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Ted Leonsis: Why Sundance Tells Us Digital Distribution is the Future

By Ted Leonsis | Indiewire February 1, 2012 at 10:00AM

"Although multiplatform distribution deals continue to be announced, it's clear that digital distribution isn’t just the best way for most films to reach audiences; it will be the only way."
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"Kinyarwanda," directed by Alrick Brown.
"Kinyarwanda," directed by Alrick Brown.

This is a first-person piece from Ted Leonsis, founder and chairman of SnagFilms (and parent company of Indiewire). He asked if he could have the floor to lay out why he believes digital distribution platforms define the future for indie films. And while as a principal of SnagFilms he clearly has a horse in this race, his perspective echoes points that others have made on our site (including this week's very popular piece written by Greenburg Traurig partner Steven Beer.) 

How does all of this square with your thoughts on indie distribution? Tell us in the comments. -- The Editors

Sunday marked the end of the Sundance Film Festival, the traditional launching point for a new year of independent films. I didn’t go to Park City this year, as I had when my films "Nanking" and "Kicking It" were in the festival, but I read the extensive coverage from Indiewire and others with interest. Since my first experience in 2007, Robert Redford’s vision of nurturing new voices and unexpected perspectives has remained constant. However, all the trends we saw six years ago have only accelerated since.

Although multiplatform distribution deals continue to be announced, it's clear that digital distribution isn’t just the best way for most films to reach audiences; it will be the only way. And despite all the talk about (and a few successes of) do-it-yourself distribution, it's not a real option for most filmmakers I know. They can't take a year to manage their film through release and lack the experience, staffing, relationships or the distribution footprint to reach audiences.

This is why we think digital distribution defines the future for indie films:

Profusion of new filmmakers. With better and cheaper cameras, and easier and far more versatile editing software, more and more storytellers are choosing film as their format. Nearly half (45 out of 117) of the features screened at this year’s Sundance came from directorial debuts, including some of the titles attracting the most buzz: "How to Survive a Plague," "Beasts of the Southern Wild," "I am Not a Hipster," "The Other Dream Team," "Robot & Frank," "Searching for Sugar Man," "For a Good Time Call," "Indie Game: The Movie" and many more. Championing new voices is a Sundance tradition, but here’s the big take-away: more good films are made each year than ever before.

Tightening of traditional distribution platforms. It is harder and harder to get independent titles into theaters. I used to say that it was easier for your kid to get into Harvard than for your film to get into Sundance, but gaining theatrical distribution is even tougher: it's the equivalent of your daughter getting into Harvard and starting on the gymnastics team her freshman year. Good luck with that. 

The best-managed of the indie theater chains has been on the sale block for a year; how can that bode well for the future of theatrical releases? And if you do secure a theatrical release, there is little chance of reaching a scale audience: Only seven of the indie films that screened at Sundance 2011 grossed over $1 million at the box office, and very few of them returned any money to their producers after exhibitors’ and distributors’ cuts and P&A expenses. Lest you consider Sundance’s selections to be an unrepresentative sample, only 28 indies grossed over $1 million domestically in 2011 (excluding studio-related and mini-major releases).

Explosion of digital platforms. More films were viewed digitally in the US last month than were seen in theaters in all of 2011. While this is very much a developing market, four approaches to digital distribution have been established: pay-on-demand (your cable, satellite or telco operator); download-to-own or -rent (iTunes, Vudu, Amazon and Xbox); subscription services (HuluPlus and Netflix); and ad-supported free streaming (Hulu, SnagFilms and others). 

At SnagFilms we've also put films on all of those platforms (including our own site), plus more than 110,000 other web allies. We also built applications for most smartphones and tablets, set-top boxes and connected TVs. In all, more than 100 devices and platforms, rivaling the biggest service’s reach. Here's what we see as the elements of success necessary for digital distribution companies:

    •    To satisfy the public and attract the attention of platform partners, you need lots of films (SnagFilms has 3,000 plus and announced 27 acquisitions while at or since Sundance, with more to come this week);

    •    To maximize the audience for filmmakers, you need to bring their films to every digital distribution platform, whether transactional or ad-supported;

    •    To acquire and market films and develop the necessary technology, you need strong capitalization (we announced a major round of funding this week for SnagFilms, from investors who are in it for the long haul -- vital for any new media venture, where bumps in the road are inevitable);

    •    To stay in a tough distribution business long enough to succeed, you need leadership at the board level equivalent to the big companies you’ll compete against, and management who have dealt with adversity and success in startups and large ventures;

    •    To attract filmmakers, you need transparent operations and regular payments – even first-time directors have heard horror tales about “studio accounting” and foreign sales agents who never providing an accounting, much less a check. That is why any reputable distributor provides statements every 90 days, with payments attached.  Those payments often start small – but keep in mind that the license to film the first NFL Championship went for $3,000. When you watch Sunday’s big game, remember that growing audiences always mean more money for content owners.

    •    For films to break through the crowded entertainment landscape, you need to turn your audience into evangelists, progressing from watching to reviewing and commenting, and ultimately to sharing.

    •    Beyond commercial objectives, every filmmaker I know believes their work can change the world for the better. Film is our most powerful communications mechanism and allying it with the web creates a virtuous circle, where story stimulates reflection and action, and plays the story forward. I’ve called it filmanthropy and you can see it in the work of the Sundance Institute, Participant Media and its TakePart, SnagFilms and others.

It will be another 12 months before the film world reconvenes in Park City. The shuttle lines again will be long, it will still be hard to get a dinner reservation – and the film offerings will continue to surprise, challenge and delight. That's a testament to the incredible motivation of inspired storytellers, a creative wellspring that was nurtured by Bingham Ray, whose untimely passing last week shocked and saddened his many friends. 

I was honored to know Bingham, to tap into his encyclopedic, idiosyncratic and passionate knowledge of the film business (always delivered with a twinkle in his eye). And I was happy to see him embrace the new future of film distribution. “I don’t know how in the hell this is going to turn out,” he told a colleague at SnagFilms, “but I don’t doubt for a minute that we have to be trying something new.” 

Trying something new is what every filmmaker at Sundance, and the tens of thousands who weren’t selected, do every day. That’s the essence of independent film, and the animating spirit of those who love it. 

Ted Leonsis is the founder and chairman of SnagFilms, which also owns Indiewire. He produced "Nanking," winner of a major award at Sundance in 2007 and subsequent Emmy and Peabody Awards; the film also was shortlisted for an Academy Award.  He also produced "Kicking It," which premiered at Sundance 2008, and "A Fighting Chance."





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