Here’s the official description from the site:
Every respectable film festival these days has a panel talking about online film distribution and increasingly these panels end up in disputes between websites promoting their services and film distributors frustrated at their online revenues. At the same time everyone seems to agree that digital distribution is the future. So where do we go from here?
Presenters: Efe Cakarel, Graham Leggat, Peter Becker, Sara Pollack
Efe Cakarel, the moderator from The Auteurs, (a social network for cinephiles) jumped into it by describing the current situation with independent film distribution (“bleak!”) and posed the key burning question to the panelists: What is going to be the dominate business model for film distribution?
After arguing with the premise of the panel, and explaining that he felt it was unnecessarily pessimistic, Peter Becker from the Criterion Collection started with a thorough, thoughtful answer: “There are lots of people showing movies successfully online: YouTube is among them. We’ve been experimenting with all kinds of platforms. There are tons of people who want to watch your movie online…Documentaries have been incredibly successful in developing an audience online, due in part to the searchability of the web and the film’s topic areas of interest. There are lots of promises of what the web represents that are coming true…slowly. The question is still: who is going to pay for this? We sort of need to break down the question and ask ‘Why is it better to watch a movie on the web?’ We all have entrenched behavior…we still go out to the movies, even though it’s still inconvenient. We watch movies on TV…some people are not even time shifting! And yes, some people even watch DVD’s and BluRay disks. That is a real business – it might not be the interactive crowd at SxSW…but our films are special b/c we focus on older films and classic and foreign films, and all of that has to be paid for. Pay the machines, pay the people, pay the rent. How do we not just make room for greed in the world, but make room for work in the world? All these entrenched behaviors and business models have to work for the content to be seen by everyone who’s interested in seeing it.”
Becker continued: “With Hulu, you’re seeing them use the internet to recreate TV, with commercials. And it works! We’re making money from Hulu…and it’s not insignificant, the checks we cash from them every month. But with Hulu, we’re essentially recreating commercial TV. But inherently that’s not enough. But we have this “recreating TV” model. Then we have the model that’s unintrusive commercial support. And I’m curious to see if that will pan out, financially and culturally. And then there’s the option to see if we can make paying for content frictionless if not making content free. [It's less about the price and more about the convenience.] Even if you only have to pay $3…if you have to put in your credit card again, that’s annoying, cumbersome and time-consuming. The model has to be something closer to E-ZPASS. If I buy a pass, I can use it in tollbooths in different cities, in different states, and it all just taps my credit card. Online, it’s basically the same technology. I’ll have a user identifier that’s associated with my PayPal or Credit Card account, and roam the internet freely and consume whatever sort of content but not have to fill out a bunch of different forms as I go to sources and sites. If I had to predict, that would be a smart thing for someone (more technically savvy and smarter than me) to develop.”
Leggat: Lots of food for thought! At the top you said, Peter, you didn’t like the title of the panel, “Nobody wants to watch your film” –which is what it sometimes feels like to independent filmmakers!…the question is will a new delivery platform change that? I agree that part of the answer is seamless delivery so that you don’t have all the technical obstacles that – no forms on the websites, clunky set top boxes, or hooking up your computer to your TV.”
He continued, “I think it’s fairly already known that most TV’s will be connected to the web in the coming years. You’ll be getting a slew of pay-per-view films that will be available in day-in-date, which is relevant to the ever-shrinking field of independent distributors…who do we have left? IFC, Magnolia, Focus, Fox Searchlight, Sony Pictures Classic…for those companies, day-in-date will be a way of life… And you’ll be watching a lot of films, just simply on your television. The question becomes what happens to your theatre? [I think it's bogus that that experience is really threatened.] You could be watching this panel online, but you’re here in person. You could be making dinner every night, but you go to restaurants. You could be listening to your stereo but you still go to concerts….I don’t think -for cinephiles- that the theatre-going experience is going to change much. It’s like going to church.”
Leggat then addressed the monetization question that Becker raised with a very visual, cinematic example. “As to this point of how money is to be made. The pay-per-view model is going to be the dominate one, I believe. There may be others. But the sort of rush to progress…it always seems to me to be like a massive army of ants marching across the dessert –voracious tiny creatures chewing their way through everything– and that’s how the online video distribution looks to me right now. And when you see that scene where the ants come to a river, they just pile in, [ignoring self-preservation] and many of them drown! But then some of them climb on top of the others and they discover ‘Hey! We can swim!’ That is what we’re waiting for in the online video monetization process – is the ant that can swim. There needs to be an evolution [with distribution practices offline and online...] sort of mutant thing that allows us to be both land and water, amphibious. So that we can be in theatres and online – both, simultaneously, surviving.”
He finished with a case study: IFC has shown that making films available in homes isn’t hurting their theatre sales at all. They’re picking up cities, and they’re making their films available in places where you can’t see the film. They’re the ants who are announcing ‘we can swim!’”
Efe, the moderator made some comments about cable VOD that’s generating “so much revenue” but then challenged the panel to explain how that experience is a truly differentiated consumer experience. He also pointed to the younger generation of viewers. “A lot of us don’t know what a scheduled TV experience is. We don’t know what TV Guide is. So that to me is a core idea that I’d like to focus on.”
YouTube’s Sara Pollack was up next. She recently launched the YouTube Screening Room, allowing independent filmmakers to rent their films for whatever price they choose, for different durations of time. “I’ll talk on how YouTube views it’s future, and a bit less about what the future for film distribution is, because Peter and Graham have both described it so well. The EZ PASS and Pay-Per-View models are clearly getting traction, and needed for this to be successful.”
“First, let me ask the audience: are people here aware that YouTube recently started make films available for rent? We’ve been working with filmmakers from the beginning…distributing short films, web videos, and helping them earn ad supported revenue. But for independent feature films the ad revenues do not ever earn the kind of money that you’d need to see to make back your budget. Certainly for us experimenting with ‘paid’ is a big move…one that I’m incredibly excited about. For certain types of films, it makes more sense. However, there are a few things that people need to keep in mind.”
“First, films have to be made for much less money – and that’s interesting to see. I don’t know if people saw that Paramount announced their $100K film division recently, Insurge? I think that’s telling. The second thing is that success in distribution takes promotion. There are too many films out there, there are too many filmmakers. So that’s just the reality. So let’s start with lower budget films to make sure we make back our money. And then we have to recognize that most film releases are incredibly excpensive! Studios are still spending millions of dollars in P&A to drive people to theatres. So with teh internet, promotion costs much much less – but most people aren’t spending anything on promoting their work online. Sometimes, there’s an unfair expectation people will just find out about it through ‘word of mouth.’ And this is a place where theatrical and online releases are similar. It does require just as much blood, sweat and tears of filmmaker DIY promotion not just to industry-centric events …but to locally-centric and content-related communities, where you can start to meet the fans of your films that will be using social networks to spread the word for you.”
Pollack then went on to explain the YouTube rental model. “The way YouTube’s rental model works is very simple. Number one is that anybody can be a partner in YouTube rentals. Unlike the Hulu model this is about opening access. Number two is that the filmmaker sets the price – how much, and for how long. You control all of your rights, you don’t give YouTube control…and you decide what path you want to take. YouTube is trying to be the platform but the film is really truly in your hands. I think that that empowerment is really key. Because that’s why people want to spend money on your film! They don’t want to spend money so it goes to TimeWarner, or Comcast. The record industry demonstrated this -people never had loyalty to the labels, it’s the connection between the artist and the fan, where there is direct support.”
She then described how when they started to charge “There was some backlash and people said ‘YT is supposed to be free!?! Why do I have to pay for it?’ But the minute that the filmmakers started getting involved and saying ‘You’re asking why YT is doing this? B/c we’re in a crisis in the industry and YT is trying to help us as filmmakers, Yes YT is taking a cut but the majority of the $ income is coming straight to the filmmakers…and we need your help to fund our films.’ Then our community started to understand what we were doing, and supported it.”
Efe then returned to an earlier subject, “Peter started with a great point: entrenched consumer behavior. What is the compelling reason to change our existing behavior and start watching these films online? Here we spend millions of dollars making 35mm or HD films and instead people are perfectly happy watching smaller resolution online?”
Becker answered, “I totally agree that people are spending more time online, consuming more video content online. But it’s not necessarily true that they’re spending more time watching feature films online. The one thing we don’t talk about is duration. We never think about the fact that the film as it evolved was designed for a ‘night out’ – and 2 hours turned out to be the right time so that you could have dinner and enjoy an evening out…you could sit in a theatre comfortably for that duration, and enjoy yourself. And it may turn out as we change the distribution that that duration is not necessarily sacrosanct. On YouTube 6 minutes is an eternity unless it’s really compelling! On an average blog when I’m reading, 3minute videos can seem long! So are we going to be watching on our we’re not going to be watching 3 hour scope movies with subtitles on our phones…but probably not. Probably not even on our iPads. Where are we going to be watching films on mobile devices? On the subway? Absolutely! I see people all the time on the subway watching TV. But I think we need to talk about duration. Longer is not necessarily better. 110min is a long YT video.”
Leggat: I think the key factors are instant-ability and selection. Instant-ability…you can what you want immediately. And Unlimited selection…you can get access to almost anything.
Becker: We have to solve the monetization problem! And it can’t be unfair and cumbersome, but it has to be solved. Access to everything is compelling but it’s not realistic unless the business proposition is compelling enough for everyone to put their movies up on YouTube. And then we get into the curation challenges – which I think is the really exciting part.
Cakarel: Let’s assume for the sake of argument that we’ve solved the monetization problem. What’s better about watching a film on your laptop? Is it there’s a better interface to search? is it being social? Because I’m not happy right now with teh selection on any of these platforms – Netflix is the biggest [for feature films] and their selection isn’t great. So what do we need to solve in order to for you to give your best films to these platforms? It’s a bit of a chicken-and-egg problem…the best films are not available quickly, so we aren’t able to monetize online distribution. The time it takes to see even a Cannes winner can be 6 months or more!
Becker: You took the key question off the table – once you solve the monetization problem, everyone will be happy to put it up online.
He then relayed the story of day-in-date with IFC.
“Every film we did with them was part of that initiative. It didn’t hurt our sales at all. In terms of streaming, Netflix is probably the best monetized example. But what they’re doing is nearly impossible to replicate. It’s very hard to create that large subscription base paying every month. Because they have a huge incentive to stop us for using the mail – which is expensive and inefficient, and hurts the planet…the planes, trains and automobiles method. When you position the question as if monetization is solved, that’s when everyone will get on board. And I think there is a lot of great content already out there – on many sites, including YouTube.
Leggat responded, “We have to look at this issue in context. The issue is not ‘how do we find an online-only system?’ It’s, ‘how do we create a mixed economy where by you have companies doing many things where the whole is bigger than the sum of it’s parts?’ We’re not looking for an online-only-experience . We need to continue to support the other aspects – going to film festivals, going to opening weekends, watching films on TV…but how do we add this one piece in that doesn’t have to be a silver bullet to cover [all our overhead and the entire film budget], but so that it also doesn’t kill other other things that have worked so far?”
There was more discussion about how the indie filmmaker may eventually competing with both Criterion Collection and Warner Brothers, and how daunting that will be.
Pollack countered by saying that the YouTube tastemakers (who have “millions of followers” ) were the most successful promoters – and were often doing a better job than YT’s own ‘official promotional’ strategies….and that’s key to the distribution of work: embracing evangelists. She also said there was a massive movement recently for “web originals” – and noted that the digital media companies that started producing these online series a few years ago had been “definitely struggling” but that the current data was impressive, showing that “there’s a huge appetite for real entertainment online… not just a funny YouTube video that somebody sends you, but original creative video series produced exclusively for the web.” She said they were beginning to really take hold as consumer habits, and that YouTube is doing a lot to support this trend.
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