Picture of Ava B. with logo of House of Film

House of Film’s fusion distribution strategy optimizes revenues for quality independent films

BY AUSTIN BURBRIDGE. 2009 AMERICAN FILM MARKET, SANTA MONICA, CALIFORNIA (CINEMA MINIMA) — House of Film — a new film distributor headed by veteran distribution executive Ava B. — offers a bold and comprehensive strategy to address the new challenges faced by independent filmmakers in a volatile market.

The formation of this firm, and its new, “fusion distribution” strategy, throws light on the dramatic changes in the market for independent films.

The 2009 American Film Market was a laboratory for producers and distributors (and a few filmmakers) to discover precisely how the market has changed; to experiment with new ways to get films before audiences; and to devise new methods to recoup investments and to realize profits from their productions.

The new market for independent films

In 2009 the market for independent movies is smaller, and heterogeneous. A producer cannot depend on a single big sale to Hollywood to recoup her costs or make profits; nor can she afford to “leave money on the table,” in smaller markets, new media, or new venues for exhibition.

Now, a filmmaker must begin early — in preproduction — to think about how she will sell her movie, get it distributed, and market it to an audience. Putting off those questions until after a film would have been completed is no longer a practical option.

Audience development

With so very many different kinds of entertainment competing for time, attention, and dollars, a movie audience is no longer a given. Nowadays, a movie does not find its audience, nor does an audience discover a movie; instead, an independent movie production must develop an audience.

Independent filmmakers must start to do what Hollywood has been doing for decades — start to work early with media, advertisers, and sponsors to develop audiences using coherent combinations of publicity, promotion, and co-branding. These relationships would not only provide financing; they would also leverage partnerships with established brands to seize public awareness — and amplify a film’s marketing message far beyond the reach of publicity and advertising.

House of Film’s new strategy for a new market

Ava B. House of Film In an exclusive interview with Cinema Minima, founder Ava B. — previously, Vice President of Sales and Acquisitions at LongTale, a foreign sales and intellectual property asset management company — explained her firm’s “Fusion Distribution” strategy.

“House of Film connects independent movies with both traditional and non-traditional distribution. We can reach the widest possible global audience and maximize producers’ revenue in a new ‘fusion distribution’ model.

“This new business model underscores our ability to incorporate product placement and integration, as well as sponsorships, into the production of quality independent films.

“Watching what’s happening to distribution these days — traditional distribution does not work any longer, but new distribution does not work yet,” she averred. This refers to the fact that — although the number of persons who go to the movies continues to decrease, and DVD sales are declining — the number of persons getting movies online has not increased so much as to make up the difference. In short, the total audience for motion picture entertainment is shrinking. As Ava B. puts it, “Filmmakers are independent, but filmmakers are lost: There is no good solution to make enough money from their content.

“So, putting together my experiences — and learning from the mistakes of other companies — I thought, all right, let’s put this together: What can work? The business model of this company, is basically, optimizing profits from any content; to look at the content and see how much it can carry:

  • Find the optimum distribution strategy.
  • Combine digital technologies with the best of the traditional methods, for both USA domestic and international distribution.
  • Negotiate contracts that provide the most lucrative return.

“First, start at the top with the best options of traditional distribution, then go one level lower, one level lower, like television, then DVD … and go through all the levels of traditional distribution. We have something like eight thousand buyers in our database — we are rather well-connected, especially with Academy Award-worthy content [i. e., SUNRISE/SUNSET] that brings in the important buyers.

“Once we have finished with the traditional distribution, we monetize the content as much as possible across all media. We switch over to non-traditional distribution for the content,” she said, “and we are trying to find other ways to monetize the content, for example, sponsorships, or cover-mount deals.

Product Integration and product placement

“And, we are looking at movies in development, where we could do product integration or product placement. That is why it is important for the company to pick up quality movies, so that it would be well-positioned to be attractive to high-end brands, so that — the Chanels, the Diors, and the Pradas of the world would not mind being associated with our company. That’s the vision. That’s what we are aiming for. …

Worldwide distribution under the House of Film brand

“… And we pick up the content accordingly. House of Film offers worldwide distribution to films — of any genre — that meet the highest standards in aesthetics, with a special focus on movies that relate to design, fashion, or the arts. Visually, quality has to be ‘A-plus’; or, a picture must be innovative in its presentation. We can pick up high-art movies, or a horror movie — if it is quality — or even an action movie, or a documentary.”

House of Film’s current lineup reflects its openness to different kinds of films — as well as its insistence on superlative visual quality. “These are all pearls here,” Ava B. remarks.

  • SUNRISE/SUNSET: DALAI LAMA XIV follows the iconic Tibetan leader for one day for an intimate — and revealing — portrait.
  • BELLADONNA is a feature which uses time travel to examine the moment of a wedding to contrast the evanescence of courtship with the permanence of love.
  • FOR THE NEXT 7 GENERATIONS presents 900 years of wisdom and prophecy from the 13 most-powerful female elders on the planet.
  • TATTOOS is a gripping documentary enlivened by celebrity cameos.
  • MILAREPA is the epic story of Tibet’s greatest yogi and saint.
  • THE RAIN is a wordless, all-dancing sequence of ravishing tableaux of love and passion.

Fashion + Design + Filmmaking

In this new environment, a distributor must be more than an efficient business opertion. To be a nexus for buyers and sellers, a market-maker must have a recognizable identity, a theme, a focus.

“Since we are aiming at establishing relationships with advertisers and sponsors,” Ava B. explains, “I thought: There is something no one is doing yet — and there is such an obvious need for it. To connect the three big businesses — fashion, design, and filmmaking/film distribution — under one umbrella. I would like this company to be the connecting point.

“Buyers would know that — when they come to House of Film — whatever they find here will be beautiful. It can be the beauty of the soul; it can be the beauty of the form, or the design, the fashion; or it can be via the participation of an artist. … Sooner or later, we will be identified as the meeting point. There’s no company that does that. It is an interesting niche; a new concept.”

A return to quality

“These days, everyone is going for quantity over quality — they’re aggregating bigger and bigger,” she observes. “If everone is going one way, there is room for someone who is doing exactly the opposite — quality over quantity.”

A focus on quality is a welcome development. The recent glut of undistinguished motion picture entertainments — created by financial, not business, considerations — has damaged the “brand” of cinema. Audiences no longer trust the movies to reliably deliver the high-quality confections of spectacle, drama, meaning, and pleasure which had made the cinema the unrivaled form of popular entertainment throughout the twentieth century. This has been especially destructive of the interests of independent filmmakers and distributors. At the Independent Film & Television Alliance’s 2009 Production Conference, independent producer (and former studio head) Bill Mechanic complained that the principal challenges to independent films are neither finance nor distribution nor piracy, but poor quality and lack of originality.

If cinema is to retrieve its privileged place in the popular imagination, and to resume its stature as a business which attracts the best and the brightest, it must again invest in the fundamental mythic and visual qualities which are meaningful to its customers. Also, it must promote business practices which foster its long-term prospects, and deprecate decisions which are motivated by short-term, financial considerations.

House of Film comes to market with a powerful strategy, singular films, and savvy, experienced management. Navigating by the pole star of æsthetic quality, it is well-positioned to prosper in this new and challenging market.

Services offered by House of Film

Distribution under the House of Film label

  • Worldwide, U.S. domestic, or international distribution for feature-length motion pictures — of any genre — that relate to fashion, design, or the arts; or that meet the highest æsthetic standards; or whose approaches are innovative or groundbreaking.

U.S. Domestic distribution

  • Submission of films to more than 20 of the best Internet/DVD distribution companies
  • Transfer of film to digital format to meet submission requirements
  • Completion of all paperwork
  • Marketing in concert with Internet/DVD distributors
  • Insertion of search-engine-friendly metadata
  • Transfer into appropriate formats of artwork and supporting materials
  • Negotiation of all deals to ensure the best possible terms for the filmmaker
  • Client approval of every deal
  • Quarterly progress reports

Producer’s representation

  • Submission of movies to multiple distribution platforms — U.S. domestic, and international
  • Contract negotiation
  • Consulting on all things distribution
  • Consideration for international sales representation by high-end distribution companies

Content management

  • Devising the optimum distribution strategy for clients’ films
  • Monetization of content by creation multiple revenue streams

Marketing

  • Product placement/product integration and sponsorships for movies with majority financing secured but still in development or post-production
  • Cover mount deals
  • Public Relations
  • Alternative marketing
  • Consultation on marketing strategy, including viral marketing and festival strategy

Technical

  • Editing (or re-editing) of trailers or movies
  • Format conversion

Production and creative development

  • House of Film evaluates projects for their commercial viability. In addition, it facilitates creative process with screenplay coverage, cast, and project evaluation.

Strategic alliances

  • House of Film will find — and introduce its clients to — synergistic partners within the design or fashion communities. Clients’ films benefit from creative, non-traditional advertising via sponsorships or product integration.

Contact

Go to Top

IFTA logo

Like Detroit's automakers, studios and independents have ignored their customers, says producer

IFTA Independent Film & Television Alliance BY AUSTIN BURBRIDGE. LOS ANGELES (CINEMA MINIMA) — The best thing about the annual Production Conference of the Independent Film & Television Alliance is the remarkable candor of the participants. The four-hour morning conference is attended by independent producers and distributors, who attend a keynote, followed by two panel discussions by prominent independent producers and distributors. Everyone is there because they want to exchange information about the business of independent film. There is no publicity or grandstanding — only straight talk. Attending it is a great way to get an accurate sounding of the state of independent film production and distribution.

The September 29, 2009 Conference in Century City in did not disappoint. Bill Mechanic — President/CEO of Pandemonium LLC and former Chairman and CEO of Fox Filmed Entertainment — delivered a bracing assesment of the current state and the future of the independent film business in the keynote speech.

Here is a video of the speech. What follows is a transcript of his remarks, supplied by IFTA:

Greetings. I was asked to address you this morning with my observations on the present as well as the future state of independent production.

But before I begin, I have to relate the story of a close friend of mine, who’s a leading heart surgeon.

He said he’d recently been involved in a very trying and emotional six-hour piece of open heart surgery where he and a team of people fought valiantly, but unsuccessfully, to save a patient.

Afterwards, my friend entered the doctor’s locker room. One of his colleagues was staring absently into the void, clearly spent from the ordeal. He tried to cheer him up, but the colleague turned to him and asked why he was not more distraught.

My friend answered with a smile, “At least we weren’t asked to save Independent Production!”

Well — truth be told — we may not be heart patients; but we aren’t that far away.

We have too many insignificant movies clogging our distribution channels.

Tightening economic conditions are sending sharp pains through our systems. Our blood supply from heretofore vibrant markets such as DVD and TV seemingly have evaporated in front of our eyes.

The question we must ask is, whether the condition is fatal? In all candor, I would say, “Only to some — those who ignore the warning signs; who don’t adjust to the threatening conditions; those producers — and distributors — who pretend there is nothing wrong.”

Nine years ago, I was a healthy (and occasionally happy) studio executive. I had taken Fox over a seven-year period from a doormat to the number-one studio; and before that, I had spent nine years at Disney building a then-dormant minor player into a muscular and, for the first time in its history, a real force in the studio world. I left Fox with five of the top ten films in history and departed Disney with 19 of the top 20 videos ever, and as the number-one International distributor.

I had fought with Rupert Murdoch over my desire to create a business for Fox in the world of animation. He felt no one could compete with Disney. Nevertheless I started up Fox Animation. ANASTASIA was a start, it made money. TITAN AE a misstep, and lost [money]. Even though that is the nature of the business — that not everything works — he didn’t want to wait for ICE AGE to finish production. I didn’t have a foot out of the door before Fox tried to sell off the film. Luckily for them, they couldn’t get a deal done.

At the same time, Peter Chernin thought I was taking too much of a chance with X-MEN. He called it my “$70-million art film,” since everyone knew that not only were comic book movies dead, but you certainly couldn’t start one in a concentration camp. That wasn’t comic book fun. Maybe not, but most comic books are dark, so it was a question of being relevant, of being grounded.

Ironically, both films have lasted longer at Fox than I did and are now the most valuable franchises in the history of that studio, throwing off billions of dollars of profit.

But they also were, along with FIGHT CLUB, the leading reasons I was shown the door. My bosses couldn’t deal with the unconventional choices like those and others such as BRAVEHEART and THERE’S SOMETHING ABOUT MARY because the films weren’t pre-sold, and thus, seemed less predictable. This, despite the fact that these unconventional movies guided Fox to the five best years in its history.

When I left, a few of the other majors called to see if I were interested in running their shops. I thought instead it was time to do things on my own, to not work for companies that no longer wanted to be in the film business, that no longer thought enough about the future to not gum it up. Easier to raise money and worry only about making good movies which could make money.

Needless to say, I was naïve. I thought raising money would be easy. I didn’t exactly foresee such things as the Silicon Valley bubble bursting, or the economic meltdown, or the Madoff scandal. But then — I guess the Captain of the Titanic thought the Atlantic was smooth sailing. And Batman thought the Joker would be a laugh.

When I first made the decision to go off on my own, Larry Gordon said to me something that I’ve never forgotten. He said running a studio is a great job but a terrible life. Producing is a great life but a terrible job.

Nine years as an independent producer provides a great perspective. It also cause heart palpitations.

Here’s the one key thing I’ve learned: There is no such thing as an independent producer.

There are only dependent producers: Dependent on distributors, financiers, bankers, and distribution channels that understand the needs of the market even less than the corporations that own the studios.

Which makes a truly independent producer even more truly dependent because the alternatives to the studio system are in many ways more difficult, not easier.

Perhaps even more than the studios, those with the controls over whether or not a movie gets made independent of the studios, do so, almost with less attention to the movie itself.

Part of that is due to outsiders who always seem to come into the business believing they can do better and yet rarely have an idea of what they are doing. Attorneys and financial analysts picking movies is a recipe for disaster. They can tell you all day long what hasn’t recently worked, but in truth, haven’t the experience or the knowledge to do anything different than has already been done.

That has been the oddest lesson of this period for me: That the independent world — which should be aiming to do things better and different from the studios — doesn’t have that as a mandate at all. If anything, the only thing that independent distributors and financiers look for is the same. Maybe costing a little less than the majors but, they want what the studios want, or — in FIGHT CLUB-speak — they want copies of a copy.

I now understand that unconventional choices like X-MEN and ICE AGE would barely have a prayer getting made independently. Why? Because at the time, they didn’t look like anything else.

It’s disrespectful if not downright dumb to think audiences can’t tell the difference between the original — which occasionally might even have some fresh faces — and the copy, which almost always is populated with retreads. It’s like thinking you can sell yesterday’s news under a different banner.

The exception to the rule is DISTRICT 9, which didn’t try to compete with the Majors with special effects or stars or plot. Instead of feeling recycled, it was fresh and is now one of the year’s best and most successful pictures. But lot of credit has to go to Peter Jackson since it was undoubtedly his clout that got the film made.

Following the lead of the majors presumes that they know what they want. It presumes they have a fix on their audiences.

I would say that’s anything but true. Admissions are down over the past few years and — perhaps most troubling — the audience that Hollywood spends the majority of time focusing on, the under-25s, are the ones finding other things to do.

Take a look at this shift over the past decade. While use of the internet and video games have dominated leisure time activities, movie consumption is down or flat over the same period. And — more to the point — you can see that there is a 21% drop in film going amongst the core target audience, and a 24% drop in the next key category, 25–39-year-olds.

And yes, these charts beg another question [sic]: if the audiences are shifting, why isn’t the product shifting as well? Name five mainstream films this year that successfully targeted an over-30 year audience.

In that way, Hollywood in the broadest sense of the word is much like Detroit. It’s a manufacturer’s mentality that reigns, seemingly indifferent to the consumers it serves: Ignore whether the consumer likes our product as long as they buy it; market it and they will come; and don’t worry if they don’t come back. Accept 60% drop off rates as the norm, saying it’s all about wide openings.

Three years ago the [Los Angeles Lakers basketball team] all-but-sold-out every game, even though they had a lousy team. Since Jerry Buss is a smart owner, he knew if he didn’t fix things, no shows would eventually turn into season ticket non-renewals. He did what he needed to do to make it the hottest ticket in town again; and a no-show today is a no-no.

When was the last time you heard anyone either from a studio or an independent talking about improving their product, of creating positive buzz and expanding the audience?

Here’s one basic question to ask yourself: If the most popular film in history was TITANIC — and it did so by weaving together interest in all demographic pockets (as well as pulling in non-film goers) — why in the last 12 years has no attempted to do the same?

TITANIC was number one at the box office for 15 consecutive weeks. It not only spurred on record year in theatrical attendance, and had the biggest video in history, but also generated the biggest Oscar telecast in years. A good movie, like a good team in sports, makes everything around it better.

An independent couldn’t — and shouldn’t — make movies of that scale; but it should make movies [that are] as individualistic and compelling. Certainly there are good examples among some of the smaller independent films — SLUMDOG MILLIONAIRE being an easy choice — that actually do stand out and succeed because of their quality and their uniqueness.

But as you can see from these next few charts, the independent world was no more concerned with the consumer than the studios.

With the influx of hedge fund money, the past decade saw a glutting of product, again most of it with no idea of who it was for or how it could be sold.

Whether some of these movies had artistic integrity or not, there is no question there was no audience appeal.

From the low water mark of 1990, there has been a 50% increase in the number of pictures and even since 2000, nearly a 25% increase. And most of the influx came from non-majors, rising from 150 in 1990 to 450 in 2008. That, my friends, is insanity.

Remember that through this entire period, the only growth at the box office has been inflationary, which means more films were fighting for a share of a flat box office. Over approximately this same period, the biggest hits took even a greater share of the box office pie, meaning the independents, even with a vastly greater number of releases, are taking a dramatically smaller percentage of the available money.

Let me get out the rest of the bad news, though I’m not telling you anything you don’t already know.

The next 2-3 years will be even worse, not because of the flood of new releases — since that is already abating — but rather due to the effect the over-saturation has had, combined with the economic downturn.

New money is going to be hard — if not impossible — to find. Ad sales are down, so TV networks around the world (other than cable) aren’t buying. Add in a confused video market and — it’s going to be tough.

To my mind, the next few years will be about survival.

If it’s any consolation, it will be harder on the Studios than the independents. Not only is it harder for big companies to change, to adapt, but there are legacy issues in terms of personnel. And within the next few years, their big market advantage, the bricks and mortar of their distribution operations, will become a disadvantage in the democratic age of digital. I would assume at least two of the Majors to be sold or consolidated by the middle of the decade.

Before I turn to why I don’t think this is all fatal — and in fact, might be a boon — let me address one more item, video. I get asked a lot if the problems are systemic. My answer is, “Not necessarily.” That we would reach a point of maturation in DVD is natural and logical, but too much of the downturn is completely self-imposed.

Like much of the bad decision making that has helped take a lot of the profit out of the business, the air was let out of the tires by the studios themselves.

No top management of a studio really cared what was going on over the past few years other than was their budget being met.

No one asked whether their units should be pushing Blu-Ray in the face of an economic melt-down or even whether or not Blu-Ray was going to be the next big app to the general consumer. They simply accepted the idea that they could resell their libraries at higher prices.

So no one asked what impact dropping the price on their existing DVD’s would have. I mean — if I can buy TITANIC for under $5 in some stores — why am I so eager then to rush out to pay $30 or so when it’s released on Blu Ray? Is the quality difference that great? How many formats are yet to come?

No one asked what buying great movies at cheap prices would do to new releases, which may not be as great. Give a consumer with less expendable dollars a choice between LEGALLY BLONDE for $5 or ALL ABOUT STEVE for $20 or $30, which do I want to buy?

Simply said: The studios have destroyed the price-value relationship in video — particularly when low-priced rental alternatives have sprung up everywhere.

And then, add in the absolute flooding of TV product from the beginning of time into the market, and you have the conditions that have absolutely killed video as the key profit center of new movies.

Ok — so in the face of all this, why can I say this is all good news? Because a lot of waste is going to be cleared from the marketplace. Excess product will go away, the people who don’t take the business seriously will go away.

Hopefully those who make crummy movies will also go away, but — that may just be a personal wish.

In 1984, I went with Michael Eisner and Jeffrey Katzenberg to Disney as perhaps the fourth employee of the new regime. Disney at the time was barely a film producer much less a major distributor. Before we could execute the plans to transform that company into one of the Majors, I was asked to prepare the presentation to the Board of Directors. A lot of capital was at stake.

The numbers, like some of those we’ve discussed today, were overwhelmingly negative. In truth, the film business has never been an easy one to master. More companies fail than succeed.

But what I presented, and this is still one of the absolute truths of the industry, was that it was only a bad business on average.

If you expect to be an average performer in this world, you can expect to fail.

Those without the ambition or the brains to figure their way through these tough economic conditions are going to be the heart patients who cannot be saved. No one has a birthright in this business.

It is a game for winners. And those who win today will win to an even greater extent than at almost any point in the past. The flattening of the box office is only true on a macro level. For the individual film, the sky is the limit. Even though there’s more piracy of the hit picture than any other, it’s still that same hit picture that can score giant revenues in all the ancillary streams.

Those who will win will be smart about what they make and how they sell their films. They will hopefully make good films but perhaps — even more key — they will make unique films that stand out, which means they will not have to compete against the bulk of the films for talent. They won’t look like all the other films so they won’t have to spend as much money marketing them.

It’s not that the buyers aren’t there. Consumers, TV outlets, Retailers and, yes, even Pirates want what works.

Don’t believe me? Ask Summit about TWILIGHT. Ask Searchlight about SLUMDOG MILLIONAIRE. Ask Screen Gems about DISTRICT 9. Ask Focus about CORALINE.

Let me conclude by saying that the challenges are great: Technological innovations often hurt before they help; it takes resources to fight the sense of entitlement that breeds piracy; it takes skill and experience to know what [U.S. President Franklin Roosevelt] FDR really meant when he said, “We have nothing to fear, but fear, itself.”

Go to Top

afm-diary1.png

Why the American Film Market 2008 offers plenty of movies for sale, but very few buyers

afm_diary1.png BY AUSTIN BURBRIDGE. SANTA MONICA, CALIFORNIA (CINEMA MINIMA) — The 2008 American Film Market offers plenty of movies for sale, but very few buyers. Independent movie producers have enjoyed easy credit and cash, while big business’ stranglehold on media has nearly eliminated the possibility of independent distribution.

This marks the climax of a trend: Banks and capitalists — in the recent free-market orgasm of cheap credit and surplus cash — had pumped money into independent film production. Independent producers — always grateful for funds regardless of source — took the money and made movies. Many, many movies.

Unfortunately, movie makers had failed to consult distributors beforehand, about the prospects for putting their entertainments before audiences.

Distributors have been suffering another — less favorable — trend, also driven by the triumph of the free market over government regulation. Big media corporations — with the connivance of American politicians — have executed a kind of pincer movement to throttle independent distribution of motion-picture entertainment.

In America in the 1990s, rules to promote competition were eliminated. Big business was permitted to consolidate, to eliminate competition, thereby to control every aspect of cinema from production, to distribution, to exhibition. Today, only a handful of companies control most ways to see a movie, whether in theaters, by broadcast, cable, or DVD — in effect, a cartel.

Now — with enthusiastic participation by the Motion Picture Association of America — American big business is on the verge of eliminating open and competitive access to the Internet by independent companies. The practical effect would be that media companies — which own local cable/Internet monopolies throughout America — would decide what Web sites and which Internet services its subscribers would be permitted to use; and according to the amount they would be willing to pay. The Independent Film & Television Alliance — which organizes the American Film Market — opposes this, in favor of Net Neutrality.

Worldwide, the demand has slackened for independently-financed movies. Multinational media corporations lobby governments internationally, that the same deregulation by which they have come to control media in USA should be enacted everywhere in the name of free trade — taking advantage of popular superstition that globalization is inevitable.

Without a level playing field for competition, independently-financed motion pictures will find few ways to reach audiences.End of Story dingbat

Go to Top