How To Return Investment In First Features To Something Other Than Philanthropy, Pt 2 of 2
How To Return Investment In First Features To Something Other Than Philanthropy, Pt 2 of 2
Other models and my recommendation for a solution (until I hear better).
This wasn’t meant to be a two part post, but I realized it was running long and I had more to say. I am trying to keep things bite-sized and provide inspirations to enjoy over a cup of coffee. Sometimes I succeed. And then there are the other times… If you missed part 1, just go online and read it now.
In my career (so far), I have gotten to make 30+ films with first time directors. I got to make these “risky” films for two reasons: I have a good track record of picking talent and my films, particularly the first features, made money. These first films made money for a couple of reasons: I pick talent well, the budgets were low, and the market for them was healthy then. The market for them now is not so good, but it is not the only reason these films aren’t getting made. I think we need to build a better mousetrap that allows for a regular cadence of ambitiously authored low budget first features, particularly those that also have a high concept that is readily embraced at their core.
Why is the market presumed bad for narrative first time features?
People throughout the film business, both professional and amateur, are spooked. They aren’t basing anything on The Before. They don’t yet know or ever pretend to know what The Next is. Is theatrical dead? Does Global Streaming work? If it does, does it work for anything other than middle-of-the-road-comfort-food (all Squid Games aside)? Is there a Second Disruption coming (another financial collapse brewing)? How long until The Next Pandemic? Is this an era of non-stop social upheavals? Our we doomed to have two Americas? Five? Is polarization here to stay? Has social media destroyed our world? How many more wars are to come? Will things ever get back to Normal?
Sure we got some things, but we gave up a lot when we fully pivoted to a film ecosystem based around Global Streaming. For investors, the alternative revenue model to streaming had its legs cut off (aka equity + international sales + loans). It is really hard to sell a movie territory by territory, media by media. But it always was REALLY hard to do this for first features anyway. And yet we got them made. And they made money. And they put more directors and talent into the system to generate more profitable films better aligned to current cultural tendencies than many of the folks previously working.
It worked. We did it then. We can do it now too.
English language first features have historically relied on the US sale for an outsized piece of its recoupment. There are many reasons for this, but primarily because first time filmmakers are generally drawing on their experience and thus the english speaking ones focus in America on American tales. They are often limited in their vision, alas — but they don’t need to be.
So what are some alternative mechanisms for investment in first time features?
The two most common considerations I have seen over the years to improve the attraction for investing in first features is to either:
offer a cut of future earnings by the filmmaker over a set length of time; or else to
spread the risk across a slate of films.
The reason the former hasn’t seemed to catch on is it comes with a perception that this could have a bit of a predatory stink to it; the filmmaker is desperate and thus under duress — they’ll agree to anything to get their movie made! Evil predatory financiers come in and steal their futures. Bad!
For the latter it is more the perception that a portfolio doesn’t only spread the risk but it's also a bit like throwing good money after bad. Of course neither of these are necessarily true, but they are a bit of a barrier.
But of course there can be more than those, and I will share some NEW ideas further on below.
Do we have to improve the investment model for first time features? Could we just improve the market? Maybe it is a questioning of the marketing and we could somehow build demand?
I really don’t think the Global Streamers are ever going to address curation themselves (they will leave that to the smaller specialty niche platforms — which may not be a fully sustainable model), but I do think there is a tremendous opportunity as a result for creating curatorial labels that work as a magnet for fans and a beacon for like-minded artists. Imagine if we had had a label for a decade now that specialized on curating first time features (and other emerging voices) and they had a stable significant audience base. More would be drawn to it. The opportunity for corporate sponsorship will have increased.
Beyond that model of a PBS-ish style of programing (that I would totally dig), I doubt such a label would have the necessary flare to take off. But one could easily add that flare and attitude. The film equivalent of a punk rock indie rock label where the attitude was as appealing as the curation, at least for the fans. To me that flare and attitude is the organizing principle beyond what ever sort of thematic or genre or demographic or psychographic is used for the selection criteria; it is what will make audiences engage.
Personally, I have always loved the “noble failure” -- the work that shows more promise and effort than accomplishment. I love this quality across many different art forms. You could almost call it the indie aesthetic. My love of it is linked to far preferring the experiment to the proof, for getting things done over talking about them, and feeling the pursuit of perfection is a perversion of the greatest aspects of our humanity. If you can get others to feel like me, not only would you improve the market for first time features (and work from other emerging artists), but I suspect I’d find even more folks I’d be eager to speak with! Wouldn’t that be something?! Maybe what’s needed is a manifesto to rally folks everywhere. Got any?
What’s the best idea you know for making the world safe for First Time Narrative Feature Filmmaker’s Films?
My answer is essentially all of the above — restated below.
Utilize a portfolio but for films that have enough in common for the slate to mature into a label.
Market the label’s attitude from the beginning to increase its potential to be a magnet for fans and a beacon for artists.
Keep the costs below predictable world wide market pricing. Lean into genre but not at the expense of ambitiously authored work.
Maintain an interest in the filmmakers’ earnings over a set time period, but not in a way that would ever be or perceived as predatory.
Provide additional context around the individual films as well as the overall slate to enhance audiences’ appreciation of the experiment over the proof.
Write a manifesto that people can dance to.
Well then, what are some of the NEW ideas for making the world safe for First Time Narrative Feature Filmmaker’s Films then?
The real answer for this is that we need to make effort to make cinema part of the cultural conversation again. Those that love cinema know that it deserves to be, and instead of just saying the audience has moved on, there are a tremendous number of things we can do on this front, and I look forward to digging into it further with you over the next few months, but for now it’s important to see the big picture. All of it is connected. If we kill off the local papers, and fire all the critics from this local and unified point of influence, we lose the local theaters that brought us all together every week. The dominoes start to fall. There may be many separate lines of dominoes but eventually they reach the center. Think holistically.
We need to also recognize that the audience is changing. This year seems to be a wake up call that we are misaligned in a myriad of ways. We need to make films for the people who attend them. We need to emphasize what makes them work where we intend to show them. We aren’t exploiting cinema’s distinct attributes. We need to emphasize what we personally love about cinema. Prestige used to be gray, but those films that were seemingly engineered for us olds — Tar, Fablemans, Triangle Of Sadness, and others — did not have the box office pull of things like EEAO (or the Awards pull). The audience has changed. Time to get used to it and deal with it.
Actors hold tremendous potential to make good things happen. They are who the financiers care about. They are who the buyers care about. They could team together and create a powerful company that commits to launching first time filmmakers. That is, if they care, there is no shortage of things they could do. Perhaps they take that continuing investment in the future earnings. Perhaps they pick well and the 3 our of 5 of their first wave of draft picks are total MVP’s. That company would certainly start attracting investment and soon they are owning all of Hollywood. Yeah, why aren’t the actors getting in on this now? If any want to, just reach out; I’ve got some ideas to share.
The Streamers could make a huge difference, and in many ways not only do they have the responsibility and duty but it is in their best interests to focus more on new directors. Their business is audience acquisition, right? Their tactic generally are a regular cadence of quality work. Their challenge is their limited bandwith and how hard it is to break through the noise.
Perhaps it is time for Streamers to not only launch their own festival, but to build some true value into the proposition (or maybe it is time for the true indie film festivals to force them to, by not playing their films?!). They presently use festivals to fill their slate, launch titles, build awareness, and discover new talent. If a streamer launched their own festival and also had an independent and impartial jury, perhaps they could then agree upfront to acquire the winners for a sizable acquisition fee, one that inspires investors to chase after by making more first time movies happen. If there is one film a year that does a 10X ROI multiple, a thousand flowers bloom.
What else? I know you have some ideas on how to turn emerging work into something beyond philanthropy. Why aren’t you sharing? Get on the bus! We are all in this together. Let’s build it better. Seriously. Plus: wouldn’t that be fun!
I apologize that I don’t have the data to back most of this up, but I’ve been doing this a long time. My facts just come from experience. If I had the time, I’d try to dig up the details. Please feel free to provide the proof — one way or the other — in the comments. And of course if we had a ThinkTankForTheFutureOfFilmStorytellingAndTheBusinessThereof it would be done by now.
Also wanted to point your eye to Scott Tobias’ great review in The Reveal substack of Hal Hartley’s AMATEUR, now streaming on Criterion. I produced that one so please check it out.
Can you let me know how you felt about a two part post and should I do more this way?
The flaw in the business model has always been on the distribution side. If you look at the top two A24 and Neon, both are under much bigger companies and can absorb heavy losses that a production company can't. That also means they can spend the money on the marketing that a production company can't. So they're capitalized to roll the dice on campaigns that cost 4x the budget of your movie and then deduct it out of your profits . So even a win for them results in very little returning to the producer.
If the production company was expected to market and distribute, I think we'd stand a better chance at it. But so far most aren't capitalized well enough to do that.
Ted- there are some good ideas here. I have worked with a number of PE (private equity) groups over the last 20 years interested in the film business. The hurdle is simple- can one illustrate a possible return of 20% per year ?
That ends up being a very difficult task.
Indie films have always been a cottage industry and now they are really the purview of billionaires and very large Funds. Very large funds with billions or trillions under management like Blackstone have invested billions into productions companies and facilitates. Billionaires are backing several US companies like Neon and Bleeker. They can afford to take a very long view and returns are not really the issue. The amounts are insignificant. Sort of like investing in Bio Tech.
Short of finding your own billionaire it is very difficult to attract smaller but significant pools of money in the $50 mil to $100 mil area.
I liked the label idea but once you cede distribution to someone else, getting a return gets very difficult.
I liked selling the futures of a film maker or group of filmmakers -sort of like backing a boxer-but what a leap of faith for investors and a really tough model to illustrate.
I wish I were 60 instead of 80-have fun !