Zig When They Zag –
the glaring opportunity in theatrical
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May 5, 2021
Everyone and their mother can tell you that the only thing that matters anymore is streaming. And not just streaming, but specifically, streaming series. Every aspect of the business is focused on the streamers, and for good reason as that’s where the attention is now, especially due to Covid. But when everyone’s attention is focused somewhere, that’s the time for smart folks to look elsewhere for opportunities, and right now, there’s nowhere more elsewhere than theatrical. And that’s the zig to the zag that offers the most opportunities.
I’m not talking about the obvious here – that people will start going back to the movies in cinemas as vaccines roll out and restrictions roll back. Duh. I’m talking about the fact that as all of the industry’s attention – and movies – go to the streamers, that leaves a big gap in quality offerings for theaters, and a huge audience that will be underserved, starving for the right content. That’s what Tyler Perry recognized years ago, and why he’s a billionaire now. His underserved audience was Black, Christian audiences who wanted some light but wholesome entertainment. The person(s) who identify the right underserved audiences and give them the right films in the right theaters might not see Billions, but will definitely make bank. Emphasis, as noted, on right in that mix.
Right now, who goes to movie theaters more than anyone else? Diverse audiences, for one. Older audiences are another (and the population is aging almost everywhere, meaning there’s more of them to buy tickets). Cineastes looking for elevated foreign language films are another. There are also many sizable niche audiences who show up in droves for “specialized” films. Hollywood will own the largest audiences, but they only make so many movies. And sure, Netflix will open films at the Paris and the Egyptian – and sometimes many more screens for big films - to satisfy talent and get some press, but this still leaves a lot of open space.
But not every film is theatrical. Meaning, they may look beautiful on, or be intended for the big screen, but they may not draw the audience to make that a worthwhile proposition. Especially most docs, contrary to their makers and the field’s opinions. But the right docs – like music docs, or outdoor docs (Reel Rock tour) and others can fill a theater. Most of the opportunity here, however, is probably in narrative film, especially the ones not getting picked up or made by the streamers. And guess what? If you make the right film, for the right audience and get it into enough of the right theaters to break, say a $-Million in box office, you’re probably just about right for the streamers again, too.
Speaking about this opportunity with a distribution friend last week, they proposed that the opportunity is really just for bigger films, not indies and arthouse, but things in the $20M+ range that are now considered small, but would fill 600+ screens at megaplexes. I think that’s true, but also think that some smart folks will do this at a smaller scale for niche audiences at the lower end of the price spectrum – those $3-10M indies that have become unicorns these days, and that can now only justifiably get made if they’re commissioned by streamers.
It’s also a big opportunity for larger brands who have been gently moving into the film space. A smart consumer brand – someone like a Coke, Pepsi, P&G, Unilever, or a recovering from Covid hospitality or airline brand – could own a niche, with quality films by focusing on the theatrical market first. They have the budgets to market the films enough to fill the seats, can also own the pre-show, and through service deal distribution could own the audience data, which they don’t get from the streamers. And when they’re successful at it, they’ll land there later anyway. Smart brands – or investors – can own a niche or two, and get attention by not being where everyone else is looking, but by operating where there’s untapped demand.
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Film
Iconic Events Launches: Speaking of serving untapped demand, there's a new event-based cinema provider launching - Iconic Events - and while their first events are more around things like live fights, they'll be doing retrospectives, new screenings, concerts, streamer premieres, branded content, etc. soon. They have an impressive founding team, over 1000 screens and they should be one of the top event cinema providers soon - just as we all start going back to the theaters (not me, but people seem to be going). HR has the news.
The Film Math Conversion Chart: Loved this post by producer Mynette Louie, which sums it up well:
Lessons From Shooting on a Rooftop: A bit of self-promotion here, but while biased, I liked Casimir Nozkowski's article for MovieMaker magazine about what he learned from shooting part of our film, The Outside Story, on a set of rooftops and a fire escape. As a producer, I learned once again, that nothing is ever as easy to make as you think it is on the first read.
Every Documentary about a White Guy Scammer: Some gold here, not just about this particular genre, but of a lot of tired tropes in doc filmmaking. I especially love the spoof of the ubiquitous shot where we see the subject speaking to the interviewer:
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Branded Content
The BMW Films Anniversary Video Last week I mentioned that Brand Storytelling held a great panel on the anniversary of the BMW Films series launch. They've now posted the video on YouTube, and it's worth a watch if you missed it.
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Miscellany:
PreShow Ad-Supported "MoviePass" for Gaming from MP founder launching: I've been waiting awhile to post about this one. Stacy Spikes, who founded UrbanWorld (where we first met) and then went on to found MoviePass - and no, he wasn't the one who ran it into the ground, that was those who took over - has now founded PreShow, which is launching soon. PreShow is an ad-supported, gamified approach to earning credits to use in video games, and eventually for movies and other cultural entertainment. Protocol has the article, but keep watching this space, because this one has potential. Do I hate ads, and find the idea of a face tracking technology that makes sure you watch them so you can earn rewards a little icky? yes. But, a lot of people would do it to earn rewards, especially those who can't afford them, and there's a lot of potential here for good branded entertainment to be in the mix. And Stacy's already told me he's doing a lot to promote companies and projects in the sustainability space. I'll keep an open mind. You can sign up here.
How TikTok Really Works - The Foundering podcast from Bloomberg took a deep dive into TikTok recently, and if you only have time to listen to one episode, listen to Episode 3, about how they work with creators. Nothing on TikTok is by accident - they are controlling who gets popular, which songs are hits, what gets seen and what trends. Lefsetz recommended this twice in his newsletter, and he's right- it's a must listen for anyone interested in how this stuff really works.
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