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Small Market, Big Box Office
... with the explosion of dvd viewership, is there still any wisdom in striving for a theatrical release?
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| “The exhibitors who want to play these kinds of films are pretty
self-sufficient. We’re able to rely on them to deal with all of
the things it takes to get people in a seat to see a movie.” — John Vanco, Cowboy Pictures |
When Larry Meistrich, founder of indie stalwart The Shooting Gallery, moved to suburban New Jersey he faced a similar dilemma: he is 50 minutes and a babysitter away from the closest art house theater. According to Meistrich, this simple fact explains why, after the demise of The Shooting Gallery, he founded Film Movement, an Internet-based distribution service that sends subscribers DVDs of its acquisitions the same day these films are released theatrically in major markets.
Film Movement is “for people who are ignored as consumers,” says Meistrich. “Just because you don’t live in an [area] that’s a strong theatrical market doesn’t mean you’re an idiot or that you’re unsophisticated or you wouldn’t like a good film. Not everybody lives in New York City.”
Film Movement is the best-known company offering an alternative to the traditional distribution model that starts with theaters in New York and Los Angeles and ends with video and DVD. Other companies, including Next Step Studios and Netflix, are trying innovative ways of reaching small market filmgoers that do not necessarily include theatrical release as the primary window.
“The cost of theatrical release in the smaller markets puts so much pressure on the film to have to drive box office,” states Meistrich. “Even in big cities, theatrical release is difficult. We’ve become an opening weekend hit-driven business, which suits big titles. But if you’ve got a limited number of advertising dollars to create a sense of urgency, it’s incredibly hard to get enough people to hold your screen for the next week.”
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| L to R: Cowboy Pictures’ Morvern Callar; Next Step Studios’ Seven Year Zig Zag; and Film Movement’s Light of My Eyes. |
Since its founding in August of 2002, Film Movement has acquired nine titles. Each film has garnered critical acclaim on the festival circuit, but no traditional theatrical distribution contract. While Meistrich won’t reveal exactly how many subscribers he has, he does admit that he’s signed up people at either $19.95 a month or $189.00 annually in 700 cities in 47 states.
At Next Step Studios, interested viewers can find two films—I Don’t Know Jack and Seven Year Zig Zag—on special edition DVDs over the Internet and through independent video retailers such as Scarecrow in Seattle and Kim’s in New York City. According to Next Step head, Richard Green, the company will target niche markets with both films, and attempt to reverse the traditional release schedule.
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| Cowboy’s successful run with The Life and Times of Hank Greenberg is a good example of how to thrive with an independent film in small markets. By “just identifying and getting the word out among Jews over 60,” Cowboy had its most successful film to date. |
“It used to be that you had to spend hundreds of thousands of dollars to market a film theatrically to garner reviews and establish a market for cable and DVD sales,” claims Green. “We reverse that by building word of mouth through the Internet and independent video retailers so that a company like HBO or the Independent Film Channel sees the value of a film, brings it out on cable and eventually the film goes back for revival.”
While Green and Meistrich are trying new distribution methods that avoid what they see as the prohibitive expense of a small market theatrical release, independent theatrical distributors like Cowboy Pictures are finding success outside of major cities by utilizing local resources.
“If I had to give up something, I’d give up opening in LA, because so often you can do everything right and still lose money,” states John Vanco, who co-founded Cowboy Pictures (formerly Cowboy Booking International) with Noah Cowan. “Once you get down to the smaller markets, the cash flow is smaller. But generally speaking, if you’re playing in Yellow Springs, OH or Ann Arbor, MI, the exhibitors who want to play these kinds of films there are pretty self-sufficient. We’re able to rely on them to deal with all of the things it takes to get people in a seat to see a movie.”
Cowboy’s successful run with The Life and Times of Hank Greenberg, about the life and career of baseball’s first major Jewish baseball star, is a good example of how to thrive with an independent film in small markets. “Realistically, in just identifying and getting the word out among Jews over 60—and having it be a priority media event for that core audience—was enough,” declares Vanco of Cowboy’s most successful film to date.
IFC used a similar tactic when it marketed My Big Fat Greek Wedding by approaching local Greek organizations. GreeneStreet and First Look used a similar tactic when they opened Lisa Picard is Famous in Kansas City. They worked with local theater troupes to gain an audience among those most likely to see a film about an actress struggling to break into the business.
“Producers need to do almost what a distributor does,” says Lemore Syvan of Blue Magic Pictures, who had success reaching small markets with Rebecca Miller’s Personal Velocity. “They need to look at the local resources in terms of the marketing/PR person and the theater chain that has the hold in that pocket of the country.”
Success in small market theaters also requires a lengthened release schedule and a range of venues. With a current total of 10 to 20 cities—and a goal of reaching 125 to 175—Cowboy’s current release, Lynne Ramsay’s Morvern Callar, will still be opening good-sized markets in May, 2003, even though the film first played at Cannes in 2002 and was released in New York and LA in late December. Venues for the film will include everything from college campuses to non-profit community centers.
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| “When we get a new documentary, we can
immediately e-mail 40,000 documentary lovers and—overnight—get
6,000 to 7,000 people to add it to the rental queue. There’s
no marketing effort.” — Ted Sarandos, Netflix |
If distributors are patient, an extended release schedule can prove profitable. An illustrative example is one of the independent films available that January weekend in Suttons Bay, Fabián Bielinsky’s Nine Queens. With its non-star cast and Argentine roots, Nine Queens would appear to be the last film to out-gross a blockbuster on any weekend—let alone Spider-Man, the highest grossing film of 2002. But in its seventeenth week of release, Nine Queens made more than $900 per screen, while Spider-Man made the same in its 15th week. Two weeks later Spider-Man was closed, but Nine Queens was still doing business.
The major drawback, then, of a theatrical release would not appear to be long-term profitability, but initial cash flow. A service like Film Movement not only offers its customers immediate access to first-run films, but also allows the company to depend on one-time payments of $189.00 rather than $6.00 per ticket sale over the course of several months. A film in theatrical release will have to sell more than 30 tickets before it can equal the gross revenue that Film Movement receives from the sale of one subscription.
The financial viability of the subscription model for Film Movement’s first-run films remains to be seen., but the model appears to have worked for independent films with previous theatrical release. The Internet company Netflix, which offers home delivery of DVDs for rent to 850,000 subscribers, has taken more than 10 percent of the rental market for indies like Todd Solondz’s Storytelling and Richard Kelly’s Donnie Darko, among others, according to their VP of Acquisitions, Ted Sarandos. In addition, they have given non-exclusive licensing agreements to six previously undistributed documentaries.
Netflix can carry more copies of both undistributed films and smaller indies than video stores because they have virtually unlimited shelf space. In addition, because the company has 12 regional hubs, consumers in smaller markets, like Traverse City, receive their films in the same time (2 to 4 days) as customers in New York or LA. “When we get a new documentary, we can immediately e-mail 40,000 documentary lovers and—overnight—get 6,000 to 7,000 people to add it to the rental queue,” states Sarandos. “There’s no marketing effort.”
With the success of his company, Sarandos, like Meistrich, challenges the wisdom of releasing an independent film theatrically at the expense of DVD. “Filmmakers give away the video rights to get a theatrical run because it feels good to see your film on the big screen and to tell people ‘I’m there.’ But the truth is the DVD release will give much more accessibility to the film. Think about it— more people saw Donnie Darko through Netflix than saw it in the theater after all that effort to get it released theatrically.”
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| Plexifilm and Cowboy Pictures worked together to bring the Wilco documentary, I am Trying to Break Your Heart, to 135 theatrical markets nationwide. |
One company that finds itself squarely between Sarandos and Green’s DVD distribution model and the traditional theatrical model is Brooklyn-based DVD label Plexifilm. The company treats its DVDs not as a supplement to a theatrical run, but as a specialized product unto themselves. A good example is the company’s upcoming release of Tony Silver and Henry Chalfant’s Style Wars, which contains three hours of new material that Plexifilm spent the past year and a half producing.
Despite Plexifilm’s commitment to making high-quality
DVDs, company president Gary Hustwit also believes in the significance
of a theatrical
run prior to DVD release. Plexifilm helped produce and distribute I
Am Trying To Break Your Heart, a film about the indie rock outfit
Wilco, in 135 cities with Cowboy Pictures. “For films that did the
festival circuit a few years ago, the directors know it’s going to
be very difficult to get a theatrical release,” remarks Hustwit.
“At that point they’re happy to have a great DVD release. With Wilco, we felt
we needed to do the theatrical as well to set up the DVD.
We believed it would make money or at least break even.”
As long as distributors like Hustwit and Vanco
remain dedicated to getting independent films to small markets, it
does not appear that
the theatrical options will become anymore limited than they already
are. The range of choices may even get wider as digital projection
systems become cheaper for exhibitors. Small markets will become even
more financially viable for independent film. If subscription services
like Film Movement and Netflix succeed, this too can only increase
the number of indies able to reach outside of traditional markets.
As more companies enter the distribution field—using new or traditional
methods—the possibility exists that access to indies will become a
more regular occurrence for the residents of Traverse City. Sometime
soon, My Big Fat Greek Wedding may no longer be the only option
on a Friday night. MM
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This story was published in the Spring 2003 MovieMaker Magazine. The headline was:
Small Market, Big Box Office / ... with the explosion of dvd viewership, is there still any wisdom in striving for a theatrical release?
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