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Industry Beat

by Anthony Kaufman

Bad Metrics

Knife Fight

Even if you don’t know baseball, you probably know the term “batting average” (or BA), which is widely used as the best measure of a batter’s prowess. Defined as the number of hits divided by the number of times at bat, it’s reported as a decimal number (i.e., .300 refers to the praiseworthy remark “batting 300”). The three all-time BA leaders are Ty Cobb (.366), Roger Hornsby (.358) and Joe Jackson (.356).

But some baseball insiders have criticized the metric because it doesn’t account for the quality of those “at bats.” For many, it’s a shortsighted statistic that elides the true efficacy of a hitter. Some experts prefer RBIs, or “runs batted in,” as that stat indicates not the number of hits but their overall effect in a game. Using RBIs, the top batters are a different bunch: Hank Aaron, Babe Ruth and Barry Bonds. So who is the best: Cobb or Aaron? Hornsby or Ruth?

Don’t be surprised if Magnolia Pictures’ Eamonn Bowles is a Hank Aaron fan. Bowles likens the film industry’s fixation with box office sales to BAs in baseball. “It’s like counting the number of singles a player has and calling him the best player,” says Bowles. “We have had at least three films this summer, Europa Report, I Give It a Year and Drinking Buddies, which have all grossed well over a million dollars on VOD, and two of them, grossed over two million on VOD.”

But media outlets have not reported on these indie success stories, probably because their theatrical box-office numbers were far from newsworthy. Added together, the three films have earned less than $400,000 in theaters. While the industry’s box-office obsession is a bit annoying to digitally minded distributors like Bowles, he says, “You can’t let your bottom line be beholden to trade reporting.”

Indeed, despite the fact that weekend box-office numbers, reported every Sunday by companies such as Rentrak, Exhibitor Relations and, remain the golden metric by which films are judged, many industry professionals, particularly in the indie sector, don’t pay attention as much as they used to. “It seems like such an antiquated model,” says IFC Films President Jonathan Sehring. “People should be fixated on the entire pie, not just on what represents 20 percent of the revenue.”

It’s common wisdom that theatrical sales are a good predictor of how a film will perform through the rest of its ancillary life, but Magnolia, IFC and a host of new distributors say otherwise. The companies can point to plenty of films that might look like financial disasters, but, in fact, were the exact opposite. For instance, IFC Films’ release of Bill Guttentag’s political satire Knife Fight, starring Rob Lowe, earned just $2,019 in its theatrical run — one of IFC Films’s lowest box-office performers — but according to Sehring, it was “a very successful movie for us on many platforms.” The producers concur. Says Knife Fight’s Catherine Davila, “We think VOD is a great model for independent films.” Similarly, Cinedigm’s releases of The English Teacher and Don’t Stop Believin’ (both of which made about $60,000 in theatrical receipts) over-performed in ancillary outlets.

Variance Films’ Dylan Marchetti likens box-office data to an iceberg. “You see what’s above the water, and sometimes it’s big and impressive, but you don’t see the VOD results that are hiding under the surface, often multiples larger than theatrical box office,” he says. Marchetti has seen numerous films earn four to five figures in theatrical sales, but generate mid-six figure grosses on VOD in just a few weeks. “And publicly, we don’t get credit for that,” he adds. “It’s fine, but it would make my job easier if there was a third-party site I could point to and say, ‘Look at what an awesome job we did.’”

Of course not all VOD titles are “making boatloads of money just because it’s available,” adds Marchetti. But some are, which makes box office increasingly irrelevant.

If digital revenue numbers remain a mystery — the “analytic black holes,” as identified by WME’s Liesl Copland in her widely heralded speech at the 2013 Toronto International Film Festival — day-and-date distribs, however, claim that the people who matter, those who need to budget films and manage financial expectations, are finding out what films are earning and on which platforms.

As Cinedigm’s Senior Vice President of Theatrical Releasing, Vincent Scordino, explains, “We have a good working relation

ship with several producers and agencies, so we can talk to them before acquiring their films about the ranges of performances that we can expect.”

Because of confidentiality agreements, Scordino admits that they can’t communicate specific numbers on specific films. “It’s a trust exercise, for sure,” he says. “Everyone has to take a leap.”

But Scordino and others believe the industry is moving toward greater transparency. And the more producers that participate in the day-and-date or digital release, the more they are learning about what can be expected. Companies such as Magnolia, IFC and Cinedigm all herald their repeat customers, filmmakers who have had some success with the model and returned. Says Scordino, “We’re trying to build trusting relationships with producers and create efficiencies within a market that’s rife with inefficiencies so people can make informed decisions.”

The problem, of course, is that there is so much that people don’t know. Although they don’t account for production costs and P&A spending, which makes them distortions of the real truth, box-office figures don’t lie — they are out there and readily available to chart, which is more than you can say for VOD. And without statistics, filmmakers — particularly newcomers — will remain in the dark.

But in many ways, that’s always been the case. “Home entertainment and ancillary performance has always driven investment and profit, and it’s not reported,” says Scordino. “So maybe you can’t blame the industry for [focusing on box-office], because it’s the only information that’s consistently been shared.”

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