HD For Indies

DVD vs. Theatrical Panel

As usual, these are my raw notes on the topic, typos and all.

It was interesting that the panel didn't get as into the guts of the topic as much as I would have liked. Of course, I could go all day on this stuff....

Here we go, notes below:


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panellists:

Kwiatkowski - distro guy came to DVD distro

Tim League (Drafthouse founder - woo hoo!) -

Blackwell - ??

John Sloss from Sloss law office in NYC, does consulting as well as law

Scott Weinberg - efilmcritic.com

!! Besner - VP original programming for netflix

!! Ted Mundorff - Landmark Theaters

Q: Tim & Ted - model for traditional filmmaker for theatrical distro

A: Tim - not the typical model - two models - traditional stuff for first run screens, he's a independent booker - hs a tiny bit of buying clout - on another level, constantly looking for small films to bring in and promote themselves to exhibit at their theaters - 75% new titiles, 25% oddball anything goes titles

Landmark Mundorff - more traditional market - some commercial studio stuff and speciality films, dominant exhibitor for indie type stuff - larger complexes like in Atlanta for traditional fare. have a healthy midnight movie setup too. Has worked in traditional exhibition world. How's that changing? Commerical exhibitors are trying to play more and more specialty stuff like landmark.

Porter - lot of press about changes, comparisons to music industry, as in MP3s, hope that studios will be smarter and be able to capitalize on this

Q: What do you see as the driving forces of change? What are the opportunities?

A: Kwiatkowski - non-traditional exhibition stuff, they show unsigned stuff in small venues across the coountry and worldwide, "microcinemas" in warehouses and stuff - a testbed for artists and a way to show to folks. Another way to reduce barriers to industry. VOD and iPods etc. will increase filmmaker opportunities. Don't know where will fall out

Q: Tim asks about broken for indies or big stuff? On a big level, Tim doesn't perceive a serious problem with big budget distro. Still a profitable year for most exhibitors as compared to a few years ago, on a smaller level, clearly a very small # of theaters (very indie operators who can make a decision whether a movie gets shown or not) - getting a movie into a bigger chain is virtually impossible for an indie filmmaker

Sloss would say that until recently wouldn't be broken. The indies we're talking about, the number of folks who consume these films, has been strong. At Sundance, this gave him pause - the advent of a hit driven mentality for specialty distributors. The "specialized blockbusters" is what the specialty studio distros want - makes 8-10 million. They don't want to make those any more. Makes

Putting 600+ films a year through landmark. Top 15 indie films provided by speciality major distro companies get shown in Regal.

Tim says - Regal Arbor plays as much indie fare as Dobie does - it is a 7/8 plex as opposed to Dobie's 4.

Tim tries to bring in art house projects but can't, there's an alliance with distros and Regal with the Arbor, or with landmark as a chain, are not willing to run with a true indie

Landmark guy says Dobie is not represntative

Tim says he shows Academy Award short for last 7 years, Apollo used to distro, can't be shown since magnolia and Landmark vertical alignment.

Mundorff disputes, says that Apollo still exists (which isn't a direct answer)

Indie blockbusters - talking about Sundance - films that were breakouts in 90s would have a hard time getting out. As it gets easier to make movies, it's harder for indies and foreign language films to compete. how many of the changes are driven by that hole in the market and the desire to find smaller films to promote

Self funded filmmakers are being successful using DVD distro - a few titles have sold over 50K copies (Kwiatkowski)

indies are tied up with wanting theatrical distribution, and is considered (Sloss saying this) - public exhibition mutating? The eyeballs are as healthy as ever - the middlemen are in flux, but outlets like alamo and Kwiatkowsi are valid, the specialty distros keep swinging for the fences rather than singles and doubles.

"Indie blockbusters" - NetFlix decided to move into acquiring original content a year ago - millions of subscribers into docs, foreign, etc. that wasn't served by theatrical distribution. Out of that came the ability for NetFlix to bring stuff to market that didn't get any or limited theatrical distro, and target amonngst their subscribers who might enjoy those films. those models will be essential as fewer films reach the tgheatrical market. As subscriber base grows, that audience will grow and be trained to like indie, docs, foreign, etc., that audience will grow. The collective efforts of people on the panel will be required to get consumers to find the channels to find that kind of product in this blockbuster driven mentality.

Q: If you make an indie film that festivals like it, is it considered a disappointment if it doesn't get theatrical? Is that a dissapointment? If it gets to DVD first? You want your film on big screen, is it bad to debut on DVD?

A: Sloss - most filmmakers would be dissapointed to go straight to DVD. Less dissapointing in the futre according to Besner. Theaters can't be replciated in the home. Audiences are getting accustomed to watching in the home - over time, different films will be percieved differently - blockbuster in the theater, niche stuff at home. Tim says - Theatrical run is a legitimizer for films. At least that's how it is perceived now. SOME hurdles have been overcome. It's an advertising means and word of mouth - they might have heard of it. If they haven't heard of it, "maybe it isn't so hot." Theatrical is still a legitimizer for indies. Kwiatkowski says they go the other way - poopular DVDs get LIMITED theatrical screenings at museums and campuses and stuff (obvioulsy a limited thing). Screening DVDs (but still DVD quality, not better!)

Blackwell - he's more music based, 8 years in film - what's happening now between music and film - they are coming much closer - when releasing a record, the artist wants to be able to go on tour - certain similarities - director wants theatrical release. It's costly to go on tour - depends on the demand as to whether they can support a tour. Start in small clubs and build up from there. There's similarities about film biz now. The expense of releasing a movie theatrically on a large # of screens is huge cost - it's part of the advertising process. I'm very keen on DVD, I'm keen on the release windows. In many but not all situations, day and date makes sense because the most costly thing is getting the product in front of the audience. In the film biz, traditionally you ramp up for theatrical, then 6-8 months later ramp up AGAIN for DVD. In music, ramp up for the project, and that marketing works with the touring, all done at the same time. Different because movies all over and an act one place one time, but from biz point of view, getting product to audience.

Q: Day and date release - what do you think? Based on Bubble's day and date rlease, what do you think? HDNet, Landmark theaters, DVD relase. Some theaters resisting altogether.

A: Landmark guy - trying to find the system that makes sense for today, day and date, two weeks, a month away - don't have an answer for that. it's a grand experimentation phase. Regal decided not to play anything that does day and date with DVD or any kind of broadcast (such as HDNet TV). Either no one in their org looks at it as pro-DVD or against DVD, trying to figure out how economically to get these films out into marketplace "and not have to do it twice" Joe roth said a (founder Revolution pix) few weeks ago - eventually things will setttle down to about 30 days - opens and 30 days later the DVD release. That way, the marekting and advertising becomes all one. Let's be clear why theaters are against - they are against it because fear of losing money. the jury is out.

Slosss - leaving about the epic scale of seeing movies in theaters - some folks will want to see some films in public - Sloss feels look at what happened to music industry - Napster and illegal downloading - not driven by greed, driven by a will towards convenience - getting something when you want it. The ability to download movies as fast as music, a will for convenience. The tech will blow through the artificial boundaries of the window, whether legally or illegally people want what they want when they want it. "Day and date is inexorable."

Show of hands on King Kong in theater if knew could get DVD in a month. Buncha hands. If could buy DVD same day...same amount of hands.

Weignberg - theatrical expeirence as a whole is degrading - people are ruder, cell phones are encroaching, prices are too high, moviegoers are getting tired of being treated that way. If they know it's out in 3 months, esp. if isn't King Kong you want to see on big screen. Teen can see theatrical PG-13 or wait 2 1/2 months for unrated....doesn't leave an option. is theatrical doomed? Tired of being surrounded by ignorant people.

blackwell - definitely not an end - people like to go see something when it's new and not wait (esp. the teens, gotta be on it)

Trying to keep all these businesses healthy. Like sports - some will go to the arena, some will watch from home. if can find that sweet spot that makes DVD and theatrical going, keep the economy flowing of that, there'll be more outlets for more content. 16 year olds aren't interested in same stuff I am when I vs. they see it, iPod vs theaters. It's very important to create a "want to see" and give the availability to be available and keep it healthy.

blackwell - how many more pictures are being made and can be - digital tech isn't all bad news - can make films much less expensively - like the record biz - 40,000 records made a year even if a huge # shouldn't have been. Be same in the film business - Tim's biz is like a small club - people can see an act ina "small club" and grow from there.

Tim League says - big budget and small budget scenarios - small budget film scenarios haven't changed that much in last 30 years - LA & NYC screenings, if critics like then scale up bit at a time. Brokeback Mountain was allowed time to breathe in a theatrical setting, day and date would have cannibalized to get anywhere near what it did. On those grounds alone, small films are eating away at your own ad campaign, for the end result for incereasing DVD sales, gotta go that way (which way? not clear)

Sloss - JP Morgan released a study - day and date release overall would cut box office up to 50%, would increase the bottom line revenues would more than offset. Study not terribly valid - polled people & asked about higher DVD prices on day and date. Would 40 Year Old Virgin have sold better after $100M budget?

DVDs and movie tix sell based on word of mouth. Can't spend your way into box office success (beyond opening weekend).

Kwiatkowski-theatrical vs. DVD vs iPod vs what kind of DVD. Walmart and Target and Best Buy (Baker & Taylor) who will not buy you indie DVD. If you don't get theatrical screening, be sure your distro isn't being blocked by oone of those big distro units. Some big studios who don't get their products beyond Big Box (Walmart etc.).

AUDIENCE Q&A:

Q: what about interactive movies

Q: what about straight downloads? How long do you think DVD has? How will it affect theatrical? Conviction came out two days BEFORE TV broadcast?

A: conviction came out 2 days early as a gimmick (Sloss) How long will discrete disks as opposed to bits over a wire. We are headed towards a universe to see every movie ever made anytime you want. How long until? Dunno.

Sloss recommends - when licensing the rights to your movie, make sure VOD is included in TV revenue NOT DVD revenue (better money for you)

Sloss sees VOD and download as the same thing - I SEE THAT AS A VERY, VERY DANGEROUS ASSUMPTION. Subscription vs download vs watch once - different needs for different products. I'd buy/download a great movie, VOD a sports event, VOD something I'm so-so on. That's my $0.02.

Talking about how to equip a 20plex with 80-$100K projectors, margins aren't thick enough to support that. Studios are trying to find a way to help pay for since they get most of the savings.

Landmark has at least a 2.0 projector in every market. Problem they'll have is to find product to fill those projectors.

The price will have to drop substantially in order to make it cost effective for theater owners (and they won't buy until next year's price drop isn't too scary to make them wait - that's my thought again)

Q: What about integration if day and date works out? Sell DVDs at theaters or what? How are they differentiating since somebody looks to lose money?

A: some experimentation about DVDs in theaters, minor scale testing. Process of cannibalization - more formats available simultaneously, somebody's gonna loose out it the fear. NetFlix guy says that's why they looked to original stuff - not talking about blockbusters, number of markets for the water cooler chatters to hear about it is minior - by going wide with long tail in nearly real time, that's significant. In new markets and massive indies it'd be a problem.

Tim'll sell DVDs after limited release stuff

Q: somebody looknig at a revenue sharing deal in Dallas - how long to be in theater to make a profit? What to beware?

A: Sloss - the longer a film plays, the more a theater owner keeps - covering the nut of the theater and then having a split - that model has existed and that model is changing, many studios have gone to aggregate charges - all weeks are "taxed" the same amount. (Mundorff) - the film will stay in the theater as long as people come in sufficient numbers. Sloss says- historically, theater owners took a greater take on longer runs. Theaters see little the first week or two on big movies, so longer it stays better for theaters.

Q: With VOD, iPod, downloads, iFilm, etc. - what kinds of budgets mumble mumble...if this is eyeball consumption moving towards cheaper formats (less than theaters), are you violating fiduciary responsibility to investors

A: no - just manage your rights and look to how much money comes to you. DVD sells for $19, wholesales for $11, you get 20% of that, OR go direct to the eyeballs off a cheaper download - gotta chug the numbers. Don't assume you're hosing investors by going that way (to downloads). In a more efficient market, as a producer, it is out of your control.

If you sign a film because you like it, I'll go to Sundance and if doesn't work out, too bad is NOT the way to do it anymore. And these issues are more and more the producer's responsibility.

Q: If can download from the Internet, need to focus on moviegoing experience

A: some theaters might die for those that don't care about the experience (I see it as a technology issue)

Q: What about adapting moviegoing stuff? Sloss asks about beer in theaters -

A: Tim says it is state by state and how you position yourself in the permitting process

Q: Production costs have dropped, but distro costs haven't, there's more stuff trying to get into the existing outlets

A: Netflix guy says that's why they got into orignial content purchasing - isn't an issue of exhibition costs, more about space - there's more good films out there that are produced inexpensively, but is more competitive to find those eyeballs

On DVD side, local DVD stores aren't there, WalMart doesn't carry the cool indie stuff, cost of exhibition will go down over time, one guy says uses a $5000 projector for their microcinema stuff to screen DVDs

Q: Netflix guy - for DVD only stuff, are people watching at home that there's an alternative community to support stuff?

A: YES - within their network have a friends program to recommend titles and talk about 'em and stuff, it's not realtime but it is useful and satisfactory for those obsessed and want to digest and process. It isn't that they are forgoing theatrical, they are supporting them to go theatrical in some cases. Netflix had a DVD release that did well and then got limited theatrical, got DVD rlease within 45 days of theatrical relase. Puffy Chair did a different deal to help'em find their audience to see it theatrically not on DVD, if you live in a zip code close to where it's showing, netflix lets you know on those co-promotion deals (Netflix does the DVD as well).

and that's it. Another panel in an hour, gotta figure out what I'm doing tonight. SXSW has a webcal thing that helps plan, but I've got 4 simultaneous desirable events at all times after about 5pm every day.

Update - ran into Turk Pipkin, another Austinite that made the movie Nobelity that will be showing at the Paramount thursday at 7:30 (only screening) that looks very intersting - interviews with Nobel Prize winners.
-mike