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Celebrating 17 Years of Film.Biz.Fans.
by Brian Brooks
April 27, 2009 6:18 AM
13 Comments
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FIRST PERSON | Four-Walling the Internet: Gigantic Releasing's Mark Lipsky

My friend Brian Devine has had a dream for well over a decade: build a NY-based indie film and music 'studio.' A place where filmmakers could, nestled within the most supportive and collaborative environment, develop their films, shoot their films, score their films, post produce their films and distribute their films. Indie film and music merged with grace and elegance. When Brian phoned me near the end of 2007 and asked me to launch Gigantic's film releasing company, all of the other pieces of his dream were in place or nearing completion. The question for me was: did the world need another indie film distributor? The answer, of course, was an emphatic no.

Unless that company had a mandate to generate dynamic new ideas for bridging the indie distribution gap and fearlessly execute on those ideas. I'm excited to report that we took on that very mandate. The stunning results demand that we enter the exhibition arena and offer all comers the keys to the Internet.

I'd been in and out of distribution for decades - New Yorker, Miramax, Lot 47 - but had been focusing more and more on technology since the late '90s. I had a pretty good grasp, then, of both sides of this equation and Brian was eager for Gigantic to take a lead in the elusive 'paradigm shift' that everyone in the industry was clearly longing for. And so Gigantic Releasing was born on January 1, 2008.

By this past summer I'd had my first and second taste of just how rotten the indie film environment had turned. Wayne Price's "The Doorman" and David Kaplan's "Year of the Fish" should each, I felt, have had their moment in the sun as distinctive first features by passionate young American filmmakers. In reality, the toxic indie landscape virtually swallowed them up alive. Each had earned critical acclaim from mainstream publications, each was supported with solid publicity, promotion and advertising and yet each opened and closed before anyone knew what happened.

People are never going to stop going to movie theaters but certainly by 2008 it had become crystal clear that the best hope for connecting the vast majority of independent and foreign language films with their audience would be online. We'd determined by early spring that the core of our digital strategy would be a broadband cinema. One that would mimic the movie-going experience as closely as possible and in certain respects, surpass it. We would stream our films at the highest possible quality given the user's available bandwidth and system configuration, the cost would be $2.99 for a three-day unlimited viewing ticket and everything would be presented commercial-free.

The website, Gigantic Digital, would not be ready to launch in time for "The Doorman" or "Year of the Fish," but we'd acquired a documentary gem that was tailor made for the new hybrid release strategy that I felt certain would come to represent the way forward. Morgan Dews's "Must Read After My Death" would open in theaters in NY and LA while the rest of the country would open day-and-date via Gigantic Digital.

The two biggest challenges we faced were 1) how to protect the integrity (read exclusivity) of the bricks and mortar engagements and 2) how to convince local media in the top 100 markets that a new film opening exclusively online in their market was virtually the same as a new film opening at the local art house - and that they should cover it as such.

In the first case the answer was geo-targeting. With Gigantic Digital we have the ability to turn on or turn off access to our content in real time and at very fine granularity. In other words, if a film is or will be opening theatrically in, say, San Francisco, we can limit access in the greater San Francisco area - or in the entire state of California - until after the theatrical engagement(s) there has completed. Those limits can be set as finely as one mile or as broadly as U.S.-only or anything inbetween. No other digital delivery service can or is willing to provide that critical, exhibitor-friendly feature. (By default, of course, access is limited to the U.S. so that international rights remain secure, although we also have the ability to turn on individual countries. In this way distributors with rights outside of the U.S. can actually open their films themselves in those markets if they choose.)

As for convincing local media that Gigantic Digital represented the future of independent film distribution, that would be a matter of literally thousands of phone calls and emails and thousands more follow-ups. We were relentless yet patient; our outreach was personal, one-to-one and genuine; we were willing to hand-hold and cajole; and we were right. The results exceeded our best expectations. "Must Read After My Death" was, indeed, covered by publications large and small - some in print and online, others exclusively online - as if it had opened in a local cinema. Journalists with a deeper understanding of the issues really appreciated what a sea-change Gigantic Digital represented and wrote feature stories about the release strategy itself, often giving the quality of the experience a rave review. And in every case, the website and ticket price was noted.

Now that we've proven the concept we're expanding our focus. We're looking to Gigantic Digital as a way for all independent distributors to have the ability to open their films 'nationally' and with extraordinary flexibility that can serve any contingency and thoroughly satisfy any potential roadblock or gatekeeper along the way. Whether a film is set to open theatrically in 5 markets, 50 or 500, Gigantic Digital can be employed in tandem with the release and provide the deepest possible reach of any film into the U.S. market without ever cannibalizing theatrical revenue, requiring a single extra hour of the distributor's time or a single extra dollar in P&A.

Another significant and exclusive feature of Gigantic Digital is that it was designed and developed by film distributors for film distributors. We understand the nature of the beast and we're willing to put that knowledge and our newly won media relationships into service for our partners as a standard feature.

In a very real sense we're offering distributers (and select independent producers without distribution) the ability to four-wall the Internet. To reach hundreds of millions of moviegoers instantaneously and for an unlimited duration rather than ten thousand here and fifty thousand there and for a finite number of weeks.

Whether employed in tandem with a theatrical release or as the exclusive delivery mechanism, Gigantic Digital is a powerful game-changer and we're excited to have opened its capabilities to the industry at large.

Ever forward...

13 Comments

  • Mark Lipsky | May 4, 2009 2:48 AMReply

    To pr_gmr: Thanks for the enthusiastic comment!

  • pr_gmr | May 1, 2009 9:04 AMReply

    A great article! I'm glad that there are companies like Gigantic and people like Mr. Lipsky out there blazing the path for new, profitable digital distribution. Yes, it's going to be a challenge, but I totally agree with Mr. Lipsky. This is the way for indie films to be released in the feature and actually make some profit. Keep up the good work, Mr. Lipsky!

  • kevster | April 30, 2009 6:02 AMReply

    I agree with jscheide. And-- this new model is brand spankin' new, as you say, Mark, and day by day, you guys'll work out the bugs best you can, as the market and technology allows. This is all very cool. Please do keep us posted.

  • pegu | April 30, 2009 1:06 AMReply

    To followon Mark's comment "the vast majority of our audience has no interest in stealing content just as the majority of music buyers are no longer stealing music", it's like when Apple introduced iTunes. Jobs stated their goal wasn't to STOP illegal usage, they wanted to make legal usage easy and cheap enough that a majority of people would do it. And, they made it so that if you did copy the music illegally (burn to CD, re-rip) then it was a conscious decision and people couldn't use the "I didn't know better" defense.

    Good luck! Looking forward.

  • keenast | April 29, 2009 7:16 AMReply

    Mark, it's great that you guys are out and try to tackle the great waters and I sincerely wish you success.

    You write: " ...we have the ability to turn on or turn off access to our content in real time and at very fine granularity etc. etc." I don't know if you really believe that (gotta be kidding) or if it's just that you want certain people to believe that (maybe they do) - this is purely wishful thinking, period.

    Nevertheless I do think what you're planning is as good as it gets for the time being and I do think there will be a reasonable amount of people willing to pay - me included ;-) Will there be enough? Well, let's hope and see.

  • Mark Lipsky | April 29, 2009 6:32 AMReply

    To aroncamp: Yes, total control is a fantasy. But the number of folks motivated to capture and release independent films is so infinitesimal as to be inconsequential. Especially so given the fact that, by any standard, the vast majority of our audience has no interest in stealing content just as the majority of music buyers are no longer stealing music.

  • keenast | April 28, 2009 7:33 AMReply

    Turning access on and off is not going to happen. Anybody can easily use a fake IP address.....!

  • aroncamp | April 28, 2009 6:27 AMReply

    I admire your efforts and best of luck to you Mark, but controlling Internet video content is a unicorns-and-pixie-dust marketing blather fantasy.

    No one with a shred of technical credibility believes this anymore.

    Filmmakers: You CANNOT control the regional release of your film online. It's trivial to capture ANY available video stream and redistribute it globally.

    The Internet = Global Release. Let's just accept this and move on.

    - Aron

  • Mark Lipsky | April 28, 2009 2:04 AMReply

    To keenast: First, that anyone might be interested enough in Gigantic Digital to fake their IP address makes me very happy. However, we have other systems - our e-commerce back end for instance - for determining location.

    To pegu: Paid advertising is one of hundreds of ways of bringing attention to online content. As a film distributor for decades and someone steeped in technology for the past several years, I'm familiar with at least a few of them.

    mrbarnard: You write "A “successful” indie film would (in the good ol’ days) be one with a $20 million gross domestic box office." First, the 90s and early 00s were not the good old days for independent films. Films grossing $20 million were all studio releases. Companies backed by hundreds of millions of dollars - or billions - rarely release independent films. Who are you referring to? Miramax? New Line? The good old days were when a film by an unknown director with no stars and budgets well under $1m could open with minimal advertising and play long enough at the local art house to find its audience, generate word of mouth and gross one or two million. In the Gigantic Digital model, even at a ticket price of $2.99, a $2m gross is not only possible, but probable (once a steady flow of product is established) and your share will be roughly $1m. Can you live with that?

    To jscheide: Thanks for having an open mind!

    To David W. Redmon: This is brand new David. We've only released one film to date and, in the case of Must Read After My Death, it was a traditional acquisition for all rights over a years long term. That's not our current model. Presently, Gigantic Digital gives us the flexibility and freedom to act more as a marketing-savvy exhibitor than that of a distributor. We don't want all rights or long terms. We want to enable filmmakers and other distributors to maximize their films' exposure and revenue. Most deals that we'll strike now will result in revenue to our partners almost immediately and the upside potential is unlimited.

    To indieWIRE: It would be awesome if you added a Comments 'Reply to' option!

  • pegu | April 27, 2009 11:27 AMReply

    To further mrbarnard's points, I'd be interested in how monies are spent for marketing. Granted it's cheaper online since you don't have to create, ship, and store 35mm prints nor agree to local print buys, there's still the need to advertise. How will individual films get an equivalent amount of attention in order to galvanize an online audience given their fickle nature? Excited this option's here but heard as many "online" flameouts as theatrical :(

  • mrbarnard | April 27, 2009 10:08 AMReply

    I agree entirely with what your assessment is, and what your strategy is.

    My question: A "successful" indie film would (in the good ol' days) be one with a $20 million gross domestic box office. The theaters would take (simply speaking) $10 million of that, leaving $10 million as the income. The distributor would take, perhaps, 50% of that, leaving $5 million for the filmmaker and all concerned.

    If we eliminate the theatrical release (damn, i HATE saying that, but it is the reality of today), that also eliminates $10 million in expense from the equation. That equals about 1.5 million audience members that pay solely for the theater.

    Again, simply speaking, at an average ticket price of $7 each, that means that roughly 2.9 million people saw the movie; remove half of them because the solely cover the cost of the theater, and that leaves a "real" audience of about 1.5 million.

    Where does Gigantic fit into the picture?

    1) What percent will you take from the Gross Domestic Internet Box Office?

    2) What portion of the 2.9 million member audience might you be able to deliver?

    3) What assumptions do you make about the Internet cannibalizing that audience? Instead of each audience member buying a ticket, there will likely be multiple audience members for every flat-price online screening.

    4) IF two audience members now watch a screening for which one $3 "ticket" has been purchased, that means that all indie films will need to reach more than FOUR TIMES the audience that their theatrical release would have reached in order to reach twice the number of audience members and twice (simply speaking) the dollar amount of the "ticket".

    Mark, do you foresee a near-future where it would be possible to replicate the theatrical experience numbers online? That is, in the foreseeable future (what is that nowadays: "hours"? "days"? "weeks"? surely "months" is not foreseeable!) that Gigantic will be able to attract 6 million paying customers (four times the equivalent theatrical audience) for an indie success?

  • jscheide | April 27, 2009 8:53 AMReply

    This is the future of delivery. Please keep us posted with more articles, case studies and reviews. I can easily see a leap from festival platforms to direct streaming distribution as a winning strategy for many worthy independent films.

  • David W. Redmon | April 27, 2009 8:23 AMReply

    What are the numbers? Do they exceed your costs to release the film? How soon do filmmakers see a return?