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The difficulties of getting paid for your film (continued)

Online film distribution.
7 minute read
Online film distribution.

Replay: Last year I wrote about Mirage Men, a documentary feature I co-produced, co-directed and co-edited and the trials and tribulations of distribution. Now I am looking at that story again, with particular emphasis on online distribution.

Online film distribution.

Five years ago online distribution was seen as the great hope for independent producers – cut out conventional distributers, DVD manufacture and the hassles of theatrical exhibition and sell your film directly to the audience. Vimeo On Demand, for instance, offer a previously unheard of 90% return to producers. What could be better?

Mirage Men is a story of how the US military helped to create the UFO cult to obscure certain secret developments the public had stumbled upon. The film was well received at the Sheffield DocFest in 2013 and had its US premiere at FantasticFest in Austin, Texas later that year. Soon after that we got a sympathetic international sales agent and, eventually, a US distribution deal.

All seemed to being going very well. The US distributors offered us a reasonable, if not massive, minimum guarantee, payable in instalments. They saw the main market for our film was transactional (pay-per-view) Video On Demand. An online platform called Yekra had already had a great success with another (but totally different) documentary that featured UFOs, taking $250k in the first weekend, eventfully making $500k online.

This previous documentary was of the evangelical ‘aliens are among us, tell your friends!’ type; ours was very different, a cold-war story of misinformation and manipulation; altogether far more sceptical and ambiguous. I don’t think the distributors ever quite got this. Nor has any independent documentary since, as far as I know, got anything like that return through VOD.

Jumping through hoops

Despite the relative ease of distributing a film online, there are still many legal and technical hoops a producer has to go through. Lawyers have to clear the production for E & O (Errors and Omissions) insurance, audio transcripts, post-production scripts and a host of other documentation are all required.

Our finished film existed as a 1080 ProRes422HQ file at 25fps. The US distributors also wanted a 24fps file and an HDCam SR tape with 10 audio channels (in late 2013 this was still standard practice). The audio channels contained a stereo mix, Dolby 5.1 surround and separate M & E (music and effects) tracks. We were also asked to make a 60 minute TV version. All needed Closed Captions sub-titles. These are considerable expenses to a low-budget producer.

If you get a reasonable minimum guarantee, you are resigned to the fact you are unlikely to get any more. The distributors deduct their marketing costs and production costs and, before that, the sub-distributors (like the companies who handle VOD and DVD), have deducted theirs. Once the minimum guarantee is paid off, the distributors also take a share of what is left - but, of course, it seldom gets to that stage. And the Sales Agent takes his cut of the money that is coming to you. At one point, we didn’t even think we were going to see all of the minimum guarantee; the distributors were ‘disappointed’ with the returns and the final payment was delayed by over 6 months. Like many other distributors who had invested their resources in VOD, they seemed to be in trouble.

Yekra, the company offering transactional VOD, and who had great success with the previous UFO documentary had an interesting business model. They would franchise their player to ‘affiliates’ - websites who could to host the film in return for a small commission, an excellent way of spreading the distribution of any film with specialist interest.

Yekra, which was launched with $3m of backing in 2013, went out of business in the summer of 2015.

Mirage Men
Mirage Men.

Picking over the pieces

What went wrong? There are perhaps two main reasons that transactional VOD failed to deliver. Firstly, there are just too many competing systems, many only existing via computer and not integrated into TV delivery, making it a nightmare for the consumer. The ones that offer the best returns to filmmakers, like Vimeo, are the least accessible to the viewer. You have to join Vimeo first, and then find whether there is an app for it on your TV. If your smart TV does have the app it also competing with many others. Most consumers never get that far.

The second reason is, of course, that people now expect to watch movies for free. There are still people around who don’t understand or want to understand what Bittorrent is. But they all know someone who does. Once you’ve got the hang of it, often the easiest way to find a TV episode or a movie is to Google the torrent. Let’s be frank: illegal access to films and music is often easier and faster than legal ones.

In the USA, Mirage Men is on Netflix and Amazon, iTunes in USA and Europe, and available on DVD. But, in advance of that, Mirage Men turned up on YouTube. YouTube will take down any material which is in contravention of copyright, and they usually do so within 24 hours, but it becomes a cat and mouse game - someone puts it up, we send a take-down notice. And often it is not easy to find your own work as an uploader has hidden it under a different title. Just two YouTube links enabled over 70,000 free, unauthorised viewings before we discovered it. There were another forty or so links to our film with smaller viewing figures. And of course, this is just YouTube - I can’t even guess how many torrents are out there in the wild.

We retained UK rights and put out a double DVD with extra material and an 8 page booklet for what we consider is a very reasonable £10. A few years ago, DVD would have been the key distribution mechanism for our film, but of course, DVD is a medium in terminal decline and Blu-ray has not really taken its place..

A generation has grown up expecting music, films and TV to be free. The download genie has not just come out of the bottle, it’s smashed that bottle into a thousand pieces. Unauthorised downloading of music and movies is no longer marginal - it’s the norm.

Behind this is a massive historical shift. We have moved from a world where information and entertainment was contained in physical objects, bought or rented, to one where content exists in computer files that can be copied and transmitted endlessly with no loss of information at virtually no cost. Cinema, which in its heyday offered an experience which simply could not exist elsewhere, now offers us a picture that is barely better than the HD or UHD screen in our home, yet seat prices have risen dramatically. The economic models we are working with are based on a radically different era; no wonder filmmakers struggle to find ways of getting paid for their films.

Opposing views

Understandably, people get excited about downloading and filesharing. On the one hand, we have producers, corporations and governments regarding this as outright theft and insisting that all illegal downloaders should be prosecuted. Illegal filesharing, from this standpoint, is bad for the industry, bad for artists and, ultimately, a threat to our culture.

On the other hand, we have the digital libertarians who think imposing any sort of copying restriction on media is an infringement of basic human rights, a curtailment on the spread of art and ideas which should be accessible to everyone; to legislate against the downloaders is simply is criminalise innocent youth. They will tell you that allowing media to flow freely is actually of benefit to producers, it is just a form of marketing. Anyway, the world of free downloading is impossible to police so it is foolish to try.

As an independent film producer and a consumer, I want steer a course between these two extremes. We’ve probably all been guilty (but probably not felt guilty) of watching or hearing an ‘illegal’ download.

There is an argument, that somehow free downloading helps to promote legal sales, but I find this spurious. Rather like those people who ask you to work for free because the ‘exposure will be great for you’, or ‘do this one free and the next one we will pay you properly’ (offers that all freelancers are familiar with), the promised returns never materialise. Yes, there is research that has shown filesharers are also file buyers, but I’m not convinced; although I’m sure there are people who have downloaded a file for free then bought the CD or DVD if they liked it, I would be surprised if anybody would pay to re-download the same file on iTunes. Once we are no longer dealing with physical objects, there is no difference between the ‘stolen’ and the real thing.

Simply guilt-tripping downloaders is not going to work; yes, fans may feel loyalty to certain artists and be prepared to support them directly, but a strategy that expects a teenager in his or her bedroom to feel guilty for downloading an episode of Game of Thrones, in a world where grossly rich celebrities are flaunt their bling and corporate tax evaders and deviant bankers go free, is doomed from the start.

So what can we do? Arresting or threatening people who illegally fileshare is not the way to go - to borrow a concept from another underground trade, I believe we should attempt to clamp down on the dealers, the pirate sites, but decriminalise possession for personal use. Yes, we will never eliminate the pirates completely, but we can do our best make their trade a lot more difficult to maintain, blocking their sites as best we can. Whatever restrictions are imposed, someone will hack them, but many are willing to pay a reasonable fee for a well-organised, efficient service that avoids any hassle.

It is widely accepted that the music industry made a disastrous error by seeing the internet as a threat rather than a way of increasing income and, when they did see the light, it was far too late. Although iTunes and other digital services helped reverse that trend, it was too late for the music industry to recover. Recorded music is now basically a marketing tool for where the money is - live performance; it used to be the other way round. Unfortunately, for filmmakers, there’s not much interest in live gigs; I’ve done a few Q and A sessions but it’s never really been a hot ticket.

Attacking the middle ground

Many will say that the fears of pirating and filesharing are unfounded - the TV and film industries are very healthy. In many ways this is true - live TV, whether it is sport or live entertainment like the ‘X-Factor’ still draws massive audiences and faces little threat from downloaders. High quality TV drama series, the mainstay of any paid-for TV service, are thriving and there is a big demand for low-cost factual entertainment to fill up the many schedules. But as the major streaming services put increasing money into production, profit margins are getting squeezed. We may have just passed the peak of high-budget, high-quality, TV drama production.

It’s the middle ground that is most under threat - any documentary that falls outside the mainstream entertainment category, independent drama features, all that interesting, diverse stuff between the prestige high-end and the dirt cheap, between HBO and YouTube.

Just like in music, it is far cheaper and easier than its ever been to produce and distribute work, but harder than ever to get a financial return from it. As media diversifies, a few celebrity brands flourish while everyone else just gets by.

My real concern is that in a unfettered free-for-all future, it is the big, established interests who will win. If films and music are all delivered for free, financing will come through product placement, data gathering, sponsorship and merchandising. This will work for established brands but everything else will become marginalised. The new technologies which we looked forward to enabling a much wider and more exciting range could end up having the reverse effect.

Tags: Production Business