Distribution

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Distribution

  1. 1. Film Distribution Consider these two competing views of who holds the most power in terms of influencing what films get made and seen: If you break it down and look at it as a business then the audience has the greatest power. It's the audience that tells you what they like. So if the audience likes a particular superstar, then Hollywood is forced to use the superstar and that star then becomes extremely powerful. (Tony Angellotti) In a world where money spent on the budget of a film often sees 50 % going on promotion as opposed to what you actually see on screen, the idea that we have a world where the consumer can exercise authority is absurd. This industry is like any other. Of course it has to sell things, but it doesn't rely on waiting, listening, responding to what audiences want and then delivering that to them. It relies on knowing which parts of the world and the media need its products and will pay for them. (Toby Miller) They can't both be right and you therefore need to come to an informed judgement on this dynamic. In the case of film marketing, it is a complex issue. Q. Did millions of people go to see Pirates of the Caribbean 2 in the first week of release because it is such a great film, or because it is so well marketed? Or both? It took $135,634,554 in its opening weekend in the US alone, 32% of its final total gross. Definition of a distributor A distributor is the link between the film-makers and the public, and allows a film to reach the public via the cinemas, DVD/video and on television. There are a number of distribution companies in the UK, all with different styles, funding structures, aims and marketing plans, all trying to sell their films in an incredibly competitive environment. Each distribution company takes on a certain number of titles each year and creates an individual release-plan for those films. Their responsibilities include: o deciding on a release date; o deciding how many prints to produce and in which cinemas to screen them; o advertising campaigns; o designing art work for adverts, posters, flyers and billboards; o organising premieres and talker screenings; o booking talent (i.e. the stars or director) for press interviews and personal appearances. Distributors are also responsible for negotiating deals regarding the film's release on video and DVD, and showings on television, cable and satellite channels. 59
  2. 2. A film could come to the distributor in a range of ways —films produced by the main American studios will be distributed through their own companies, so Warner Bros. will distribute their own films as will 20th Century Fox and Buena Vista International will distribute Disney films as it is the Disney distribution 'arm'. Some films are seen at film festivals and are picked up through complicated negotiations with sales agents and producers so deals can be struck in different territories (i.e. North America, Europe, Asia, Australasia). Some Background Facts and Statistics Worldwide spend on films is around $65 billion a year, of which the distributors' share is about $35 billion. Total revenues are split almost equally between the North American market and the Rest of the World. The industry has doubled in size in the last since 2000 - an annual growth rate of almost 10%. Few, if any, major businesses can boast such continued growth over this period. DVD has contributed significantly to the growth levels. DVD sales have seen a tenfold rise in the last 3 years. The average cost for an American studio film is now more than $50m with a further $30m spent on marketing (up from $8m and $3m respectively in 1980). Theatrical (i.e. cinema) revenues only account for about 25% of the total profit, with DVD taking about 40%; television screening accounting for 28% and ancillary revenues the final 7%. The main revenue streams for filmed entertainment are: 1. Theatrical (cinema) exhibition 2. DVD/Blu-ray rental 3. DVD/Blu-ray retail (or sell-through) 4. Pay per View Television 5. Subscription or Pay Television 6. Free to air Television The industry maximises revenues at each stage of the value chain and avoids any clashes in the marketplace. Release windows are starting to close up as the non-theatrical streams start to eclipse the original release in terms of revenue generation (although the cinematic shop window still remains the main driver of revenues throughout the chain in most cases) but are roughly as indicated below: Theatrical: 0 - 6 Months DVD/Blu-ray: 6 - 15 Months Pay Per View: 15 - 18 Months Pay TV: 18 - 30 Months Free TV: 30 + Months The spectacular success of the home DVD market has led to increased pressure on the DVD rental 60
  3. 3. window with some of the major distributors keen to put their product into the retail market place as soon as possible. In the immediate future more films will be released simultaneously into the rental and sell-through DVD/video windows. The rental window, which currently lasts for about six months before titles go into retail outlets, may be closed altogether before too long. This may also lead to the Pay per View window moving forwards with titles reaching television screens within 9 to 12 months of their theatrical release. Theatrical Distribution Deals The share of Box Office paid over to distributors varies between territories. The typical exhibitor's share in the US is 45 to 55% and in the Rest of the World 55 to 65%. The UK has some of the highest retentions by the exhibitor, averaging around 65 to 70%. Types of UK distributors In the UK, distributors are divided into the majors and the independents. The Majors The majors are those affiliated to the biggest Hollywood companies and are: • Warner Bros.; • 20th Century Fox; • Columbia Tri-Star; • Buena Vista International (BVI, owned by the Disney Corporation); • United International Pictures (UIP, who release films from Universal and MGM studios). The films released by the majors tend to be mainstream - Hollywood blockbusters as well as UK/USA co productions such as Bridget Jones's Diary, Love Actually and Calendar Girls. Some companies have an 'indie' arm such as Fox Searchlight or Focus Features (Universal) that will take risks on films that are not such commercial blockbusters. The Independents These are companies who release a much wider range of films, and include Artificial Eye, Pattie, Metro Tartan, Metrodome, Momentum and Contemporary. Titles will include foreign language films, documentaries, re-releases and non-mainstream Hollywood/UK titles picked up at film festivals across the world. Entertainment Distribution is an unusual case in that it is a UK independent that has a long standing relationship with US studio New Line Cinema (a unit of the Time Warner Corporation). Entertainment release their titles in the UK, therefore getting such films as Lord Of the Rings as well as small UK tides such as Sex Lives of the Potato Men and Charlie (2004). (The vast majority of Entertainment's 14.5 % market share in the table opposite will have come from the second and third films in The Lord of the Rings trilogy, both on release in 2003). Acquiring a film A distributor can acquire the rights to release a film in the UK in a number of different ways: • directly from their parent studio (i.e. Universal through UIP); • through a deal a distributor may have with a production company or studio; 61
  4. 4. • a distributor may be approached by a third party sales agent; • a distributor may attend a film festival and approach a sales agent after watching a film at a screening. A distribution deal is different for every film, and will include theatrical rights (i.e. the screening of the film in cinemas), and possibly the release of the film on DVD as well as TV and satellite rights. Releasing a film Hollywood distributors will consider their release strategies from (at least) four perspectives: Global: where will the film work? Regional: how will we make it work in (say) Europe? National: how should we release it in each country? Local: are there any particular local conditions that need to be taken into account within each country? Many things have to be taken into consideration when distributors choose a release date for a movie. School holidays in Easter, half term, summer and Christmas tend to be the time when big family movies are set for release. Big national sporting events, particularly when England are taking part, such as the European Championships and the World Cup can affect audiences, so care is taken about releasing male-orientated, action-type movies at that time. It is also crucial to know the landscape with regard to film and media related events happening nationally and most importantly, what else is being released at the time. The last thing you want is your film being released on the weekend The Lord of the Rings: The Return of the King (2003) or Indiana Jones and the Kingdom of the Crystal Skull (2008), are released, both of which will swamp the media and the national consciousness (unless, that is, you are consciously positioning the marketing strategy in opposition to these blockbusters). Box office - A film's performance in the cinema is judged on the box-office figures. Box-office figures are based on the number of people who purchase a ticket to see a particular film and what they pay: it is the accumulated cost of tickets which equals the box-office figure. The US box-office figures will give a rough indication of how successful a film might be in the UK. For most films, almost 40% of total Box Office will be taken in the first week, with the majority of that arriving in the first weekend. Takings tend to fall to about 5% of the total by the sixth week of release (if the film has lasted that long). Oscar winning films have tended recently to gross more internationally than at the US Box Office, partly because the release pattern means that their Academy Award success can be used in the International marketing campaigns. Films like The English Patient (1997) and Slumdog Millionaire (2008) are good examples of this. Case Study – United International Pictures (UIP) Whenever you visit the cinema, there's a strong chance that the film you are watching is one handled by United International Pictures (UIP). UIP is jointly owned by two of Hollywood biggest studios, Paramount and Universal. They channel the films they produce through UIP, which is responsible for distributing them to cinemas in the international marketplace outside North America. UIP also handles films 62
  5. 5. from their non-mainstream divisions, Paramount Classics and Universal Focus. Stephen Spielberg's studio Dreamworks also distributes its films around the world through UIP. Furthermore, UIP will acquire and distribute films made by independent producers in local and international markets. Since its launch in 1981, UIP reckons it has distributed over 1,000 films internationally - including Shrek, Love Actually, Jurassic Park, Collateral, Mission Impossible, and Bridget Jones: The Edge Of Reason. It is a huge and complex operation, with offices in 35 countries stretching from Russia to New Zealand and South Africa to Singapore. It also has representatives or agents working in another 23 countries. Its takings from the global box office in 2003 stood at nearly $2 billion. An important focus for UIP at the moment is expanding into what it regards as growth markets, in particular countries with huge potential like China and Russia. UIPs global operation, which employs 700 people around the world, is co-ordinated from a small tower block office in Hammersmith, West London, with 150 staff. Key departments include the marketing and distribution teams, which liaise with the US studio parent companies and UIP offices around the world to agree release dates as well as marketing and press strategies for films. However, UIP chairman and chief executive officer Stewart Till (pictured right), says: "We try to let the territories be as autonomous as possible and empower them as much as we can." The Hammersmith HQ also includes departments such as human resources, business affairs and finance. Also in London is UIP's separate UK distribution office, based in Golden Square in London's Soho. Run by Chris Hedges and employing 35 staff, the operation consists of a sales and distribution team responsible for booking UIP films into theatres throughout the UK, as well as a PR and marketing unit charged with generating press coverage and reviews of films and for running marketing campaigns. Film Classification Before a film can be shown to a paying audience, it is required by law that it is certificated by the British Board of Film Classification. This ensures, for example, that films which are of an adult nature are not shown to children. Distributors must submit their films to be watched by examiners who write reports describing each film and justifying the decisions they have reached. The cost to the distributor is roughly £9.50 per minute, so classification of an average film costs 63
  6. 6. around £800 – £1100. The British Board of Film Classification produces a set of guidelines which are easily obtained for your reference from the organisation's website (www.bbfc.co.uk). The BBFC is not a separate entity from the film industry or a government department. It is a self- regulatory body as it is made up of film industry representatives. But despite this, this is the one area of film distribution over which the makers and promoters of a specific film have limited control. It is possible for a film to be targeted and promoted for a particular audience group such as 15 and over, only for the BBFC to impose an 18 certificate, although this is rare. The film certificate influences the marketing campaign of the film since this will need to be pitched at the age range indicated by the certificate. A distributor may indicate to the Board which certificate they are hoping the film will be awarded, for example, a PG certificate to allow a wider audience to see the film. The Board, in turn, might suggest cuts are made in order for it to get this certificate. Conversely, there might be times when a higher rather than a lower certificate will actually help to sell a film. For a thriller or a horror film to be rated 18 will do more for it than if it were to be awarded a 15 certificate. In 2008, 639 films were classified of which 7 had to make cuts - 4 at the 15 rating, 2 at 12A and 1 at PG. The BBFC's guidelines state that there are three main considerations for any film: 1 Legal (material may break the law—-there are several laws to do with obscenity, equality, incitement and the protection of children) 2 Protective (material is scrutinised for its potential to cause 'harm' though this is a huge area for debate—who decides who needs protecting from what?) 3 Societal (material is reviewed with broader public opinion in mind with particular regard to language). The second and third considerations are more significant in stipulating an age classification for a film. It is important to recognise that the BBFC make recommendations, but it is possible for local authorities not to comply and either allow films to be exhibited to a wider age range than the BBFC recommends, or to deny younger viewers access in the locality, or even to ban a film from release in the area. This hardly ever happens, but a famous example was the decision of Westminster Council to ban the screening of David Cronenberg's Crash (1996), which was given an 18 certificate elsewhere. The BBFC's relationship with Government is known, rather misogynistically, as a 'Gentleman's Understanding' which means that Parliament observes from a distance and the 64
  7. 7. BBFC regulates itself in accordance with the political climate established by the Government (stricter or more liberal depending on who is in power). During the New Labour Blair/Brown era, the BBFC has been more relaxed about material for the 18 certificate, but ‘tougher’ when considering material for younger children. It is important to be aware of classification as an element in 'gate keeping' the distribution process. The classifications, as published in the BBFC guidelines, are as follows: U: Universal (suitable for all). PG: Parental Guidance (general viewing, some scenes may be unsuitable for young children). 12 and 12A: Suitable for 12 years and older. No one younger than 12 may see a 12A film in a cinema unless accompanied by an adult. No one younger than 12 may rent or buy a 12 rated DVD. Responsibility for allowing under 12s to view lies with the accompanying or supervising adult. 15: Suitable only for 15 years and over. No one younger than 15 may see a 15 film in a cinema. No one younger than 15 may rent or buy a 15 rated DVD. 18: Suitable only for adults. No one younger than 18 may see an 18 film in a cinema. No one younger than 18 may rent or buy an 18 rated DVD. R18: To be shown only in specially licensed cinemas, or supplied only in licensed sex shops, and to adults of not less than 18 years. (Source: BBFC guidelines) Classification Case Studies - Spiderman (2002) & The Dark Knight (2008) The BBFC announced in September 2000 that it would look at the possibility of making the '12' cinema category advisory, like 'U' and 'PG'. This was in response to complaints from parents - particularly whenever a new James Bond film came out - who felt that they were better placed to decide which films their under 12s could cope with. In 2001 they carried out a pilot in Norwich. The outcome was that the public was only in favour of making the '12' cinema rating advisory if under 12s were accompanied by an adult throughout the film, and if consumer advice about the content of the film, for instance, 'Contains a single use of strong language and moderate violence' - was available on publicity material and was included in local cinema listings. The Board then carried out a national survey in May 2002 and got almost identical results with over 70% of people supporting the introduction of '12A'. 65
  8. 8. Once the Board was satisfied that the film industry was including the Consumer Advice on publicity and that the cinema exhibitors were including it in cinema listings, the new category was introduced on 30 August 2002. Spider-Man had been passed '12' in April 2002, in spite of a request from the distributor for a 'PG'. The reason for the '12' was that the film contained a level of personal violence and a revenge theme that went beyond what was acceptable under the 'PG' Guidelines. The decision proved to be unpopular with the under 12s who had collected the merchandise, toys, lunch-boxes etc, which were specifically marketed at young children. The BBFC received many letters from disappointed children questioning the decision. The distributor of Spider-Man, Sony Pictures, decided to re-release the film immediately after the introduction of '12A' so that young fans had the chance to see the film at the cinema. The decision to introduce '12A' had nothing to do with Spider-Man or the pressure from parents and children who wanted to see the film. The Board had announced its decision to consider changing the category in September 2000 because it recognised that children were growing up faster and that parents were better placed to decide what their children should watch. For the record, the first '12A' film was The Bourne Identity. Much excitement and anticipation surrounded Christopher Nolan’s The Dark Knight based both on the success of the previous film and the recent death of Australian actor Heath Ledger. But though there has been much critical interest in Ledger’s final high profile performance some quarters of the British press focussed on something quite different – the film’s ‘12A’ certificate. The Dark Knight was submitted with a '12A' request which came as no surprise given the likely appeal of the film to younger audiences. It had also recently been awarded a ‘PG-13’, (a near '12A' equivalent), by the American ratings organisation, the MPAA. 66
  9. 9. Several factors were noted which supported a ‘12A’ certificate. These included the film’s comic book style, the appeal of the work to 12 –15 year olds, the clear fantasy context and the lack of strong detail, blood or gore. The BBFC was also careful to ensure that additional advice was available to parents and other moviegoers through the bbfc.co.uk website including extended information about the film detailing how and why it was classified ‘12A’ and urging parents to think carefully before taking youngsters to see it. Films classified '12A' are, broadly speaking, the most complained about decisions. As is often the case such complaints about The Dark Knight focussed largely on the possibility of very young children seeing the film – although many correspondents also cited what they believed to be brutal, sadistic and strong violence. Several noted in particular the focus on knife threat and violence perpetuated by the Joker character. Some complaints also linked the content of the film to concerns about knife crime. Everyone who contacts the BBFC gets a personal reply. But it is important to set the complaints in the context of the number of people who saw the film. In the case of The Dark Knight the 200 plus complaints are a tiny proportion of the five million people plus who saw it in the first two weeks after it opened. The introduction of the 12A classification demonstrates that the BBFC have become more careful with children's viewing, but the introduction of the R18 legalises forms of pornography that were previously banned completely. 67
  10. 10. Marketing a Film Making an audience aware - The Unique Selling Point As with any product, the potential buyer (the audience) needs to know that a film is available and is coming to their local cinema. Not only do they have to know about the film, they also have to be persuaded to want to go and see it. In starting to plan a marketing campaign for a film, the distribution company has to decide how it will present the film to the potential audience -they will look for the 'unique selling point' (USP). If, for example, a distributor is handling a science fiction film, they will need to look for the aspect of the film which sets it aside from other science fiction films. Normally, in deciding what the USP of a film is, the distributor will first of all look at the storyline to see how this differs from other films and what the key elements of the story are. This is vitally important as the key storyline elements will influence the way that the visual campaign - posters, trailers etc. - is put together. After this they will look at such things as stars, special effects and director to see how these can be incorporated within the campaign. Once the USP of the film has been decided on, the distributor will begin to develop the marketing campaign and set their overall budget. The budget spent on distributing a film is known as the Print and Advertising (P & A) budget. The P & A comprises the cost of prints, advertising, publicity and promotions and is set at around 40% of the estimated box-office income. The P & A budget is set by assessing the potential box-office income of the film. The distributor will take into account the last picture the star of the film has appeared in, which gives them an idea of the popularity of the star. For example, in setting the P & A budget for a film starring George Clooney, the box office of his last film will be used as a guide for the estimated box office of his next film. Films which do not feature well-known stars could have greatly reduced box-office takings and therefore a smaller amount will be estimated in the P & A budget. However, some films defy this logic. Trainspotting (1996) was a case in point. It did not feature any stars and yet the film managed to capture the public's imagination. The marketing campaign, combined with the simultaneous release of the soundtrack and book, meant that the film became a major box-office success attracting a wide audience in both the UK and the US. Even though a film may have big stars with vast amounts of money spent on marketing it, there is no guarantee that the film will recoup the money invested. As William Goldman, 68
  11. 11. author of 'Adventures in the Screen Trade' said "in the film industry nobody knows anything." In the end, it is up to the audience to decide whether a film is a success or not. Very few films make a profit at the box office; this does not mean that they make a loss, but that they make their money in pre-sales deals with television and DVD companies. A marketing campaign is divided into three areas: 1. Advertising 2. Publicity 3. Promotions The marketing campaign is also divided into above-the-line and below-the-line costs. Above-the-line costs Here, the above-the-line costs are for advertising. This is where the distributor pays a certain amount of money to buy advertising space. They pay for a slot on television or radio, or buy advertising space in newspapers or magazines, and know what they are getting for their money. They know the size of the advert, when and where it will be placed and roughly how many people are expected to see it. Below-the-line costs Publicity and promotions are below-the-line costs. Publicity is where money is spent on bringing stars in from the United States for example. By doing so the distributor hopes to get good coverage in the media, but it's not guaranteed. It's all about taking a risk and hoping the gamble pays off. Promotions are set up with another company (e.g. a tie in with McDonald's) to promote the film to a wider audience. The trailer The trailer often plays in the cinema around six weeks before the release of a film and continues to play until the picture opens in the cinema. The trailer aims to raise audience awareness of a film by logging the film title in their minds. It gives an overall impression of the film to its potential audience, making sure that the audience is aware of the stars — particularly where their names will help to sell the picture. It should create the desire to see the film when it finally opens. Trailers tend to use a combination of footage from the film, graphics and voice-over to generate curiosity. 'Teaser' trailers might also be used to whet the appetite of the audience in the same way as a 'teaser' poster. Lasting approximately 30 seconds, these are shorter than the main trailer and play in the cinema for anything up to six months before a film opens. However, it is important to understand that cinema advertising will only reach a cinema-going audience. It is always important to make as many people as possible aware that a film is coming and so other audiences must also be reached. Media advertising The distributor will want to buy advertising space in as many different media as is appropriate both for the film and its P & A budget. The media normally available are newspapers, magazines, television and radio. Internet websites are also set up to announce the arrival of a film. The form of the advertising in each medium must tie in with the overall campaign. Thus, newspaper advertising will be based on the campaign poster, whilst 69
  12. 12. television advertising will have elements of the cinema trailer in it. What is vital is that the right media outlet is chosen for the film. Research will already have shown who the target audience for a film is. It is up to the distributor to decide which would be the best newspapers, magazines, slots on television and radio to select in order to reach that audience. Extensive use is made of radio advertising on regional commercial radio stations. Radio is a powerful medium, and reinforces the message of the poster and trailer, particularly if the film has a strong soundtrack. Radio advertising is considerably cheaper than television, and is usually used for mainstream films. Radio stations which target a particular audience, such as a jazz station or a classical station, might be appropriate for the advertising of specialist films. Adverts themselves consist of music from the film and narrative voice-over detailing the cinema and release date. Preview screenings The general public are invited to a preview screening of the film in the hope that they will enjoy it, and more importantly, that they will recommend it to friends. Following a preview screening a questionnaire like the one opposite is handed out which the audience is expected to complete in return for their free ticket to see the film. These preview screenings, sometimes also called 'talker screenings', start the process of word of mouth publicity, with audience members telling their friends and contacts about the film. The completed questionnaire also provides the distributor with information about the audience's enjoyment of the film, which will affect the way the film is sold to the public. Publicity Publicity involves gaining attention for the film in the media - newspapers, magazines, television and radio - without paying for the space. Some distributors employ independent companies who specialise in this area, known as PR companies, short for Public Relations. Working in this area involves dealing with national and regional journalists, keeping them informed about the film using the publicity tools outlined in the following pages. Although the distributor will have to spend money on publicity, the amount of coverage that could be gained will probably far outweigh in value the amount of money spent. Using Film Festivals PR strategies will vary hugely between different films - the most important thing is to make sure that the strategy is appropriate for each particular film. Film festivals can be a very effective way of raising awareness of a film, but they must be used carefully - for example, there’s rarely any logic in showcasing a film at the Toronto Film Festival if you do not already have a US distribution deal in place because the PR impact achieved at Toronto throughout North America will have been dissipated by the time the film is eventually released some months later. 70
  13. 13. Obviously, there are exceptions that prove the rule, films that have created a feeding frenzy at Sundance or Toronto that are then nurtured and fully exploited by the winning distributor. Cannes remains the most important international event, particularly for independent films, although Venice and Berlin can be better platforms on occasion. Cannes is the most difficult marketplace in which to create any noise because there are so many other films jostling for press attention at the same time. At any festival, a priority is to give the press as many chances as possible to see the film in order to stoke their interest and open up other opportunities for interviews. It can often be advantageous to pre-screen films (on an embargoed basis) prior to their Festival screenings to build up awareness and get the media schedules partially filled up in advance of the Festival. If there are stars attending the festival in support of the film, then clearly it is important that the press are given access to them - but bear in mind that, in Cannes, there may be 5000 accredited media either chasing or needing persuading to conduct an interview. Somehow their needs have to be satisfied within 10, 20 or, if you are lucky, 30 working hours from each of a small number of stars, each of whom may be spending fewer than 3 days at the Festival. PR Agencies spend a lot of time nurturing their relationships with the key media representatives, so that they can increase the chances of winning their attention when it is being stretched across so many competing priorities. PR Budgets Very often, PR is over-looked when producers are putting budgets together and, even if there is an allowance made for this expense, it is usually too small. A typical budget for unit publicity might be around £10 - £15,000 on a £3-5 million film. There also need to be allowances for photography, Electronic press kits (EPKs) and media visits. The Press Kit Press kits are sent to journalists all over the country to give them information about forthcoming films. They are one of the basic tools of any publicity department. Kits include a set of authorised stills to be printed in newspapers and magazines, cast and crew credits, production notes, biographies and filmographies of the stars, director and producer. EPKs are also available to journalists working in television and contain many of the same items as the written kits but with the addition of selected video clips and interviews for television. Audio clips are also made available for radio. Star Tours & Press Junkets Touring a star of a film is a costly business, but one that usually pays dividends. Stars are brought into the country at the distributor's expense, which means paying for flights, travel (usually a chauffeur driven car), hotels, meals, a daily spending allowance and entertainment. The distributor plans the tours down to the last hour, making good use of their stars' time and carefully scheduling interviews to make sure that a spread of media are covered, and that publications or television programmes with similar audiences do not clash. Newspapers with a similar readership, and television programmes will want exclusivity of a star. For radio broadcasts, tapes of interviews are usually syndicated: for maximum publicity one radio interview is recorded with a star or director and then sent to local radio stations on a 71
  14. 14. tape ready for immediate broadcast. As with the press and with television, interviews of this kind provide good material for a radio show as well as 'free' publicity for the film. Where stars are unable to travel, perhaps because of other filming commitments, a press junket will be arranged. Selected journalists are taken, at the distributor's expense, to a location convenient to the star for a round-the-table interview with them. The Press Screening Before a film is released, the press who are reviewing the film will be invited to a special screening which will encourage the spread of word of mouth recommendations among the media. Gala premieres For high profile films, the release might be preceded by a Royal or Charity Film Premiere. These premieres are prestigious evenings where the stars, cast, crew and celebrity guests are invited to a special screening of the film a few days in advance of its release. The media are also invited to secure coverage of the event and increase public awareness of the film. The benefit of a film premiere for the distributor is that this will usually gain a great deal of media attention. It is very expensive to organise a premiere and it is only films with larger marketing budgets that can afford to do this. A large cinema is hired and a post- screening party is organised. We are all familiar with pictures in the newspaper or shots on television of stars arriving at these events, usually in formal evening wear. The guests arrive at the cinema in chauffeur driven cars, and members of the public often turn out to see the arrival of these celebrities, all helping to make the premiere a "special occasion". These events are not easily accessible to the public: tickets are extremely difficult to obtain, with those that are sold raising money for a selected charity. The publicity gained for the film, including newspaper editorials and news items is better than any advertising. 72
  15. 15. Screening programmes To build on awareness for a film, screenings are organised prior to the release of the film in conjunction with a media outlet which will appeal to the target audience. An example of this would be the screening programmes organised through T4. These are free screenings with tickets obtained by calling a hotline number advertised on the television screen. Merchandise and Promotion Campaigns Ever since the promotional campaign surrounding the release of Star Wars in 1977, movie merchandise has become an important part of film marketing. The merchandising deals that can be made from a potential 'blockbuster' are very lucrative, and in some cases can even necessitate the setting up of a department which deals solely with merchandising produced for the company's films. Merchandising has become a sophisticated, well-oiled department – toys, clothes and gimmicks such as pencil cases and lunch boxes are now commonplace. Promotions give added awareness to a film and help reinforce its title. They tend to take the form of joint involvement with another party, known as the third party, who will gain from their involvement with the film, for example, a tie in with Pizza Hut or McDonald's. The Biggest Seller? Call it Word of mouth, call it buzz, call it chatter… Research has proved that the key factor which will get audiences in to see a film is something which cannot be bought - the personal recommendation of a friend or acquaintance who has seen the film. It is word of mouth that really gets audiences into cinemas. This explains why the opening weekend of a film's release is so important. Whatever the advertising spend or however good the publicity - it is the audience's verdict which will make or break a film. Release patterns An important decision for the distributor is how many screens to open the movie on. This depends largely on the results expected for the film but may also be influenced by the wish to attract as big an audience in the first week as possible to help the film retain its screens for subsequent weeks. (Conversely, a higher screen average from fewer screens can also help to persuade exhibitors to keep a film in play even if its overall Box Office is not as high as some competitors). The different types of release that might be considered are: Approx. number of screens in the UK Platform: 15 Limited: 150 Wide: 300 Saturation: 600+ There are basically three types of release in the UK: Saturation A film that literally saturates the country in terms of number of prints and national publicity, i.e. The Lord Of The Rings (2004), the Harry Potter series (2008), Spiderman sequels (2007). 73
  16. 16. These are usually films backed by the major Hollywood studios and will have had an extremely large publicity and production budget behind them. There will also be advertising tie-ins to high street companies and merchandising spin-offs such as computer games, books, magazines and a TV Making of ... documentary. The films will also have almost as much publicity when they are released, only a few months later, on DVD and video. In terms of screenings, films like Iron Man will be shown up to 12-15 times a day at most multiplexes even three or four weeks after their release. Posters will be on key billboard and bus shelters sites, and recognisable images will usually feature on magazine covers with saturation coverage inside. In Empire for example, each month the cover and dozens of inside pages are given over to one new blockbuster film in terms of articles, reviews, interviews and adverts. In Empire's July 1999 issue, over 50 per cent of the pages in the magazine featured articles, adverts and interviews about Star Wars Episode III, The Phantom Menace (1999), and 34 pages in the June 2003 issue are dedicated to the The Matrix Reloaded. The July 2003 issue saw The Hulk (2003) dominating and the final film in The Lord of the Rings trilogy had blanket coverage in the January 2004 issue. This massive coverage is something that seems to be unstoppable and is worth considering when American film industry executives such as Motion Picture Association of America (MPAA) head honcho Jack Valenti talk about `healthy competition' in Europe. There is no serious competition — Hollywood majors, unsurprisingly, sweep all aside. The number of prints for a saturation release can range from 600-800 and will screen at all the major cinema chains (i.e. Odeon, UCI, UGC, Warner's), as well as high street commercial independents such as City Screen sites, opening across the country on the same day. It is now usual for the biggest films to have 1 or 2 days of 'preview screenings' before the Friday opening. Wide release This is still a large release, but not on the same scale as the blockbusters. There will usually be around 300 prints. These titles are also known as 'crossover' films, as they may also screen at subsidised independent cinemas as well as multiplexes. The film may open in London, gradually spreading across the country over the next few weeks. Recent examples of a wide release title would be Girl with a Pearl Earring (2003) or The Duchess (2008) Limited release This is a small scale release, around 10-20 prints. Titles are usually known as 'art house' or 74
  17. 17. 'specialised' films and will play in the Regional Film Theatres (RFTs), the National Film Theatre in London and some City Screen sites. Films will tend to be foreign language titles, re-released classics, small independent English language titles. Some films on a Platform release may have as little as 4 or 5 prints, and if it's a film touring as part of a festival (i.e. The London Film Festival on Tour), only one print may be available. Recent example of limited release title - In This World (2002) Costs Cinemas will pay distributors a percentage of net box office, which is usually between 35-60 % but may be higher for some multiplex chains for franchises such as James Bond, Harry Potter, The Lord of the Rings, etc. In the case of smaller cinemas that may get the film on a second run or may screen a classic repertory title, the rental fee may be around 25-30 %. Universal Pictures International claimed the crown as the UK's No. 1 distributor in 2008 on the back of a slew of hits, the biggest of them Mamma Mia! which secured a whopping £67.9 million alone. UPI, Universal's overseas distribution arm, took £176.6 million for the year, an 18.5% market share. Sony’s best box office showing was Quantum of Solace which bonded with audiences to the tune of £50.7 million. January 13, 2009 Throughout the marketing campaign the distributor will be concerned about the effectiveness of their pre-release film advertising and publicity. Private companies are employed to conduct the audience research which can take a number of forms: Audience tracking At regular intervals leading up to the release of a film and during its first weeks of play, a random selection of the public will be interviewed over the phone or on the street by a research company. This is known as tracking. People are asked whether they have heard of the film, whether they intend to see it or, if they have seen it, whether they enjoyed it. This type of information can then be used by the distributors to assess the effectiveness of their marketing campaign. If there are any serious problems, for example, the audience does not know that the film is coming, then they can change the emphasis of the campaign. After the Cinema Release…DVD Distribution Deals Film distributors take an average of 75% of consumer spend from retail DVD activity compared to about 25 - 33% from rental activity (hence their keenness to get titles into the sell-through market as quickly as possible). A billion DVDs have been sold in the U.K. since the format launched less than a decade ago, according to the British Video Association. The bestselling DVD ever in the U.K. is Lord of the Rings: Fellowship of the Ring, which has sold almost five million units. The two sequels -- The Two Towers and Return of the King -- have also proved home hits, coming in second and fourth respectively in the all-time DVD sales chart. The DVD one billion mark was reached seven years quicker than it took the same number of VHS units to fly off shelves. (Variety June 2007) 75
  18. 18. Television Deals Pay per View: the Pay TV service retains about 40 to 50% of the viewer's fee, recoups the distributor's advance and pays any balance to the distributor. The distributor usually retains around 25 to 35% in commission. Subscription TV: The TV operator pays a fixed fee to the distributor (of £50k to £1.2m) which usually depends on the film's performance at the Box Office. The distributor takes between 25 and 35% commission with the balance to the producer / financier / agent. Free TV: the fee paid by the broadcaster usually depends on the film's Box Office performance. The distributor takes percentage fees of between 25 and 50% in the US and 20 - 40% in the Rest of the World, with the balance to the producers. The Film Industry and DVDs In 2002 the worldwide Home Entertainment business, encompassing video and DVD, was worth $46 billion dollars globally (split - video $20 billion; DVD $26 billion), which made it as valuable as the entire music industry. Some $15.9 billion (35%) of this total was accounted for by the international market (including the UK), with the US accounting for the other $30 million. It is expected to grow to $62 billion by 2006, of which video will account for just $6 billion, and DVD $56 billion. The international market is projected to slightly increase its share to around 38% of the total ($23.4 billion). The key international markets Home Entertainment are the UK, Japan, France and Germany which between them account for more than 60% of international revenues and reflects the higher penetration of sales of DVD players in these territories: in the UK in 2003 44% of households have DVD players (or other hardware that can play DVDs) and this is set to rise to 114% by 2006 - ie. an average of more than one player per household. The Home Entertainment business is now worth twice as much to the studios as their cinema business although commercial success at the Box Office is still crucial to making money in DVD sales. The rental proportion of this market in 2002 was around 30% and this is expected to fall to 20% by 2006. The studios are keen to continue to support the rental business because it brings them higher margins than retail, but it does appear now to be in decline. In the UK the market is fragmented, with one major player (Blockbuster) generally dominating the large number of smaller outlets. The rental window is already closing, with DVD releases happening nearer and nearer to the rental release date, and in an increasing number of instances, the studios are going day and date with retail and rental. • The DVD market is expected to continue to achieve dramatic growth over the next few years. Pressure on retail prices, however, will mean that the total value of the business may eventually start to fall even though sales volumes will still be growing. • Windows of exploitation will close over time in an effort to ward off the impact of piracy and to improve cash flows to the studios. • By 2008, every household in the UK will have at least 1 DVD player • Good extra features are becoming increasingly important as a means of selling DVDs and maintaining margins. 76
  19. 19. Issues for DVDs in the early 21st Century Windows of Exploitation - In 2001, the average timetable for roll out of a film from theatrical release to free television was around 30 months. In 2008, this has shrunk to as little as 20 - 24 months. All other revenue opportunities have shrunk: • Video Rental - 2001: 6 months 2008: 4 months • Video Retail - 2001: 12 months 2008: 4-8 months • Pay per View - 2001: 18 months 2008: 7-12 months • Pay TV - 2001: 24 months 2008: 10-18 months • This change in pattern is partly to combat the effects of piracy which is proving to be a huge problem in certain territories, but also to boost the studios' cash flow by reducing the amount of time it takes for them to see revenues from further along the value chain. ‘Fast Burn’ Sales - 50% of new DVD sales are generated in the first month of release. Getting the in-store point of sale materials and displays right is crucial to the studios if they want to maximise sales of their top titles. Release Days - Traditionally new videos and DVDs have been released on a Monday. Distributors are now looking to move key releases to a Thursday or Friday to make best use of their major marketing campaigns immediately before the heaviest buying days (50% of DVD sales take place on Friday and Saturday). Pricing - DVD retail prices are falling much faster than was the case with CDs. In the UK, CD prices fell 13% in the first 6 years after their introduction; DVD prices have fallen by 19% in just three years. This is the result of some aggressive market by the majors who have priced very aggressively to boost sales and consumer behaviour: research suggests that a 40% drop in retail price can lead to a 3,4 or 5 times lift in unit sales. To maintain their profits, the studios will have to reduce their costs of sales by reducing the additional cost of marketing DVDs by reducing the gap between cinema and DVD release - or develop more premium priced products by improving the extras supplied on the disc. DVD Extras - Extra features on DVDs are becoming increasingly important to differentiate products in the market and to generate premium pricing. Reviews of DVDs often focus on the extras and consumers are increasingly expecting them - research has shown that the presence of good quality extras increases the consumer's intention to buy the disc. To ensure top quality extras, it is essential to plan their content at the film's pre-production stage and get endorsement for them from the producer and director of the film. Additional footage might need to be shot on set or produced during post-production. Finished bonus material needs to be delivered before the film's theatrical release so that it can be factored into the DVD's release schedule. Piracy - The MPAA estimates that piracy is currently running at 20% of the total DVD market and is likely to get worse with the increased domestic take up of broadband. The studios are considering technical solutions to help combat this problem but their main weapon may be closing exploitation windows to reduce the time available for pirated copies to circulate. 77
  20. 20. Marketing - Mobile Phone Campaigns - There are 290 million mobile phone users in Europe - 100 million of whom are under 25. This makes text-based campaigns ideal for movies that are aimed at the younger market. Online Campaigns - People spend approximately twice as much time online each day as they do reading a newspaper. £7 billion of transactions are carried out on the internet each year (excluding pornography) and DVDs are the most popular item purchased online. Many DVD buyers do their research online even if they buy through traditional outlets. And in the future… Digital Delivery There is little doubt that at some point in the future, all films will be distributed and screened digitally. The big question is when this revolution will take place. The digital roll-out will involve a huge capital investment and, although the benefits will be enjoyed by both exhibitors and distributors, it is not yet clear who will pay for the necessary investment. There are also still issues to be resolved over security - with piracy an increasing problem, the transmission mechanism for the digital output will need to be 100% secure. The different methods of transmission available - satellite, cable and data file - will have to be assessed against this criterion but also for their ease of delivery and relative costs. Day and Date Distribution With the various exploitation windows closing, there is an increasing trend towards films being released internationally on the same day as (or close to) their North American release. This has the advantages of reducing the opportunities for piracy; enabling marketing campaigns from the US to roll over into other territories; and allowing earlier exploitation of other windows. On the other hand, day and date releasing requires more prints and means that marketing spend must be committed internationally before the studio knows how the film has played in the US. It also reduces the time that the distributors have for sorting out dubbing, classification and other issues in each territory and makes it less likely that the talent will be available to promote it in as many markets. In practice, decisions on release pattern will continue to be taken on a film by film basis, with release dates generally moving closer to the initial US release. 78
  21. 21. Case Study – The Marketing of Cloverfield (2008) Constructed specifically as a 'monster movie for the YouTube generation’, Cloverfield built a viral marketing campaign - and its own audience - through an enigmatic teaser-trailer, word of mouth and a widget. Its innovative uses of an alternative reality games and videocam techniques involve audiences in new and interactive ways. With a very low production budget in Hollywood terms (£15m), Cloverfield became an instant financial success making £22 million in its opening weekend. It is a recent example of the power of viral marketing (sometimes called user- generated marketing) to create audience interest before a film's release and, most importantly, to get people into the cinema. Whether or not Cloverfield is a good film is up to you to decide (critics are divided); but it stands as a great example of the way modern marketers are using a range of methods to attempt to reach their audience and sell a film. The film's media language choice of an 'eye-witness' presentation of the story using a hand- held camera acts as a representation of our current technological age. Cloverfield's marketing also makes use of recent developments in technology and changes in audience activity and behaviour to create and sustain interest. The director (Matt Reeves) called the film 'a monster movie for the YouTube generation' indicating that the producers of this film were specifically aware that their target audience were Internet-literate young people. It is these people who have been the targets for the marketing campaign and have also been encouraged to be a part of it. The first glimpse – Teaser Trailer The first anyone knew of the film was a teaser trailer shown before the 2007 summer blockbuster Transformers. The trailer did not name the film and only gave a release date after showing glimpses of an apparently home-made video of New York being attacked by something, culminating in the shocking image of the head of the Statue of Liberty crashing through a New York street. By creating memorable images and using an unconventional method to present the events, the filmmakers were using a tried-and tested marketing device, the creation of enigma mystery. Creating audience curiosity is a great way to generate interest in a product. Those who saw the trailer would have been left wondering what they had just seen: What genre was the film alluding to (Sci-Fi/Disaster/Monster)? Why was the footage they had been shown more like their own home-movies rather than a slick Hollywood production? 79
  22. 22. Target audience The trailer's placement gives an indication of the target audience, one which is a difficult market for advertisers at the moment: teens and, more specifically, young adults. These groups are becoming hard to reach for advertisers who rely on conventional methods. Young adults tend not to watch TV on a predictable, regular basis and often have access to multi-channel cable television which fragments the audience across a range of channels. Devices like Sky+ mean they can record television programmes, watch them when they choose and fast-forward through any advertising. Alternative methods of viewing television programmes also make this audience hard to find. 'On demand'. downloads and YouTube split the audience further and this is the generation that is likely to wait to buy television programmes and films on DVD rather than watch them in traditional settings surrounded by advertising. Alternative advertising methods were needed if Cloverfield was going to be able to attract the attention of the group of people who could be used to help make the film a success in the cinema. A specialised online and computer savvy audience was specifically targeted as their interaction with the marketing was vital in the film generating interest from another valuable audience group, the mainstream movie-goer. The story of Cloverfield's marketing shows how the online audience was used to create a buzz about the film to support a more traditional marketing campaign. Building the campaign The teaser trailer provided one piece of important information, the name of the producer JJ Abrams. This would have created a number of genre expectations. Abrams is the creator of Alias and Lost and so the audience could expect an element of Sci-Fi/Horror within this film and might anticipate a narrative that was complex, fragmented and laden with 'clues' rather than explanations. Web searches after the teaser trailer led the audience to a website named only as the date of the film's release (www.1-08-08.com). This site slowly released photos which were time and date stamped to allow the audience to build up chronological glimpses into the narrative of the film. 80
  23. 23. Building ‘buzz’ and ‘chatter’ on the Net The enigma and the slow release of information were both constructed to encourage discussion online in blogs, social networks and chat rooms, which was how the real marketing took place via 'word of mouth. Web-chatter was heightened on the release of a poster showing a decapitated Statue of Liberty, a devastated New York and the release of a second, more detailed trailer. Still maintaining the mystery, the trailer's exposition contained a chilling geographical marker identifying the location of events to be in the 'area formally known as Central Park'. For the first time the film's title was identified and the trailer was released online along with an official movie website (www.cloverfieldmovie.com) which eventually provided links to MySpace and Facebook pages 'created' by some of the characters from the film. These regularly updated pages created a real-time story which showed the characters moving towards the eventful night and provided a back-story to the film itself. The MySpace blog was where the film's protagonist announced he was moving to Japan to take a new job at Slusho!, a Japanese soft drinks company, which explains why the film begins with a going away party. In addition a widget was available for download from the website. This piece of software could be attached to MySpace pages, blogs etc. and contained the first five minutes of the film with an introduction by JJ Abrams. To download and use the widget people needed to register their contact details. This registration immediately entered people into a competition based on who managed to distribute the widget to the most people; a direct encouragement of more 'word of mouth' marketing. They did the traditional stuff too… Adverts were also sent to mobile phones, traditional posters and TV slots were also used and the culmination of all these events was an increasing public and mainstream press awareness of the film. The campaign was creating a deep curiosity as so much information had been held back and the only way for the audience to gain answers to the questions the marketing 81
  24. 24. raised was to go to the cinema to see the film. As the character Hud said in the second trailer, with this much interest it was almost inevitable that people are gonna want to know how it all went down. But that's not all... Parallel to this campaign, a related story was being told through an ARG. The ARG centred around a fictional Japanese company called Tagruato and its subsidiary Slusho! and only a few direct connections were made to the Cloverfield plot. Home pages for Slusho! and Tagruato were put online. The former ran a competition for audience members to create adverts for the frozen soft drink whose USP was its addictive nature ('You can't drink just six') and the happiness it would bring its consumer. (Remember, Slusho! was the company the character Rob from the film was taking a job with.) http://www.slusho.jp/ Vocab - ARG — alternative reality game A set of interlinked sources, mostly websites, along with voicemails, scavenger hunts and even novels, which shed light on a hidden story. ARGs challenge players to make connections and solve puzzles to piece together a 'distributed narrative' Tagruato's corporate homepage looks like a conventional business website — even down to experiencing hacks by 'eco-terrorists' It appeared that Slusho's key ingredient, 'seabed nectar', might not be entirely safe. The site reported that a drilling rig in the Atlantic Ocean had been mysteriously destroyed.'TV reports' based on mobile phone footage showed huge chunks of debris being hurled from the sinking rig although there was no explanation for this phenomenon. Pictures from the scene were added to www.1-01-08.com. There's more... A Manhattan couple Jamie and Teddy set up a website to post video-blogs to stay in touch after Teddy had gone to Japan to work for Tagruato. Jamie assumed she had been dumped as she hadn't heard from Teddy for over a month when she received a package containing a Tagurato baseball cap, something wrapped in tin- foil (which she was instructed not to eat) and a 82
  25. 25. recorded message indicating Teddy was in some sort of trouble. Interpreting this as a sick practical joke, she assumed he had a new skanky girlfriend and decided to eat the gooey product she received. Almost immediately she appears to become extremely intoxicated. Jamie makes a brief appearance in Cloverfield where the audience can glimpse her passed out on the sofa at Rob's leaving do in the opening scene of the film. Marketing + movie = more mystery The addition of a number of back stories to the Cloverfield tale, without giving clear ideas of 'cause and effect' encourages the audience to attempt to build a story for themselves; first of all to attempt to make sense of the promotional material and, after watching the film, to supplement the limited information provided by the film's highly restricted narration. The marketing has created a 'Cloverfield universe' bigger than the events of the 90-minute film, but has held back on providing enough information to give resolution to all the mysteries. The film's story is told from the point of view of people who (just like the target audience) have very little information as to what is occurring around them; the characters just catch snippets of information in news reports and in conversations with the military (just like the audience). The viral marketing, the ARG and then the video-cam style presentation all enhance audience identification with the characters and this heightens the shocking nature of the events we witness with them in the film. The desire to make sense of the events unfolding within the film has been played on for both the interactive and mainstream audience but the filmmakers are still holding back vital pieces of information: What does Slusho! have to do with all of this? Where did the monster come from? Do the military manage to destroy the monster? Do any of the characters from the film survive? Cloverfield 2? Could the actual film Cloverfield be just another element in a complex marketing campaign? Is the film an expensive advert for yet another product still to be made? There are online rumours already about a Cloverfield 2 with theories ranging from the sequel being told from another victim's perspective (plenty of people can be seen filming events in the film) or from a military or reporter's point of view. Maybe Cloverfield 2 will be a standard blockbuster movie with omniscient narration and a solid resolution. At this point the 'truth' is irrelevant. What is important is that people are talking about a potential second film and so the viral campaign has already begun. 83
  26. 26. Film and the Audience of Tomorrow Danah Boyd Cannes Film Festival Opening Speech - May 16th 2007 Introduction Film has gone digital. The digitization of film takes place at multiple levels, but most noticeably: production, distribution and consumption. 1. Production: What cameras you use, how you do lighting, special effects, storage of content, editing of content, etc. 2. Distribution: Advertising your film, DVD culture, download culture. 3. Consumption: remix, sharing, clipping culture. At each of these three levels, there are stages to how technology affects practice. The first stage is TRANSLATION. Old practices are kept intact and imported into the new medium. Many of you are familiar with this - your cameras went digital but they still looked and acted like cameras... for the most part. The second stage is LOCALIZATION. People realize that there are much more effective and efficient ways of utilizing the technology to reach a desired end goal. Practices are modified to take advantage of the technology, usually to make things more efficient. At the same time, these practices feel quite similar to the translated ones. Tickets for films can be bought online and printed. People can sign up to be notified by email when a film is released. The third stage is CO-OPTION. This is the stage when new practices emerge that are completely incomprehensible to those who were fluent in the previous culture of film. You can see this in visual effects where things like CGI were impossible without digitization, but more radical practices have to do with how viewers consume, share, and mess with film. Think REMIX. It is easy to be terrified of co-option because much of what emerges seems to go against what was typical before. Conclusions – the future of Digital Rights Management (DRM) Film is not disappearing, but the Internet is here to stay. It's easy to play ostrich and pretend nothing is changing, but the fact is that the Internet is changing many things including the film audience. When we talk about how how audiences have changed these are four key areas that help define them: 1. They are Persistent. 2. They expect searchability 3. They expect replicability 4. They are invisible Film can always be turned into video, regardless of what DRM you choose to use. Sure, DRM makes it harder, but when there's a will, there's always a way and you lose your viewers trust in the process if you choose to make their lives more difficult. As we saw a few weeks ago with the HD-DVD hack, once information is out there, there's no bringing it back. 84
  27. 27. Once it's digital, it can be copied and reformatted to make searching difficult. It's much faster to copy than it is to clean up copies, for better and for worse. DRM will never protect film but it will alienate consumers. DRM does slow the flow of content, which can benefit big blockbusters but makes independent film even more obscure. For example, there's no point in crippling a trailer with flash DRM. Trailers are advertisements. Put it up on YouTube, Revver, MySpace, everywhere you can think of... provide the code for people to copy/paste your trailer into their blogs and MySpaces. If people like it and want to pass it on, encourage them! Copy/paste! The more people who hear about your film, the better. I bring up DRM because as we think of the audiences of tomorrow, we need to think of ways to engage them, not alienate and control them. There's a lot of creativity in this room. Why put it into trying to maintain status quo rather than taking things to the next level? By and large, we treat the Internet as another broadcast medium where you push content at people. In other words, we're still aiming to localize rather than to co-opt. A better way of conceiving it is as a public space where people want to pull content in to personalize it, identify with it, and share it. It is no secret that we're not yet sure how to monetize this practice, but efforts to stop it are like trying to build gigantic walls after planes were invented. The audience of tomorrow is online. They're consuming video; they want to be consuming film. There's unbelievable room for innovation and creativity in this space. The technology is not stable and it never will be stable. Successful filmmakers will need to pay attention to the dynamics and optimize their strategies accordingly. We all know that agility in the presence of challenges results in good art. So, in conclusion, here are four things to remember: • Youth are online to hang out with friends... they use media to jockey for status and socialize with their peers. • Youth do not and will not consume media whole in a passive way.. the more they are able, the deeper they were engage. This means remix, chopping it and sharing it. • Building walls to stop deep engagement scares off fans and never actually closes the loophole. • It is time for the film industry to innovate rather than trying to control. Many new opportunities lie ahead. 85

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