The Turmoil in the Industry: Part Two

The Turmoil in the Industry: Part Two
Pick a distribution channel, any distribution channel.

In part one of this series, I laid out the challenges facing the indepedent film industry today – namely, financing its films when the distribution model is defunct. In this post I will explain some of the particular challenges of the internet. Indie film has never had a great model, and I will discuss the difficulties in marketing that we’ve had forever, and what I see as the big-deal problem with indie film.

Many of us are looking to the Internet as an answer to our troubles, and it certainly will be for the players who manage to stay relevant. Sadly, though, the internet is a bitch to monetize. The only tried and true model for moneymaking so far is iTunes, and it takes a lot of hoop-jumping to get work on there. A good producer with an award-winning film can swing it, but the movie is not going to make much. (Not to mention that to base an industry model off of one company’s service is a terrible idea.) Other opportunities are Netflix and online DVD sales, which can also play a small role in making money the costs of a film but only if that film is in the upper echelons of popularity.

The trouble with the internet is that with few exceptions, consumers are unwilling to pay for content in a medium that has so much free stuff. Advertising-sponsored content is theoretically great, but Google’s market dominance has pushed these revenues so far downward that again, only the top fraction of films can make any sort of money at all. (Maha writes about that a lot about this pickle in the journalism industry.)

None of these problems are new – if anything, the internet has given independent filmmakers *the chance* to make money where it was not possible before by directly targeting large numbers of people. But just because it is possible does not mean it is feasible, and we’re looking for a viable model for independent cinema large and small here.

What solutions have been advanced so far? Many and none all at once. The best solution so far is a scramble to monetize through fragmented, low-return channels. Successful independent films target demographics tightly and reach them effectively. They tie themselves to an issue-based campaign, a niche community like lesbian activists or black artists or environmentalists, or a hot political issue. Through direct marketing they drum up grassroots interest and recruit others to be their advocate. A film that cannot also be a movement is not as likely to succeed, even if it is well-made and fascinating to watch.

This brings me to the big-deal problem in independent film — a difficulty that we’ve had since the dawn of mass media, and is only now showing signs that it can be overcome: moviegoers do not watch films actively.

Like many aspects of our culture, advertising is king in moviegoers’ decisions of which movie to watch. If you were to plot a film’s popularity by how many times it has been watched, you’d get a curve that starts out very high and drops precipitously; for example, something like 5% of feature films and shorts account for 95% of the watching (not real numbers.). Many of the other 95% are of good quality, but they don’t have the benefit of a national media campaign, or can’t catch on with the viewing public.

This phenomenon is a reflection of our mass media culture – a few companies and entities have the attention of most of the population. Watching a film in theaters is a shared cultural experience that we can talk about with pretty much anybody we meet. The Internet is changing this reality as I will discuss in the next post, but most of this change is yet to come.

The one major piece in this puzzle is film festivals – as champions of independent film, they give an opportunity for films to be exhibited. If an indie film gets bought, it is probably by a distributor at a film festival. And if the film doesn’t get bought, at least it is being received by an audience. Festivals really are godsends in their leveling of the playing field, but I see them as a small piece of the solution. Submission fees can cost thousands, and once a film is accepted there is no monetary payoff (with the exception of cash prizes.) Most people view festivals as an opportunity to advance their film and be selected for the studio/big-player distribution system.

So we have an Internet that is hard to monetize and a mass distribution system that requires huge amounts of capital outlay and offers few prospects for any but the most successful films. This is not the distribution system of tomorrow: everyone knows the game is changing drastically but not in which direction. If we follow a number of technological trends to their natural conclusion, we can see a glimpse of where they are going, and the big-deal conclusion to this shift.

Read On: Final article, The Turmoil in the Industry, Part Three –>