Film as an industry: A look at how films are bought and sold

Do not be fooled. The film industry is just like any other industry. Hollywood makes products churned off an assembly line just as Henry Ford first did with the Model T in 1913.
There is a wide range of models for the consumer to choose from: bloated action, humourless comedy, phony drama and for the kids a bit of mind rotting family friendly entertainment. Occasionally, a Mercedes Benz or Rolls Royce is produced, and they shine brightly as they pass through the junkyard. As with any business it is about what you can sell.

Perhaps that outlook is too cynical and pessimistic, but the point to be garnered is this: for production company executives and studio heads, a film is a product that must be sold. It does not matter if it is Deuce Bigalo: European Giglio or Schindler’s List, money has been invested and it must be made back. This holds true even in the independent world.

“Independent film is dead, it really is,” says Darien Sills-Evan, an independent filmmaker, who also makes educational programming within the studio system. “As someone who is working in the system now I can tell you it is a deathtrap out there.”

So, how is it possible that films that are different, challenging or confrontational even get distribution? Why take the risk when the safe route would be a better guarantee for film company executives of getting their money back?

“Small amounts of money can be made off particular programming strategies, particular types of films. If you add up all those niches, you wind up making a whole lot of money,” says Adam Hodgkins, a film professor at the University of Westminster. “It is no different than the supermarkets doing a Jewish range or a health range, those are niche areas of food consumption and the supermarkets realised they could cash in on that.”

If film is merely a product, what it comes down to is supply and demand and as long as there is a demand for cinema counter to the mainstream than it will be provided, although it may not always be under the best terms.

“There’s a volume of stuff that needs to go through the distribution and exhibition machine, so part of the job of the mainstream filmmaking business is to provide that volume,” says Patrick Towell, the Chief Executive of Golant Films. “The distribution and exhibition parts of the industry don’t necessarily make money off of individual films, what they make money off of is a collective.”

Most mainstream films made within the studio system have a distribution package drawn up in the planning of the film. Often for potential blockbusters, a date is already in mind for the film’s release.

However, for independent films, this is not the case and filmmakers will have to seek distribution. This is where distribution companies such as THINKFilm, which deal solely in art house, independent, foreign and specialist films appear.

“You have to identify potential films where the rights are available, then you have to analyze what it would take to best exploit the film,” says Daniel Katz who works in acquisitions at THINKFilm.

According to Katz, how well a film sells depends on how many distribution companies, television broadcasters or video distribution companies are interested in it. The more interest the higher the price.

It is rare that a film’s producer or director will be representing the film themselves. A representative, usually a sales agent, is the one trying to get the film sold. It is the sales agent calling up the various companies stirring up interest in a film.

“The sales agent takes a cut of the fee paid to the filmmakers, between five or ten per cent, but generally that’s well spent. A good sales agent will get you a higher price,” says Hodgkins.

Once a film is acquired, the real fun begins: marketing. This is where a film becomes a product that must be processed, packaged and advertised. Katz explains that a film is placed in various “windows,” the first being theatrical, followed by DVD and television. Each new window acts at getting exposure to the next.

“If you look at the market of other things, not films, what we all do is we rely on packaging,” says Towell. “The reality is most people are non-expert buyers of that product, they just want to have a good time. So then it all comes down to the unspoken things about the advertising.”

How a film is sold to the public can make or break it. Marketing that is too narrow can miss the opportunity of finding a bigger audience. Advertising that is too broad could isolate a core audience leery of Hollywood films.

Take the case of Brokeback Mountain, which was marketed to a wide audience, despite a potentially controversial subject. Towell recalls hearing a radio advertisement that sold the film as one with broad appeal.

“There was nothing to scare the horse about gay issues and it was very particularly planted to be, ‘this is a feel good movie, you’ll have a good time,’” recalls Towell. If Brokeback had been sold to a more niche audience as the gay cowboy movie it most likely would not have become the phenomenon it did.

The way films are marketed can even change the very way we think of them. How audiences perceive independent and mainstream is being blurred by the way both are advertised. Hodgkins, as the former manager of the Plymouth Art Centre saw this blurring first hand selecting films to screen at the centre.

“Miramax are the kings of that confusion. They were an independent and now they’re Disney,” says Hodgkins. “They were an independent making big, old fashioned Hollywood films, to be honest. Golden Era of Hollywood- type films, studio system looking films.”

This left Hodgkins having to begrudgingly show films like The English Patient because that was the film his audiences believed he should be screening. “That is independent according to Hollywood and according to the popular press that is independent,” says Hodgkins

For the daring, independent minded filmmaker who just created something that they believe is a piece of art the idea of trying to package and sell it as if it were a new flavour of cereal can be a harsh reality.

“You can make a film, but if no one is willing to put it out there, no one will see it and cinemas won’t be able to buy it,” says Hodgkins. “Distribution is the pivotal point and in truth it is where the money is made, it is the controlling force.”

Sadly, what finds distribution sometimes has little to do with quality, and more to do with what executives think they can sell. This is what happened with Sills-Evan’s film X-Patriots, which focuses on two African Americans dealing with issues of race, love and infidelity in the Netherlands.

“At the time it was doing the festival circuit there weren’t that many films being made for 200,000 dollars getting distribution,” says Sills-Evan. “At the same time, what we met with, was there was no other ‘black films’ to compare to it on the market to create a strategy behind it, so how do you sell that to an audience that doesn’t know anything about it?”

The film was not fluffy enough to be sold as a romantic comedy, nor was it as edgy as a Spike Lee film. “We basically made a European art movie and there isn’t much of a market if you’re an American director, an American black director specifically.”

Hence, despite getting strong reviews and picking up awards at film festivals, the film did not get distribution in either the states or Europe, even though it was set in Europe and made with a European sensibility.

“No matter what they say, European distribution still has a lot to do with American distribution,” says Sills-Evan.

If studios or distribution companies cannot fit a film into a certain demographic, it is like trying to fit a square peg into a circular hole, it will not happen.

“It depends on who it is and what the film is, what they can sell, the idea of any movie is what they can sell, what can they market,” says Sills-Evan. “If they can market Napoleon Dynamite you’re going to get a better deal than trying to market whatever other obscure movie you haven’t heard of.”

According to Katz, there are one or two indie films a year in the states like Napoleon Dynamite or March of the Penguins, which will achieve box office success.

“On one hand it is very fortunate for something like Napoleon Dynamite, but on the other hand it makes everyone else have to now change that new corporate genre of indie,” says Sills-Evan.

With every indie hit, the studios and distribution companies will start looking for similar films. For example after the success of Quentin Taratino’s Pulp Fiction there was an onslaught of hip, stylish crime thrillers. The studios are desperate for the next sleeper hit, a film that no one expects to be a big moneymaker.

“Anyone who tells you that they know exactly what is going to take off and what’s not is lying to you and I think that is one of the interesting salient points. It is very hard to tell what the consumer will embrace and what they won’t,” says Katz.

Therefore, the studios keep taking chances on the indie films, at least the ones they think they can sell, hoping to find the next big thing.

“For the close to half a billion or so you spend on a Pearl Harbor, how many small independents can you make?” says Hodgkins. “If once every ten years one of them does a Blair Witch just think of the business sense of that.”

And business is the key word. Even for a company like THINKFilm that does provide different and unique films to the market it will always come down to money. After all, it is an industry we are talking about.

“Ideally we’d love to do films that we are passionate about and that is certainly part of the process, but at the end of the day it is a business decision,” says Katz.