May 19, 2022
Ok, sorry for the bad puns in the title; I guess I’m becoming my father. But boy what a week, and we’re only just past Humpday. As I mentioned last week, many think we’re getting close to time to “buy the dip,” but I’ve been betting we’ll keep seeing stock decline through September. I guess I’m not pessimistic enough, because smarter folks than me are saying we might be facing a “lost decade” in the stock market. And it’s hitting media stocks – and the SPAC’s that have been buying media companies, or might have soon (which is fueling a lot of our industry's madness) – pretty damned hard. But don’t tell that to anyone at Cannes – as predicted, everyone there is watching films, making deals and as evidenced by my socials, going maskless and giving one another Covid.
I’ve heard of at least five film premiere parties, dinners and or industry socials in NYC that became super-spreaders in as many days, and more than half of those people (maybe the asymptomatic ones?) got on planes and went to spread the cheer. I can't help but see the photos of NY company's dinners and parties, and suspect NYC just infected the entire foreign film business. But despite the facts - that this variant spreads more easily than others, that long-covid is becoming a real problem, and that K/N-95’s work pretty damned well – no one is thinking of wearing them, much less being required to anymore. And definitely not in France. C’est la vie.
Not that I don’t wish I were there. This might be one of the last chances to see the film business back in full-tilt mode – celebrating the best and worst in cinema, and making deals to bring all of the above to the masses, or at least what passes for the masses in arthouse cinemas. And it’s a great line-up of movies, many of which I can’t wait to see on screens big and small (and boy could I use a drink with my industry friends).
But given that most of these films rely on big streaming deals to do gangbusters and break-even or something, even if they get a good theatrical release, and that most streamers are facing headwinds that will cut their acquisitions even more than the paltry state they’ve been in for two years, and that’s for the ones who survive… it’s gonna get interesting. I guess those films will be looking for new homes alongside the people who used to buy them and market them. As the SVOD market shrinks, I don’t expect PVOD or even TVOD to make up the difference, given that consumers will be belt-tightening in all formats as we endure inflation and enter a possible recession.
Of course, everyone thinks AVOD will save the day, but guess what else tends to get cut in a recession? Despite plenty of articles about how brands who advertise during a recession tend to come out ahead, there’s also plenty of studies showing the cuts to advertising budgets during those months or years are pretty severe. And what money is spent will be put against more surefire bets than most of what’s being sold on La Croisette (leaving aside Top Gun: Maverick, which isn't rushing to small screens or AVOD anyway). Think TikTok not Titane. In fact, that last line sums up the business, but that's another story.
On the plus side, a good ol’ culling never hurt the business – just many individual lives – and perhaps this will lead to some new business models being built as the old ones collapse around us. That’s what I’m hoping for, and planning on, because such times aren’t just good for “buying the dip,” but also for hiring brilliant people to launch new things that will replace old, bad business models. And we have a business built upon both (good people and shit business models).
But as I said last week, you’ve gotta have cash under the mattress to take advantage of these situations, so make sure you save up what’s left of the last of this bright moment. Sad that it’s coming after 2+ years of struggle for many aspects of the film biz – exhibition at the top of that list – and the window is likely to be so brief. I guess this business really is all about shrinking windows now! But hey, I could be wrong. Then again, even if I am, it’s not a bad idea to plan like I might be right. During the build up to the last recession, I was running an org that was looking ahead and made the cuts needed preemptively, so we could invest where the money was needed, which worked. I also tried to raise money for a new model in the middle of it all, and that wasn't so successful. Planning ahead was the smarter move.
In the meantime, go see some movies, make some deals, but please for the love of god, mask-up when you're with groups indoors for the next few weeks.
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Film
Building the SVOD we need with Film Fests: Eric Kohn at Indiewire looks at the success of the Netflix is a Joke fest and asks an obvious question - why don't we try to build a platform that can take the buzz from film fests and turn it into a curated streamer? How? In his words: " A way to codify this trajectory might take the form of an SVOD service with an opt-in option for all films programmed at major festivals. Build in a generous profit share for filmmakers (most likely around an AVOD model, so every view puts money in their pocket). Movies that play one major festival could wait and see if they get invited to others before pulling the trigger on the VOD release; if a buyer comes along at any point, filmmakers have the option to withdraw from the service. If the offers don’t appeal, these films could capitalize on festival buzz at any point to become more widely available on VOD." I've suggested the same, and agree we need more strategizing around this, but it's the beginnings of a promising idea, even though I doubt folks will get around to it. (BN)
Movies about abortion look different as we contemplate a post-Roe future: Viewing recommendations: In a discussion about the way abortion is/has been portrayed in film, Mick LaSalle, writer for the San Francisco Chronicle, arrives at two films that were released in 2020 and 2022. These are Never Rarely Sometimes Always (Eliza Hitman) and Happening (Audrey Diwan). LaSalle writes, “These are both exceptional films, written, acted and directed by women and dealing with a subject directly concerning women. They were worth seeing months ago. Today, with the overturn of Roe v. Wade appearing imminent, they’re practically mandatory viewing.” (GSH)
Why aren’t Chinese films traveling to international festivals?: Liz Shackleton, founder and editor of Streamlined points out that “the number of Chinese films playing in major festivals has declined substantially over the past few years. [But] production has been on-going throughout the pandemic, so why the decrease?” Sure, the pandemic certainly hasn’t helped — filmmakers were hesitant to premiere films at festivals that were postponing dates and theaters were closing, which made timing theatrical releases extremely difficult. But these hurdles don't explain why major festivals like Cannes saw zero Chinese feature films this year. Shackleton says it’s “an ideological repositioning” (or an “ideological tightening”) in China — “a rising form of nationalism and anti-Western sentiment that has accelerated during the pandemic” — that’s responsible for the decrease of Chinese film appearing in festivals abroad. “The current political headwinds are not just preventing certain films from entering China, they’re making it difficult for Chinese films to get out,” she writes. Filmmakers in China are pressured to premiere their work through officially sanctioned Chinese film festivals where they’re given the thumbs up/down to take it overseas. What’s more, directors that try to bring their work to the international stage first might make it difficult for other Chinese films to premiere overseas. The takeaways: (1) Big name directors (less so small indie filmmakers) are being pressured “to make films with politically acceptable themes… few of which are likely to resonate with international audiences. (2) The strength of Chinese cinema lies in its diverse voices and narratives. “If those voices start to retreat from the world stage or simply disappear, there are plenty of other filmmaking nations waiting in the wings to step in.” (GSH) Note: Screen International also added an article about this issue this week.
The Algorithm Is A Lie: The Entertainment Strategy Guy (ESG) has a fun new post breaking down the myths that have been built upon the Netflix algorithm. They have lots of data, sure, and they use it (and algorithms too), but they don't have a magic one that makes all decisions, nor does anyone else. I've also found, in speaking with execs at some of their biggest rivals, that you'd be shocked at how little this data gets paired and used to even market the films they do make. I usually find the ESG a little wonky, but this one is gold. (BN)
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Branded Content
 Cannes Film Festival Dives into the Metaverse with Fortnite and Brut: Brut, Cannes’ new partner is bringing the festival into the metaverse through Fortnite, the video game. Gamers will be able to experience Cannes with 3 different characters: A journalist, an actor, or a director (each character has a different storyline and quest — i.e. the actor must audition for a major director and walk the red carpet). Why this matters: (1) The initiative makes the Cannes Film Festival accessible to a wider and younger audience; (2) The operation gives us a sneak peak into what film festivals may look like in the future. You can check out the teaser promo in the article. Elsa Keslassy for Variety has the news. (GSH)
Fortnite Creative’s creator economy represents the future of metaverse brand activations: Fortnite Creative is a mode within the video-game, Fortnite (by Epic Games), that allows users to freely create content on their own Creative islands, kind of like Roblox or Minecraft. And it’s become a hot spot for brands to experiment with the metaverse and reach new audiences. What’s special about Fortnite Creative is that brands can create activations without going through Epic Games and in Fortnight Creative 2.0 they’ll be able to write their own code. Brands that do create experiences for users through Creative can gather data and learn a lot about a user base they may not have tapped into previously. The takeaway: “the upcoming release of Fortnite Creative 2.0, will give [independent] agencies more control over how they can build brand activations within virtual space” and Brands are going to be making major plays (new experiences…etc) once it does. Digiday’s Aron Garst has the news. (GSH)
BBC Studios Productions and Tastemade launch first-of-its-kind development and production partnership for branded content: BBC Studios Productions and Tastemade, the media company known for its video content and programming in the Food, Travel, and Design space have just partnered to bring long and short form branded content to 300 million viewers a month on social media and streaming platforms. BBC’s Director of Digital & Business Development Helen Pendlebury explains that “Brands will now get the chance to work with many of the award-winning creative executives behind some of BBC Studios Productions’ best known global formats.” This is a big moment for branded film and storytelling, especially as branded content is somewhat newer territory in the UK. News from the BBC. (GSH)
GSH = Articles written by Sub-Genre's Gabriel Schillinger-Hyman, not Brian Newman (BN)
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