17 Things About The Film Biz That Should Significantly Influence Your Behavior By Ted Hope

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On May 2nd, 2013, I launched the A2E (Artist To Entrepreneur) program at the San Francisco Film Society with OnRamp (The Direct Distribution Lab). This is a pilot lab of a pilot program designed to give filmmakers the necessary entrepreneurial skills to achieve a sustainable creative life amidst this changing paradigm. We will be working out some bugs but I hope to launch the second iteration as soon as possible (but to do so requires some support, both financial and otherwise, so if you know anyone or any organization that might be interested in advancing film culture and enterprise, please do send them my way!).

As part of the lab, we have a first day of big ideas and case studies that hopefully will give the participants the foundation for a design for living and thriving on their art. As part of that I have prepared three brief lectures focused on what every filmmaker needs to recognize about the business, the culture, and their practice if they want to have a sustainable creative life. Split between the three categories, I came up with fifty things you should know. I will provide them to you over the next week or two, but I wish you all could have been there. It’s always different when you are in the room.

Today, I will unleash what I think it is necessary to recognize about our industry if you are a filmmaker looking to survive from the work you generate.

WARNING: taking any of these points out of context, could create unnecessary fear or depression. If you want to tackle reality, you need to know what ground you walk on. Some truths are hard to accept but once you do, you can move forward and to a different place. Adding Film Biz realities to Culture truths, and building Best Filmmaker Practices on those understandings could provide a Design For Sustainable Collective Creation. Or at least that’s this Hope’s hope.

Filmmaking is not currently a sustainable occupation for any but the very rare. It is not enough to be very good at what you do if you want to survive by doing what you love. Presently speaking, artists & their supporters are rarely the primary financial beneficiaries of their work – if at all. Filmmakers are not sufficiently rewarded for their quality creative output under current practices. The film industry’s economic models are not based on today’s reality. They are predicated on and remain structured upon antiquated principals of scarcity of content, centralized control of that content, and the ability to focus the majority of consumers towards that content. Film audience’s current consumption habits do not come close to matching the film industry’s production output. America remains the top film consumption market in the world, and is thought to be able to handle only around 1% of the world annual supply – consuming somewhere between 500-600 titles of the annual output of approximate 50,000 feature films. We make far more films than we currently know how to use or consume. We drown our audiences in choices. The film industry has not found a way to match audiences with the content they will most likely to respond to. It doesn’t even look like this is a priority for the business. Everything is spaghetti against the wall, marketed in the same way & only to the most general demographics of race, gender, & income. In order to reach the people who might respond to a film, the film industry remains dependent on telling everyone (including those who could care less) about each new film. It is a poorly allocated dedication of resources. We spend more money telling those who will never be interested, than focusing on those who have already demonstrated support. There is no audience aggregation platform exclusively for those who love movies, no place where all people who love movies engage deeply about films – if there was, marketing costs could shrink. Digital distribution is an emerging market and will continue to evolve over the next decade. The value for titles for the long term has not been specified for digital distribution; currently only short term value is derived – and as a result films are licensed without full understanding of future worth. We are doing a business of ignorance. Predictive value of films is primarily currently determined by an incredibly imprecise method:“star value”, a concept that grows less predictive by the day. Ask anyone and they will tell you that people do not go to movies anymore to see specific stars but interesting subjects. Granted, that is not a scientific method, but we know it to be true. The “fair market value” of a feature film’s distribution rights in the US that multiple buyers want has dropped astronomically: from 50% of negative costs 25 years ago, to 30% 15 years ago, to 25% 10 years ago, to 10% today.

10. International territorial licensing of American independent feature films has dropped by approximately 60% over the last decade. Major territories no longer buy product. Most have given up on “American Indies”.

11. Everything that has ever been made, has also been copied. The logic of a business based on exclusive ownership or limited access to something can not sustain. In the digital era the duplication of data is inevitable. The unauthorized copy will never go away. People can choose to try to avoid unauthorized versions but they will be made or shared. This does not have to always be a bad thing either.

12. Competing options for film viewing have diminished the comparative value of theatrical exhibition. A consumer can not justify the cost of a movie ticket when that ticket costs more than the cost of a month of unlimited streaming. Home theaters’ quality surpasses many theaters, and the seats are always better. Soon 4K Televisions will be the norm while movie theaters are stuck in 2K.

13. The film business lacks a long range economic model for exhibition. What is the business of movie going? Exhibition gathers people together to sell them a 15 cent bag of popcorn for six dollars. We can profit from a large group’s interest in more and more meaningful ways, but the infrastructure is not yet designed to expolit this.

14. The film industry foolishly rewards quantity over quality. Producers are incentivized to forever take on more and the films’ quality suffers as a result. The best work is not rewarded. Once upon a time, filmmakers got overhead deals and that made some difference, but those days are long gone.

15. Movies have a unique capacity to create empathy for people and actions we don’t know or have not experienced. Science has shown that the imagined releases a similar chemical response to the actual experience. If this empathic experience is virtually unique to film, can it be utilized more? I think so, tremendously so in fact.

16. Movies create a shared emotional response amongst all those that view it simultaneously. What other product can claim that? As a unique attribute, how can you emphasize that more? Shouldn’t that be the takeaway that your audience remembers and shares?

17. There has never been a better time for most creative individuals to be both a truly independent filmmaker and/or a collaborative creative person. The barriers to entry are lower, the cost & labor time of creation & distribution are lower than ever, and there are more opportunities and methods that ever. We just need to abandon the old ways and unearth the new ways.

What’s your response to these? I personally think it would be great if the answer could always be: “I am going to do something about that. And I am going to get a little help from my friends.” Every single one of these can change; it may require a complete move from doing things the way we do them now, but they can get better. If you want to make movies, and make your profession filmmaking, I think you will have a tremendous advantage if you recognize the world we are living in and the power you have to improve it. I think these points are the obvious truths that we can use to drive us forward. And there are more.

Next week I will share “19 Things About Our Current Culture That Should Influence Your Creative & Entrepreneurial Practice“. Until then, keep producing. We can build it better together.

Note: I followed this subsequent post up with 16 Recommendations For Best Practices.

