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in Filmmaking
on Oct 8, 2009

Here’s Mike Johnston’s second post from the Future of Music Conference.

One of the most important considerations for most musicians or filmmakers is to have their work exposed to as wide an audience as possible. The existing model of taking a product to market is still alive but it is no longer the only way to do it. That model depended on the acquisition of funding from a major record label or film studio for production expenses, distribution and major commercial exposure (promotion). Trying to navigate this avenue is full of potholes for the indie artist due to the inherent biases based on the perceived commercial viability of the product in question and in a broader sense the fact that there is only so much financial pie to go around.

Digital technologies have enabled artists to produce and edit high quality products on a comparative shoestring budget. Sites like kickstarter.com provide new and creative ways for artists to raise any capital they need to cover production costs. Distribution of CD’s/DVD’s is available through any number of websites such as Amazon and even the rental market is now available to indie artists through Cinema Now or Netflix (through an aggregator).

I found a great example of the old meeting the new and the old failing to adapt in a previous blog post here on the Filmmaker Magazine site. In a video interview included in that post director Estevan Oriol rants on how “upstarts” using less expensive digital tools to produce music videos have ruined the market for three-minute videos with six-figure budgets. He doesn’t talk about how to adapt to the new market or the advantages digital holds for both independent video producers and indie musicians. He just bemoans the lost revenue and pines for the good old days. A similar attitude is what is preventing indie film from taking advantage of digital media as well.

A great deal of the material presented at the Future of Music Conference in Washington this week has been about various aspects of DIY marketing for indie bands, and I think that most of it applies equally well to indie film. Whether your main goal is to simply expose your work of art to as wide an audience as possible or to try to profit from your efforts, the strategy is pretty much the same. According to at least one speaker at the conference the DIY model can actually be more profitable in the long run because artists retain the rights to their products and, therefore, the lions’ share of the profits.

Probably the best single presentation on this subject came from Ariel Hyatt of Ariel Cyber PR, although other speakers did a good job of rounding out, polishing and building on the concepts she presented. Echoing Kevin Kelly, she started with the premise that an artist can make a reasonable living with only 1,000 dedicated fans who are each willing to spend $100 a year on products or services from the artist.

Acquiring a thousand fans seems to be a reasonable enough goal but the idea of finding one thousand people who are willing to spend a hundred bucks each when all you are offering for sale is one CD or DVD may seem like a bit of a stretch. Is it impossible though? No, the secret is learning to actively build and maintain a fan base by providing value to them on a recurring basis. How to provide that value is up to the individual.

An example of how this can work really well is how Nine Inch Nails (Trent Reznor) released the recent “Ghosts I-IV” album. He made the album available in four different forms. The first was as a free download of the first 9 songs (of 36 on the album). Of course the immediate thought is that, with the free option available, fans would by and large choose that option and the album wouldn’t generate any revenue. But the album took in 1.6 million dollars in the first week.

The other options were; a $5 download of the entire album, a $10 two CD set, a $75 set that included a book, a data DVD and a Blue Ray disk with high def video and a slide show. The final choice was a $300 edition which was personally signed and numbered by Reznor. At each level he built more value into the product. That additional value was enough to bring in millions in revenue. Not everyone has the star power that NIN does but the concept is certainly scalable to any production and most importantly, it works.

Filmmakers have similar digital distribution opportunities through aggregators or independently on pay per view streaming sites or DVD rental outfits like Netflix. With a broadband connection and a connection to their TV customers can watch film just as easily as they can stream music with equally good quality. Is digital distribution really working out as a major revenue stream for anyone? Not yet, according to Morgan Spurlock (Supersize Me) who was quoted recently as saying;

“The reason numbers aren’t released (for digital distribution revenues) is because the numbers are pathetic. The numbers are sadly low in comparison to what we expect from film and television.”

“If you’re looking to pay your rent, not so much, if you’re looking to pay your phone bill, you have a great chance. It’s getting to a point where it’s down the road from being profitable, but we’re just not at that point yet.”

Jed Carlson, COO of ReverbNation, pointed out that despite all of the potential digital revenue streams available to a band today such as MP3 sales and royalties from radio and streaming airplay, most bands still make 50% of their income from live performances and merchandise sales. It seems, then, as though live screenings and theater placements coupled with DVD and related merchandise sales are potentially still the best source of revenue for filmmakers just as they are for bands.

Even though digital sales and rentals may not be the big cash machine that everyone hoped they would be they are great promotion and audience building tools. A recent survey found that word of mouth is still the number one way people find out about music or movies and social networking is all about word of mouth. Ariel Hutton stressed the importance of building an audience through proactive use of all of the social networking platforms that are available but pointed out that the way you use them and the content that you provide are every bit as important as is just having a presence on them.

She advised against just blasting out random bulletins on MySpace or sending out BCC newsletters to everyone on your mailing list. Her alternatives to these easy0peasy actions involved more personalized communication tailored to specific areas of interest or importance to your fans based on things like where they live and again, providing value to the fan. She said that fan clubs offering opportunities or merchandise not available to the general public were one route to create value and increase revenue. Fan club bonuses could include things like free tickets to local performances or screenings, backstage passes and even paid events like dinner with the stars.

The entertainment world is currently in a state of flux between the old model of doing business and the new one. Nobody is quite sure how it will all end up or even how everyone will get paid for what they do. Despite that, what seems to be clear is that independent artists have opportunities today that they never had before and what the outcome will be depends on how well the artists understand those opportunities and how well they use their talents to take advantage of them. — Mike Johnston

Mike Johnston started his career writing op-ed pieces for several newspapers in the mid 1990’s. He most commonly writes on the environment, alternative energy and the arts. In the early part of the new century he had a climate change/alt energy blog which saw a half million hits. At that time he was asked to be an energy advisor to the Gephardt for President campaign. More recently he has writing on the blogcritics.org site and was called Boone Picken’s favorite blogger on the Pickens Plan website.

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