential investors: “little films can make money so invest in a little film”.
This argument here can be defined as:
MARKET = DEMAND * PRODUCT
Where the product is your film, the demand is the audience’s prior desire for films similar to the product, and the market is the potential success of that film. We make the assumption that the product is singular and therefore its success is solely dependent on demand (ie: multiply demand by 1).
The problem here is that you have defined the market by removing the dimensions of time & quantity from the equation. If there were only a single film in the marketplace then this equation would work well, but what if there are many films? The demand should be split amongst them. In fact, the equation should be more like:
MARKET = DEMAND / PRODUCT
Where product is now ALL the films in the marketplace which meet the demand. We can agree that the distribution will not be even amongst all product but framing the equation like this can properly ratchet the risk.
But we still have a problem of time. If all films were released on a sequential timeline then this equation would work. This equation would describe a situation where we have 10 films, all horror, all budgeted under $1M, all released in one window (weekend). This is a saturation problem. We also need to account for the frequency of those releases since those 10 films spread out over a year might well work just fine. We focus so much on whether ANYONE will be interested in showing up that we don’t think about how many films that audience can show up for at once.
Our investment equation should really look like this:
MARKET = TIME * (DEMAND / PRODUCT)
Point 1: Film production does not respond to market saturation but film distribution does.
I often describe the film industry as a thousand-watt bulb out on the porch on a warm summer night. Every moth for miles is attracted to it and they all will come crashing into it without much thought. The perception of glitz and glamour, the publicity, the myths, the artistic aspirations, the self-aggrandizing, the political posturing all contribute to that bulb and lure people from all corners into the industry. This means that when money is available, money will pour into the film industry.
Point 2: The production of film will expand to absorb all available capital.
The consequence of this is that there has been a glut of films produced and released over the last decade. In particular, while the number of studios films has declined slightly the number of independent films has grown substantially.
In 1999 there were 200 MPAA films and 256 independent films released theatrically (this includes foreign, docs, etc…). By 2007 those numbers had shifted to 188 MPAA films and 396 independents and in 2008 the MPAA released only 162 features while 444 independent films entered the theatrical marketplace. (note: the drop in MPAA features last year can partially be pinned to labor strife with the WGA and SAG). (source for all these stats is the MPAA)
This means we’ve seen an increase in the number of releases over all by 34% and independent releases of an astounding 73%. But when we factor in time we see how this becomes a tangible problem. The average number of independent films entering the marketplace per weekend has grown from 4.9 to 8.5. Factor in MPAA films and you have an average of nearly 12 films per week entering theaters.
The control point to pair that data with is the number of people going to the movies and that, unfortunately, has stayed nearly constant. In 1999 there were 1.44 billion admissions and in 2008 there were 1.36 billion, a decline of 5%. Though revenue has increased from $7.31B to $9.79B, that represents an increase of 33% which is roughly on par with the increase of total films (34%) but far behind the increase in independents (73%).
Point 3: We have been releasing too many films for the marketplace.
Putting aside the question of whether or not we can make 444 good films we have other problems. With so many films coming out each week it is increasingly difficult for each film to find its audience. Theater programmers know that there is a new crop of films coming down the pipe next week so if you don’t perform right away then you are pushed out by the wave of product behind you and there are more films competing for limited attention from reviewers, bloggers, and the general white noise of promotion.
Look at the case of the Israeli film BEAUFORT last year, which, the same week as receiving an Academy Award nomination, was pushed out of New York theaters to make way for new content. If a nomination can’t keep you an extra week then the marketplace is oversaturated.
You may now be saying: ‘but Noah, you’re only talking about theatrical and theatrical is dead.” You’re partially right. I am focusing on theatrical as those numbers are the easiest to find and break down but these issues extend to other mediums. We have to assume that each individual watcher is going to consume a finite and roughly constant number of films each year, regardless of platform. Perhaps they’ll watch a few more if they can get them easily at home, but that adds to the argument I’m making about the future. The place of consumption of content may evolve (TV, Cable, VOD, theaters, Internet, etc…), and the specific form of that content may evolve (featurettes, shorts, multi-part serials, ARG’s) but the consumption itself will still take place.
Furthermore (and I acknowledge this as an aside), I believe the theatrical market will continue to exist for a very long time and the reason has nothing to do with technology or cost. It’s about human nature. Teens want to get together, away from their parents but are too young for bars so they go to the movies. Parents want to give their kids to a sitter and go tune out for a few hours on a Friday night. People on dates don’t know what to say to each other and would rather sit in a movie and have something to discuss over dinner. The theaters are going to be just fine but we have to evolve our thinking about the economics of our content.
The Thinning Of The Herd
Since the number of films has been growing and we know that production expands to absorb all capital we can take a look at the production of films versus the stock market:
We can see that the expansion of independent films tracks pretty closely to the performance of the economy (as measured by the stock market). I will make the assertion that as new forms of media become monetizable that the cache of film will move across to the new media in a largely similar fashion.
What anyone who has tried to finance a film in the past nine months has encountered is the contraction of capital. The economic turmoil has contracted the amount of available capital and, following our axiom of available capital, that should lead to a significant contraction in the production of films. This will affect both private financiers (think: your uncle Morty the dentist) and independent financing companies who depend on wealthy private investors for their funds.
Point 4: Less free cash means fewer movies.
Our industry managed to walk into two different buzzsaws at once. Before the financial crisis reached its climax in September we were already in the throws of our own economic turmoil. We were seeing the decline of one set of business models and the emergence of a new one, which we couldn’t model with any degree of accuracy.
As an industry we all know where we’re headed. Things are moving towards digital distribution. What we don’t know is what that model will be. You have ad-supported models (Hulu, Snag and YouTube), download to own (iTunes, CreateSpace/Amazon), online rentals (iTunes, Jaman), VOD (cable operators) and subscription services (Netflix) all competing to provide content. Ultimately we’ll see a combination of these services but the lack of consolidation and evolving pricing models make it hard to project the revenues for a given project. The only consistently emerging piece of data seems to be that the pricing model for a single DVD will not hold up in a digital distribution marketplace. Prices will be less and per-unit revenue will consequently be less.
But do not lose hope! We are also seeing the declining need for intermediaries for independent films entering the marketplace. Where once we needed sales agents to broker deals with distributors who would then broker deals with fulfillment companies who would broker deals with points of sale who would sell to the consumer, we now can sell directly and circumvent many of the middlemen. We can refocus our costs towards marketing and targeting our audience. The incremental cost of making your content available to a worldwide audience is crashing towards zero and this is a good thing.
Point 5: Digital distribution means a global audience for the same cost as a local audience.
Kevin Kelly’s idea of artists needing 1,000 true fans willing to spend $100 each is spot on but when you have a global audience you may be able to accomplish the same thing with 10,000 less-true fans willing to spend $10 or 100,000 casual consumers willing to spend $.99.
Where once the idea of reaching tens of thousands of consumers was an incredibly remote possibility for independent artists it now happens all the time, just look at YouTube. Jaime King got to 6,000,000 (by his estimate) viewers with STEAL THIS FILM and the incremental cost to him was virtually zero.
In the next 24 months the ability to monetize online revenue in a meaningful way will become a reality. I make this guess about timing by looking at the uptake of other related technologies in recent years. Consider that YouTube was only created in February 2005 and was ubiquitous by 2007. Netflix was created in 1997 and had shipped a billion DVDs by February 2007; they shipped their second billion in the next 26 months. Hulu went live barely one year ago and is now a top online video destination.
Whether it’s through iTunes, Hulu, Netflix or Vodo, it’s coming and the numbers will be substantial enough to at least make up for, and likely far exceed, the revenues from media distributed through traditional bricks & mortar channels with it’s production, packaging, shipping and storing requirements.
What we must do is to reorient our business plans to look at the remarkable moment we are in and how new content, professionally produced and financed, can have a more successful life than ever. A moment with this much possibility has not existed in the content world in a very long time.
The Key Points
So let’s summarize the key points at work here:
- Film is a risky investment. It always has been and it always will be. It is only a question of how to mitigate and evaluate that risk. (I say this because I believe if we are not up front with our investors we are bound to get into trouble down the line – also because some offerings require disclosure).
- The contraction of capital means there are going to be fewer films made right now. If I can make a film right now it will enter the marketplace with less competition than at any time in the last ten years.
- The cost of production is lower and incentives are better than they have been so your dollar will get you more than at any time in the recent past.
- The films being made right now are going to be entering the digital marketplace roughly in line with when we will expect the consolidation of that marketplace to take place. These films will ride the first wave of global digital distribution revenue. We have geometrically larger audiences with geometrically lower cost. The decline in per-viewer revenue is irrelevant.
- Whether you are making a traditional 90-minute feature or a ‘new media’ work, we are ALL in a new distribution model. As filmmakers we need to not cling to the arguments of past success but instead look at the future and show where our products can exist and thrive. (HT: Scott Macaulay for helping to clarify that point)
So get out there. This is a great time to make films.
This piece is cross-posted here and at Filmmaker Magazine’s awesome blog. Thanks to Scott Macaulay for some editorial guidance from a writer far better than me.
I’ve been attending the Cannes Film Festival for nearly 10 years now (which, admittedly, makes me a Johnny-Come-Lately) and each experience of the week on the Croisette takes on it’s own qualities. Where you are staying, what you are trying to accomplish (premiering, selling, financing), the weather and a multitude of other factors come into play when evaluating the overall festival experience. But no single factor can change your experience more than the difference between attending the festival and participating in the festival.
When you have a film in the Official Selection the team at the festival are amazing and in the best possible way. Unlike festivals that are obsessed with social caché or media relations, Cannes is obsessed with its filmmakers and it treats them phenomenally well. Directors of selected films are invited, completely at festival expense, and are given ‘protocol’ representatives who will take care of any needs they have while they are there.
Tickets to a premiere? Done. Car to drive you somewhere? Done. Invitations to parties? Done. Press conference with a knowledgeable moderator? Of Course…
In 1998 the festival started the Cinéfondation to “inspire and support the next generation of international filmmakers.” The Cinéfondation is broken up into three parts: the Selection, the Residence and the Atelier.
The Selection comprises short films (this year 17), made by film students from around the world and which are screened in Cannes, as Official Selections, during the festival. These films compete for prizes that include roughly 35,000 Euros in cash and are judged by a serious jury, this year headed by John Boorman.
The Residence selects 6 filmmakers, twice a year, for a 4-1/2 month residency in a beautiful apartment in Paris where they are supported and mentored through the writing of a new project. The selected filmmakers have directed either shorts or, at most, one feature. The residency includes visits from acclaimed filmmakers (I’ve heard of people like Haneke just “popping in” to the apartment to chat) and each filmmaker is given an hour of Kodak stock towards their next feature. Additionally, once a year a filmmaker is awarded 20,000 Euro towards their film.
The Atelier started in 2005 and takes place for 8 days during Cannes. It is one of an emerging number of co-production markets taking place throughout the year. The Atelier selects 15 projects to participate and this year two of them were American: Jake Mahaffy’s FREE IN DEED (which I am producing) and Caran Hartsfield’s BURY ME STANDING (produced by the inimitable Effie Brown) – both Sundance Lab Projects. The Atelier sends out a booklet containing profiles of all the projects before Cannes to all the attendees and producers, financiers, distributors, broadcasters and sales companies are all invited to schedule meetings with the projects they are interested in. The Cinéfondation is overseen by Georges Goldenstern and the Atelier itself is run by Agnès Durvin (with support from Charles and Claire).
The father of all co-production markets is Rotterdam’s CineMart, a grueling (and thrilling) 4-1/2 days of meetings (upwards of 60-70) in half-hour increments. The Atelier is a little more relaxed given the greater time it has to run. Other co-pro markets include the Berlinale Co-Production Market, Tribeca All Access, Strategic Partners and IFP’s No Borders (and many others). Each has its own qualities and strengths but all can be useful ways to debut a project, meet potential partners and start (or continue) building your team.
As an independent producer in Cannes you are used to doing the Cannes shuffle: traipsing up and down the Croisette from meeting to meeting – now at the Grand Terrace, then to the Palais, then in the Miramar, then back to the Majestic Bar, etc… This is an exhausting process and as the sun gets hotter you become increasingly worn out. Each meeting involves taking a moment outside the door to some company’s office to collect yourself so you seem fresh, and clear, and then going into pitch mode. The primary activity of most companies at Cannes is buying and selling finished films in the market (if you’ve never been, think: AFM). This means that many people have relatively little bandwidth to discuss future projects and so you have to make the most of the limited attention you can claim from acquisitions execs and sales agents between screenings.
Being in the Atelier changes that experience. The Atelier provides a place – a terrace with tables, refreshments and a catered lunch – where you and your director host meetings. The execs meeting with you, have come because they know about the project and THEY have asked for the meeting. It creates a more comfortable environment and changes the dynamic somewhat. The basic “why are you here” is gone and instead it is replaced with a bit of “so the festival thinks you’re interesting, tell me more.” And that’s a better position to be in. In addition, the staff of the Atelier help to track down people you want to meet, they find tickets to screenings (Jake was handed orchestra tickets to that night’s competition premiere when he arrived – that’s pretty sweet). All of this makes the whole experience wildly different and far less stressful. It’s amazing what a little palm leaf in the corner of your script does…
Attending an international co-production market with an American project is a tricky prospect. There exists a form of Chinese Wall at the border of the United States and the definition of “co-production” is wildly different on either side. For us in the US, coproduction can mean any time two producers say to each other “hey, let’s work together.” They are, by colloquial definition, co-producing at that point. In Europe (in most of the world except the US), the local governments have proscribed a set of rules that define co-producing in a way that will best protect both their national cultural interests and their national financial interests. French films should be French. Israeli films should be Israeli and so on. To this end, they set up, often elaborate, sets of tax incentives, funds, and benefits for local production.
In order to facilitate making these films the various governments have signed treaties with each other to allow elements to be, in essence, ‘shared’. This means that if France and Israel have a bilateral coproduction treaty and a project has producers in both countries then any French element will be considered Israeli for qualifying in Israel and vice versa. This allows those producers to then access government film funds and tax investment funds and allows distributors and TV Channels in each country to do the same (which makes it easier for them to buy your film). In addition to bilateral treaties, some regions have governing conventions – for example Europe – where all the countries have a collective treaty. There are even specific organizations (Europe’s MEDIA, for example) that exist to support only projects that will broadcast in at least three different countries.
At first glance, this system seems like a panacea for the average producer trying to make strong, independent films. But then you reach the US border. There are NO, and I mean NO – NONE – ZIP – ZILCH – NADA, treaties with the US. This was done to defend against the global hegemony of Hollywood Cinema. Without supporting their local industries, many countries would not have much of a local cinema and the multiplexes would be dominated by Nora Ephron and Michael Bay. Unfortunately the rules don’t differentiate between “independent” US films and Hollywood so most foreign producers are simply not able to work with you. That also means that you are a harder acquisition for distributors and TV channels and thus, harder for Sales companies to bet on.
However, don’t lose hope! The flipside of all this is that English language films tend to sell better when they are made, they travel better and the audience will watch them. So that, at least, will keep the sales teams interested.
The way I like to run the pitch meeting is to, after the customary pleasantries, tell the person meeting with us what we’re going to do. This establishes the agenda and allows me to guide the conversation. I give them my card and a booklet we’ve made about the project. I will tell them about who I am, who Jake is and a tiny bit of background about the project and then I will have Jake tell them about the film. He describes the basic story (which they probably already know, but now he fleshes out more details), why he’s making the film, his approach to the material and anything else that fills out the picture of the project. Some execs will ask lots of questions, others will be rather quiet. My job is to cover any points in the pitch that Jake may have missed – you begin to forget what you’ve said after doing a dozen pitches in a day – and to answer technical questions about schedule, financing, or other matters.
You often get a quick sense as to whether someone is interested or not and if you wind up having a lively discussion about the ideas, themes or creative concepts of the project then you can feel pretty good. If they don’t ask questions then I tend to find they’re probably not that interested and you should let them out of the meeting gracefully. If they seem interested then we offer DVDs with samples of Jake’s work (or in some cases a full feature) and I offer to give them a hard copy of the script, mail them one or email them a PDF. 99% of the time they want the script emailed. Nobody wants to lug home 20 pounds of scripts, so don’t worry about too many copies. In all of Cannes this year I gave out a single hard copy.
In preparing for your meetings it’s important to do some basic due diligence to understand who you’re meeting with. Are they a sales company? If so, what are they selling? If you don’t know, ask. Even if you do know, ask. The best thing you can do is to understand a company’s editorial line. Everyone has SOME editorial line that guides their decisions. We met with one woman who is a consultant for a foreign sales company who, in so many words, told us that “you probably will get a big sales company but, if you don’t, we’d be interested”. So their editorial line is picking up the crumbs. Good to know, I’m probably not going to sign with them before the film is done, whereas I might sign with a bigger sales agent who focuses on films like ours earlier (think Fortissimo, Celluloid Dreams, Films Distribution, etc…).
For some foreign producers, they are trying to see if there is an angle to get involved given the limitations on American coproductions. For example, one producer from a former eastern bloc country told us he could bring 20% in local funding for post production services, particularly if we used local technicians, and then he told us we could probably fudge the books about the local technicians. He wasn’t joking – in fact he scared us a little when he declared, “You will come and work in [city name redacted for my safety], yes? I provide what I say, so you bring film.” Awkward, but perhaps useful someday.
There was a company from England that met with us who sat down and explained that they were really into genre product (ie: commercial horror or comedy). We asked if they had read the synopsis of our film. They said no. We asked if they had seen the Atelier’s booklet. They said no. Apparently, they heard there were films taking meetings and they just signed up. That meeting was a waste of everyone’s time.
There were several producers from France & Germany who met with us thinking they could find an angle to participate in an American film but I know they can’t. In some cases, the producers don’t even realize that they can’t participate. I had to explain to a couple why they couldn’t work on our film. Some would swear that we could make our film with Arté, but I have spoken with Michel Reilhac (head of Arté France Cinema) and he has told me personally he can’t come on board since his money is all French state money. I would have to explain this to these producers. We had a great meeting with Jörg Schneider from Das kleine Fernsehspiel in Germany who loved the project and felt it was exactly what he was looking for, however he can ONLY invest in first or second features. We all pondered for a few minutes if Jake’s experimental first feature, WAR, could be considered an art piece instead of a feature but, having premiered at Sundance, we realized there was nothing to be done.
The dance of co-production rules is frustrating and I actually know of one US producer who just flat out said to a French producer at the start of a meeting “we can’t work with you.”
Blunt. But True.
In looking back at the 55 or 60 meetings of the past week I feel that the most productive were likely with International Sales agents and with producers in the UK, Russia and Korea where the investment criteria is more liberal and they can, occasionally, participate in a US film.
So, where do we find ourselves? We’ll know more in a couple weeks after people have read the script and watched Jake’s films. Often the meetings you are taking in a co-production market are really laying the groundwork for deals that may not materialize until the film is shot but that doesn’t mean the experience was fruitless. Also, the credibility of having Cannes’ stamp on the project while it is still in development has tangible value. This year there were (I believe) six films in various parts of the festival that were from the Atelier and the Atelier as a whole has an 80% success rate in getting films financed.
I only hope the last 20% aren’t all the American projects…
I just returned from a great weekend in Virginia (everyone should spend time in a house built 50 years before the revolution sometime) and on the drive back I listened to the fascinating breakfast conversation at SXSW between producer Ted Hope, filmmaker Lance Weiler, conference organizer and producer Liz Rosenthal, technologist Brian Chirls, outreach guru Caitlin Boyle, filmmaker Brett Gaylor, producer and Filmmaker Mag editor Scott Macaulay, and journalist & film technologist Scott Kirsner. All are very smart people and the conversation is definitely worth a listen (the audio quality is not great but it’s worth soldiering through).
As I listened to them wrestle with questions relating to finding revenue in a digital age, I got the sense that there was a battle that had been fought and had already been lost. The battle was over payments for content. The semi-consensus view, and one I know Lance in particular espouses, is that the days of people paying directly for content (or at least paying up front) are rapidly disappearing and we should step forward into a share economy (I’m not sure that Scott was totally in agreement, but I don’t won’t to put words in anyone’s mouths). There was much discussion of putting your work out for free and then asking for contributions from consumers and this model, I feel, is akin to going back to the shareware model on computers.
Software started as free and then (as is mentioned in passing during the audio, interestingly enough) became a product to be paid for. Through that transition emerged a third tier of software – the product of independent software developers – that was Shareware. Shareware came in a few different varieties:
- Freeware: Software that was freely distributed and free to be passed around.
- Shareware: Software that was freely distributed but, if you chose to use it, you were asked to pay (on the honor system) a small amount to the creator
- Crippleware: Software that was freely distributed but was limited in its features and, if you wanted to unlock the full features, you paid the creator
This system has some analogies to the ideas being explored by a lot of people in the transmedia world, notably in Brett Gaylor’s “RIP: A Remix Manifesto”. We’ve seen variations of Freeware & Shareware espoused through Creative Commons and even Crippleware from people like Nine Inch Nails with their (ok, “his”) release of Ghosts with higher audio quality and greater numbers of tracks being reserved for paying customers.
What interested me though, was that noone looked at the iTunes App Store as an example of how to bring payments back into the system.
Recently one of the most successful developers of Shareware for the Mac, Pangea Software, announced they were abandoning shareware development in favor of the App Store after the staggering success they’ve found on the pay-to-use platform. Numerous independent developers have had similar success. (Full disclosure and self-promotion, I have two Apps on the store now and more coming) I believe that there are several take-aways we can gain from the App Store example:
- One: When offered a seamless way to pay and affordable, quality content to buy, people will pay for content.
- Two: A seamless system of purchase & usage is vital to a financial model. The App Store only works because of it’s seamless integration with the iPhone. This is the same lesson the record companies failed to learn and why they were crushed by the iTunes music store.
- Three: The consumer must remain conditioned to pay for content. One of the biggest threats to payments for content is that consumers begin to assume content is free. Does this mean legally hunting them down? NO! The RIAA has done a terrible job on that front. What it means is keeping people aware that they can get more reliable content, at better quality, and be more supportive of the creators by paying a small amount.
- Four: We need to coalesce the online market. The single greatest obstacle we have right now is, ironically, the sheer multiplicity of options for where to view content. The App Store works because there is only one. If there were fifty, each with different content, it would be less successful. Blockbuster worked this way when we were bricks & mortar bound. Netflix worked this way when we were DVD-bound. Now we need a new solution. This doesn’t mean there needs to be only one online exhibitor (for why I say exhibitor and not distributor please visit this article on the Filmmaker Magazine blog) but, rather, we need consolidated places to find the content. There are some efforts underway to do just that including SpeedCine and the UK Film Council’s Find Any Film but these are just the beginning.
- Five: Lastly, and this relates directly to point #2 above, we need to have better ways to move our media around. The tyranny of a particular box as viewing platform undercuts any efforts to simplify the process. Boxee and the Apple TV are both good moves in that direction but Boxee is in a tough fight. The studios decided to hamstring Boxee by forcing HULU to pull its content (a move that even HULU thought was wrong) in a ridiculously narrow-minded attempt to keep control of content (and an approach to DRM that is deeply reminiscent of the RIAA’s moronic and self-destructive resistance to iTunes). Until filmed content can seamlessly move from computer monitor to TV screen and back we are going to be behind the eight-ball, as it were.
These are a lot of things to ask but, if it means that content creators can be paid for their work then it is worth it. We need to embrace and fight for the technological innovations that can support our need to support ourselves. While releasing media for free and asking for contributions may work on a micro-scale and/or for the few, amazingly talented promoter/marketers like Lance and Arin, but for many talented filmmakers, it’s not their best skill and they should still be able to make amazing work, pay back their supporters, and earn a living. I do not believe that throwing in the towel and saying we live in a Pirate Bay world now and that we should give up on paid content is the right attitude and doing so will potentially hamstring future generations of content creators in their endeavors to make lives from their work.