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The Niche Driven Entertainment Model
In The New & Evolving Digital Age

Scott Jones
  
Scott J. Jones founded Artist View Entertainment in 1991. Scott has over 30 years of diverse entertainment industry experience, spanning from ownership of video retail outlets to serving as executive producer on over a dozen feature films.

If you look back, based on the fact that we've been doing this for more than 15 years, the patterns for the independents have actually been fairly consistent. One of the biggest changes, if you think about the late 80s when the independent international business really started to boom, a lot of people said that had to do with video stores opening up and that's absolutely true. There was a big demand for content. But it was an interesting time. Back in those days, if it was a million dollar movie, a million dollars 25 or 30 years ago is a little bit different than a million dollars today. It's still a million dollars but there wasn't that much money around, which meant there wasn't that much product, and there weren't that many buyers and there was a massive demand.

What we've seen over the years is that the business has developed into what I'd like to think is a real business. It was the Wild West then. If you had the right poster and a decent trailer, you could make the sale. What's happened with the evolution of entertainment over the last 25 or 30 years, and it's the one aspect you can't ignore, is how niche-driven entertainment has evolved. Back in the 80's, there wasn't the same level of niche product; there wasn't the same level of niche demand. In other words, the things that were movies of the week on free TV at that time, or maybe what HBO would broadcast, were different. There are more independent-type movies now, and it is a lot different in today's market. Even if you say, "I sell family product," there's a difference between a family product that you sell to Disney and a family product you sell to Nickelodeon. They are both considered family product, but they have different niches determined by their age demographic.

When we talk about the next evolution in the digital world and SVOD versus AVOD, you can't help but pay attention to the niches involved. I started with video stores in the beginning of 1980, and there's no doubt that there was a specific niche. The biggest consumer of that product, most people would agree, was 15 to 25 year old males. There were certainly other consumers past that age group, but the big demand that drove the business was that demographic, and we paid attention to them. In today's world, I'm not sure how far you can differentiate between a male or female demographic, but what I'm seeing with the younger audience of today is: first, they went through a period where everything was free, and as the internet grew, and as the digital world grew, people knew where they could find content for nothing. The good news, we've found, is that, just like with iTunes, people are willing to pay for music, but it has to be at the right price. As we have seen, Netflix has achieved massive subscriber growth as they have now made streaming and the SVOD world a very real part of so many people's lives.

I think it amounts to figuring out the consumer and what they want and thinking about the entertainment business as if it were the car, shoe, or any other business you want to use as a comparison. Entertainment has evolved into a business where you have to pay attention to what particular audiences want . The means of distribution are going to continue to be vast. It's said that DVD is dead, yet at the same time we've seen the success of Redbox and the capacity that they've been able to take for DVDs from the independent world. If you actually look at a reasonable Redbox order, it's the same number as the good old days when Blockbuster and Hollywood were around, say, 35,000 to 40,000 units, that's a Redbox order. So there's still the same number of DVDs consumed but in a completely different way. I think as the VOD business grows, there will be a pattern. For example, it's not a secret that a lot of independents started titling their movies with an A or a B or preferably even a number. Because the VOD business wasn't that sophisticated, you want your title at the top of a list, because in general people aren't going to make it all the way through the alphabet to R and T. Being intelligent marketing people, the independent world said, "Hey, we need to start titling a film whatever number we can or "Adventures of" and try to achieve top of the list placement so we can generate money."

It's an evolving business, and in order to survive in it you have to be aware of all these trends, You have to be aware of that one crazy thing that works. You have to be aware of what demographic seems to be willing to put money into the different ways the business of getting product to the consumer have evolved.

In a roundabout way SVOD is similar to what pay TV was in the beginning. Consumers were willing to pay x-amount for Showtime per month and could get x-amount of movies or entertainment for that price. I think AVOD is going to be similar to the free TV business that we grew up with. If you have a series or a different type of programming that an advertiser believes they can generate eyeballs off, they will be willing to pay for that because they want their product out there.

It's still in the early days of that, but I think it's an interesting comparison to say that these are the patterns that aren't as different as everybody thinks. What you need to pay attention to is, what niche are you dealing with?

On the producers' side I think they've becoming more aware of the importance of sales and marketing - instead of 'their vision'. We've seen amazing, incredible success with stubborn producers who've said, "I'm not listening to you marketing people. This is my vision," and some incredible movies and unique product have come out of that. The problem is that those projects don't always tend to be the most profitable. There's a very fine line for a producer who doesn't want to make one movie and then be back out in the financial marketplace on bended knees trying to raise money for the next film. At a certain point in time, the investors are going to say, "Well, that's a very nice script, but how do we make money?" We both know that there are investors who are not worried about getting their investment back; they believe in the arts and they want to back the creative side of it. But I'm finding a lot more producers that I deal with saying, "I don't want to spend all this time raising the money and making a product and then find out that I missed the mark. How do we make this better?"

Artist View Entertainment - Siren
Like any other business, production has to talk to sales and marketing, if you want to make a product that the market wants to buy. In my world, I'm finding that the producers I'm speaking to are definitely more willing to have those conversations. As long as you don't, as a sales and marketing person, try to step all over them creatively, I think there's good synergy that only makes sense. I don't want to be on the set pointing the camera in any particular direction and I don't really want my producers or directors coming in and telling me how to close a deal with Germany. There's plenty of work for everybody.

Part of the question with regard to the digital evolution is, because the producer has the digital ability to go directly to distribution, does he need a sales agent? I think that's like saying, "Now that we have the Internet, you don't need a car salesman or a car lot." Just because a producer may have the opportunity to speak with a distributor, it doesn't necessarily mean that they know what the distributor wants or really know how to deal with them. Hopefully, in our case, and in our 23rd year of business, my first market was 1988, there's a value in being the dealmaker, and making both sides happy. In the final analysis, if a sales agency is run properly and you're servicing your clients on both sides of the deal, I think there's room for a sales agent. You can't be greedy. You can't try to make it all work on one deal. You have to have long-term thinking. There are a lot of creative people who don't want to sell their own baby. They're quite happy to be involved in the creative process and get to the end of post. They certainly don't want to be told no, but it's very tough to be good at everything. That's why we don't produce. I don't sit here and claim to be somebody who can put the best budget together for a movie, that's what producers are good at. At the same time, hopefully, they depend on us to make the best deals and manage their property the best way possible. So I do believe that there's still room in that aspect of the independent business.

In the New Digital Age, even though we now have all these distribution outlets, with the way that the business is moving so quickly, you really have to have your finger on the pulse of it all year round. We're doing eight markets this year in 12 months. How do you be a great film producer and be on set, make the best product possible and at the same time be in eight different places at the same time? You can, but how good of a job are you going to do at anything? Something's going to go wrong, even for us, with for instance the managing windows. Out of the blue somebody will come to us and ask for a new right. Is that a video right, a broadcast right? Where does that fall in? It's not like we appear there and just show somebody a trailer and seal a deal. Plus, and this is really important, every buyer's needs as far as how a contract is serviced – when the deal is done - Is totally different. Once the deal is done, the type of master they want, the ratio of the master, the paperwork to back it up, it's all different. There's a lot that goes on in the kitchen. The producer might say, I'll just go at it myself and save on a commission. But what's the value of that commission and how many different jobs are being done there? When you go to a full-service sales agency, you've got an acquisitions person, you've got sales people, you've got servicing people. If you have a catalog and you're dealing with a decent volume of product every year, you need a very capable staff to make it work.

I do believe it's still a people-driven business and that we want to be in a situation where we're shaking hands and standing in front of the people that we not only have long-term relationships with, but also people who could potentially become long-term clients. There's no doubt that the world is used to dealing with email and doing things very quickly, in a faster way than when this technology called the Internet wasn't available. At the same time, especially when you're dealing with large sums of money, there's also a big trust factor because it's not about everything going right, it's about the day that things don't go right. So I believe you have to spend time. In our case, that means we have to be out there at these markets to meet with the people that we have ongoing relationships with. I'm not going to sit back and wait for them to come see me in LA. I think it's important. As for the way we do that, which is really the question, I think that will continue to change. Maybe it doesn't need to always be so glamorous and fancy. What's more important is there's work to be done by both the seller and the buyer, and I think they'd like to sit down for 10, 15 or 30 minutes and have that conversation and make sure everything's good for both companies. I think it's just important for us as humans to do that. For me over the years the markets have been a very important part of how we do business. How we treat people is an important part of how we handle ourselves.

I think markets are now more about meetings than they are per se about "market." In the early days of markets, it was definitely a place where people congregated and did a lot of business under the roof of that marketplace. A lot of deals were written, a lot of late nights were spent writing deal memos. Now because the business has evolved, those meetings happen but we don't go into the market saying that we have an expectation of writing a whole bunch of business in those three, four or five days. It's an ongoing process. I explain to my producers that for the most part those markets, for me, have become more a week of advertising. Here's what we have that's new, here's what's coming, and maybe some follow-up from two months ago when you last sat with somebody. There isn't the same urgency. In the old days, it used to be that one of our clients would come in and say, "I'm interested in that movie," and I would say, "Oh, I'm sorry, we already sold it." "Oh, who'd you sell it to?" "Oh, we sold it to Bill." "What do you mean you sold it to Bill?" Now it's "Oh, you sold it Bill. Okay, what else do you have?" There's a lot less buyers and there's a lot less impulse buying. People have to be careful because of the quick transient nature of their markets. It's more important that they know what you have and what you have available for sale, so that when they call in three or four weeks and say, "Hey, is that still available for my territory?" and you say, "Yes, it is," then you can close the deal. So it's become a year-round business, and the markets are just a wonderful way to advertise your product.

I think dealing with people over time, where you have built trust with clients, in this Digital Age the way we're now evolving and adapting to the technology has another interesting and human side. In certain ways it's almost like we're repeating history because before the Internet was in place, the only way that people wanted or could do business was with people we knew had relationships on both sides. And it's come around almost full cycle. Things have changed but they haven't really changed. You need to have a history to understand the present. Sure there are changes, almost on a daily basis. We simply have to keep our eyes and ears wide open, because we already know what we know, it's just a matter of not being afraid to learn. There is always a new way of doing the same thing, and the day you have it all figured out is the day you're done. The above article also appears in The Business of Film's innovative AFM 2013 Printed QR Reader Magazine & Product Guide launched in 2011 and available during the AFM Market.

The above article also appears in The Business of Film's innovative AFM 2013 Printed QR Reader Magazine & Product Guide launched in 2011 and available during the AFM Market.


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