May 23, 2024
I was at a meeting last week where I was talking with a group of film investors about the state of the market. When I summed up the current situation, someone asked me if I had a post about this, and while I’ve written a fair bit here about this stuff in different posts, I realized I hadn’t laid it all out in one easy to read post. So, here’s the current “Rules of the Game” for distribution as of May, 2024 – this could all change before September, but I bet this will be pretty true through most of 2025 (that’s a prediction, let’s see whether I’m right or wrong).
1. Streamers rarely show up
Someone told me the other day that when they surveyed filmmakers at a recent conference, everyone’s plan was essentially the same – get into Sundance, or another major festival and sell to Netflix, or another major streamer. To state the obvious – those days are done. Over. The major streamers are not showing up at the bargaining table for 99% of the films being made today, even the ones that get into Sundance. When they do show up, it’s either because a film is big – meaning it has big stars, a name director, and/or killer subject matter (and usually all of these); or because they feel it’s an Academy contender. I know you think your film is all of the above, but it probably isn’t, and selling to a major streamer is likely not gonna happen. This is nothing against your film – it may be great. But the major streamers are chasing subscribers and (increasingly) advertisers, which means a move towards much more commercial fare, and lowest common denominator stuff (reality TV), which brings the eyeballs. A few prestige projects are all they need, and there are too many good ones to pick from, so they have it easy.
2. Distributors have lost the Pay 1 window
Most of the next layer of distributors – the ones who release films in theaters and would typically have an output deal or something close to it with a major streamer, have lost those deals. Or they’re expiring later this year. That represented a big chunk of change for them, as they knew they had a safety net, and they could take more risks on what they would buy, or pay more for something, knowing that Hulu (or whoever) would come in with X amount of dollars for anything they released. The loss of these deals is probably the biggest crisis facing the field right now – it has changed everything. That means most of these distributors must be much safer on what they buy, and when they do buy, they often can’t afford to pay as much for the film. In fact, they often don’t think they can make back what you probably spent on your movie, so you’ll often hear about offers that are substantially less than the “negative cost” of your movie.
3. Transactional Revenues are Down – and for Docs, they’ve fallen off the cliff.
Just a few years ago, maybe even just a year ago, one could count on making a good amount of money when your film went to transactional windows – PVOD, or premium VOD, where people pay around $20 USD for early access to a film, or in TVOD, where people pay a smaller fee to rent or buy the film a little bit later. But now that most consumers have between 4-6 subscription services in their monthly bill, very many of them are not willing to spend money on a movie when they can probably wait and see it on SVOD later. Of course, per one and two above, that film might not ever end up on SVOD, but the audience doesn’t always know this, and forgets by that time, anyway.
On the positive side of things here – most distributors seem to be reporting that for a decent narrative/fiction film, there’s still a pretty healthy transactional window – it’s down from years ago, but these revenues can still be decent, and good reviews, good marketing and buzz from a theatrical release can help. The bad news here is that this isn’t true for documentary films. With just a couple of exceptions each year, people just aren’t paying to rent or buy documentaries on transactional platforms anymore. Most distributors and aggregators will tell you that for docs, transactional has “fallen off a cliff,” which means they can take even fewer of those. This is also because of the next point.
4. Documentaries don’t work theatrically anymore.
A curious thing has been happening since Covid – audiences are coming back to movie theaters, especially the better run/curated arthouses (more on this below), but people are not showing up for documentary films. Audiences are watching these films at film festivals, so an audience is out there, but they don’t come buy a ticket for a regular release. There are exceptions, of course, and a few “big” docs will do ok. But most documentaries have to rely on event-based releases, four-walls, and service deals (more on all of this below). People might show up for a one night only event, with a great Q&A, but they won’t be there for the matinees, much less the Tuesday evening showing, and week-long runs rarely make any sense anymore (but people do them to qualify for the Oscars…).
5. But theatrical has never been more important, or interesting
While audiences might not be showing up for docs, they are showing up for other things. Many of the better, curated arthouses are saying that audiences are showing up for strong narratives, and there’s also a growing sense that the theatrical window is becoming more important than ever before. If a film can make it past that first week and be doing well, the word of mouth can spread. In addition, younger audiences are coming back to theaters, especially for repertory cinema and special events. There’s a bit of a problem in getting screens – it’s a crowded marketplace in arthouse land (not the case with the megaplexes right now). And on the other hand, many exhibitors have told me that they often lose out on getting some of the bigger arthouse films they want, and which would bring them more revenue, because the bigger distributors are going for bigger footprints which they can only get from the bigger chains and megaplexes. Nothing is perfect in exhibition land, but aside from docs, theatrical is looking interesting.
6. Event-Releasing is Key
As I mentioned above, audiences do seem to show up when you give them something special. When you “event-ize” your screening, audiences will show up, and this is especially true for documentary films. Have a one or two night only screening event, bring in the director (and subjects or cast) for a Q&A, have a party, offer free beer, have a music performance… whatever makes it special. This also works for smaller narrative films that might not be able to get a booking without a four-wall (Rental of the theater). When done right, you might get more people in one night than you’d get in an entire week-long run for some films, and everyone – filmmakers, audiences and theaters – are much happier.
7. You need to own your distribution, and you must budget for it
I’ve been telling people this for years, and no one wants to listen. For a few years, you could even get away with not doing this, because the market was that strong. But not anymore. At my day job here, we work with our better brand clients to plan for distribution before they even shoot their films. We start by building what I call our Plan A – it’s everything we can do with our resources – time, money, people, and for brands they can add things like their owned & operated channels, retail stores, etc. – and assume we won’t sell to a major distributor. Any indie can do this same thing, you just might not have the same level of resources as a brand. This plan comes with a budget – for brands it might be about 1/3 to ½ of what they plan to spend on the film itself. For an indie, it might be a lot less, but you must have a budget and a way to raise those funds (this is not easy, I know). If you have a good budget, you can hire a service deal booker/distributor and impact producer, and PR and marketing and have a team to help you. If you have less money, you can do it with (paid) interns and a smart strategy, you have to adjust this plan to your reality, but you still need a plan.
Later, when you get to some film festival and any distributor offers a deal (if one arises), that’s a Plan B. Because you already have a Plan A, you now have something to negotiate – can you carve out certain rights? The distributor isn’t doing a few things in your Plan A, can you keep those rights, or get them to do something better? In the best case, you come up with a hybrid of Plan A and Plan B, which we call Plan C – this is the best of your two plans, combined. In some cases, Plan C is your new plan without a distributor, but it’s been made better based on what you learned in negotiating (maybe you stole an idea…). If their Plan B is actually better, you will likely still use some of your Plan A, and use some of the funds you saved – maybe you can now pay for your E&O and delivery costs. Maybe you can afford to put money into a good social media campaign because your distributor (unless it’s named A24 or Neon) won’t know how to do that at all. But if you didn’t plan, and you didn’t raise some funds, you are in a very bad place in 2024.
8. If you’re not a US filmmaker this sounds crazy, but it’s still true.
I gave a talk about this with a group of filmmakers from Europe last week, and their jaws dropped. Why would we spend money on distribution or marketing, isn’t that the distributor’s job? Great question, and I understand the mindset. But that’s old-world thinking. There’s a very good chance you won’t get US distribution for your film. And you probably need some form of US theatrical and distribution to close other international deals (this is pretty common). So, your sales agent might take a deal from a tiny US distributor for a very low MG, and guess what – your film won’t perform well here, but you’ll close those other deals and be on to your next film. But if you raise some funds, you could do a service deal with a distributor or booker in the US, and keep your rights, get a better release, build your fan base and audience, and maybe come out ahead. That’s much better than getting no distribution in the US or very poor distribution in the US. This is a tough one, I know, but humor me – it even pays for international filmmakers to think about doing this, because it can be better for your film and your career.
9. This works better if you are making a film for a very specific, sizable, underserved audience.
Look at the recent success of Angel Studios. Or look back at Tyler Perry. Or take a look at the old case studies for IndieGame: The Movie, or BURN. In all of these cases, the filmmakers identified a core audience that was not being served by the media, their niche was not small, but quite large, and it was begging for good films. I always tell people – make a film that’s film festival and distributor proof, meaning it doesn’t matter whether you get into any film fest, or if no distributor buys your film, because you have such a sizable potential audience that is hungry for your film, that you can go directly to them and succeed. As I’ve written before, this is my new recipe for success: identify these groups of audiences, and build a brand for them – and you will profit.
10. Luckily, there are new tools to help with some of this distribution and marketing stuff. But you have to use and embrace them.
Finding success in today’s marketplace is tough, but things are a little bit easier now because we have tools we didn’t have before. Most obviously, we have social media – especially Instgram, TikTok and Letterboxd. You can use these to find your audience, but only if you embrace them – and these need to be done by filmmakers. And while everyone I know is on social media all day long, too few filmmakers adopt it for promoting their films, and their careers. I met one producer this week whose entire business model is financing not just the film, but also their social media campaigns – they’ll build a social strategy before they shoot, and they’ll prep materials while they’re shooting, to build an audience early, but also to have a folder full of stuff to share once the film releases to the public. They’ll shoot vertical video for Insta and TikTok, they’ll have their cast record simple videos from the set, which they can use later. They’ll pre-record intros to theater audiences around the country (Hello Nashville, thanks for coming to see our movie) to personalize their screenings. But these have to be authentic, and in the “voice” of the filmmakers and your cast/subjects.
In addition to the obvious social media tools, we also have new systems. Kinema has been building a suite of tools for filmmakers to own their distribution, and I recommend checking them out. There’s also Artinii, which let’s you send your film securely without the cost of a DCP, which also opens up many nontheatrical opportunities. This year also saw the launch of Jolt, which is using new tech, machine learning and smart use of data to help filmmakers aggregate audiences for their films. It’s in beta now, and not open for everyone, but I suspect it will be by next year. You can also learn a lot more about this stuff from the good work of Distribution Advocates, who now have a podcast on distribution, and a new grant to assist with new marketing ideas for distribution. There’s also been a lot of work behind the scenes lately – Sundance’s Catalyst is helping to bring investors to this space, and I know many investors who are starting to look at financing distribution/marketing, not just the making of new films. My hope is we’ll see a lot of new activity in this space, and a lot of it will be more public, later this year.
Last, I am hoping this might be the year that more filmmakers will embrace YouTube – our biggest distribution system, but one very underused by filmmakers. At minimum, people should be using it more for their trailers, out-takes, behind the scenes, and the like. You may think your film couldn’t work there, but I beg to differ, and can offer a great example. Check out animator Patrick Smith’s YouTube channel. Go look at his community page, where he’s not just posting behind the scenes of his animation process, but asking his audience what they want to see, and he even uses it to test ideas and get feedback on his edits on works-in-progress, thus building his audience while refining his art. Read this interview with him in ASIFA East, which is chock-full of awesome ideas for how indies can use YouTube to build an audience and a career – he’s making a healthy six figure salary from his YouTube work alone now, and he argues that no one would have thought his little animations would work there before he did it. It seems obvious now, but it wasn’t when he started. Now granted, this works a lot better for short work, and animation has a big, underserved audience, but if you read his interview with an open mind, I think you’ll see how it can also help the average indie/arthouse film as well.
So, that’s the general state of film distribution right now in 2024, along with a few hopes for the future. The main takeaway should be – don’t put all of your faith in selling your film to a major distributor or streamer – own your destiny. It’s always been a smart strategy for savvy filmmakers (DIY distribution is a very old concept), but right now, in this market – it’s the only strategy that makes any sense.
Note, after writing this on Tues night, but before posting it today, I noticed Ted Hope wrote a similar newsletter on the need for new thinking in distribution. I recommend checking out his thoughts too. Several good minds are all thinking about the same things, it seems. Matt Kohn also sent me this great Reel on the situation, which is worth a watch.
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Film
“Invisible Nation” Documentary Hits NYC Theaters Next Week: “Invisible Nation” directed by Vanessa Hope, investigates the election and tenure of Tsai Ing-wen, the first female president of Taiwan, and her living tightrope walk as she balances the hopes and dreams of her nation between the colossal geopolitical forces of the U.S. and China. Described as “strong, effective observational documentary filmmaking… bound to make many viewers deeply concerned about how the next chapters in Taiwan’s story might unfold (Richard Kuipers, Variety),” “Invisible Nation” will be playing in New York’s Quad Cinema followed by Q&As with the filmmakers on the first two evenings. Grab your tickets here! (GSH)
 A24 Fans Will Start Reading Books: The just 7-year-old production studio is moving into the world of books through an historic partnership with Mack, an independent publisher. The partnership will see A24s existing line of film, TV, and books sold in bookstores around the world starting in September, distributed through Mack. A24 films Ex Machina, The Witch, and Moonlight will receive limited edition books that run about 225 pages in total. Moonlight’s book will include a forward by singer Frank Ocean and transcriptions of Academy Award Acceptance speeches. The Witch will contain a conversation between the director and historian David D. Hall, production sketches, and a fictional short story by Carmen Maria Machado. Ex Machina’s book will include essays by experts in gender studies and cognitive robotics and feature concept art. Julia Alexander has the news. Check out her article for The Verge to view the stills and promo videos featuring A24’s books (honestly, they look pretty great). My takeaway: When a leading entertainment company is making a big push into books it either means one of two things (or both): (1) They must not be doing too great and feel pressure to expand into new markets and/or (2) they know the value of their brand, they knows exactly who their fans are, and are putting in the extra effort to reach them and keep them. (GSH)
What's Next in the Battle between Actors and AI Companies?: I think by now everyone has heard about the dust-up between Scarlett Johansson and OpenAI when they essentially stole her voice this week. Winston Cho for the Hollywood Reporter take a closer look at what might happen next - more lawsuits, big questions over First Amendment issues, and more. It's worth a read. (BN)
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Branded Content
Changes To YouTube Select Will Alter The Relationship Between Brands, Creators, & Their Audiences: YouTube Select is a program which previously allowed advertisers to pay to place their ads on the top 5% highest-performing channels. Now it’ll become more selective by consisting of only the top 1% of channels. Digiday’s Tim Peterson explains that “through YouTube Select… brands can effectively buy out a given channel's ad inventory” which comes with pros and cons. “While it can provide exposure and exclusivity, there’s also the risk of overexposing a brand to a creator’s channel by having ads airing in every video from that channel.” Creators may have their own concerns too and may not even support the brand that’s ‘taking over’. On the other hand, a longer relationship between a creator and a brand may bring about a more organic connection for audiences. Agency executives acknowledge that while YouTube Select’s pricing isn’t prohibitive, they’ve seen more clients leaning more and more into auction. A lot more detail about what this change means for creators, brands, and audiences in Peterson’s article. (GSH)
The Dark Underbelly of Creator-Brand Partnerships on TikTok: Check out Gillian Follett’s piece for AdAge to learn about ethically dubious practices TikTok creators commonly navigate when dealing with brands and what creators are (or aren’t) doing about it. Here’re four common issues creators face: (1) Brands pushing creators to lie to their viewers about their experience using products or services… or asking creators to omit the fact that the content is sponsored; (2) Brands setting unreasonable deadlines or not adjusting them when a creator has a personal emergency; (3) Brands using creators’ content without their permission and trying to ‘pay them in exposure’; (4) Paying creators months after they post. One of Follett’s takeaways: It’s no wonder that dozens of creators have subverted the “Get Ready With Me” trend and began divulging their negative experiences with brands with their audiences (brands better watch out). And my (grim) takeaway: Since we’re entering an era where brands and creators depend on each other across multiple channels and mediums from YouTube to TV/Film, to Gaming…etc, respect for creators should be paramount… until it isn’t and AI influencers take over. (GSH)
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Miscellany:
Debunking Internet Misconceptions: Mike Masnik for TechDirt writes two articles that challenge popular conceptions of the internet’s impact on personal and national health/wellbeing. These are: (1) Social Media’s Electoral Power: More Hype Than Reality? and (2) Yet Another Study Finds That Internet Usage Is Correlated With GREATER Wellbeing, Not Less. I encourage you to check them out, but for now, know that a new study out of NYU’s Center for Social Media & Politics suggests that social media’s impact on the 2020 election was minimal. Interestingly enough, it also found that the deactivation of social media accounts had basically no impact on “issue polarization.” The other potentially hard pill to swallow for believers that the internet is destroying our children…etc is that “there appears to be a general positive association between internet usage and wellbeing (The Oxford Internet Institute). Masnik notes that “this is a correlational study, and is not suggesting a direct causal relationship between having internet access and wellbeing.” Check out the full study here. (GSH)
GSH = Articles written by Sub-Genre's Gabriel Schillinger-Hyman, not Brian Newman (BN)
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