FUTURE 2: The Brothers Lipsky, Lot 47 Films
by Eugene Hernandez and Anthony Kaufman
Mark Lipsky: And by the way, I'm not bemoaning any of this. I think it's all very exciting and a great opportunity for us as Jeff was just saying. We've got an opportunity now to re-invent, or to re-re-invent what independent film is and represents. That's tremendously exciting.
Jeff Lipsky: The interesting thing is that this year, the Shooting Gallery was getting a lot of critical recognition for having done something new and different in order to bring people in many, many places in the United States, independent films they might not have seen, but you know something, apart from "Croupier," nobody saw them. The media saw them, the media got excited about them, and that goes back to what I said. We can't be so concerned about a new distributor putting out 10 more films. We have to figure out methods of educating the public and getting them to see the best of the films that are already being put out. What did the census declare? We have 285 million people here, a $1 million gross these days requires only 120,000 people in the United States seeing a movie. We've got to figure out better way of getting those 120,000 people into a theater to see a quality film. Not find other quality films just to make exhibitors happy or more specifically, the media, exited.
iW: But Jeff, you don't think the Shooting Gallery model, by going to these cities and using the marketing model that they had set up with Loews and the sponsors, that it did infuse those cities with a little more interest in independent film?
Jeff Lipsky: No, I don't. I don't think it expanded the audience whatsoever, and again, why did the media write about it? Because they were compelled to write. The one ingenious way they got the media to write about the Shooting Gallery was to create a "film festival." That's the only time the media is intrigued -- oh, that's a hook, okay, we'll write about it, it's a "film festival!" I maintain that "Croupier" could have made more money if it had been discovered as a singular sensation. What do I do as Jeff Lipsky, who saw the film before Shooting Gallery and told Sam Goldwyn we had to buy the film, but Sam didn't like the movie. That's why it sat around on a shelf. Not because no one saw it, just because no one had the wherewithal to buy it or loved it.
iW: I want to go to the other end of the spectrum and try to work Scott in, because I have a particular question about the Internet. Scott, given your background online, I want to find out how Lot 47, but also the bigger picture, how a distribution company can use the Internet to accomplish some of these tasks that we've just been discussing, and to address some of the challenges we've just been talking about.
Scott Lipsky: Sure, but I think there's a bigger factor, on the same level as advertising but something else: we're going to see an evolution of the home video market from a world that is still controlled by a few subjective individuals at video store chains and cable and movie networks to a world where every individual will be able to press the movie button on their cable TV remote control and select any film ever released in the US. Not only studio films, not only films with mega-marketing budgets, not only English language films, not only films that were released theatrically -- these will be films released by distributors who have the right relationships with the cable operators and with the future interactive TV portals. This means moviegoers will no longer have to search for the small ads or the art film reviews in their local papers to catch indie films at the one or two art theaters that might be convenient for them in their town to see the film. This means that individuals will be choosing films on a much more level playing field, with the same information available for all of them, the same reviews by Ebert and the New York Times and whoever else their favorite reviewers are, and reviews from other moviegoers.
So community will start playing a bigger role than it ever has in the filmgoing experience, and yes, when they hit the movie button on their remote control, there will be 5 or 10 films pushed onto them very hard by studios who will pay big dollars to get that kind of ad placement, but then once the consumer goes beyond the front page, they will be receiving listings of films based on their preferences. If the cable company knows, or the movie portal knows that they are interested in independent films or foreign language films or French films, then those are the films that are going to be selected for them to choose, and as long as our films, the independent films are available and made available, they are going to receive them, just like anything else on the web today where it's all about having the ultimate selection of product, the ultimate selection for the consumer to choose from, independent films are going to have a rebirth. And the availability of independent films is going to have a rebirth, because again, it's all about the way that studio films are marketed versus the way independent films must be marketed. And it does go back to the selection process all the way through to the consumer marketing.
And you asked about advertising and what that's going to effect. I think we are going to see raw advertising dollars being spent on the web, and that's my core business at Avenue A, that's what we're all about at Avenue A, is how to leverage this new marketing platform to build a one-to-one marketing relationship with consumers to get consumers the right type of product, the ads for the right type of product. There are film companies that are advertising, there are studios and distributors that are advertising now on the Web. It's not being done very effectively yet, because it's difficult to build one-to-one relationships, but again, over time, the one-to-one relationships are going to be stronger and the information that is learned about the individual and what's the individual's movie preferences are, the stronger that medium is going to become. Lot 47 definitely is going to be building a strategy for leveraging the advertising medium, but even beyond that, back to the interactive TV and the next generation of interactive TV, that's going to allow the selection of film for on-demand pay per view viewing, and the relationship is going to be between the consumer and their cable companies and the consumer and what I'm calling the TV portals or the movie portals in the future, which will be Microsoft TV, AOL TV, Yahoo TV, they're all going to have a presence on your TV screen. Yahoo! might have a relationship with AT&T broadband, so Yahoo! Movies might be a portal for all of the AT&T subscribers, which means that Lot 47 will have a relationship with Yahoo! to make sure that our films are well-positioned and that our films are completely available, or we will have relationships with the cable companies and the cable operators. And we're going to have relationships on all these different levels, but again, this is going to change the way that consumers choose which films they want to see, it's going to change the access to films which they don't have access to today.
iW: How do you think that this portal will effect theatrical distribution?
Scott Lipsky: I think for studios it's going to be somewhat more canibalistic, because studios have the power to reach 90-100% of consumers in one big blow in this country. And so if they're going to start spending a lot of money on the future TV portal distribution and buying those top 5 or 10 placements just like they do in newspapers today, then it will be cannibalistic, just like they did in home video. Home video has definitely been cannibalistic to the theatrical releases for bigger films. And the impact has been less on independent films where consumers are typically looking for films in home video because they missed it in theaters. I think we're going to see the same thing with the future of on-demand pay per view through the next generation of digital TV. I think we're going to see where consumers are suddenly going to have access to films that they've heard about that they've never had a chance to see for two reasons -- one, they might have missed the shorter play at theaters and there are fewer number of theaters theatrically, and their local video stores might not carry many independent films. So I think it's going to be less cannibalistic for independents, which is great. It's going to create new revenue streams for us. It's going to generate new eyeballs and a whole new set of customers especially in Middle America where it's even more difficult to reach these people outside the metropolitan areas. I think it's going to be a great positive thing for us, whereas studios I think will be more cannibalized.
iW: But there's a theory that because of this new portal environment, that independent films will just get delegated and marginalized to that and won't be in movie theater screens anymore.
Scott Lipsky: Well, that's like saying movie theaters are going to stop playing studio films. I think we're always going to be in the struggle of competing with studio films theatrically. It does not mean that theaters do not want to carry independent films, they want to carry quality films, they want to carry films that are going to make money, and I do think studios are going to see that much more than the independents. I don't think we're going to marginalize the independents at all. I think what we're going to do is make the independents much more available like they've never been available before because we're competing with the studio films. What do you think guys?
Mark Lipsky: Specific to that question, again much more so than it will with the studios, I think the exposure that the new program guides and the new kinds of navigation that are going to come in will be very helpful along the lines of what Jeff was talking about in terms of education and getting people excited about independent film. And nobody has to get excited about studio films; they know what they are, they see them all the time, they're in their face constantly. But for that generation or even two generations at this point who haven't had the exposure or education, don't have the interest yet, don't know what it's all about, this is a very powerful way to spread the word and seed the audience in a way that won't happen for the studios. And Scott is absolutely right. If anyone is a loser in that proposition or that calculation, it's the studios. I don't think it's us.
Scott Lipsky: And I'm not talking about Web marketing, using web sites and actual ad dollars. I'm talking about once we get the pay per view level of distribution, which is going to remain the last distribution channel. That's when we're going to see changes. During the theatrical distribution, and we're obviously going to be leveraging new technology and the Web, if you want to call it Web, and digital marketing technology, during the theatrical release, and there are strategies that are available now and a million that haven't even been developed yet.
Mark Lipsky: I think where it's going to change the independent world radically, and I think in a positive way, is that all of those hundreds, soon to be thousands, of films that Jeff was talking about, good and bad but mostly bad, that are being made, once the digital delivery becomes really viable and actively used by the general public, I think lots and lots and lots of those films will be self-distributed. It won't be a big thing to get your film out, just like launching a web site or putting up still pictures for grandma to see on her computer at home. People are going to make their digital movies, and they're going to show them on the equivalent of what the Web is at that point. And they're going to leave us alone because it's not fun for us and it's not fun for them.
Scott Lipsky: If you want to see a great example of how it's going to work, and I'm not only talking about this because I worked at Amazon, but if you go to Amazon today, more and more they have a whole different homepage when you get there, and half of the homepage now is recommendations to you of books and movies that they think you're going to be interested in buying. And if you look at those titles, 95% of those titles are not big titles. 95% of those titles are strictly based on the films that you've chosen before, the books that you've chosen before, and what they think you're going to be most interested in buying next. And that is the same proven, working method that's going to be used by the TV portals in the future, because they just want you to buy movies.
Mark Lipsky: That's kind of like online grassroots.
Scott Lipsky: It is.
iW: Computers are doing it for you, they're filtering it for you in a certain respect.
Scott Lipsky: And it's sort of the tip of the iceberg, because what's going to start happening, and this sort of gets to my former company, Singing Fish, and other companies that are doing this, instead of just doing that with known quantities, where it's an easy way to get the list of the music that was released on Tuesday. When there is a fairly streamlined way of going out and searching the Web for everything that's out there -- not only finding something that's music, but you know that it's blues and you know that it's guitar blues, and you know that it's from a band in Memphis -- once all that stuff is out there and all the information is able to be acquired in an automated fashion, that's really going to be a whole new world.
Jeff Lipsky: And, of course, the other thing that we have to spearhead, is to avoid this whole thing becoming a vicious cycle, which is what pertains to that kind of Amazon recommendation area, how we keep people's minds open to things that might not fit their normal profile.
Scott Lipsky: Yup.
Jeff Lipsky: We want to stay a step ahead of the curve there.