Found or Not Found via a Short Film

For decades amateur filmmakers put their hopes and dreams into developing a great short film with the hope that it created an opportunity to make a feature. Since 1971 independent directors have created 294,499 short films to date (according to IMDB) that have received some form of distribution. Industry estimates reveal that only 6% of the films made get distribution, suggesting that just shy of 5MM short films were made during that time.

ChartShortFilmOut of the 5MM pictures made, only 19 filmmakers got a shot at making a feature film based on their short. That is less than a thousandth of a percent of the distributed films released and completely insignificant when compared to the total number of shorts made. From an accounting perspective the number would round to zero.

Oddly enough, there are new filmmakers every year that are convinced they can be the 20th person. They pull a team together and instill everyone with the hope that their film might launch the next director and his team.

The industry was intrigued by the phenomenon and built a multi-billion dollar sub-industry to help these filmmakers get their shot at success. In fact, the entire prosumer line of equipment came into being based on the demand independents placed on manufacturers.

Three new filmmakers recently asked me how they could make a short film that would get them a feature. I shared the numbers and suggested they instead focus on making a short that they can sell. They rebutted my comments and said that lots of people get feature deals from their shorts.

The adamant hope within the independent filmmakers is admirable, but not consistent with reality. Filmmakers would find it more plausible to redirect their efforts and focus on revenue. My first short film cost $3,500 to make and generated a net profit of $15,000. It never won an award or brought fame, but it did allow me to continue the pattern until I was fulltime in filmmaking five years later.

From a financial perspective, industry shifts has placed the risk of filmmaking into the hands of the independent macro studios. The small studios are pumping out monthly shorts that make an average margin of 70%. They also pump out television and independent features, both of which increase the risk factor and time before profits emerge.

Distribution has also changed to an independent model that allows filmmakers to sell their works directly to their fans. Major distribution contracts are no longer necessary for a macro studio to be profitable. The business model has shifted to the macro studio’s side, yet independents are still adamant about taking the nostalgic route that no longer exists.

While a psychologist might have a better handle on this phenomenon, I’m confident most newbie filmmakers are going after the glamour, not a functioning business of storytelling. There is no glamour or sex appeal in making profitable short films, but it’s how the market is now positioned.

This new process is more difficult for individual filmmakers, but a perfect fit for macro studios that house several individual filmmakers that team together. The new high quality equipment blazed the road for this format and it also forced audiences to sift through a glut of product.

Macro studios with numerous talented people attached have developed communication processes to keep their audience educated on future products. With each new release, the audience determines if the macro studio can be trusted in providing excellent entertainment and is worth following. If not, the audience hunts for the next studio to follow.

This fan-based process used to be associated with studios, then actors, but today has shifted to directors. Christopher Nolan fans see every one of his films regardless of budget or what distributor was involved in its release. The actor’s draw no longer has the same pull, with the exception of a handful of artists. Best selling authors can also create some draw if their book sold enough copies, but they no longer impact the box office like in the past.

This trend doesn’t stop filmmakers from trying to leverage other people and things to draw an audience. In the faith-based market there was a ten-year push to have a spiritual word in a title to draw an audience. Some believed titles could promote sequels, like “God’s Not Dead 2” reminding the audience of the “God’s Not Dead” successful box office run.

But today’s reality is that people follow people, not titles. Filmmakers must now step out from behind the camera and get to know their audiences. It’s no longer profitable to make a short and hope the audience likes it. The director must know his audience and make a film they will love. And, he must charge for it to survive.

Filmmakers must make profitable content and sell it to an audience that loves his or her style and ability to tell story. Audiences today assume the show will be high quality, as production costs have dropped and quality levels of affordable technology have improved. It’s no longer about being attached to a major studio, but about how well the filmmaker can tell a great story to the right audience.

Copyright © 2015 by CJ Powers

 

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Box Office Mendoza Line

Mendoza Trading CardMany times critics and filmmakers argue about the quality of a film’s content or message against its story. Star power and a filmmaker’s ability to draw in an audience also factor into arguments about what makes a film successful. But, one factor stands the test of time and survives all arguments about the monetary success of a film: the box office Mendoza line.

Named after baseball’s Mario Mendoza, whose mediocre batting average defined the threshold for incompetent hitting, the box office marks the threshold when theaters drop titles from its screens for the next best opportunity to make money.

The moment a film drops below a per screen average of $2,000 per weekend, it’s no longer viable as a money making device. This amount has stood the test of time based on competitive new releases, negotiated house nuts and the duration of marketing budgets.

When a film crosses the Mendoza line distributors stop promoting the film in order to cut its potential losses and replace it with new selections. Films that fail to rise above the Mendoza line rarely survive past the second week in theaters, as numerous films fight for the few open screens during each release period.

This is partially due to distributors not wanting to lose a screen to a competitor and desiring to manage risk mitigation on the film’s current margins. Theaters also need to maintain a certain level of revenue stream in order to protect its house nut (its negotiated take on concessions).

While the exit strategy on films typically cause titles to have a long distribution tail, very little revenue is generated during this period. Most films only make 5-10% more unless it’s in a light distribution window that can generate an additional15%.

Analysts that estimate each film’s market potential and weekend predictions, use additional tools that determine expected thresholds of a film’s longevity. For instance, prior to making adjustments based on the impact of social media, all films will make 50% of its opening during its second weekend. The third weekend will make 50% of the second weekend’s box office and so on.

However, advertising and social media directly impact the percentage. The alterations can change the percentage from 50% to 35-55%. The addition or dropping of screens due to contract changes or regional performance success can also impact the percentage by a plus or minus 30-45%. While these sound like huge swings, an analyst who has tracked the market for two years can easily estimate within a plus or minus 5% of accuracy.

Analysts do take into account outliers and transitions within sub-genres, which paint clear pictures of market trends. This gives production and acquisition departments a leg up when determining future investments and expansion.

Production companies also benefit from understanding and tracking the Mendoza line. Any picture that never rises above it or falls too quickly below it either has too few super-fans or has a story that didn’t connect on a universal basis. In a fragmented market that’s filled with social media, a film only needs 1,000 super-fans (or influential fans) to succeed.

The combination of factors that keep a film above the Mendoza line for numerous weeks includes a great story, influential super-fans, star power and provocative social media. Writer/directors have also become a factor over the past ten years, but are still considered new to the promotional cycle.

Copyright © 2015 by CJ Powers

Abandon the Faith-Based Label

The Passion of the ChristThe Hollywood Reporter printed a guest column by Mark Joseph. The title was “’Faith-Based’ Is Not a Film Genre” and the column opened with a quote from the author. “I’ve come to the conclusion that the label is both untrue and unhelpful, and should be abandoned.”

Joseph is a marketing expert that has worked on the development and/or marketing of 40 films including, The Passion of the Christ, The Chronicles of Narnia, and, I Am David. His article opposes his success stories being lumped together with the myriad of bad Christian movies that, based on its significant volume, created the Faith-Based label.

I understand his concern, since in Hollywood the term “Faith-Based films” is synonymous with “bad Christian movies.” When a producer approaches a distributor and presents a Faith-Based movie for consideration, the distributor immediately tells him not to expect any revenue from the limited release. The shoddy contract supports the statement.

However, Joseph’s article fails to mention that marketing must label product in order to properly promote it. This is why most Oscar winning films are genre specific, which is easier to market. It’s not possible to market a film that is “sort of this and kinda like that, with a twist and biblical message.”

The real problem isn’t that the large number of Faith-Based films forced Hollywood to group the movies into a single label that preempts the audience with its consistently bad storytelling and lack of artistic prowess. The real problem is that those making Faith-Based films actually think what they’re making is high quality and they see no reason to improve their craft.

I’ve had several opportunities for funding that required us to add a handful of elements to satisfy the religious investor, which would destroy the storyline and artistic expression of the film. Having a history of making artistic story rich shows for most of the major networks, my integrity didn’t allow me to accept the terms and I  suffered the consequences of not being funded. Several fund worthy friends had similar experiences and we’ve all scratched our heads wondering why bad films are funded and great ones are not. This made me wonder if investors don’t truly understand how great story in film impacts society.

Some producers tried to re-label their Faith-Based films for a general release, but because the investor funded elements were present, the story was destroyed and the film received the unwanted label – Forcing the film’s failure in the marketplace. Not only did the films fail as predicted, but it also positioned the producers as liars.

Today, the only way to avoid the Faith-Based label, which alerts the audience that a film is bad, is to make a universal story picture for the general public. As for the biblical message, it can be lightly salted into the theme, where based on the art form, would have the greatest impact. This will also push the film to the largest number of people in each market, placing the message before millions worldwide.

Now, I understand that there is one other way to change the Faith-Based label to something meaningful that draws a new audience, but it requires those who participate in Christian films to judge and categorize each film’s actual level of quality. Bad films have to be called bad and compared to the good films, which must be called good. And, for those few great films, they too must be called great. Then, and only then, will marketers be able to clearly articulate the differences between Faith-Based films, recreating the meaning of the label.

Since most Christians don’t want to suggest that a film carrying a message from God is bad, this will probably never happen. Instead, the funds will eventually dry up and Faith-Based films will disappear until the next generation can find a way to make the films self-sustaining. I’d wager a guess that within the next ten years a new breed of filmmakers would step into the limelight and change the definition of Faith-Based films forever.

Copyright © 2015 by CJ Powers