5

 

The Markets

But the Devil whoops, as he whooped of old: It’s clever but is it art?

RUDYARD KIPLING

You can view the 6.5 billion people in the world as potential moviegoers, but very few filmmakers have expected to sell tickets to all of them—that is, until Jurassic Park pushed the boxoffice frontier further than ever before in 1993. It earned more than $750 million worldwide. You didn’t need to speak English or know anything about biology to enjoy this film. It had something for everyone who was old enough to watch it. Then, in 1998, Titanic racked up $1.7 billion worldwide. More recently, the three films of The Lord of the Rings trilogy, all of which were financed independently, earned more than $3 billion worldwide.

What does this mean to you, the smaller independent? While studios are concentrating on very high budgets, there is no longer a ceiling for independents. This emphasis leaves a much larger part of the theatrical ballpark for the independent filmmaker making low- to medium-budget movies. And the home runs being hit in the past 10 years have opened the game to many more players. In the mid-1990s, Steven Spielberg told Premiere magazine, “It’s getting to the point where only two kinds of movies are being made—the tent-pole summer or Christmas movies or the sequels, and the audacious little films. It’s like there’s an upper class, a poverty class, and no middle class.” More of the film middle class has now arrived.

In previous editions of this book, I wrote about the financing of independent films by foreign companies and consortiums of investors and the growth in their numbers. In the past six years, many funds have failed; on the other hand, new companies and funds are aiming to take their place. Most of these money sources look for stars with a capital “A” as in “A-list.” Realistically, though, your potential of having Tom Hanks star in your film is low. In fact, if you are a neophyte, it is probably a suicidal thought.

On the other hand, whether your film’s budget is $400,000 or $40 million and whether it has newbie actors or stars, you need to research the market for your film. The market comprises all those people who are going to buy tickets. In this chapter, we will be looking at the potential popularity of the themes and styles your films represent. To some extent, we also will look at marketing, but do not confuse these two concepts. Marketing involves selling your idea not only to the investor, but also to the distributor and audience. In this chapter, we will focus on selling to the investor through the business plan, but we will also touch on current forms of self-marketing; the distributor is dealt with in Chapter 7. To make terms somewhat more confusing, this book also refers to “the markets,” such as the American Film Market and Cannes, the two largest international marketplaces where production and distribution deals are closed.

In the previous section of your business plan, the Industry section, you defined the industry as a whole and independent film as a segment of it. Now, in the Market section, you will build on that definition by further dividing your industry segment. Your segment may not be as global in size as “everyone,” but it has its own value. You will also take the projects that you described in the earlier Films section and use their components to pinpoint your market. This analysis gives you a base for later estimating those very important gross revenues.

Market Segment

Your market segment, or niche, consists of the type of person out of the total movie-going population who is likely to rush out to see your film the first weekend, as well as secondary target groups that will be interested. You need to identify, for yourself and those reading your proposal, the size and population characteristics of this segment. By devising a snapshot of your film’s likely audience, you will be able to determine the film’s ability, first, to survive and, second, to succeed. Who are the end users of your film—that is, the ticket buyers—and how many of them are there likely to be? Before you worry about marketing strategies and distribution channels, create a picture of the potential size of your market’s population. How can you do this? Very carefully. But do not worry. It is easier than you think; it just takes work. You do not need to have inside information or to live in Los Angeles to do this. Research is your tool.

Having divided the industry into studio and independent, you now need to divide your segment into smaller pieces. In looking at this piece of the market, ask yourself these questions:

• How large a population segment is likely to see my film?
• What size budget is reasonable vis-à-vis the size of this segment?

Defining Your Segment

Filmmakers would like to appeal to everyone, and some mainstream films reach that goal. It is said that it is the big budget tentpole films (a big budget film that can “prop up” a studio’s finances) that create the highest boxoffice grosses. This is true to a certain extent; the more money you spend, the bigger the audience you will attract—and the bigger the audience you will need to attract. An independent film, for the most part, will attract moviegoers from one or two identifiable segments of the audience. To understand how to focus your investor’s expectations (and your own), you will have to do a little research. You do not have to be a research expert, but investigation will help make you and your investor wiser and wealthier.

The profile of your target market in terms of audience might include the following:

• Popular film genres into which your film would fit—comedy, action, thriller, horror, drama, romance, etc.
• Underlying themes
• Age
• Sex
• Affinity groups—ethnic, urban, religious, sports
• Similar budget parameters

To Pigeonhole or Not to Pigeonhole

Your identification of the target audience for your film begins when you select the genre of the film. The term “genre” can be very confusing. Some people appear to use the term to refer to cheap and formulaic, as in “it is a genre film.” One client of mine was upset that I was cheapening her films by using the term genre. For the business plans I write, it is used to refer to films that can be grouped together by plot, settings, and/or themes. Genre doesn’t refer to how well you made the film or the amount of the budget. You could probably use the word “category,” but it doesn’t have the same feel.

As a genre, horror films, for example, are generally movies that scare you for some reason and have lots of blood and gore. In the Internet Movie Database (www.imdb.com), there are over 7,000 theatrical horror films listed, ranging from the low-budget Bloodsucking Killer Clowns from Outer Space and Saw to the higher-budgeted Boogeyman and The Sixth Sense. These films have different premises (sci-fi creatures, blood and gore, childhood nightmares) and appeal to different audience segments. The over-40 group was more likely to be drawn to The Sixth Sense than anything with the word “bloodsucking” in the title and therefore was the initial target audience for that film. Saw was definitely a grabber for the 12- to 24-year-olds, with the repeat attendance that is a hallmark of this audience segment resulting in the film’s high box office. In the end, though, all of them are still horror films.

Genres can be big or small. Drama is considered the most pervasive genre but is inclusive of many films. The next most popular genre by number of films produced is usually comedy. Both of these genres include films that often carry descriptive adjectives, such as “family,” “romantic,” or “dark,” to further narrow the category. Then we have thriller and action/adventure, which are unique genres. Defining the genre of a particular film doesn’t have to be difficult. In trying to be precise when describing a movie, the filmmaker may call it a drama/comedy/romance. This description covers all the bases. It fits Sideways, which skewed to an older audience, and The Sisterhood of the Traveling Pants, which skewed younger.

There are also filmmakers who are linked with specific genres, and who have become their own genre. Saying a movie will be a Quentin Tarantino film, a Robert Altman film, a John Waters film, or a Michael Moore film creates a frame of reference for the particular experience moviegoers will have. You can even have a producer genre. For example, a Joel Silver film would immediately be envisioned as another Die Hard, Matrix, or Lethal Weapon. This does not mean that his films will not fit into other genres, such as comedy. However, if a filmmaker is so identified with a particular type of experience, the audience will pick the film based on that track record rather than anything else. If you feel that your style is akin to a particular director’s niche, you can draw from that audience.

Why bother identifying the genre for your film? Many writers and directors believe that categorizing their films is not only meaningless but also, in some cases, demeaning. There are always filmmakers who say, “My picture is different and can’t be compared to any other films.” This entrepreneurial attitude is the same in all industries. Nonetheless, all films can be compared, and you do have competition. By giving your investors these frames of reference, you are able to identify the groups of moviegoers to whom the film might appeal and explain the genesis of your projections. One of the challenges you face with your business plan is being understood. You must be certain that you convey your meaning correctly to investors. It is important, therefore, that you define your terms so that everyone is on the same page.

Art versus Specialty

For 18 years, I have participated in discussions on whether independent films are by definition “art” films, and, if they are, what an art film is. In one such discussion, one person claimed that Federico Fellini and art films were one and the same. Someone else said that they “explain human foibles in an intellectual way.” Another suggested that the term had nothing to do with a film’s subject. Various people still insist to me that The Blair Witch Project was a commercial film and, therefore, by definition not art or specialty. The terms are not mutually exclusive.

In recent years, production and distribution companies have preferred the term “specialty” for their films rather than “arthouse,” and with good reason. “Art” may bring to mind a very narrow image of a type of film. Many would assume the film to be an inaccessible film only for the intellectually intense. “Specialty,” on the other hand, is a broader term without these negative connotations. Until you define it, there may be no frame of reference for the investor. Creating a definitive description that everyone agrees with would be impossible. In writing your business plan, you have to find whatever phrases and film references best convey your meaning.

I have been involved with proposals for companies that the client intended to be like The Weinstein Company (a lot of people seem to think they are the Weinstein brothers), Lionsgate, or Sony Classics. What did we start with? We used those companies to define the genre. For example, you could write the following as your introduction:

We define the specialty market by the types of films acquired by Lionsgate Releasing and Sony Pictures Classics. Our films have a sensitivity of story and a delicate balance of characters that require unique handling. Therefore, our audience will be the same people who saw Gods and Monsters, Monster’s Ball, and Real Women Have Curves.

These pictures may have nothing in common in story or overall theme, but they are used to present a backdrop for the discussion; they give readers something to relate to. Of course, Lionsgate and Sony Classics do not have a lock on specialty films. Which companies you use for comparison depend on your feeling about their products and your reasons for making it.

An important aspect of specialty films is their distribution (and, consequently, revenue) potential. In recent years, the scope of specialty films has widened tremendously. Typically, a specialty film may open on one to 15 screens and expand to more screens as revenues become available. On the other hand, if the distributor has enough money and faith, a small independent film can play on many screens. Napoleon Dynamite opened on six screens domestically and played on 1,027 at its widest distribution. My Big Fat Greek Wedding opened on 108 screens, and due to its extraordinary success, was on 2,014 screens at its widest point of distribution.

Genre History

When describing the history of the Western genre, for example, you do not need to go back to Tom Mix or Gene Autry (ask your grandmother). For the most part, your primary reference period should be the past five to six years. Some genres, such as action/adventure or comedy, are always going strong. They are always popular in one form or another. This is not the case with other genres, however.

Take horror again, for example. This genre, once popular, languished in the ultra-low-budget, direct-to-video, and direct-toforeign world until the release of Scream in 1996. (Note: The first DVD wasn’t released until 1997, and the format didn’t outstrip VHS releases until 2003.) Until Scream, the general wisdom was that horror films were not worth putting any money into; therefore, it was hard to get the investment community interested in the genre.

Timing is everything. Now production money is available everywhere, not only for the traditional scary film (Silent Hill, The Grudge, Hostel, Saw 1 and 2 but also for variations on the theme, such as the Scary Movie franchise (comedy/horror) and The Blair Witch Project (mockumentary). Suppose you wanted to make a horror film before any of the above films were released. How would you convince someone that your film would be successful? There are several techniques you could use.

1. Emphasize other elements: The Cell is a psychological thriller/horror in which a psychotherapist must race against time to explore the twisted mind of the killer to find where he has buried a woman.
2. Redefine the genre: New Guy is a comedy about a paper pusher at a company whose motto is “Sacrifice Equals Success”; the film shifts back and forth between satire and horror. After a long day of embarrassments, the protagonist is locked in the office overnight and finds the real meaning of the word “sacrifice.”
3. Override the horror genre altogether: The Sixth Sense is a chilling mystery in which a child psychologist treats a disturbed young boy who thinks he sees ghosts. The film has a twist at the end that will bring interest from the potential audience in the same way that the “secret” in The Crying Game did.
4. Use the cycle theory: The Blair Witch Project is a mockumentary/horror film. While neither of these genres have been financially successful in recent years, we believe that the filmmakers’ fresh and original touches, such as the audience’s uncertainty about whether the story is true or not, will create favorable word-of-mouth for the film and bring back these genres.

More about Cycles

The argument used in the last technique is not a spurious one. The popularity of a particular genre often rises and falls in cycles. For example, continuing our examination of horror films, this genre made up 24 percent of the product at the 1989 American Film Market, fell to less than 3 percent of the total in 1993 (interestingly, the genre fell out of favor in the book industry at the same time), and rose back to 6.3 percent by 2003. Statistics like these, by the way, can be part of your extended discussion.

A successful film often inspires a number of similar films that try to capitalize on the popularity of the original. Film noir is a term coined by French movie critics to describe American crime dramas in the 1940s. After a brief reappearance of the genre in 1962 with the original Cape Fear, the genre’s real resurgence began in the 1990s with Martin Scorsese’s Cape Fear remake in 1991 followed by, among others, The Usual Suspects in 1994. It encouraged a proliferation of updated film noirs (the darkly lit look of the 1940s films contributed to the term), such as Fargo, Lost Highway, Devil in a Blue Dress, The Underneath, Exotica, L.A. Confidential (which won two 1997 Oscars, for Best Supporting Actress and Adapted Screenplay, and was nominated for six more, including Best Picture), The General’s Daughter, The Bone Collector, and Sin City. These films broadened the boundaries of the genre beyond the detective thriller to represent a way of looking at the world through a dark mirror reflecting the shadowy underside of life. (Note that, being purists about the term film noir, the Internet Movie Database lists all the post-1950 films in this category as “neo-noir.”)

Considering the length of time from development to release, the market may be glutted with a particular type of film for two or three years. When this happens, the audience may reach a saturation point and simply stop going to see films of that genre for a while. Then someone comes along with a well-crafted film that makes money, and the cycle begins again.

Who Is Going to See This Film?

Do you know the age and sex of the person most likely to see your film? Market research properly belongs in the hands of the person doing the actual marketing (probably the distributor), but you can estimate the appeal of your potential market based on its age groups. For example, one animated film may be aimed primarily at children aged 12 and under. Another animated film, with a slightly more hip theme and a pop music soundtrack, may entertain children but also draw in teenagers and young adults. DreamWork’s hits Shrek and Shrek 2 were geared for the very young to the very old, while Tokuma’s Princess Mononoke skewed to a teenage and older audience due to its content.

Teen films are targeted toward an affluent and sizable group. Think School of Rock, Princess Diaries 2, and Freaky Friday. Teenage movies are traditionally released at the beginning of the summer, when schools are out and kids have a lot of time to go to the theater. And they often go to the same movie more than once.

Studios are particularly eager to make films for the teen and young adult market—usually defined as people between the ages of 12 and 24. Still the single largest audience block, they made up 38 percent of moviegoers in 2005, according to the MPAA’s “U.S. Economic Review 2005.” The rest of the audience makeup is 11 percent ages 25–29, 17 percent 30–39, and 34 percent over 40. These admissions measurements change from year to year; therefore, you will want to check the MPAA’s website (www.mpaa.org)for current information. Unfortunately, the National Association of Theater Owners, which collects this data for the MPAA, does not count anyone under 12; therefore, the previous percentages add to 100. Since family films have made big inroads, such data would be very helpful in explaining that segment to investors. In its place, I use the revenues from comparative films.

Special Niche Groups

Certain groups of films initially appeal to a small segment of the population and then grow, often to the surprise of the filmmakers, to become crossover films. Y tu mamá también is an example of a film in Spanish that initially was targeted to an older, Hispanic/Latino audience and attracted a significant number of teenage Anglo filmgoers. The high cost structures of the studios inhibit their ability to exploit smaller, underdeveloped markets, but independent filmmakers have the ability to take chances. They can make a low-budget or even a “no-budget” film to play to a tiny initial market. If the film and its theme catch on, the audience grows, and the film crosses over to a larger portion of the public, introducing that genre to a new group. Subsequent films of that type then draw on the larger audience. When the first edition of this book was published, it appeared to be big news that African-American filmmakers could draw a wide audience. Throughout the rest of the 1990s, gay and lesbian films came to the fore, capped by the Oscar wins of 2005’s Brokeback Mountain and Capote. At this vantage point in 2006, let’s look at how some of the other target markets have developed.

Until 2000, The Walt Disney Company seemed to have a lock on family films. It was almost impossible for independents to break into that category. Now Hollywood seems to have discovered that not R-rated films but G- and PG-rated are its next best thing. The industry made its biggest profits in 2001 from G- and PG-rated movies, according to a report in the Los Angeles Times, and plans to fill the nation’s screens in the next few years with even more princesses, monsters, talking animals, bright school kids, and scrappy ballplayers. The independent film My Dog Skip was at the forefront of the family film renaissance in 2000. This was followed by Dimension’s Spy Kids, a breakout hit with a U.S. box office of $113 million that inspired a sequel and a flock of imitators. Feeding the burgeoning family film market through 2006 were such films as Spy Kids 2; Hey, Arnold!; Wallace & Gromit—The Curse of the Were-Rabbit; Hoodwinked; and Racing Stripes. John Fithian, President of the National Association of Theater Owners (NATO), said, “Family values are OK. Family values sell tickets.”

What originally I categorized as “faith-based” films, I now identify as “inspirational” films. One of the popular film genres of the 21^st Century, inspirational films cover elements of good versus evil, redemption, and the eternal questions of who we are and why we are here. In the past few years, films such as The Passion of the Christ, A Walk to Remember, The Pianist, What the Bleep Do We Know?, and even March of the Penguins have alerted production companies and distributors that there is a major market for inspirational films.

Now that this larger genre has been defined, faith-based films fit into it nicely as a subset, including the many films that are likely to appeal to the large Christian audience. For example, Crash, End of the Spear, Woman Thou Art Loosed, and Diary of a Mad Housewife specifically espouse Christian values, even though they may contain some questionable elements. The tagline for Mad Housewife—“Time heals the heart. Faith heals the rest.”—is a good example. Although 70 million people of all ages describe themselves as Christian, it is hard to measure their specific impact on the movie business. Nevertheless, the extraordinary success of The Passion of the Christ and the more moderate successes of the other films identified above demonstrate the box office and retail clout of an audience previously ignored by mainstream filmmakers and marketers. What once was a video business supplied mostly by Christian booksellers has now become a part of the theatrical film experience. However, as Ted Baehr points out in his book The Media-Wise Family, in making a “good news” film, you still have to make a film with good entertainment value. Research indicates that the same percentage of Christian teenagers as non-Christian teenagers watch R-rated films, with the same frequency. There is no reason why you can’t make a film that reaches a large segment of this audience. My admonition to my faith-inspired filmmaker clients is to make a film that has a subtle message and doesn’t announce an agenda. Samuel Goldwyn has often been quoted as saying, “If you want to send a message, call Western Union” (ask your mother).

Inspirational films appeal both to people who are philosophically curious or generally spiritual in addition to people who adhere to specific religious and spiritual groups. As the filmmakers of the popular film What the Bleep Do We Know? stated on their website, “There are a great number of mystical traditions and spiritual practices, many paths that lead people to wholeness and peace of mind.” With this type of film, you may be describing different groupings of target audiences. For example, for one such film, I included yoga groups and “cultural creatives” in the target market. Or you may have a film that shows someone overcoming great odds that will inspire a few filmgoers to change their lives. Interestingly, March of the Penguins has been declared an inspirational documentary due to the great odds that the Emperor penguin has to overcome just to survive.

While some people prefer the term “Latino” and some prefer “Hispanic” (for example, a Latino client has suggested that I use the word “Hispanic” to describe the Hispanic/Latino market), films that appeal to this audience have been considered a “new market” for the past six years. Estimates are that there are 41 million U.S. Hispanics who are more frequent moviegoers than either Anglos or African Americans, going to movies an average of 12 times a year. Despite buying about 15% of all movie tickets, Hispanics are a relatively untapped group in terms of film marketing. A study by Global Insight predicts that, by 2012, Hispanics will account for about 18% of ticket purchases (equivalent to about $2.9 billion in sales) due to fast population growth. These moviegoers are concentrated in the trend-setting major markets that make or break Hollywood releases.

The success of Latin American imports is bringing more attention and investment to U.S. filmmakers who want to make films with Hispanic/Latino themes, but, at this point, it is still hard for these films to go beyond very limited distribution. Jack Foley, President of Distribution at Focus Features, told the New York Times, “The Latino market in the U.S. is not changing. Latinos most enjoy English-language Hollywood entertainment. They want escapism and entertainment, exactly as the majority of American moviegoers demand.” Films like his company’s Spanish-language feature The Motorcycle Diaries and Lionsgate’s Amores Perros, as well as IFC’s Y tu mamá también, worked in the limited independent specialty market and did well overall financially. Films from U.S. filmmakers, such as Frida, Real Women Have Curves, and Tortilla Soup, also have helped awaken what has been termed the “sleeping giant” of the Hispanic market. However, both the imports and the U.S.-made films have failed to attract the broad, multi-ethnic Spanish-speaking population in the United States. Still, they have the attention of the power brokers—investors and distributors. That is what counts.

Production Cost

When writing a business plan, you need to find as many ways to support your argument as possible. A valid comparison for films concerns the amount of the production (negative) cost. In some cases, the cost is additional confirmation for your assertions; in other instances, it may be your only argument. There are as many configurations of a film’s budget as there are producers. No two situations are ever alike. So we will review the most common cases and let you extrapolate from there.

Case 1: Similar films, similar budgets

Your films should be able to make equivalent or better revenues as films that share a genre or theme with yours and cost about what you’re budgeting for your film. When preparing your proposal, the first step is to read every interview with the filmmakers that you can find. You will usually be able to find information on how they made their pictures work—creating a production budget, finding a distributor, and getting by on a low budget. The market is more open for a small film to be successful than it has ever been. The potential for having a breakout film increases with the release of each successful film.

Case 2: Similar films, higher budgets

If your film has a story or theme similar to that of others but will be made with a significantly higher budget, you can point out that better attachments are likely to help bring in more revenue. If you have a well-known director who will draw some attention, be sure to mention that it is another Arthur Artiste picture. For a film with a budget of up to $1 or $2 million, both the director and the stars can be unknown; the film will rely totally on its story and quality. For a larger film, story and quality will still matter, but name value will mean even more.

Case 3: Different films, moderate budgets

There may be a ceiling on the ability of niche films to grab the market. One strategy in this case is to start with moderate budgets that have mainstream potential. For this example, we will assume that you will start with a $5-million movie and move up to a much broader market. Always keep your genre in mind in addition to all the factors mentioned in Case 2.

There are many variations to putting together your comparative films and your explanations of the markets for your film. The point is that you should build on what exists. No matter what your niche market—and it may be a specialized one that has not really been explored yet—the same principles apply. Take the experience of similar films and use it to your advantage.

Even with these three cases, a discussion of the success of similarly budgeted films is in order. For example, I created a business plan for producers of a $7-million gay/lesbian romantic comedy a few years ago. Since there were no gay/lesbian films made within the $3- to $14-million budget range to use for comparison, I created tables of other romantic and comedy films.

Detailed tables showing the actual results of other films with similar budgets belong in the Financing section of your plan. Here, however, you can use the summary information to build a story. Gather comparative market information to prove the size and extent of the audience for your film.

What if you do not know the budgets of the films you are going to make? Your case will be much weaker, but you can still develop a rationale. Showing the results of films with various budgets will help. The other elements of your company, as described in Chapter 3, “The Films,” can bring more credence to your proposal. If you have well-known directors or actors committed to your projects, you can use their previous films to describe a segment of the market.

What if you have someone else’s budget for a $2 million film? Don’t use it. Your film will have characteristics that don’t match that budget and needs a knowledgeable person, such as your friendly production manager, line producer, or unit production manager (UPM), to create its budget. Make sure you are right before going to investors. At the end of the day, you have to work within this budget.

Marketing Strategy

Marketing strategy is usually defined as the techniques used to make the end user aware of a product. In film, you have more than one potential end user, more than one person who might queue up to the box office to buy a ticket. There is also an intermediate end user: the money person. The ticket buyer will not read your business plan. Instead, your marketing is aimed at those who might provide the financing to make those ticket purchases possible. First, we’ll look at your own strategies for getting the film made. Then, we’ll look at some of the marketing tactics that distributors and producers may use for the film.

Experts often talk about the four Ps of marketing: product, price, place, and promotion. We have already touched on the first three in this section. In the Markets section of your business plan, you don’t want to forget promotion. However, do not confuse what you will do and what the distributor will do.

Market Research

As cognizant as investors or distributors might be about the emergence of a particular market, they may not know its true scope. One step in promoting your projects is to obtain as much market research data as possible to bolster your contentions. Whether you are raising money for one film or a group of them, gathering data on the feasibility of your concept is important. Part of that information is contained in your description of the market segment. However, you can go a step further and get real facts and figures.

There are many formal and informal ways to gather information. Many of them are right in your own backyard. You can gain a lot of knowledge with a minimum of time and effort if you know how. Granted, some of these tricks of the trade are easier the closer you are to Hollywood or New York, but with the proliferation of events to which “Hollywoodites” travel and the proliferation of resources on the Internet, being from another city is not a good excuse for failing to do adequate research. Your task may be a little harder, but you can still accomplish it.

Reading—A Lost Art

The most difficult idea to get across to many filmmakers is that they need to become voracious readers. Many creative folks are too busy doing their own thing to take time out to read. Even seasoned professionals say, “But I don’t have time.” This is a big mistake. There is a lot of information available to you if you will take the time and trouble to find it.

The truth is that you cannot afford not to have time. The trade papers, primarily The Hollywood Reporter (www.hollywoodreporter.com), Daily Variety (www.variety.com), and the UK publication Screen International (www.screendaily.com), are the primary source of information for people in the film business. Those who are serious about having a business or even participating in the industry will do themselves a favor by subscribing to either the web or print issue of at least one of the U.S. publications. Many people argue, “I can’t afford it,” but in the long run, it will be the cheapest way for you to get the most information.

The trades have the news articles that tell you who is doing what with whom and how much it is going to cost. If you follow these sources carefully, you can pull out enough data to fill in the minimum financial information for any package. Nestled among the press releases and gossip are facts on the production costs of films and descriptions of how the producers found their financing. In addition, the trades also publish lists of films in production, preproduction, and development. From the production columns, you can learn what genres of films are being made and with what types of casts. Some of the preproduction material is real and some is fantasy, but it gives you a fair idea of what people want to produce. You can list your films in the development columns free of charge. Many filmmakers have gotten contacts with production companies and distributors that way. Placing announcements also gives private investors a chance to hear about you. Many people with the ability to finance films choose to remain incognito; otherwise, they would be deluged with unwanted phone calls or scripts. Some do read the trades, however, and it gives them the opportunity to contact producers whose stories interest them. Admittedly, this may be a long shot, but it does not cost you anything, and it gets your name out there. And if you see anything that looks just like your film, don’t worry. You will make a better film! One interesting quirk about Hollywood, and this is probably true of other places as well, is that people have more respect for names they recognize than for those that are unfamiliar. They will not necessarily remember where they saw or heard your name, but familiarity results in returned phone calls. Therefore, any opportunity to get your name in print is helpful.

Another benefit of reading the trades is that you learn who the movers and shakers are. Take the case of Robert Rodriguez, writer/director of the reportedly $7,000 miracle film, El Mariachi. He did not know any agents or other film contacts in Los Angeles, but he saw the name of Robert Newman, an agent at ICM (one of the three largest talent agencies in the entertainment business), in the trade papers and sent him the film as a sample director’s reel. Newman took it to Columbia. Rodriguez went on to make Spy Kids 1 through 3 as well as Sin City, among others. Now people have to know his name!

Besides the industry publications, you can find a lot of information in regular monthly magazines that have no direct connection to the film industry. Let’s look at just a small sampling of magazines. Interviews with producers or directors of independent films and articles with business statistics were published recently in such nonentertainment publications as the New York Times, Vanity Fair, Time, Newsweek, and Forbes. Local daily newspapers and USA Today, a national daily, also carry interviews in their entertainment and business sections. The proliferation of sites on the Internet has made this information far more accessible and, in many cases, free.

Networking

My first Sundance Film Festival was also my first entertainment industry event. Until then, I had worked in “real business,” creating business plans and corporate strategies. Although I had mixed and mingled at meetings before, I had never tried to “work a town.” I knew no one and had a general feeling of nausea as I got off the plane. On the shuttle to Park City, everyone was silent. Finally, I asked a gentleman sitting behind me if it was his first trip. He and his friend turned out to be film commissioners. We chatted the rest of the way. That night I went with them to the opening night gathering and met more people. The next day, I chatted with those people and learned a lot about how they had financed their films and other salient information. Had I not spoken to the first two people, I might never have met the rest. The concept of networking this way can be very scary, but you can do it. Being friendly is a way not only to gather information, but also to make yourself known to others.

Why do you want to network? Your best sources of information may come from attending seminars, luncheons, industry meetings, festivals, and markets. Besides listening to whatever public speaking occurs, you should go up and introduce yourself to the speakers and mix with the other people in the room.

There is no better source of information for you than other independent filmmakers. Whenever you have a chance to meet filmmakers, grill them for advice and facts. People like to talk about their experiences and, especially, their successes. (If this were not the case, I would not be able to get well-known filmmakers to talk to my classes and seminars.) You will learn more from someone who has done what you are interested in doing than from all the books in the world.

The Internet and Libraries

This section was originally titled “Libraries and Computer Sources.” Times have changed. Even I do most of my research on the Internet. Like reading, however, another lost art appears to be the ability to do research in a library. Libraries still contain information that can’t be found—or, at least, can’t be found for free—on the Internet. When teaching a course, I have been stunned to find out that graduate students have never heard of the Business Periodicals Index and other common library reference tools. Rumor has it that they not only still exist, but have books and database sources that would cost you money anywhere else. If you are a student, take advantage.

When writing a business plan, you must be concerned with more than just film grosses. You must be able to discuss the markets, the environment, ethnic groups, population figures, societal trends—whatever is pertinent to your projects and to your ticket buyers. In addition, a business plan should contain specifics about other companies, industry mergers and acquisitions, new industries, and so on.

The first source for this information is all those articles and books you never read or even knew existed. Besides visiting bookstores, go to your local film school or university library. If you live near Los Angeles, you have the added advantage of the library at the Academy of Motion Picture Arts and Sciences.

Look up your subject in the Business Periodicals Index and other periodical guides in the library. Many libraries have systems that allow you to do a computerized search of subjects. Finally, do not forget your friendly librarians; they are there to help you. Through your computer, you can log onto the Internet and use online services to do library searches without ever leaving home. Good sources are the Internet Movie Database (IMDB) and Box Office Mojo (both are free) and www.baseline.hollywood.com(subscription). To find who directed or produced what film, the locations, release dates, etc., IMDB is fine. For data, however, I often recommend www.boxofficemojo.com and Filmtracker’s Baseline, which leases and sells the movie data from Kagan Research, LLC. It is a credible database with budgets, P&A, domestic DVD revenues, and worldwide revenues. Much of this data is hard to find anywhere else.

Promoting Yourself and Your Projects

We make our own opportunities, as every overnight success will tell you. By doing all that market research, you have prepared yourself for two things:

1. Quantifying your market segment
2. Approaching others with your project

At the beginning of this chapter, we talked about the market segment and how it is time to focus on marketing yourself and your project. As noted before, your goal is to find the money or links to the money. There are entire books that focus on this subject, so I am providing you with just the basic information.

Arm Yourself with Ammunition

As a good promoter, there are certain materials you can prepare before seeking out contacts. Business cards, sales sheets, press kits, and director’s reels are among the promotional materials you might use. Some filmmakers have even made a 20-minute version of their film, often on videotape, for promotion. For first-time filmmakers with no other footage to show, putting a long treatment on film may be the way to go.

More Networking

The materials just described serve to get you into meetings. Whether your aim is to sell a single film or to obtain financing for your company’s group of films, the first step is to evoke interest. Making contacts is your objective, wherever you are. Earlier we talked about networking as a means of gathering information. Another purpose is to unearth those money sources, wherever they are.

People with like interests tend to congregate in the same places; therefore, entertainment-related gatherings are your most likely place for success. Although potential investors are not likely to be in attendance, their friends and acquaintances may be. Festivals and markets are critical for whatever you are selling, and working them is of the utmost importance. You do not want to be carrying around business plans, handing them to everyone who says, “I can get you a deal.” That is why you bother with the materials described earlier. Those are the items you hand to people initially. Common sense will stand you in good stead in attending markets and festivals. There is no trick to meeting and greeting, no secret handshakes or passwords. (Just get out there and shake hands!) When you attend a market, remember that a distributor’s goal in being there is not to meet you; it is to sell product. Here are guidelines for you to follow:

• Be prepared: Bring your short-term promotional materials, and bone up on who is who before you go. Let your fingers do some walking through the trades.
• Be aware: Distribution companies usually focus on certain types of films. Look at their posters and at the items listed in their market catalogs. Try to match your films to their inventory. After all, the distributor is your shortest route to those foreign buyers and presales.
• Be inquisitive: Ask questions of everyone you meet—in an office, in the lobby, on the street. Try to discover the person’s qualifications before spilling your guts about your plans and projects, however.
• Be considerate: In introducing yourself to distributors, pick slack times. Very early in the day and at the end of the day are best. Whenever you reach a distributor’s display room, notice if buyers are there. If they are, go back later.
• Be succinct: Keep the discussion short and sweet. Your objective is to get a meeting at a later time. You want your “prey” to feel relaxed and be attentive. Try for a meeting at the distributor’s office.
• Be dubious: Lots of people are milling around screenings, hotel lobbies, and expo halls pretending to be something they are not. It may be a big rush for someone to tell you that they were the “real” investor behind Napoleon Dynamite (when they had nothing to do with it) and are interested in financing your film for $2 million (when they have no money). Listen carefully, take cards, and try to verify the facts afterward. Do not give your scripts or proposals to anyone unless you can validate their credentials.

Self-Marketing

An important component for any film, especially the opening weekend of the film, is word-of-mouth. Without incurring additional costs, it is possible for a filmmaker to implement a marketing strategy that is complementary to that of the distributor. Or in the absence of having a distributor, create word-of-mouth. Grassroots organizations can get a “buzz” going with a process referred to as “viral marketing.” Many special interest groups have e-mail lists and will be happy to send out information on a film that attracts them. The people on their lists then send the e-mail on to other individuals and organizations, and the marketing message is spread exponentially. Don’t forget to include your hometown newspapers in this activity.

With some films, it may also be appropriate to schedule free showings in a church, synagogue, or other spiritual gathering place. As many of you have read, this method was used to great effect by Mel Gibson with The Passion of the Christ. However, smaller films, such as March of the Penguins, have been promoted this way also.

This area is one in which it is good to think outside the box. Explore what is best for your film. Remember, however, that anything you describe in your business plan is a form of promise to the investor. Do not say that you will do something for which you don’t have the money or other resources.