5
The Markets: The Spin

You may view the 7.02 billion people in the world as potential moviegoers, but very few filmmakers expected to sell tickets to all of them—that is, until Jurassic Park pushed the box office frontier farther 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.

On the independent side, the three films of The Lord of the Rings trilogy, released between 2001 and 2003, earned more than $3 billion worldwide. Then through 2011, the seven Saw films earned more than $1.4 billion in total revenue.

What does this mean to you the independent? While studios are emphasizing tentpole films, there remains a very large theatrical ballpark in which independents can play. The indie home runs being hit in this century have opened the game to many more players.

On the financing side, everything has gone through a strange transformation. With the change in the economic climate since 2008–2009, many hedge and real estate funds have failed. While the hedge funds were more interested in large, integrated production companies real estate investors have been partnering with individual filmmakers. As we will discuss in Chapter 13, “Other People’s Money,” not all these investors seek the same film package. 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 and explain it for your investors.

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. Here, 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 Film 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 moviegoing 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 independent films reach a mainstream goal. For the most part, though, an independent film 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 an 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:

• Main film genres into which your film would fit—comedy, action, thriller, horror, drama, romance.
• Special formats—documentary, animation, large format.
• Underlying themes—inspirational, young adult, magical realism (Beasts of the Southern Wild, Pan's Labyrinth).
• Affinity groups—ethnic, urban, religious, sports.
• Age and sex groups.
• 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 movie 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 (http://www.imdb.com), there are almost 3,400 theatrical horror films from 2007 to mid-2012, ranging from the no-budget Paranormal Activity to the higher-budgeted One Missed Call. These films have different premises (sci-fi creatures, blood and gore, childhood nightmares) and appeal to different audience segments. The former will appeal to teenage moviegoers as an initial audience, while the over-35 group is more likely to be drawn to the latter. In the end, though, both 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. Very few films are just one genre or theme. A filmmaker wants to use everything that fits the film, which sometimes can be a large number of the main genres. For example, One For the Money is described as an action, comedy, crime, romance, and thriller. What isn’t included in that general description is the “female protagonist .” This genre is growing as the audience, both men and women, have become used to women heading films that aren’t classified as “chick flicks.”

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, Judd Apatow, Kirby Dick, Tyler Perry, or Hayao Miyazaki film creates a frame of reference for the particular experience moviegoers will have. Woody Allen is so identified with comedy romance by an older audience that Midnight in Paris in 2011 grossed much better than films in recent years that his dramas.

You can even have a producer genre. For example, an Avi and Danny Lerner film would immediately be envisioned as a recent Rambo or The Expendables. If a producer or production company is identified with a particular type of experience, the audience tends to 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 25 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 commer cial film and, therefore, by definition, not art or specialty. The terms are not mutually exclusive.

As far back as the first edition of this book production and distribution companies have preferred the term specialty for their films rather than art-house 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:

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 depends 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 1 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. Little Miss Sunshine opened on seven screens domestically and played on 1,602 at its widest distribution. Juno opened on seven screens, and due to its extraordinary success, it was on 2,534 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 Hopalong Cassidy (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-to-foreign 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 (Hostel 1 and 2, Saw 1 through 5, Halloween) but also for variations on the theme, such as the Scary Movie franchise (comedy/horror) and The Devil Inside (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: Devil is a horror/mystery/thriller in which five people trapped in an elevator are killed, one by one, an alcoholic detective and rescuers work to free them. Do bad things happen for a reason?
2. Redefine the genre: Twilight is a teenage Romeo and Juliet vampire story. Moving to a small town to live with her father, Bella meets the mysterious and beautiful Edward. The two fall unconditionally in love with each other. Even learning that he is a vampire does not deter her passion. How will they resolve this unnatural relationship?
3. Override the horror genre altogether: Shaun of the Dead has the zombies playing comic foils to Shaun, even while eating and killing people.
4. Use the cycle theory: The three (so far) Paranormal Activity films are mockumentary/horror stories with found footage.

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 an estimated 20 percent by 2011.

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, No Country For Old Men, The Town, The Dark Knight, Brooklyn’s Finest, and Winter’s Bone. 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 (proimdb.com) uses the term “Neo-Noir” to refer to the post-1950.)

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.

Special Niche/Affiliated 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. By 2010, The Kids Are All Right was talked about more as a film about family relations than that the family was headed by a Lesbian couple.

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 films are its next best thing. The industry makes its biggest profits from G- and PG-rated movies, according to many analysts’ reports, 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 part 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 2011 were such films as Spy Kids 3 and 4D, Akeelah and the Bee, Are We Done Yet?, The World of Arriety, and Soul Surfers. John Fithian has 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 past 12 years, 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, The Pianist, the Tyler Perry films, What the Bleep Do We Know?, and even March of the Penguins 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, Facing the Giants, End of the Spear, Fireproof, and Courageous specifically espouse Christian values, even though they may contain some questionable elements. The tagline for Facing the Giants—“Never give up. Never back down. Never lose faith.”—is a good example. At Variety’s “Faith and Values Movie Conference” in 2012 Grace Hill Media’s Jonathan Bock, who worked on campaigns for The Vow, War Horse and Act of Valor, said, “On any given weekend, forty-three percent of the country are in church, with two-thirds attending once a month. When you’re talking about an audience that big, you’re talking a broad spectrum of movie tastes, Hollywood has a tendency to view Christians in political terms, and the audience is much more than that.” My admonition to my faith-inspired filmmaker clients is to make a film that has a subtle message and doesn’t announce an agenda (i.e., sermonize). Producer Samuel Goldwyn has often been quoted as saying, “If you want to send a message, call Western Union” (ask your grandmother again). Or, as Paul Haggis, director of Crash, said, “Film is an emotional medium, not an intellectual medium, so you have to move people. You can’t just lecture them.”

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.

Another large group to look is the Latino/Hispanic audience. While the terms tend to be used interchangeable, a Latino client has suggested that I use the word Hispanic to describe the entire market. Films that appeal to this audience also have been considered a “new market” for the past 10 years. The latest census reveals that of the 50.5 million Hispanics in the United States. While only 16 percent of the population, they were 24 percent of frequent moviegoers in 2011. On top of that, Latino adults are nearly twice as likely as the total adult population to see a movie on opening weekend and are, on average, 10 years younger than the population as a whole, making them prime movie consumers. Despite buying about 22 percent of all movie tickets, however, Hispanics are a relatively untapped group in terms of film marketing. 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 United States 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 Fox Searchlight’s La misma luna (released in the United States as Under the Same Moon), as well as Lionsgate’s Ladrón que roba a Ladrón and a mores perros 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, multiethnic, Spanish-speaking population in the United States. Still, they have the attention of the power brokers—investors and distributors. That is what counts.

Sports movies are going to attract people who are interested in not only specific games, but sports in general. I have done business plans for football, baseball, basketball, and soccer. For each of those, you use films of any sport to show the genre. In this section of the business plan, you are not confined by similar budgets. Your goal is to how that there is an audience for sports films. For a plan that I wrote in 2010, I used The Blind Side, Miracle, The Rookie, Coach Carter, Glory Road, We Are Marshall, and Invincible as examples. In a separate sentence, I mentioned the “classics” Hoosiers and Rudy, as baby boomers are a big part of the audience. In this case, I did not use their box office results. You still only want to use revenues from the past five years plus the current year.

Who Is Going to See This Film?

Demographics are an important subsection. 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, for years we accepted the term “family” as referring to G-and PG-rated films. Now we have started referring to many films as “family-friendly,” which allows PG-13 to be included.

Teen films are targeted toward an affluent and sizable group. The run the gamut from High School Musical 1 through 3, and How She Move to slacker/stoner films, such as Superbad, That My Boy, and the Harold and Kumar films. Teenage movies are traditionally released at the beginning of the summer, when schools are out and teens have a lot of time to go to the theater. While the often have gone to the same movie more than once with various groups of friends, it is likely that their additional viewings may via the assortment of ancillary sources available.

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. No longer the single largest audience block, they made up 22 percent of moviegoers in 2011, according to the 2011 Theatrical Market Statistics Report of the Motion Picture Association of America (MPAA), while filmgoers 40 and over made up 39 percent of the audience. The crossover group of the audiences (ages 25–39) made up 24 percent. These admissions measurements change from year to year; therefore, you will want to check the MPAA’s website (http://www.mpaa.org) for current information. In 2011, the National Association of Theater Owners (NATO), which collects these data for the MPAA, either counted everyone under 12 or just assumed that the other 15 percent were ages 2 to 11. Unfortunately, that range is too wide to use.

For the preteens (often referred to as the “tweens”), who are ages 8 or 9 to 12 depending on who is counting, I use marketing statistics. This group is 20 million-plus strong and has a buying power of $43 billion. The Hannah Montana, Jonas Brothers, and Justin Bieber films and concerts owe much to this group.

Be careful to use as wide a market as you have. For example, I have had students say that a film is for women ages 35 to 45. If women are the first group that is going to be attracted, then use the broader categories of 25 and under or 25 and older. Don’t leave out the grandmas. We oldies still like to have fun. As I was writing this edition, the movie Magic Mike was released. Despite a moderate budget of $7 million, it grossed $40 million the first weekend. If you had been putting together a business plan for this film which you knew was going to be R-rated, my suggestion would be to use women aged 18 and over. The MPAA stats in 2011 showed that 75 percent of moviegoers were over the age of 17, and women were 51 percent of all moviegoers. The actual results for Mike, according to The Wall Street Journal, were that females made up 73 percent of the audience and those under the age of 35 made up 57 percent of the audience. That is your primary group that will make up the first weekend audience. Was everyone who went over the age of 18? I doubt it. However, when looking ahead to the audience you want to predict data for which you have backup.

On the other hand, don’t discount men. When The Help was released, everyone assumed it was simply a “chick flick.” Exit interviews done with the audience indicated that men began going by themselves by the end of the first weekend. Welcome to the new media era. Good buzz travels faster.

In addition, the old four-quadrant system that the studios like to use is no longer viable. The system says that a film will attract exclusively young boys, young girls, older men, and older women. It is clear now that the sexes and age groups do not necessarily restrict themselves to one kind of film.

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 the producers of a $7-million gay/lesbian romantic comedy several years ago. Since there were no gay/lesbian films made within the $3- to $14-million budget range to use for comparison at that time, 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.

Incentives

With the proliferation of state incentives, filmmakers have been tempted to subtract the total that they “hope” to get from the state. While states will approve a film for their incentives, in most cases, the money is not guaranteed. At the end of filming, you will be sending in a Certified Public Accountant (CPA) report on expenses which will be gone over by their CPA. That person will then certify what amount of money you will get. To make the film, however, you need to raise the entire amount of your budget. Any amount that is paid back by the state later will make both you and your investors very happy.

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 farther 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.

Much of the information in industry websites is free. In those with box office data, you may hit a pay wall; but that is free on http://www.boxofficemojo.com. Likewise, you can read a great deal of the Hollywood Reporter (http://www.hollywoodreporter.com) for free. Those longtime papers, however, have begun to be replaced by totally free news services. For overall entertainment news, I recommend subscribing to the daily news release of http://www.deadline.com and http://www.thewrap.com. I also subscribe to http://www.screendaily.com to keep track of European and Asian news. Even though there are some articles that require the paid subscription, there is still a large amount of free information. The website’s home page also has a section called “The Web Today,” which has links to articles on websites in the United Kingdom, the United States, and other countries. A hint about for pay sites: even if you log on and just read the first paragraph of stories, you will have enhanced your knowledge of the industry.

Since the last edition of the book, the only film-centered daily trade paper still available in print is Variety. The Hollywood Reporter is available in a weekly magazine. If you are a film student, you may be able to find those publications in your library. Screen International which may have a weekly publication in the United Kingdom is not available in the United States.

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 pre-production 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 Pictures. 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.

Where's the Data?

As mentioned above, you can find box office totals on Box Office Mojo. For total worldwide data, however, I recommend Baseline (baselineresearch.com). You will find different areas, such as studio systems, script shark, and inhollywood. However, I recommend going directly to the “Film Revenue and Cost Estimate” (FRCE) at (baselineintel .com) in order to access the per film data that the company sells. There are various levels of subscriptions. With the extended FRCE, besides the domestic and foreign box office and budget, you get will get both domestic and foreign home videos and domestic prints and ads. Why should you spend the money? Besides the fact that you don’t want to make it up, you need a credible reference to give investors. When you are asking other people to fund your film, making up data is a very bad idea; and using only the North American box office doesn’t give a good picture of how well a film performed.

Libraries

The entire marketing research section originally was 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. If you are a student, you have free access to information that can’t be found—or at least can’t be found for free—on the Internet. In addition to the film school libraries, your local library may subscribe to data services that will help.

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, Utah, 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, college classes, 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. You don’t have to be in Los Angeles or New York. Many states and cities have festivals and other meetings. Take advantage of whatever is in your area. Always check with your local film commissioner to learn about events in your area.

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.

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 short version of their film, often on their websites, for promotion. For first-time filmmakers with no other footage to show, making a short video of yourself talking about the virtues of your film may be the way to go.

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.

Film Markets

Knowing how to attend and network at film markets is critical. 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. 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 The Visitor (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.

There is more detail about pitching in Chapter 13, “Other People’s Money.”

Advice from a Filmmaker

Joe Majestic formed Majestic World Entertainment in 2007 as a film, multimedia development, and distribution company. Previous to that, in 2003, he co-founded the Ilya Salkind Company, where he served as Vice President of Production. He was a contributing architect of the company’s initial slate of film and television properties. In 2008, he partnered in Monterrey Pictures Entertainment. He left that company in 2009 to focus on film development and sales as President of Majestic. In 2011, he also founded film and television production company Hurricane Film Partners, LLC. Having worked with Joe as a consultant since 2003, I asked him to lend his advice on both attending and being an exhibitor at the American Film Market. In addition, check the market’s website at http://www.ifta-online.org/afm/ for its section “How to Work the AFM.”

Social Media and 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. You can get a “buzz” by contacting grassroots organizations with a process referred to as viral marketing. Many special-interest groups have email lists and will be happy to send out information on a film that attracts them. It is a strategy that encourages individuals to pass on an email or video marketing message to others, creating the potential for exponential growth in the message’s exposure. The people on their lists then send the email on to other individuals and organizations, and the marketing message is spread exponentially. Don’t forget to include your hometown newspapers in this activity. An important component for any film, especially the opening weekend of the film, is word-of-mouth.

For some inspirational films, it may also be appropriate to schedule free showings in a church, synagogue, or other spiritual gathering place. By having such screenings, which often are free to the participants, you create word-of-mouth before a film opens on local screens. For other films, you can promote the film on websites devoted to the genre. For example, there are quite a few sites devoted to horror films. When you think about the “affiliate groups,” make them aware that your films will open. For example, in a business plan that had a story about a writer, I added: “Particularly relevant to [name deleted] are the hundreds of writer’s groups that meet live and/or online. In the age of the Internet, they all have email lists.”

Facebook, LinkedIn, and Twitter, along with other social media sites, are used every day for this purpose. No matter how big a site is and fast it has grown when I am writing this edition, it can fall out of favor with consumers just as fast. Do you remember Friendster? Remember when MySpace was an unbeatable force? None are immune to change.

Self-marketing is an area 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 type of promise to the investor. Do not say that you will do something for which you have to spend money that you don’t have. Never, every use the word “guarantee.”

The entire discussion of Social Media and Self-marketing that I currently use in business plans can be found in Chapter 11, “The Sample Business Plan.” Much of it is boilerplate; however, I update and tweak it depending on what is happening in the industry and the genre of the film. Be sure that you do the same.