Distribution panels have it tough: There's always an audience for the information, but the panelists are always loath to give up real numbers. So this year Sundance tried to have it both ways with "Distribution X," a January 21 panel that asked top distributors to spill the numbers on imaginary projects.
The panelists were very real: independent producer Karin Chien acted as moderator for veteran sales agent Josh Braun of Submarine; New Video co-president Susan Margolin; Tom Quinn, co-president of TWC's new label RADiUS; distribution strategist Peter Broderick and filmmaker Tiffany Shlain ("Connected").
Pitching the mock movies were producer Alicia Van Couvering ("Tiny Furniture") and filmmaker Senain Kheshgi ("Project Kashmir"). Jay Van Hoy, executive producer of Sundance 2012 selection "Keep the Lights On," also presided, weighing in and doing the math.
Chien asked for "real numbers" and that panelists and audiences work to keep the speakers honest… with the caveat that, of course, the films don't exist. She compared the panel to a game show; "There's no right answer," she said, "just the best guess."
So with that, here's the Sundance 2012 episode of "The Gross is Right."
Case study #1: Documentary, pitched by Senain Kheshgi
This documentary is about the case of the 10 Muslim student alliance kids at U.C. Irvine who protested/heckled the Israeli Ambassador at a speech in 2010 and were charged with federal offenses.
Budget: $575,000 (about half equity, the rest non-repayable grants and foundations).
Needs: About $100,000 to finish film.
Distribution: Has a $45,000 deal from TV broadcaster… who also wants first right of refusal on VOD/digital distribution. Unclear whether those are subscription VOD rights or ad-supported VOD rights, or if they can be negotiated.
Status: The film is in rough cut.
- Giving up TV rights too soon for too little money in the US is not advisable
- A 52-minute TV-version is key; without it, you lose opportunities.
- Selling for $45,000 and not carving our key digits rights is a bad idea, as it severely limits sales potential and theatrical investment.
- You can do multiple subscription VOD deals, so as the lines blur between TV and Internet platforms, it will likely be harder to carve out rights.
- The key to preselling TV is that the sale should amount to at least 50% of the budget.
- This film is ripe for a Participant collaboration.
- Little VOD value here; about $50,000-$60,000.
- A non-traditional approach would be required.
- Grassroots distribution can work for political titles; "Gerrymandering" was widely and successfully distributed only in California, but Quinn noted that not every filmmaker wants to dedicate so much of their own time to distribution.
- Cable VOD would not even be worth the associated expenses (at least $7,000 for an anticipated gross of $10,000 – $20,000).
- Recommends a limited theatrical of 10-20 markets, to be combined with community screenings for a P&A spend of $50,000-$60,000.
- Recommends a day-and-date DVD with transactional VOD/digital.
- Estimated revenue of approximately $25,000, from about 1,800 download-to-own transactions and 4,000 download-to-rent.
- DVD revenue: About $150,000 from 7,000-10,000 units.
- Subscription VOD revenue: About $20,000.
- Hulu ad-supported views could mean about $20,000 from 250,000 views.
- Advocated not giving up any rights at all.
- If the film was excellent and provocative, there was significant revenue potential — but only with time and money, which would need to be raised.
- Theatrical release would cost about $100,000 and would not net a profit; it only drives other revenue streams.
- An educational kit would ultimately generate revenue, but it would cost between $25,000 – $40,000 as well as staff support,
- Gross revenue estimates included $280,000 in sales of the educational kit, $15,000 in speaking fees, $140,000 from home screenings and about $200,000 from community screenings and festivals.
- The cheapest service deal is $25,000.
- The film’s budget was too high; it would need to be cut, with monies reserved for distribution costs.
- Could see $10,000 revenue from festivals.
- Carve out the ability to sell DVD and digital from your own website.
- The semi-theatrical component of the release would be the most critical and revenue generating.
- Under this plan, you could make 50% of the budget back.
Case study #2: A narrative film with an ensemble cast, pitched by Alicia Van Couvering.
A character-driven drama about people looking to live off the grid whoget trapped in a snowstorm. NOT a thriller or horror; has some experimental aspects, but also some sex. Inspired by the 2009 documentary "Collapse" http://www.imdb.com/title/tt1503769/ and by the current financial crisis.
Budget: About $500,000 in equity investments.
Cast: Upcoming names who are currently on TV and have had small roles in indie film. Star is Allison Pill (http://www.imdb.com/name/nm0683467/). It’s a reviews-driven concept that will have a few names, but no one who drives ticket sales or cable VOD in an obvious way. A hip indie band did the soundtrack and they are going on tour. The film premiered at SXSW and won the best ensemble cast award, with most attention paid to Pill.
Distribution: No concrete offers about one month after the SXSW premiere, although one mid-level/small company is interested. Studios have passed. Van Couvering’s wants to keep up the film's profile, but she also has to be accountable to the investors. She also has $25,000 to work with.
- Finding a buyer a month after a festival premiere could be tough, but sales cycles sometimes go on longer.
- Life can be breathed back into the film as smaller buyers circle back, especially if the film’s cast does something interesting or if there is a top international festival premiere, or because they can now fit the film into their slate without bidding too high at an A-list fest.
- A few well thought-out regional fests could add to buzz. Buyers as guests or jurors may see the film there.
- Be creative on the backend; you aren't likely to get a minimum guarantee, but you could get but better terms and backend splits.
- Emphasized the “Ultra VOD” method in which a premium cable VOD window occurs before theatrical.
- Estimated a gross of $350,000- $500,000 on VOD (90% of which would be cable VOD), but we did not learn the expenses or fees associated.
- There would be a theatrical release to increase profile and DVD would be tough, 35,000 units at best.
- Agreed about the Cable VOD window and all agreed about need for a small theatrical.
- Her numbers suggested $65,000 from transactional digital; 20,000 units on DVD, generating $300,000.
- Subscription VOD would yield between $100,000-$150,000.
- Ad-sponsored VOD about $50,000, presuming 625,000 views.
- Advocated starting with the smallest distribution of one city: New York.
This case study seemed positive in terms of cash-flow; Van Couvering could even net a profit ($300,000 according to Jay Van Hoy, though note not all expenses were accounted for and some numbers seemed exaggerated).
It was an interesting exercise, but in the end it was just that: A trial run that shouldn't be mistaken for the real thing.
Among the topics that weren't touched:
- Compare expenses and revenues in the net analysis for traditional distribution vs. hybrid or DIY.
- Union dues and other legal and delivery costs were not addressed; these would be separate and above the budgets cited.
- Fees and more details about expenses that would be recouped before we can count the profits to filmmaker.
- Cheaper service deals are available (The Film Collaborative offers the service for about $2,000-$5,000, against 20% of film rentals).
- Multiple subscription VOD deals can sometimes be bigger than TV deals.
Don't blame the panel organizers: They have 90-minute slots and that's not enough for topics as broad as this. And that's a problem for filmmakers, who can attend and emerge thinking they now know. And in my opinion many of the numbers here were exaggerated and wouldn't stand up in a real-world setting.
Rotterdam is hosting a panel in which industry experts weigh in on how they'd distribute a real-life film. There's no doubt that there's nothing like the real thing — any ideas on how the industry and filmmakers can be encouraged to discuss it more often?