An introduction to the art and business of making feature films...
The Challenges of the Modern Marketplace
We live in a new digital age. An age where media consumption and entertainment are now virtually free. Consumers are spending much more time being entertained by free media shared on social networks, free articles/blogs, free YouTube videos, free viral videos, nearly free feature content on Hulu and Netflix, free music on YouTube, Spotify, and Pandora. And since FREE is now a part of consumers’ daily consumption process, they(we) have become used to it and even expect it.
Furthermore, our culture has become over-saturated with media and advertising, causing us to become numb to these messages. Nowadays, it requires much more to get people’s attention. Because of this, major marketing firms are now shunning traditional advertising techniques and embracing new ways to get people’s attention (Harvard Business Review, Marketing is Dead, 2012).
But that’s okay! This is the natural evolution of the marketplace. Can’t change it, so we might as well take advantage of it.
So… How do you compete with a sea of free? How do you stand out in such an over-saturated market, offer timely products of interest, and add enough value to convince people to pay $10 to see a movie or buy an album instead of waiting until they can see it for free? This is today’s unique business and marketing challenge.
Age-old business, marketing, and sales practices: Build rapport with an audience, keep them engaged by continuing to add value with free content, start a dialogue, figure out who they really are and what they really want, design/build products based on their wants/needs, market a release, make it easy for them to buy. But that first one: “build an audience”… This is the key to success in the marketplace today. Build a fan-base, build a tribe, build a culture, build a family of people who will follow you, support you, and continue to buy whatever you make. There’s no shortcut around it – it just takes time.
Why Moving Images?
In the 1950s, when the television first became commercially available to the public, the government supported and even helped fund the research and development of this box that could bring moving images into homes (Human Resources Documentary: Social Engineering in the 20th Century, 2010). They found that moving images had hypnotic effects on the brain, making people more docile and complacent, which motivated them to invest in utilizing broadcast television as the “primary medium for molding public opinion (Strategic Public Relations: Audience Focused Practice, 2011)
Why do moving images have such an effect on the human brain? Based on researching how thousands of individual brains learn, Edgar Dale’s Cone of Learning shows that the brain retains…
• 20% of what we hear,
• 30% of what we see,
• 50% of what we hear and see (moving images).
Add the catharsis of a good emotional narrative, and our memory of the experiences is branded into our consciousness forever. Do you remember where you were when you first heard or saw images from 9/11?
Biology may have an even simpler explanation for why moving images have such a strong effect on us. Because the eyes are so close to the visual cortex in the brain, information gets there quicker than data coming from any other nerve pathways, making it easier/quicker for our brains to digest and interpret the information. And with ever-shortening attention spans, people are much more willing to watch a short video than to read a blurb, look at an ad, or listen to the radio or podcast.
The most powerful characteristic of the moving image is its storytelling capability. Movies have become the main medium through which we tell stories, whether in documentary or fictional narrative form. As a species, we’ve been storytellers for thousands of years. Cavemen used the charred ends of burnt sticks to exchange narratives on cave walls as much as thirty thousand years ago (Cave of Forgotten Dreams, Werner Herzog, 2010). Storytelling was a way for man to share history, teach lessons, entertain, dream, and even worship. Why are moving images such good capsules for storytelling? Because of their emotional impact. Perhaps that’s another reason they are called “movies” – because they move you. Marketing professors Jonah Berger and Katherine Milkman studied and tested the science and mechanics of going VIRAL, trying to answer the question, “What makes people rush to the SHARE button?” What they and many others have found is that the videos and articles that are shared the most are the ones with the highest EMOTIONAL impact (American Marketing Association, What Makes Online Content Viral? 2011).
Today, moving images are how we communicate, learn, entertain, socialize, think, and grow. This powerful technology has even enabled us to transcend space and time, allowing us to travel great distances instantly to communicate with a friend on the other side of the world, see images from deep space, or share an idea with millions INSTANTLY on YouTube.
Moving Images as a Viable Digital Product
Since the industrial revolution, investors have been very interested in capitalizing off of the hypnotic fascination people have with the magic of moving images. In 1903, one of Thomas Edison Studio’s first publicly viewed films, The Great Train Robbery, was the first sign that moving images could be a great way to make money. Legend says that when the train approached its platform, because audiences had never before seen an image that MOVED, they thought the train was going to come right through the screen, and some even ran out of the theatre screaming. This myth may have been just a rumor or very clever marketing. Regardless, word of mouth spread like wildfire, and the new technology became a way to entertain the MASSES. Edison and other capitalists saw dollar signs. (The Great Train Robbery, 1903)
Today, moving images are produced, distributed, and consumed digitally. This creates an easy opportunity for entrepreneurs to capitalize. Because a film product is in a digital format, it does not require any physical production or fulfillment, while most digital sales mechanisms require very little to no startup cost. This means more attractive margins, higher percentage of profit, more control, etc. Contained in a medium without form, digital films can be viewed and shared millions of times INSTANTLY. This is all good stuff. However...
On the flip side, feature films are the MOST DIFFICULT product to produce BY FAR. Filmmaking requires expertise in MULTIPLE areas of skill – hiring, management, communication, storytelling, planning/strategy, photography, lighting, acting/performance, editing, sound, music. And because of the unique business challenge in today’s digital marketplace, filmmaking now also requires the utmost skill in marketing and distribution. Because of the sheer number of skills/trades needed to master, filmmaking requires a lot of labor. Being the most valuable and therefore the most expensive asset in any business or industry, labor requires a lot of payroll in the form of capital. Therefore, because filmmaking is expensive by its nature, it requires even more sales to break even with the startup investment than it would a book or other products. Because of this large startup cost, money will usually come from private investors, which is why every film MUST be treated like a business to recoup that investment.
The 50/50 Business Model
For over 100 years, studios have followed the classic 50/50 business model to make and distribute their films. That’s 50% of the capital investment to MAKE the film, and 50% to market and distribute it. This model works because budgeting the cash this way guarantees that half of the time and energy will be put into making a quality product, and half of the time and energy will be put into influencing sales to make the money back. Rather than putting everything into making the film, and hoping that people will see it.
The Law of Film Production
Requiring many resources, the production process has developed three main characteristics: time, money, and quality. Of course the ultimate goal is to make a film quickly, cheaply, and very well(high quality). But it’s a balance… The Law of Film Production states that production can be done two of these three ways, but not all three. For example, to produce a high quality product, it can be done quickly with a lot of money, or cheaply over a very long period of time (ex: people donating their time on the weekends). But if you want to make something quickly and cheaply, it probably won’t be very good (YouTube). By the same law, the highest quality productions require a lot of money and a lot of time (think about Pixar films and big blockbusters).
If you’re going to do something, you might as well do it right!
The Future of Film Distribution is NOW
Where is the industry headed? What is distribution and consumption going to look like in the future? Many see a future where all films are available worldwide and every film finds its own audience (American Film Market, 2014). Customers used to go to the theatre or video store to watch a film. In the future, their favorite films will find them online. But nobody really knows how yet. It’s uncharted territory – untapped, undiscovered, unlimited potential. Being a new marketplace, the industry will only experience growth, as well as any working within it. So NOW is the time to study, explore, experiment, and find new ways to profitability. Whoever first discovers the key to profitability in a digital world will become legends – forever used as examples. Whoever does it BEST will become industry leaders….