The digital frontier has gone from exciting possibility to reality in the film industry, bringing new challenges as producers, distributors and exhibitors struggle to understand its role. A group of high-profile players came together to discuss some of these issues at the Tribeca Film Festival’s Digital by Design panel, held at the School of Visual Arts Theatre.
The talk primarily revolved around funding models, intellectual property management and distribution channels. Panelists included Eugene Hernandez (co-founder and former editor-in-chief of indieWIRE, acting director of digital strategy at the Film Society of Lincoln Center), Trevor Kaufman (CEO of Possible Worldwide), Michael Lang (CEO of Miramax), Tom Lesinski (president of Paramount Digital Entertainment), John Sloss (founder of Cinetic Media), and was moderated by Richard Whittington (senior VP of media and entertainment at SAP).
Below are some conversation highlights:
On Sundance 2011
Michael Lang: Clearly all the major studios are very much committed to the acquisition of independent film, as we can see with such a robust Sundance this year, I just don’t think you’re going to have as large of a film slate as we might have seen in the past with everyone trying to get 15-20 [releases]. Those days are gone and may not come back for a while… if you’re a really good filmmaker, that’s a good thing for you. The cream rises to the top and if you have a great film it’s still going to allow you to succeed but it’s going to be a lot more selective. In general, there’s less movies and less capital but I don’t think that’s necessarily bad for the film industry… it’ll bring more quality to the top.
John Sloss: I know the conventional wisdom that says Sundance was better this year than it had been in a few years, but I think if you look beneath the surface of that… I don’t necessarily agree with it. There were a lot of deals done… but the films weren’t better or as good as the historical norm of the festival. One of the reasons I think that is is a reverse trickle-down effect. Studios are making fewer films, so the people who get movies made are getting fewer studio gigs and they need to keep working and their agencies need to keep them working. So they are more available to make independent films.
I think the studios are getting out of the development business. I think the entire industry is moving away from this 20th-century notion who ordained a movie as a movie which should be made. The functional result is a bunch of movies at Sundance that are movie-star laden. Stars will often make movies because of parts as opposed to great scripts or an auteur. I think a lot of the movies that were sold at Sundance this year were sold for parts. There were films sold for a lot of money to certain buyers that can get released wide because they have stars in them but may or may not be well reviewed.
On Growing Trends:
Tom Lesinski: At Paramount, we track the social media footprint of all the talent. People who’ve got 25 million followers can help open movies. From a Hollywood point of view, we like to see talent that’s engaged with its audience. We made the Justin Bieber movie this year and it relied almost exclusively on social media. The way we released the movie was going into Justin Bieber pockets around the world and if there were enough people there we would release the movie.
Trevor Kaufman: I have to believe intuitively that the reason that the video game business is now larger than the motion picture business is because people are spending 20 hours a week playing “World of Warcraft” and Xbox Live. There’s no question that kids in America, in Asia, the prime movie-going audience is spending time with entertainment that is no longer movies.
If you ask them, Microsoft will tell you they are the biggest cable network in the United States because there are more minutes logged on Xbox Live than there are on Comcast. I remember when I’d tell people about the internet and they’d say… the internet is a young male/early adopter thing. I think we’re all on the verge of making the same mistake with the video game market.
Eugene Hernandez: The one thing that everyone knows in Hollywood and the entertainment industry is that institutions that are established and entrenched are going to do everything they can to try to preserve and maintain structures that they’ve established. Knowing that creates opportunity. On those margins outside those structures there’s a lot of opportunity. That’s what I learned with indieWIRE as it relates to other traditional Hollywood trade publications.
On Home Media:
Tom Lesinski: The whole process of making movies is the same as it was — it’s just that when you add up all the beans in the jar, the jar is ¾ full of where it was 3 years ago. When you’re owned by big conglomerates as most of us are, they look at that and go, “Wow, I’m not going to invest as much money in this business –look at the marketplace.” Everyone had hopes that as DVD sales declined, digital distribution would replace it. What really happened is that digital distribution just created more piracy and created more opportunities to watch a movie for free.
The video business has lost almost 30% of its value over the last 4 years. The digital part that has offset that is between 5 to 10%. I don’t see the [remaining percent] being filled up any time soon. When you’re young you have to look at industries that are growing. The traditional film business is not growing. It hasn’t been growing for the last 4 or 5 years.
Michael Lang: 25% of our revenue has been through international sales. I want that to be 50 to 60% in the future. I think international/global [sales] is going to be a major growth engine for this industry. Not only do you have audiences who want to see our product, but you have pay-television and digital platforms in those parts of the world and they need content, they need a lot of content. As a result, going through the whole process and identifying the rights and understanding exactly what you have is an incredibly complex process.
John Sloss: The dust hasn’t settled on the revenue numbers. I think there’s probably as much or more revenue out there but it’s fractioned and you have to make ten times as many deals to wring it out.
Michael Lang: In this industry you take a moment in time and you make an assumption that that’s how it’s going to be. Many people in the early 70’s and 80’s thought cable television would never work. Today in most of the media companies the cable networks represent 70 to 80% of their revenue –and they need content. We don’t have any idea what digital is going to be in the future but I do know this: there’s an endless amount of inventory so you’re not constrained by shelf-space or a schedule [in terms of programming]. To me that’s pretty positive if you have a deep library and a lot of product because you will find consumers who will want to pay for it. It may not be the value we hope today, but we’re only in the first inning of this game.