Tuesday, February 10, 2009

2008 Sez: "Eff You Theatrical Distribution!!!"

I have railed long and hard against those indie film assholes who always think they MUST get a theatrical release in order to be taken seriously as a filmmaker. They have the idea that they will make tons of money screening their "masterpieces" (masterfeces) for the intelligentsia while indie film distributors feed into their mass delusions with artistic ego handjobs while charging up their expense accounts against the film's revenues so the filmmaker and his financiers will never see a dime...

Well, guys. Guess what? You don't have to buy into that "Intelligent Design" of film distribution anymore. 2008 has the Darwinian proof that online and/or digital distribution is the major force in revenue:

From Content Agenda ---

The entertainment biz will remember 2008 as the year when global revenues from digital media exceeded revenue generated by movie theaters and homevideo combined. In its "Global Media & Entertainment Market Forecast, 2004 - 2012," London research firm Strategy Analytics reported that online and mobile channels accounted for $90 billion in worldwide revenues; the global filmed entertainment market generated $83.1 billion.

"We're starting to see now that digital media is becoming a significant part of revenue for a lot of companies," says Strategy Analytics director of digital media research Martin Olausson. "A few years back, everyone was still discussing whether movies would be distributed online. That's not a discussion anymore."

For the global film industry, this is a double-edged sword.

Broadband downloading and streaming, terrestrial and cable video-on-demand (VOD), and mobile platforms are now all ways to watch entertainment content, from feature films and TV shows to made-for-Internet/mobile programming.

For the last few years, the questions have been: Are these viable alternatives to theatrical distribution? How much more content will auds consume on digital platforms? And will such platforms offer new production opportunities and generate fresh revenue streams?

Strategy Analytics' astonishing numbers imply that digital distribution may have already won the day.

And for those of you who are reading the article where it says " there are complications", understand that broadband penetration in the US is only at 63.1%. That means there is room to grow the business.

Although kinks in the model have yet to be resolved, the momentum is undeniably -- indeed, relentlessly -- forward. "It's very much a youth-driven revolution," Schaeffler says. "Technology makes digital distribution very desirable, and the forthcoming generations will demand it."


Percentage of households with broadband in 2008, listed by country's rank:

94.0% South Korea

85.4% Denmark

82.9% Netherlands

81.7% Hong Kong

76.3% Australia

75.2% Norway

74.7% Canada

71.7% Japan

71.5% Spain

71.2% Switzerland

70.9% Finland

68.1% Taiwan

66.3% United Kingdom

63.1% USA

63.0% France

62.5% Sweden

58.7% Belgium

56.4% Ireland

56.2% Germany

52.3% Austria

Just so we're all clear - movies and other media will cost less for the consumer, earn more for the filmmakers/ creators and will be available everywhere people want to consume them. This is a light year away from theatrical distribution which is now considered a "marketing campaign for the DVD."

This is the future. This is not saying that theatrical will go away. This IS saying that you don't need it to be successful and profitable.

It means the evolution will be streamed.


Unknown said...

Bill, great points as usual.

A quick comment, though from outside the U.S.

I don't know about other jurisdictions, but in Canada, being considered a "professional" by the standards of government funding agencies like Telefilm does mean having had a film released or at least screened theatrically (although that can include festival screenings and sometimes even a second-run theatre you rent yourself for a premiere).

Otherwise your credits don't count towards the minimum required to qualify for funding. I know that government funding for movies is a highly debatable issue, but it is a real part of the equation up here, for a whole lot of people.

You're clearly right that onlne distribution is the future (and increasingly the present), but the transition is going to be tricky for a lot of Canadian creators.

Cunningham said...

I understand that the the whole government funding issue is a big deal up there.

I think that requiring a theatrical screening for funding credit is an outmoded, archaic point-of-view that falls into my "indie film assholes" and "intelligentsia" comments in my opening paragraph.

Things will evolve. They must or they WILL die out. I personally want to back a filmmaker who makes a profit FAR MORE than I do a filmmaker who knows how to give a politician a paperwork "handjob" in order to finance his film.

The point isn't to look good on paper, but to look good onscreen (whether that's a laptop, tv or iphone).

And seriously, the more you demonstrate you can make a profit without a theatrical screening because you use new media, the more YOU WON'T EVEN NEED THE GOVERNMENT HANDOUT. People will be lining up to finance you. You won't be a filmmaker, you'll be a media maker, a new media business person.

Phantom of Pulp said...

You only had to visit the Used Car Salesmen convention that is AFM this year to know that theatrical distribution is heading into oblivion.

If the truth be told (which it isn't very often in this business), indie distribution has been oblivion for most indie filmmakers for years, anyway.

As you mentioned, possible returns beyond initial advances (if you're lucky!) are expensed to hell and back and you never see a cent, anyway.

Then you're supposed to feel grateful that you got a "theatrical". What utter bullshit! In some businesses it's called stealing.

In countries where there is a large component of government funding, the "theatrical" allure dies hard mainly because these agencies are not run by people with a finger on the current pulse. They're usually years behind where the new markets are going because they dwell in an insulated world, not a market.

For example, Australian funding bodies don't even recognize Direct-To-DVD movies as movies. They won't even create a category for them. In Japan, these have been legit for years. In the US, the majors have finally embraced them.

Broadband distribution and a type of simple but airtight encryption process will grow indie distribution and, hopefully, curtail piracy.

As long as the big boys don't achieve their aim of controlling the internet, there is a hope for the induie sector. If the big boys do get their way, we'll be right back where we started with an elite few anointed to carry the flame of filmmaking.

For mine, as soon as downloading a movie is as simple as pressing a button (and is a fast process), traditional indie distribution will become irrelevant (and producers/directors may start seeing some returns). I can't wait for that to happen!

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