Nov 5, 2021
But what it is ain’t exactly clear…
Last week's main article was about indie film financing, and how to follow the money to potential success. But as I noted there, a lot of those who are succeeding, and even excelling in this marketplace are well-established producers with track records, and things remain tough for nearly everyone else. This was confirmed by a series of articles that came out following my piece.
First up, later on the same day as my last newsletter, Variety ran a report on the overall state of indie film financing in the lead-up to the upcoming (virtual) American Film Market. I was tipped to this article by a Filmmaker Magazine tweet, which noted it was dense, and interesting because of its density. That is true - and some of it is about very specific financing structures that many indies don't often utilize, but it's worth the read.
But be forewarned, because a close-read leads to some dire quotes for the average indie, such as: “Indie movies are coming under major pressure re costs and fees. The majority are performing far from cash break-even and tangible net profits than ever before;” or “evidence from financiers and sellers is that, for the right package and correctly priced project, pre-sales are alive — but not for sub-$5 million marginal fare with no recognizable director and onscreen talent;” or this gem: “In terms of performance, ECA topper Peter Bille Krogh says the polarization suggested by their data is striking. “We’re seeing strong titles are getting better revenue results, but the lowest performing films are much worse.””
What does all of that add up to? Things are tough, getting tougher for small indies without a major director/cast, and won't be getting easier anytime soon. And sales agents, distributors, and other industry types are trying to make the best of it, but are obviously caught in some winds of change they still don’t understand.
Meanwhile, over in doc land, things don’t seem much better, but this Variety article about how to make docs in a crowded marketplace applies, in many ways, to the entire specialized business. The piece is definitely a must-read on the state of the doc marketplace, what's working and what's not working. But to my mind, this is the most important piece to understand when it comes to the streamers, and you can delete the words doc here as it applies across the board:
"“There are two general categories of content that streamers are looking for: docs for subscriber acquisition, and for subscriber retention,” says Endeavor Content senior VP of documentary Kevin Iwashina. The seller/producer sold worldwide rights to the Broadway smash “Hamilton” to Disney for $75 million. “The former have the most value to streamers, because acquiring subscribers is very expensive. The latter are generally broad interest documentaries, like true crime or a current event, which presumably prevent subscribers from cancelling their service.”
Too few people I know (even those running other streamers) seem to understand that in a streaming world, all that matters anymore is the costs of acquiring members, retaining them and limiting churn. If you stop and think about what that means for the types of content they want, it’s a very different business model than we’ve been used to in the film world, and that needs to drive decisions on what producer’s make, as much or more as what we love to see. Add to this that the streamer’s greatest growth areas for new subscribers are from outside the US and Europe, and you have a lot less demand for the average indie festival type film. We need to build another system for those, sure, but no one has the money or the ideas (as of yet) to launch that system either. We’re stuck in the streaming wars-world for quite a while longer, and that’s a race for a population of eyeballs bigger than those watching arthouse fare (see below on festivals for further proof).
I was hoping to be cheered up by the recent release of the Film Festival and Filmmaker Sustainability Report, put together by The Film Fest Alliance and Dear Producer, but while I am glad they’ve started this research (my kudos to the team should not be lost here – we can’t have the hard discussions without this data), the initial results were not encouraging. They acknowledge some more work needs to be done to get accurate data, but when they find that “Festivals reported nearly $3 million in box office receipts in 2020. However, when divided by the number of respondents (68 festivals), we see an average of $41,000 in box office revenue per festival.” 41K…let that sink in a bit. That’s across multiple films – and with reports from some of the better festivals in the US (one presumes), many with budgets over $100K (and 17% over $500K). One has to wonder – wouldn’t it be easier just to give away the films for free? Or pay people to watch them? And with “900 days of film festivals in 2020. That’s nearly 2.5 festivals happening each day during 2020,” one must wonder what, dear god, we think we’re doing in festival land?
Something ain’t working here anymore – just like in other parts of the business. But once again, as in each other part of the business, folks seem so invested in their current models, that they can’t step back and imagine how they’d rebuild this whole system if we started from scratch, given today’s actual artistic and business marketplace. I know that if we did that, we would not invent festivals as we experience them, or work with sales agents and distributors as they’re currently operating, or make the 20-30K+ extra films that don’t fit what audiences want- or at least not what they’re watching online – that keep getting made.
The only upside to all of this is that when the tide goes out, we’ll see who's wearing the swim trunks, as Warren Buffet says. It won’t be a pretty sight at first (this being a business of mainly old white men), but those not caught hangin’ will help build a better future… one hopes.
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Film
Art Houses Want Audiences Back. Can a MoviePass-Style Program Help?: For the cinephiles out there afraid that art-house culture has been lost, the streaming service Mubi has an answer: Mubi Go “ has begun offering a membership program that will seek to give art-house fans...a well-stocked streaming service that movie lovers can flip on from home, bundled with a weekly ticket they can use to go see a handpicked film at their favorite theater." Mubi Go has helped sustain art-houses internationally — in Britain, they’ve connected with 150 art houses and they’ve been operating in India as well. C. Mason Wells, Mubi’s director of distribution in the U.S. explains that given the pandemic, Mubi Go has been key in providing independent cinemas and art houses a lifeline. Here’s to their success in NYC. Matt Stevens from The New York Times has the news. (GSH)
‘Churn and Return’: Younger Generations More Likely to Cancel and Then Renew Streaming Services, Study Finds: I’ll admit that my partner and I subscribed to HBO Max last week just to watch Dune with the intention of canceling our subscription with them after a month. I was mildly surprised to find that there’s a term for what we did — “Churn and Return’ — and people from younger generations like me (I’m on the older side of Gen Z) are churning and returning more and more. Deloitte’s “Digital Media Trends” found that “nearly half of millennials (47%) and 34% of Gen Z in the U.S. canceled and then resubscribed to the same streaming video service within the following 12 months… Among Gen X consumers, 25% say they’ve engaged in “churn and return” in the last year, while the rates are even lower among Boomers (6%) and Matures (3%).” What are the implications of all these churners and returners? For starters, streamers are losing money. As a result, we’ll likely start seeing major efforts to attract and retain younger audiences (Netflix is already a step ahead with their acquisition of gaming company Night School Studio last month). Check out Todd Spangler’s article for Variety, where he illuminates more generational preferences when it comes to streaming and entertainment. (GSH)
 Documentary Recommendation Alert! - Quick Movie Rec from Gabriel at Sub-Genre: Directed by Frank Pavich and released in 2014, Jodrowsky’s Dune is a documentary that tells the awesome, inspiring, and tragic story about the monumental adaptation of Dune that was never made. My rough summary: The Chilean-French-Jewish filmmaker and artist Alejandro Jodorosky assembled a super-team of creators including Salvador Dalí (who was paid $100,000 per minute), H.R. Giger (the artist behind the Alien films), comic artist Jean “Moebius” Giraud, Orson Welles, Pink Floyd, and Mick Jagger to produce an epic 10-14 hour adaptation of Dune. Hollywood, of course, never agreed to fund such a lengthy production which led to a devastating crumbling of the team and subsequent abandonment of the dream film. After all these years, Frank Pavich unearths footage and artwork which attest to the teams’ genius and fascination with the future and all things bizarre. He interviews Jodorowsky and other core project members, breathing life into the massive sci-fi project that never came to be. “The film notes that Jodorowsky's script, extensive storyboards [they included 3,000 drawings], and concept art were sent to all major film studios, and argues that these influenced and inspired later film productions, including Star Wars, the Alien series, Flash Gordon, the Terminator series, and The Fifth Element (Wikipedia).” I highly recommend watching the documentary before or after watching Villenueve’s Dune (2021). It’ll change the way you read and watch Sci-Fi, dare I say, for the rest of your life. (GSH)
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Branded Content
Questlove and The Balvenie launch The Quest for Craft - and promote boredom: The Balvenie has made a pretty swell bit of branded entertainment with Questlove and his production company, TwoOneFive Entertainment. This seems to be a continuation of a project they'd done before with Anthony Bourdain, called Raw Craft. I'd never watched that one, but this series - The Quest for Craft - is pretty decent, and Questlove gets into some pretty interesting conversations with his guests - and takes the show for a somewhat wild ride for a brand. Episode 1, for example, is an interview with Michael Che about creativity and comedy, but it gets into things like the music and practice of Butch Morris, and chaos theory, as represented by Professor Steven Strogatz. I also love that in his interview about it with The Drum, Questlove promotes my favorite theory on creativity - that creatives need to seek out, fight for, and treasure boredom. Exactly what all of our advertising and apps - and booze - try to get us to avoid. Oh, the irony. (BN)
A Study Reveals That TikTok Creators With The Largest Audiences May Not Be The Best For Branded Content: A research firm called RealEyes recently released some paradoxical findings. Arooj Ahmed, a writer for Digital Information World shares the biggest takeaway: “mid-tier TikTok creators [as opposed to influencers] ended up generating the most amount of engagement, as far as branded content is concerned.” What’s more, the research insinuates “that marketing with larger content creators may prove to be damaging.” WHaT? And more importantly, Why? While “larger brands may be speaking to a larger audience… their message may come across as inauthentic or forged”, explains Ahmed. People are simply tired of advertisements. They want something real to engage with. RealEyes also found that “videos shorter than 40 seconds proved to be more emotionally engaging, and branded content worked best when packaging was visible for about 25% of the video.” Influencers are called influencers for a reason, but apparently the number of followers isn’t everything. (GSH)
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Miscellany:
 A New Wave of Lo-Fi Games Is Reshaping Horror: Who said gamers can only get scared in 4K? While the nightmares certainly come to life in games like Resident Evil and Alan Wake, “new retro horror scoffs at such notions of verisimilitude”, explains The Verge’s Alexander Chatziioannou. “Wildly divergent, this new generation of lo-fi horror games is united by a shared philosophy: treating earlier, era-specific styles from the crude polygons of the original PlayStation to 1-bit monochrome palettes not as intermediary failures on the path to some dubious ideal of “realism,” but embracing them as valid aesthetic springboards in their own right...But what has prompted the sudden surge of popularity for such archaic : ? And why the disproportionate focus of such efforts on horror?” Nostalgia, probably. Videogame designer James Wragg explains, “there’s...something about the tactility of physical media which is gratifying; just as book lovers will relish the smell of a new book.” He also likens the PS1 style to impressionist painting (“it portrays reality through the subjective vision of an artist”). And why is the horror genre so popular in gaming today? “While the homogeneity of marquee franchises will put off a segment of the audience in any genre, it is horror that, by its very nature, thrives on the unexpected”, explains Chatziioannou. I’d also add that the horror genre provides the perfect lens through which we can (safely) experience and expose individual and/or national anxieties and insecurities (or maybe I’m going too meta). Happy (belated) Halloween and happy (1-bit monochrome) gaming! (GSH)
How Will Privacy, Free Speech And Safety Coexist in VR/AR?: Check out this site for a riveting conversation with Information Technology and Innovative Foundation policy analyst and expert, Ellysse Dick. Interviewer Ian Hamilton asks some great questions about privacy, free speech, and safety as it pertains to our rapid advancements in VR/AR. Some questions he poses are as follows: (1) Is current policy strong enough for the wave of technological change that’s coming? (2) What do people need from a policy perspective to feel comfortable using AR/VR devices? (3) “What policies are in Facebook’s interest to change?” (4) “Are elected officials prepared to make these changes that more tech savvy people understand deeply [and] how do we actually effect change through our elected officials?” (5) “Do you think our social networks become a layer of self-governance that happens before, or even replaces, our traditional institutions?” In the midst of a tech boom where machine learning is king and where virtual interaction with one another is so much more vivid than ever before, addressing these questions now is absolutely critical. (GSH)
What Is The Metaverse, and Do I Have To Care?: We talk quite a bit about the Metaverse on this blog, and that’s no coincidence. The Metaverse is increasingly becoming a part of our reality, whether we realize it or not. But do you really know what it is? If not, it’s probably not your fault — it’s not tangible, so we often speak about it in vague terms. Often, we have many questions when we hear the word: How is the Metaverse different from the Internet? What distinguishes the Metaverse from “online worlds”? You’ll find some answers to these questions in Adi Robertson and Jay Peters’ piece for The Verge. Other, more practical questions worth considering especially if you’re in the branded content/storytelling space are: How do/should/will brands interact with audiences through the Metaverse and how will branded content change or be shaped? How will brands’ digital identity and how will our personal identities be shaped or changed by our engagement with the Metaverse? (GSH)
(GSH) = articles written by Sub-Genre's Gabriel Schillinger-Hyman
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