By Tom Hall | Indiewire February 13, 2013 at 8:57AM
As the economy continues to struggle, the film industry has also felt the effect across the board, from film investment and production to the dramatic cost shift from traditional theatrical distribution (and the marketing dollars required for success) to a diversified approach that has seen a dramatic rise in video on demand (VOD) utilization across a number of platformed distribution strategies. And so, filmmakers and many distributors, facing a new environment where theatrical distribution grows more costly (and therefore unlikely for many) while the marketplace for VOD grows more crowded, are looking for new revenue streams to replace the diminishing likelihood of wider distribution and revenue
So, why not film festivals? They are, in many cases, the only opportunity for a film to screen in a movie theater in many communities. They appear to be spending money on things that, when seen by a filmmaker struggling to make investors whole, appear relatively superfluous-- parties, hotels and plane tickets, etc. The new thinking is that since the decline of the theatrical market for most independents, film festivals have become a "de facto" distribution strategy unto themselves. So, why not apply the old distribution model to festivals to replace what was lost in the ongoing theatrical decline and transition?
First and foremost, the reason the traditional distribution economy is failing and changing is because it didn't make economic sense for distributors and exhibitors themselves. Why should we be applying a failing and uncertain economic model to any organization at this point? The recent example of Indomina shuttering its theatrical distribution arm in the wake of releasing two of the most acclaimed films of the year is only a small example of how difficult distribution and exhibition of independent, non-fiction and foreign films are today. The theatrical film experience is competing against a dizzying array of choices for the consumer, from home VOD to other forms of entertainment, while consumer dollars remain relatively flat or in, many cases, decline.
And of all the structures in place to generate revenue for films, the least profitable and viable is the film festival. At each screening of a film, my festival loses money. The cost of theater rentals, projection rentals and technical staffing, building and implementing a stand alone ticketing system online and on site, marketing our films and promoting them to the press, staffing the theaters and often traveling filmmakers to the festival means that ticket sales do not cover the cost of any screening. Yes, festivals raise money outside of ticket sales, but they do so in order to not only supplement film exhibition costs, but to create the kind of environment and event that actually drives an audience into the theaters to see films.
Which is to say that yes, you can have a film festival without filmmakers, press and community events that create an environment outside of theatrical norms, but I am not sure how that helps anyone. Without building the event itself, there is no audience. Just take a look at a weekend’s per-screen average for some of the most interesting work that has played the festival circuit. Even with five screenings a day in cities full of millions of people, there are films losing money against the cost of exhibition and P&A. Film festivals are not simply exhibitors, generating revenue on concession stands and throwing a print on a screen, they are there to create a living environment where the experience of seeing a film matters. Where there is dialogue and engagement, where word of mouth can be a powerful force for a film’s future. Film festivals are marketing partners and audience builders, platforms from which filmmakers can and should be launching an integrated campaign for their VOD and ancillary distribution strategy. We live in world where, aside from the biggest studio films, theatrical exhibition is a loss leader for the long tail of VOD and home video revenues.