A (spruced up) transcript of today’s episode

I recognize this episode is likely going to be a bit controversial, so let's start off with a few facts we can all agree on.

For starters, there was a stretch of time, specifically the late 1980s through the early 2000s, where film festivals really could be considered a viable strategy for making money with indie films.

There were far fewer festivals, many of them with a heavy industry and distribution presence, and far less competition to get in.

And in fact, many of the big name filmmakers we look up to very likely got their start in that ecosystem.

But things have changed rather dramatically over the last 15 years.

These days, the domestic market for indie films has largely collapsed (it's still there, but it’s on life support).

This is compounded by the fact that there are exponentially more films being made each year, thanks to cheap digital technology. So not only are fewer consumers looking for indie films, but they have nearly unlimited choice. In other words, there’s way more competition for fewer eyeballs.

In addition to all of that, there are now thousands upon thousands of film festivals all competing for your submission dollars.

Many of these festivals, particularly the smaller, more regional, more niche ones, don’t offer much in the way of getting your film in front of distributors or people who can shepherd it through the distribution process.

And on top of all of that, it’s now possible to reach audiences yourself and make a living completely outside the traditional distribution system.

Point is, even though there was once a time where festivals were the best way forward for indie filmmakers, the world has changed substantially, and festivals are now far less effective at helping us make money with our work.

So let’s dig into the details of how the festival system really works (or doesn’t).

The psychological bias at the heart of the film festival myth

Now, there is still some money to be made as a filmmaker in the realm of high-end indie features. Obviously there's never any guarantee—as many films, even the quality ones, end up losing money.

With that said, every year we get news of indie films being acquired for substantial amounts of money, usually during large festivals like Sundance and Cannes.

And then of course, these deals get covered extensively in the trade publications and indie film blogs and whatnot.

The cultural effect of this is that we tend to think this is still a viable path for our own films. After all, some people are clearly succeeding in this system, so perhaps we will succeed as well someday.

But we never hear about the thousands of films vying for that same outcome that didn't get it.

In the world of psychology, this is called survivorship bias.

It’s when we only hear about rare winners in a system that, in actuality, doesn't work for the vast majority of people. However, we still form our worldview and strategy around those winners, despite the fact that the evidence and the data doesn't point to that being an effective strategy.

And that's the whole point of this episode. We're trying to combat the survivorship bias that leads many of us to think that film festivals are still the best path forward for indie filmmakers.

The truth about landing a huge distribution deal

When it comes to defeating survivorship bias, the best place to start is the the not-so-secret truth about those big lucrative distribution deals we always hear about.

For starters, if you want to compete at that level, you need to make a film that's substantially better than the vast majority of what else is on the festival circuit.

I don't mean to kill anybody's dreams or expectations of what their film will be, but most of those films at the top tier have budgets ranging from a million to 20 million dollars.

Since most of us (especially readers of Filmmaker Freedom) are working with tiny little micro budgets, or maybe no budget whatsoever, it’s nearly impossible for us to compete at that level from the start.

Now, that's not to say that it's impossible to compete. However, unless you've got a “lightning in a bottle” project like The Blair Witch Project, you're very likely not going to be able to make it in that system from the start.

Truth is, films like the Blair Witch, inspirational as they may be, are extraordinarily rare exceptions and not the rule.

So that's the first thing to consider—the quality of your project compared to what else is out there on the market.

The disheartening festival odds for truly independent filmmakers

The next thing you need to know about those “mega deals” is that you have to get into a top tier festivals like Sundance or Cannes or Telluride or Toronto and maybe a handful of others.

At this point, we all know just how difficult these are to get into. Statistically speaking, you have a better chance at getting accepted into Harvard than you do of getting into Sundance.

There are so few slots available—many of which are actually taken before programmers even start considering outside submissions. There's all sorts of “inside baseball” and politics that eat up those spots before they're ever made available to the public.

And on top of that, there are just so many submissions—thousands upon thousands of submissions—many of which are extremely high quality.

When you take all of that into consideration, our chances, especially with smaller micro budget projects, are chances are hilariously slim when it comes to getting into these top-tier festivals.

Even getting into a big festival doesn’t guarantee a great distribution deal

Here's the kicker on all of this.

Even if you manage to get into a top-tier festival, a lucrative deal is anything but a guarantee.

Truth is there are hundreds of features every year that play big festivals that don't end up getting acquired. No doubt these filmmakers get distribution offers, but they’re often bad deals that verge on predatory.

So far too often, these solid films languish in obscurity after their festival run, and never really making their money back.

In fact, this is the reality for a solid majority of festival films, even the ones that generate buzz and get great reviews.

The market is completely saturated with content right now. So even quality projects with big-name talent that screen at big festivals end up failing financially.

Counting on a deal like this is like hoping to win the lottery… twice.

So the point of all of this is that it's not impossible to earn great money within this whole system, but it's a bit like having to win the lottery twice. Once just to get into a top tier festival, and once to actually land one of those lucrative deals.

Not to mention that the cost of the first lottery ticket is having a film that's good enough to compete at that level—which means you likely have financial backing in the millions of dollars already, which probably counts out 99% of us from the start.

**In no other field of business or media, where the explicit goal is to make money, would those odds of success be acceptable. **

In fact, those odds would get you laughed at if you approached serious investors with that as your primary strategy for earning them a return. But in the indie film community, we've been treating this whole system like it's the best path forward for decades now, even though that's clearly not true anymore.

But what about smaller festivals and distributors?

There's another question to consider here—and that's the role of small festivals and distributors. Even if the high-end festivals and mega deals are off the table for most of us, aren't those smaller fests and distribution companies still worth considering?

Honestly, this is a complicated question. Just as there are success stories within the ecosystem of big festivals, the same is true for the smaller ones.

However, the question we need to be asking ourselves is: what are my odds of succeeding financially if I go that path?

Though I’ve talked a bit about how shady many of the smaller distribution companies can be in previous episodes, let’s recap what you can expect.

First off, it’s really not hard to get into festivals anymore. In fact, it’s pretty damn easy.

Again, there are thousands of festivals now, and many of them are super specialized or super niche, which makes it easier to get into those if you have a niche product.

Plus, many of these fests have really, really, really low standards. They'll screen basically anything as long as it's somewhat competently made.

Basically, if you spend enough money on submission fees, you will get into festivals, and you’ll some cool laurels that you can put on your poster.

Hell, you might even get into a lot of festivals with this strategy. They just won't be the ones where those lucrative deals are happening.

And that brings me to the second point here. If you screen at a few festivals, even the smaller, less well-known ones, you almost certainly will get offered a distribution deal.

But again, we talked about this extensively in some of the prior episodes. These deals, for lack of a better way to put it, are very often shady, downright predatory, and not worth your time.

There are a lot of bottom-feeding distributors who use the festival circuit as a means to snatch up films for pennies on the dollar—if they even pay you anything upfront, which very often they don’t.

And despite the fact they’ll talk a big game and make all sorts of promises about the money you’ll make, far too often you won’t see a dime on the back end, even if they’re making money with your project. There are all sorts of creative accounting tricks they use to pull off that feat.

Granted, not all small distributors are bad, and you can indeed strike worthwhile deals if you're careful and do your due diligence.

Just know that it's a major uphill battle, especially if you’re not privy to these shenanigans, and well versed in the various types of rights you can negotiate in a distribution deal.

Why film festivals are the exact opposite of a sound business plan

The point I’ve been trying to make all along is that if your goal is to make money with your films, festivals aren’t going to serve you well. They’re about as far from a viable business plan as you can get.

In a real business plan, you outline what your product is, how it fits into the market, what the reach and revenue potential is for that market. You also outline how you're going to reach those particular people. You know, you figure out the actual strategies and tactics you'll try for achieving real business results.

Basically, a business plan is a well-informed hypothesis and game plan for how you can create a product that interfaces with the market and creates real revenue.

Film festivals, on the other hand, are basically akin to buying a lottery ticket. It's like hoping and praying for money to magically appear instead of doing the hard, grungy work of making it happen yourself.

Not only that, when you submit to festivals in the hopes of a payday, you’re putting all your hopes and dreams into a broken, ineffective system that’ll almost certainly let you down (and perhaps drain your bank account in the process).

I honestly can't think of a better way to end up feeling disheartened and frustrated, and like you're just not cut out to do this filmmaking thing in a profitable way.

So, if you genuinely desire to make money with your films, you need to start thinking outside of the box. You have to take responsibility for that outcome and do the work to make it happen.

Just because filmmakers have been relying on this system for decades now, doesn't mean you have to follow along.

Because as you know, the definition of insanity is doing the same thing over and over again and expecting different results.

As a proud member of the indie film community, I’m hoping we can put an end to this collective insanity and start looking for better ways forward.

So are all festivals a total waste of time and money?

Now before we wrap this up, I want to take a little bit of time to talk about a few ways to use festivals in the modern ecosystem. Because as much as I'm bashing on festivals here, I don't think they're worthless. Far from it.

The first thing I'd mention is that festivals are hands down one of the best places to build your network.

Obviously the bigger festivals have more of an industry presence. So if you're looking to meet an agent or make various types of film business connections, that can happen at those types of festivals.

With that said, don't write off the the smaller, local, and regional festivals. Because along with industry contacts, it’s equally important to have a strong network of ambitious local filmmakers on your side.

So even if you're not screening a film of your own, I still recommend going to those types of festivals, because you're going to meet people who are making things and getting those things out into the world.

And those are the people you want in your corner. Those are the people you want strong relationships with. Filmmaking is a team sport, and especially in the indie world, you have to do it as a community.

Film festivals offer such fertile ground for building those communities, so don’t pass them up.

The second use for festivals is seeing your film in a theater setting, and in front of a live audience.

This is really, really valuable. There's nothing quite like seeing something that you made—that you poured your heart and soul into—up on the big screen. It validates the tedious process of producing a film, and makes it real.

Plus, there’s another important aspect to screening your films. Seeing and hearing how the audience reacts in real time is super valuable feedback as a filmmaker.

Do they laugh when you want them to? Do people seem engaged, or bored? Did your big twist at the end work? Answering these questions honestly (which isn’t easy) can help you hone your craft in ways that 100 YouTube tutorials never could.

Frankly, I think the theater experience is one that all of us should have it one point. So if festivals are your best option to get that experience, go for it, because it's absolutely worth it.

Now, the only thing I’d add is that you should at least consider trying to rent out, or maybe do a revenue split, with a local indie theater.

It's not always possible depending on where you live, but with a little bit of legwork, you could very well make some money from screening your film. As opposed to having to pay to submit to a festival and then playing the waiting game to see if you actually got in.

You can be more proactive about this and just screen locally on your own dime and maybe make some money. So consider that if it's something that you're willing to go after.

Finally, niche film festivals can be a gold mine for audience engagement and acquisition.

If you've listened to the other episodes of this show, you know that one of the core tenets of self-distribution is making niche films for specific niche audiences.

So think of horror or LGBT or Christian or Jewish films. These are just a few different viable niches that you could tackle, though we're going to cover this far more future episodes.

But for now, just know this.

If there happen to be festivals that directly serve the niche you’re going after with your films, it's a no-brainer for you to submit to those.

Not to mention, it’s going to be easier for you to get in because your content is basically tailor made for that festival’s audience.

And when you screen at those festivals and network, you're basically interfacing with your audience in a real, valuable way.

Not only can you can you talk to people and get direct feedback from the group you’re trying to serve, but you can even get these people onto your email list right at the festival. This makes it easier to sell future films to that audience.

So there's a real business case to be made for these types of niche festivals if your work is a good fit. They can help you build a long-term audience and get feedback that's invaluable.

Wrapping up

So yeah, that's all I've got for you today. Hopefully you're now looking a bit more skeptically at film festivals.

I know we live in a culture where we see festivals as the either the pinnacle of success if it's a big festival, or the path to success if it's one of the smaller ones. But hopefully after listening to this episode, you know that it's just not a viable business plan. Not even close.

Luckily, there are better ways forward for indie filmmakers. New methods that are cheaper to access, more predictable, more profitable, and just better business all around. And that's what you'll learn about in the other episodes of this podcast.

So that's what I want to leave you with. Just get out there and make your own path. The old one—the festival path—might be broken and ineffective. But there's so much potential now for doing it yourself, for making work you're proud of, for getting in front of an audience, and for actually making some money.

So good luck to you, and godspeed.

-Rob Hardy