Alternative approaches to entertainment distribution/consumption

Started by Sleepless, September 06, 2013, 02:08:09 PM

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This is something that we've touched on quite a bit in other threads, and is something which really interests me at the moment. What Shane Carruth did with Upstream Color I think will continue to evolve and become the norm for many indie filmmakers, where a theatrical release is not necessarily the only option. For better or worse, the internet has leveled the playing field and now anyone who has a mind to can theoretically make movies for a living on their own terms.

As alternatives to cable also become increasingly popular (Netflix, Apple TV, Aereo, etc.) additional means of consumption and potentially distribution are also opened up.

I'm going to start posting articles that jive with this subject in here as I come across them. Please feel free to add others you find.

From Variety:

Studios Find Their Best Hope for Offsetting a DVD Decline

When Walt Disney Pictures releases "Iron Man 3" on homevideo Sept. 24, it won't be the first post-theatrical glimpse fans will get of the film after its theatrical run. The movie will be available for high-definition download three weeks earlier on a range of digital platforms from iTunes to Amazon, instead of the typical simultaneous rollout with disc purchase and digital rental/VOD formats.

What was once an exception to traditional windowing for movies is steadily becoming the rule. One year after Fox announced plans to offer all of its films two to four weeks early under the "Digital HD" banner, more and more blockbuster titles are getting the same distribution treatment. Warner Bros.' "The Great Gatsby" was available on select digital platforms weeks before its Aug. 27 street date, while Paramount's "Star Trek Into Darkness" did the same Aug. 20 — though disc buyers will have to wait until Sept. 10.

And after a few years of scattered trials with what the industry calls "early electronic sellthrough," or EST, it's not just the timing and duration of the window that's being tweaked. Both where and when films are offered is being tested outside the home in retail stores and movie theaters.

Enabling this increasing experimentation is the changing operational structure at studios, most of which have combined their digital and disc divisions. Sony, Fox and Paramount have made such moves over the past several years, followed more recently by Warner Bros. and Universal.

With disc sales struggling to maintain the value they've long enjoyed on conglomerate balance sheets, EST growth is critical to studios, which must transition the whole notion of ownership to digital, a format far more conducive to the much lower margins being earned by rentals.

"We're looking to encourage ownership in a digital world, and what EST does is separate the ownership piece out, brings it directly to the consumers, and creates impulse sales like we never had before," said David Bishop, worldwide president of Sony Pictures Home Entertainment, who said Sony was the first to offer EST, through an exclusive iTunes sell-through for 2011 documentary "It Might Get Loud." It soon followed with the studio's fi rst major title in the window, "Bad Teacher."

Disc Decline

Even in decline the disc business is the most valuable window after theatrical. In January, Nomura Securities estimated that home entertainment was responsible for 14% of total revenues at News Corp., 12% at Time Warner and 5% for Disney. Homevideo generated $18 billion in sales in 2012, according to the Digital Entertainment Group, slightly up over the previous year.

Whether an earlier electronic sell-through window is working is difficult to quantify, considering detailed statistics aren't easy to come by in home entertainment, which is seeing a combination of Blu-ray sales and digital compensating for DVD losses. How much EST has to do with that isn't clear: The early sales aren't parsed out by the Digital Entertainment Group, which did fi nd, however, that EST overall soared by more than 50% in the first half of the year over the same period in 2012. That amounted to $490 million of the $8.6 billion spent on home entertainment in the first half of 2013, putting the category on track to reach $1 billion this year.

An earlier digital window could be propelling that growth, or perhaps such growth can be credited in part to the emergence of Ultraviolet, which has reached 13 million accounts via its cloud-based system for digitally accessing movies from every studio but Disney. That said, while EST's growth is far stronger than that of any other subset of home entertainment, it still amounts to less than half of what VOD or subscription VOD collects.

Still, the margin on EST is so much greater than on its digital counterparts that studios can't ignore it. At an investor's day earlier this year, Time Warner disclosed that HD EST contributed $17.50 per transaction — $14 more than what VOD gets, and $16 more than SVOD.

Fox's EST revenues are up 200% vs. a year ago on comparable titles in 2012, which the studio's CEO, Jim Gianopulos, deemed "extremely encouraging" last month. "Many people have their credit cards already loaded into their (digital viewing) devices," said Mike Dunn, worldwide president of 20th Century Fox Home Entertainment. "We are now getting back that impulse purchase with early digital offers."

With an early two-week window on "Paranormal Activity 4" in January, Paramount sold 12 times the EST copies sold on "Paranormal 3." "For those who want the film first, they'll come out and purchase," said Dennis Maguire, president of worldwide home media distribution at Paramount.

Divisions Unite

Those successes have been enabled by integrating disc and digital departments at the studios instead of forcing them to compete for development, marketing and distribution resources.

In mid-May of this year, Warner Bros. became the most recent studio to make such a realignment. Previously, Ron Sanders oversaw physical sales and rentals at Warner while Thomas Gewecke, Warner's former president of digital distribution, held the reins over digital film and TV transactions.

But in the wake of Kevin Tsujihara's ascension to CEO of the studio, Gewecke was promoted to the more strategic role of chief digital officer, freeing up Sanders to deploy digital-fi rst sale offers with more gusto.

"When you're only in charge of one piece of the business, you resist giving an advantage to digital, because you feel you like you should be protecting that one side of the business," explained Sanders, now Warner's president of worldwide home entertainment distribution. "When you are viewing across the whole P&L, you are willing to try things to drive ownership that you wouldn't have been able to try in the old days."

This single-shop approach enabled the EST international release in July on "42," significantly before its street date in the U.S. Sanders needed to think big to connect a film about baseball to global audiences that weren't at all familiar with the sport.

He and his team opted to give Apple's iTunes a two-week exclusive to sell the title in the 86 countries where the American-centric story wasn't playing theatrically. The iTunes service trumpeted its exclusivity by prominently promoting "42" on its home page in those nations. The movie was an iTunes top-five seller in a number of those territories during "42's" first week of digital availability, and Warner is calling the experiment a success.

Universal Pictures is also more streamlined since May. The studio lured Fox digital guru Peter Levinsohn to take charge of physical and digital content across all windows after theatrical and broadcast runs worldwide. In overseeing subscription VOD as well as the transactional business, the newly minted president and chief distribution officer stands apart from many home entertainment chiefs who leave all film and TV subscription content oversight to their TV division colleagues.

What's in Store

While Universal has been transforming the way its titles are released, the studio, instead of simply accelerating the window, has connected the transactional opportunity to a movie's merchandise tie-ins before the movie even hits theaters.

"Despicable Me 2" made a unique splash at the retail level one week before its U.S. theatrical launch July 3, when Walmart and others were selling early EST pre-orders bundled with "Despicable Me 2" plush toys out of large cardboard stand-up displays. Consumers got to take the toys home right away and could access a digital sneak peek of the film. They will score the digital movie two weeks before its general home entertainment release across all formats at a to-be-determined date. They'll also receive a Bluray/DVD copy on its street date.

Early EST availability for "Fast & Furious 6" was similarly marketed across retail, encouraging the digital buy at the time of the film's launch in theaters. Brick-and-mortar stores have digital relevance given that many major chains have branded online storefronts, with Target the latest entrant to a category already occupied by Walmart and Best Buy.

Collaborating across departments was crucial to making such an innovation work, according to veteran U home entertainment chief Craig Kornblau. "There are a lot of different complications to consider before making the final move in regards to windows and timing," he said.

In addition to pre-theatrical retail, early EST popped up this summer in select theaters in the form of souped-up movie tickets that were tied to new releases.

For about $25 plus the price of theatrical admission, patrons of Canadian theater chain Cineplex scored a ticket to see "Pacific Rim," and guaranteed future access to an early digital HD copy. Purchasers were also granted immediate exclusive access to digital content created by the film's director, Guillermo del Toro.

At select U.S. theaters, folks were offered a deluxe $50 ticket to Paramount's "World War Z," encompassing movie ticket, future digital copy, limited-edition poster and 3D glasses.

Rattling Windows

Tying pre-orders to a digital-first title in theaters is all the more unusual considering early EST treads on the tail-end of the theatrical window, which generally runs about four to five months until the DVD window begins. It speaks to the delicate balance among all windows in the distribution scheme that is the backbone of the studio business.

An earlier EST window may be less of a threat to that old world order than so-called premium VOD — the delivery of in-home rentals before or during the theatrical window — a prospect exhibitors have treated as a nuclear option for top-tier titles. While early EST could conceivably dilute the value of the theatrical window by riding its coattails so closely, it's a bet home entertainment divisions are willing to make, because the window is seen as a way to train the subset of the audience who are DVD collectors to make the jump to digital ownership by getting movies earlier than they would on disc.

Digital storefronts where early EST is made available also benefit. John Batter, CEO of M-Go, a relatively new service that provides films and TV for purchase and rentals from many studios, sees it as a win-win. "Viewers value getting the movies earlier, and it's great for services like M-Go because it drives adoption," he said.

While a consistent window might help in that regard, too, don't expect one anytime soon. Lionsgate in particular has tried multiple options; there's a gap of just three days between the Aug. 30 digital release of "Now You See Me" and the release on disc, for $14.99 in standard definition and $17.99 in HD. That's within the $13-$20 range most EST is priced at regardless of whether it's on the early side or not, though there is experimentation there as well.

"I think the only standard is that there is not a standard," said Steve Beeks, co-chief operating officer of Lionsgate and the president of Lionsgate Motion Picture Group. "Sometimes we go early with different pictures. It's (calculated through) an algorithm that we use to try to maximize what the return can be."

Lionsgate centralizes control of what it calls "all entertainment in the home" in one integrated department that pushes disc, transactional digital, VOD and TV distribution. Beeks has ultimate oversight, with Ron Schwartz, president and g.m. of home entertainment sales and distribution; and Jim Packer, president of worldwide TV and digital distribution, his top lieutenants primarily focusing on physical and digital, respectively.

Disney Undivided

Disney is the only major currently sticking to a separated digital and physical sales strategy, overseen by Janice Marinelli, president of ABC-Disney Domestic Television; and Lori MacPherson, exec VP of global product management, respectively.

Adding a third unique layer, Bob Chapek serves as Disney's president of consumer products, managing all retail distribution of studio franchise merchandise, spanning toys, food, clothing, titles and other items.

Because Disney deals more in multiproduct brands and franchises than in single-title launches, the studio believes it takes a more complex approach to get product to consumers. Nevertheless, those on the team said they go out of their way not to compete with each other.

"This absolutely works for us," said Marinelli, who handles subscription, streaming and transactional digital operations. "We are all coming to the table to discuss 'Iron Man 3' for fall. Lori is looking at setting up a window for the physical world; I'm looking at advancing the digital, and Bob is inside retail stores on this. We're looking to try to manage the whole brand, as opposed to individual businesses."

Disney has been slower out of the gate on early EST, with "Wreck-It-Ralph" its first such offering Feb. 12, prior to the March 5 bow of the title on Blu-ray/DVD and VOD. It's important for the studio to take its time figuring out how to maximize revenues when considering this new way of looking at the home entertainment sector.

"Everything is in transition," said Marinelli. "For the longest time, home entertainment was content delivered to your home. Now it's something that is so much broader. Ultimately, we'll have to come up with a better term to acknowledge how the business is transforming itself."
He held on. The dolphin and all the rest of its pod turned and swam out to sea, and still he held on. This is it, he thought. Then he remembered that they were air-breathers too. It was going to be all right.


Good idea for a thread. VHX is the method by which Upstream was distributed.

Edit - Apparently the platform Louis CK used was also commission based, don't know which one. So much for that idea.


Thanks for that info. I didn't know VHX was specifically what was used. It's a cool idea. I haven't spent a great deal of time on their website, but it seems like even though VHX of course takes a cut, it does give the filmmaker much more control than the conventional studio/theaters distribution system.

As for the DIY model you referenced, there are certainly some similar out-of-the-box options out there already being utilized by various experts and gurus that a filmmaker could take and adapt for their own purposes.

Here's an interesting article from Indiewire which was abridged in Filmmaker Magazine:

Digital On Demand: Show Us The Numbers

Video on Demand is a fast-growing distribution sector for films. But unlike theatrical box office reporting, cable companies and other video viewing platforms don't report viewership in a uniform and transparent way, leaving filmmakers and the industry without any benchmarks for where audiences are engaging with their content. Liesl Copland, of WME's Global Finance and Distribution and Digital Media groups discussed the future of Big Data and the need to change the system in a rousing speech at the TIFF Doc Conference this afternoon. She emphasized the need for transparency in the VOD industry and called upon filmmakers to demand it. Read her full speech below:

You may have seen a New York Times article a couple of Sundays ago that profiled one of the largest consumer information gathering companies in the world of "Big Data" - the Acxiom Corporation. Acxiom, founded by a former Microsoft executive Scott Howe, was doing something novel and perhaps even counter-intuitive.

They created a website called that allows you and I to view our consumer profiles - all of that information that is secretly gathered every time we make a purchase, and that advertisers are eager to know so that they can specifically target their products.

Now on this site you not only can view your profile - but you can engage with that data - editing it to better reflect your consumer behavior, and even choosing to opt out of the system completely.

In an industry known for its lack of transparency, this is a truly disruptive move on Acxiom's part.

By crowd-sourcing consumer behavior, Acxiom hopes to breed efficiencies that advertisers have dreamed of and that will make us as consumers less annoyed by those targeted ads.

I decided to check it out for myself. When I looked up my own profile, I realized that the system isn't flawless. For instance, Acxiom pegged me as a "high-volume/low-end retail purchaser" -- which I was truly hurt by, having spent a considerable portion of my disposable income stocking my closet well beyond my means with upscale retail items.

But I decided to take control of my data nonetheless. After filling out a couple of questions and making some changes to my personal information, I suddenly realized that it was not only kind of fun, but revolutionary in that I was playing a role in crafting my consumer identity.

This two-way and participatory nature of where consumerism is going was sold to me in an instant. And while our personal data is certainly a hot button issue these days, I have to give Acxiom credit for bringing the consumer under the tent when it comes to their data gathering goals. And hey, if it means that I'll be receiving fewer credit card offers and more notices about sales on upscale kids' clothes, I'm all for it.

All of this made me think about our own industry, and what could be possible if there was more transparency about our data.

I think a lot about how data relates to our business. As we're all too aware, it can be currency for how our projects ultimately get off the ground.  I got this bug, as I mentioned the last time I gave a talk here in 2009 when I worked for Netflix.

Seeing film lovers put movies in their queue when festival awards were announced half-way around the world sparked both my inner data geek and opened my eyes to where movie consumption - particularly documentary viewing - was going. The big, opaque world of "digital media."

So, that great unknown is clearly here to stay.

And here's what it's telling us: the viewership for documentaries is increasingly happening on "home" entertainment platforms:  Netflix, iTunes, to some degree Hulu and Amazon.  In addition a lot of new platforms have cropped up - a few in that strange and new "crowdsourcing" category I mentioned (a-hem) and many on the consumption side like VHX and Chill.

Theatrical has even become digitally "enabled" and "on demand" with platforms like Gathr and Tugg,  – and hence you have heard of titles like Indie Game, Sound City, Girl Rising and #Regeneration.

Along the path of innovation, the "new" undoubtedly favors the documentary, whose audiences are passionate, leaning in, eager to eventize and highly "gatherable," and increasingly interested in seeing all the great stories that you filmmakers are compelled to tell.

The digital world is rich with data and documentaries are overindexing in the digitally enabled present, so suffice it to say, I found the "novel tactic of openness" mentioned in the Acxiom article reassuring. But not all platforms are equal regarding the data they offer, and hence the title of this talk today -- "Digital on Demand: Show Us the Numbers."

My goal here is to give you a snapshot of data tracking in the digital space now, some input on what we're missing, and a few solutions to get us closer to that novel idea of "openness."

Of course, the motion picture business is no stranger to data.  We use a lot of consumer research in our industry – MPG theater test screenings, Rentrak home video numbers, Nielsen ratings, online tracking, exit polling, focus groups – there seems to be a measurement system at every point of a film's lifespan.

Studios and agencies like mine pick our poison and try to get ahead of the curve and the world goes round.

But there are some analytic "black holes" that we - the buyers, sellers, and content creators - can't see into. For starters Netflix, iTunes, Amazon, and Hulu. And we are receiving data but there is no uniform reporting or clarity along the chain that would allow us to really do something with that information.

A "viral video" from the last week or two is also relevant to this discussion about data and content. You may have caught this speech from Oscar-winning, Emmy-nominated actor Kevin Spacey at the Edinburgh Television Conference.

In it he discussed his experience getting "House of Cards" off the ground, and how Netflix and similar platforms are affecting the traditional television development model.

Spacey sort of embodies the bridge between old media and new; he is the Artistic Director of the Old Vic Theatre Company in London and the co-founder of Trigger Street Productions and Labs with digital pioneer and social media maven Dana Brunetti.

If you haven't seen Spacey's talk yet (which some of you probably have since it's already had more than 1M hits), I encourage you to watch it.

One of the most interesting things he said was that when he, Beau Willimon and David Fincher met with all the networks in pitching the series "House of Cards," something unique happened at Netflix. They said, and I quote: "we looked inside our data and know our subscribers will enjoy your series --  'we believe in you.;" (

He also made a point that should be very compelling to content creators in the room about the difference between the traditional TV pilot model and the "straight to series" /"House of Cards" model.

He implied that there would naturally be a different product at the end of these two processes by the very fact of how they operate and strive for success.

Netflix greenlights approximately 13 episodes at once, releasing them at the same time, trusting that the audience is going to allow the story to play out.  In the traditional model, networks order about 100 pilots a season, air about a third of them, and decide what they will send to series based on the reaction to more or less one block of 22 or 44 minutes.

The full season approach allows for and recognizes that it can be afforded more patience from the audience. Meanwhile in the network model, makers of TV pilots have to describe everything that's at stake, define all of the characters and their motivations, and wow and cliffhanger their way to a positive response from execs and focus groups in less than an hour.

Spacey talks about how focus groups almost tanked "House of Blues" for all the wonderful characteristics that made it so unique and special, and draws our attention to how both "The Sopranos" and "Seinfeld" developed audiences over 4 or 5 seasons before reaching their peak. Sometimes content needs time to connect with its core audience. And sometimes that might not even happen it a film or TV series' primary window.

At the recent season premiere of season 5.2 of "Breaking Bad," the accumulated audience from the series picking up speed on other platforms - ringing in the highest ratings to date - was called "The Netflix Effect.

People are watching things out of time, on demand, and that very fact is also giving the content more of a chance.

Most of the platforms showing content out of time are creating original series, but the point is the data set is helping them do it in potentially more effective ways, and also helping audiences connect with them, paying dividends back to the creative process.

Of course we know that both Netflix and the networks have data.  But the types of data they have are very different.

Over the past decade Netflix has developed a much more complex data set for film and television content viewing.  They know everything you and I have ordered since the day we became subscribers.  They know if you consistently rate content from different genres, if you're watching "Breasts:  A Documentary" in the middle of the afternoon...they even know if you are cheating on your spouse - Have you seen those ads?

I can see the engineer who was puzzled at the behavior of all of these households watching episodes twice.  Probably right at the beginning of a binge, and intuiting that it meant someone in the household couldn't wait to get further ahead into their favorite series so they committed Netflix Adultery.

Networks don't have data at such a sophisticated level.

They don't have the ability to see all of the series that you're watching, they can't follow what you're watching on your office computer, and they definitely don't have insight into what series you are passionate about, evidenced by a weekend of binge watching, willingness to sit through an episode twice to keep your marriage alive, or whether you give a series of film a 2 or a 5 star viewer rating.

The idea here is that access to data is not enough. More so, it's the complexity of that data and the ability to relate it to data about other content that will ultimately allow creatives like many of you in this room the opportunity to make better content. And relate it across platforms.

So if this is a means to richer content and more engaged audiences, where are we with gaining access and analysis of this data?

While we have insight into some of the data, the reporting hasn't evolved with the rapidly increasing viewership patterns. There is still no uniform reporting system that aggregates all data on, say, a film or documentary across all of the platforms.

Here's a brief primer on how home viewing has been traditionally measured:

 At the outset of home viewing, the ad supported model took hold and it was part of the institutionalized Nielsen system – what we all know as the barometer by which ads are sold and series are judged.

As the VHS and DVD came to bear, viewership tracking adapted to include DVD rental and sales. With a Rentrak subscription you can pull up most of the market on a DVD (aside from Wal-Mart in some cases), but overall the system is an accurate measurement tool.

But as we all know, home viewing has shifted from an ad supported model to one of digital transactions and subscription viewing.  There is no ratings equivalent in this space, no title-specific tracking system available to all data subscribers about "on demand."

Cable VOD viewership is tracked and I have some numbers to share on that in a minute. But for the moment this space is equivalent to a landfill in an earthquake - all the patterns go haywire. We - as the subscribers to the data - can't track performance across media at even a title level when it comes to the cable VOD platform.

We are able to get data on our titles if we are the network or distribution company, but the data is not transparent like Nielsen or Rentrak's data across the industry.  We have experienced the day-and-date boom (starting in 2007) and bust to independent film and still we have no system of reporting.

If you're lucky enough to be on the other side of a movie's release, you may have some additional data -- the accounting statement can be a hefty tool into this fuzzy world. But in many ways, information actually gets even more confusing and frustrating because the data - what the revenues are from various platforms and windows during which your film has been exploited - are lumped imperceptibly together into a few seemingly simple categories that aren't telling us enough.

We don't know if more people bought a film at $2.99 vs. $12.99, we don't know if they loved it so much that had to own a digital copy or if they just were happy to stream it. And we don't know if it over-indexed on iTunes like "Conan O'Brien Can't Stop" and "Marley"; or found more of an audience on cable VOD like maybe "Joan Rivers"; or whether it ran a more or less consistent audience, evergreen on Hulu like, say, "Super Size Me."

I am not citing actual performances here – maybe making educated guesses – but that's exactly it. I can still only guess.

If we could make even the simplest of connections, we could learn things.  But of course, the platforms are learning, and the scariest part of all is that they are learning how much to pay for our content.

I think one of the reasons why this lack of reporting gets little attention is because if you look at the digital space in general -- and by that I'm primarily referring to the web -- the metrics business is presumably thriving.

Dozens of information systems like comScore, Mass Relevance, Google analytics, Klout, ContentID and ZEFR have cropped up that literally measure every click of online activity - online or fan - and every shade of gray of relevance among taste-makers. 

But when comparing these tools to what is available on the "on demand" platforms we're discussing today, the black holes are really overwhelming.

Let's take a look at them:

VOD : Almost half the country is watching VOD via cable. 8.9B transactions in 2012, 78% of which were "Free On Demand" (FOD), 19% were "Subscription On Demand" (SVOD), and 3% were "Transactional On Demand" (TOD).


Not surprisingly, among FOD content, the "TV Entertainment" category is the leader with over 2.3B transactions and 1.3B hours of viewing in 2012.

The availability of more long-form content is driving the categories growth.


Extending the IP's value via FOD... The "TV Entertainment" category reaches 30% of cume transactions by Day 3, 50% by Day 7, and 72% by Day 15.

In other words, a significant amount of viewing is happening beyond 7 days, which means there is an opportunity to monetize content well beyond the "7-day window."

Among the three SVOD PROVIDERS, we see a lot of activity on a monthly pay model.

NETFLIX has 37.6M Global streaming subs, *HULU PLUS - 4.0M subscribers, available on more than 350M mobile/connected devices. * AMAZON PRIME, 10.0M subscribers, and so on.

In 2012, PRIME members accounted for roughly 4% of AMAZON's 182M active customer base, but they accounted for nearly 10% of purchases and they spend twice as much as non-prime customers on the platform, $1,224 vs. $505 per year.

iTunes is a little different, it's a TRANSACTIONAL platform but practically ubiquitous, and some of those VOD numbers on your accounting statements are coming from rental on the platform.  Apple's iTunes music store is now home to 577M users, adding nearly half-million new accounts every day.

At its current rate, Apple will add another 100M iTunes accounts by the end of 2013, and have served up over 15 BILLION media downloads.

But you and I don't know anything about them beyond what the analysts tell us in aggregate or what Apple or Amazon chooses to reveal.  And that is a LOT of valuable information that we are missing out on.

Consumer behavior varies greatly across these platforms and is measurable against entirely different things.

At the moment, cable VOD has virtually no user experience, no algorithm offering more movies similar to those you have watched or paid for, no metadata - it is, as people lament, an alphabetical list of titles "foldered" into a growing number of categories.

To put it mildly, discoverability is a bitch. Now, of course the cable companies are working on this because they too would love to be able to serve up more transactions by title than 3% of the overall usage on the platform. And believe me, business will grow when discoverability gets better.

By comparison, Netflix allows you and your household to curate your own content library, Amazon can correlate film recommendations to things you purchase and read. Oh, and it controls the Internet Movie Database which is a sleeping giant of a film network. And iTunes has a ton of information on price sensitivity around content.

The fact that this data exists and we still can't see it or cross-reference it across different films is truly an oversight whose time has come to bear.

We can't have any leverage in a market if we don't have access to this information.

 Simply stated, the player that controls the information has the upper hand in a deal.

We're missing out on opportunities here. Transparency breeds efficiency - it shows what's working, what isn't. What programs, genres, nights, talent, themes are generating audience interest. Where audiences are, go after they watch, to whom they tweet and post and share.

Consumers should want this because right now the studios are only relying on their own data, making for poorly researched greenlight decisions. Studios should want this because they will be able to access their competitors' data as well as their own. And the data companies should want this because it will maintain their relevance and hence increase their revenue in this new content ecosystem.

The technology exists, but perhaps the will does not. Right now huge deals are being structured between these platforms and the studios. Libraries of content are being turned over, and so far to my knowledge, no deal has included the rights to see detailed consumption and viewership data on a mass reporting level that can be cross-referenced.

I don't think anyone wants to diminish the huge expenditure, both financially and intellectually, that these platforms have spent to create their products and algorithms, and gather all this consumer information that helps them grow their businesses.  But it seems unfair that the people who are creating this content are boxed out of learning about their own audiences.

And for filmmakers like you this can be maddening, considering that every festival panel features execs like me telling you to "know your audience."

You have the power to track audiences through social media, ask for their emails, encourage them to tell their friends about your project and ultimately tap into their networks.

Now, this where I envision the utopian future that I have to believe will eventually become a reality.

Imagine we will one day track a film's audience from the very first point of discovery - say here at TIFF.

We will follow it through theaters, gaining audiences, and emails - pick up who watched the trailer on various websites. Who bought a ticket, then voted 5 stars on some app that knows they left the theater and then tweeted about it, causing an additional 25 people to see the film the next day.

Follow this pattern through exhibition, VOD, all the other platforms and distribution windows... or reach back perhaps to the film's crowd-funding campaign and discern who the film's most influential evangelists were. And then use this data to cross-reference it against other films with either similar or entirely different characteristics to uncover what audiences are responding to.

I don't think my utopian future is very far off.

And for docs, very much the beneficiary of these new technologies, the present is bright.  That same week the Acxiom and Spacey news hit, The Economist published this article about the rise of documentary films in the UK. One point you will find particularly interesting and that many of you I am sure have read, is that Netflix is now producing documentaries as it moves further into original content.

But the article moreover is about the new health in the documentary space – in this case in the UK.  The genre has been making better content – a "new breed of theatrically-minded, more commercially viable documentaries" and the numbers, at least in the UK, are growing.

So I wondered about the numbers in North America, and so I did a little digging.

The numbers are growing year over year here as well.  One theory is that day-and-date releases are bringing a large number of docs and films in general into a small number of theaters for a brief time to create awareness for a multi-platform release. But nonetheless, we are on the rise – and since we know docs do so well on all these platforms, now all we need is the data and we have a perfect system.

So how could we engender this Utopia even more?

Books have ISBN numbers, every single product we purchase has a UPC code or some sort of tracking system associated with it. So why the bleep hasn't the movie business been able to come up with some sort of equivalent? Why isn't there some sort of universal code or content watermark that follows the shelf life of a film and provides us with valuable information along the way?

Well that would mean that every movie ever made would have to be cataloged. A Herculean task to say the least, much like mapping the entire human genome or every street corner on the planet (hint: Google), or cataloging every book ever put into print or... something as completely insurmountable as that...So what can we do until the impossible becomes possible? 

CROWDFUND: on sites like Kickstarter and IndieGogo, you can engage directly with super passionate early adopters or "alpha audiences," get their email addresses, bring them on as evangelists.

KEEP THEM ENGAGED and watch your social footprint grow.


HELP IMPROVE USER INTERFACE.  Cable promises to improve beyond the alphabetical list, but look at VHX and Chill and see what the future should be.


SHARE INFORMATION. Create a Wikipedia of reporting until such time we have a uniform reporting and metrics system.

And someone invent the Universal content SKU please.

If you are a member of a guild, think long and hard about the negotiations coming up in 2014. Many of the big platforms that control a lot of your audience are not at the table and don't have a uniform contract with the studios.  This near-future transparency could have a watershed moment in those negotiations where monetization of new media is likely to rear its head again as a hot-button issue.

You can start having an impact on the metadata right now, here at the film festival. Ask your festival coordinator what you can learn from the behavior of the audience here and on the TIFF website. Find out how many trailer views you have and share share share.

All of this information should be part of the conversation.

Hollywood is woefully behind but with a little ingenuity and passion from all of you, we can catch up and eventually surpass the present reality.  I am very optimistic and deeply believe in the possibility of a clear, transparent reporting model that gives us visibility into everything. One that makes us all smarter and better at making movies, frees up the artist, and creates more engaged moviegoers who are eager to support fresh voices.

I am happy to have a little, but hope I don't have to have too much – patience.
He held on. The dolphin and all the rest of its pod turned and swam out to sea, and still he held on. This is it, he thought. Then he remembered that they were air-breathers too. It was going to be all right.


Distributing Films In The Internet Age: Interviews with Pivotshare and Fandor


The Film, TV & Digital Session at the recent Hacking Arts event focused on film distribution, with panelists Richard Matson from Gathr Films, Adam Mosam from Pivotshare and Albert Reinhardt from Fandor. The panel was moderated by Elle Schneider of Digital Bolex.

All three firms are involved with distribution. Pivotshare offers tools to help the filmmaker sell their videos online. Fandor is an online subscription platform that pays its filmmakers a share of its subscription fees. Gathr Films provides an on-demand theatrical experience; a screening of a film can be requested at a local theater, and if enough people buy tickets, the screening happens.

The event was held at MIT and attendance skewed strongly towards students, so it probably shouldn't be a surprise that when Gathr's Matson asked who had a cable subscription, less than a third of the audience of about 400 put up their hands. More significant was that when asked "who buys DVDs on a regular basis?" only two people in the entire audience raised their hands.

Pivotshare's Mosam observed that there are some disturbing trends facing the industry. "While filmmakers want everything at 4K, I was on a panel with a guy from Google, and they're working on screens on your toaster. What it's really doing is taking the acceptable quality down. What that means; it becomes all about context and interaction."
Film & TV Panel: Matson, Mosam, Reinhardt and moderator Elle Schneider

Film & TV Panel: Matson, Mosam, Reinhardt and moderator Elle Schneider

Asked whether they feel any pressure from ISPs or the studios, Fandor's Reinhardt said that they had felt no pressure from the large studios, who probably don't see them as a competitor. Of the ISPS he went on to say that "they haven't directly challenged the data we're pushing through [the networks], but we do face issues with performance." Both Pivotshare and Fandor have to work on getting their traffic routed as efficiently as possible to minimize the hops between stations, something that larger services like Netflix have spent years optimizing.

In talking about movie distribution, Gathr's Matson said, "You need to have an understanding of the space and how movies make money, because even if your motivation isn't to do so, you need to understand what everyone else's is." Matson went on to say, "The more niche your movie, the easier it is to market," but he's clearly uncomfortable with that statement, as he goes on to add, "that worries me because I've handled lots of issue-oriented things, and you can get your core audience behind that, but how valuable is it? I want people outside of that niche to be coming and experiencing movies because those are the ones that are most likely to be affected by them."

We spoke to both Albert Rienhardt of Fandor and Adam Mosam of Pivotshare about their online services:


Filmmaker: What is Fandor?

Reinhardt: We have an echo system where all these filmmakers can have their films together. It's a subscription service, and we have layers of curation and recommendation built up so that we can lead subscribers from one film to another.

Filmmaker: How is it different from, say, YouTube or Pivotshare?

Reinhardt: We have a closed echo system; not everyone can upload to it, and we make choices about what's in the library. We have a revenue share with our filmmakers so that they can get direct compensation from the monthly subscription revenue and put it towards paying off their old credit card bills or starting a new film!


Filmmaker: What kinds of films are you looking for?

Reinhardt: We're looking for a wide variety from people who aren't completely unseasoned. They've been in festivals or they have tried to get their films into festivals, so they have some sense of what the world is like and, as Richard was saying, they know a little bit about what the framework for this distribution is and they're open for having us as another means of distributing their film. They're not expecting an upfront payment for it and they're not necessarily bound by some exclusive contract. And if they've done carve-outs, or not signed with other people, and they have worldwide rights, then we can look towards the future and bring it to a global audience, not just U.S. and Canada.

Filmmaker: How does a filmmaker get on Fandor?

Reinhardt: It's curated; submit a DVD or a hard drive and we take that and we do all the prep and then there's a 50-50 revenue share.

Filmmaker: What sort of analytics do you provide?

Reinhardt: We have a lot of data, but primarily we're giving breakdowns on seconds per film viewed, and we do some territory information so that filmmakers have a sense of how there individual titles are performing by state.



Filmmaker: Where does Pivotshare fit into the market?

Mosam: In the whole value chain you have the content itself, you have distribution, and then you have marketing. With us, you're selling, renting or subscribing content, and the filmmaker gets 70%. The difference between what we do and what Fandor does is that they provide marketing; they're bringing you an audience. With our platform, we're empowering you to distribute to your audience.

Everybody is trying to figure out; what services do I need? Do I have a social following that is actually substantial enough to make money? Or is it just going to be a blip on the radar? And the answer everyone is coming to is, "My film should be everywhere, at different times."

If you're going to do a VOD-only play, your film needs to be on iTunes, on GooglePlay, on Amazon, and wherever else you can put it. What's the difference? Everyone will do distribution; they'll all get your bits from A to B. The perceived benefit of iTunes is the large audience.

What we tell filmmakers is put it on us, and put it everywhere else as well. You're going to make the most money with us, but if somebody finds your film through iTunes and buys it, then iTunes has earned their percentage. Amazon will charge 50%, but Amazon has earned that if they have brought you the customer; you're paying marketing.

If you have a website for your film, you should use us to power your site.

But still the biggest challenge for filmmakers is building an audience and rallying the community depending on the type of film it is.

Filmmaker: So you're more the playback and payment mechanism?

Mosam: Sure, the infrastructure layer for serving your content, accepting payment, seeing the analytics.

If you don't have a site, we will automatically generate one for you — you don't need to have any technical knowledge. If you have a site, you can embed a Pivotshare embeddable player on your site.

The main message to filmmakers is there's more to life in the future than iTunes, Netflix and YouTube.

Filmmaker: How do filmmakers sign up?

Mosam: There's no cost to sign up. We take 30% of sales.

Filmmaker: What sort of analytics do you provide?

Mosam: As with many of us, it's evolving. We start with the website analytics side; where is your business coming from? How long are they on the site for? How many views, bounce rate etc.? It's what you'd typically find in a Google analytics package, and then we move on to the income analytics: how many people pay per view, rent it or bought it? Who are they? You can export a customer list, names, email etc., all the way down to the media-level analytics. It will tell you viewership by device, how many plays on web, iPhone, etc., the drop off or when they stopped watching, all the way down to total income.
He held on. The dolphin and all the rest of its pod turned and swam out to sea, and still he held on. This is it, he thought. Then he remembered that they were air-breathers too. It was going to be all right.


Ted Hope Takes CEO Post At Fandor, Subscription VOD Service For Indie Films
8 January 2014
via Deadline

BREAKING: Ted Hope, the veteran independent producer who took a sabbatical to run the San Francisco Film Society, has resurfaced in a new gig. He starts at the end of the month as CEO of Fandor, a subscription service that hopes to do for festival and foreign films what Netflix does for mainstream films and TV series. He has been on Fandor's board of advisors since the service launched in 2011 and sees an opportunity to redraw what he feels is an arcane infrastructure that results in all but the most commercial or exceptional arthouse titles falling through the cracks.

"At the Film Society, I went from project producer to trying to build something better for the ambitious hyper film culture and as much as I loved that mission, it is hard to be nimble and entrepreneurial in a non-profit world," Hope told Deadline. "The entrepreneurial for-profit world felt like a perfect transition to refocus myself on the mission to enable change."

Hope said that Fandor already has more than 5000 titles, and the basic subscription fee for cinephiles is $9 per month or $90 annually. That catalogue is growing—Hope said Fandor has formed alliances with 13 distributors in the last quarter alone and that the service is available on Roku—and he said that the combination of choice, and aggressive and informed curation of titles to a hungry specialized film audience, will bring greater revenues to makers of these films and the rights holders.

"It is set up to favor the artists and rights holders, and 50% of the subscription fees are generated back to them in a revenue sharing program based on the idea that the more the film is viewed, the greater the financial benefit," said Hope, who will remain in San Francisco.

Hope has been around the block in the indie space since the 90s, forming Good Machine with James Schamus and producing over 60 indies that range from Happiness to The Ice Storm, American Splendor and In The Bedroom. He has watched the prestige film biz evolve but not take full advantage of digital possibilities to corral the niche audience for festival films.

"The industry has done a poor job matching these films with the right people," he said. "Most people see three movies a year, and the art house audience, people like me who might see 250 films, is 3% of the film going audience. Yet these films are marketed to everybody. Creating a strongly curated pool to help those people find what is most appropriate for them creates an opportunity for the artists. Once you move past the 500-600 titles distributed theatrically, what about the other 49,455 titles? The ventures that succeed are the ones that will best match those films with the audiences that want to see them. To rely on impulse buys or encourage passive consumption of film is not unleashing the potential of cinema. I think Fandor can be an important part of changing that."


"Tragedy is a close-up; comedy, a long shot."
- Buster Keaton


Does anyone here subscribe to Fandor? Are you mostly able to find what you're looking for or just end up watching what looks interesting from the selection they have?


Looks like they have a 2 week free trial so you can find out.
He held on. The dolphin and all the rest of its pod turned and swam out to sea, and still he held on. This is it, he thought. Then he remembered that they were air-breathers too. It was going to be all right.


Something to consider about the distribution landscape moving away from physical media, from a thread on Criterion Forum - Major New Films Getting DVD-Only Releases (of which Under the Skin is apparently one)

Quote from: warren oates


From Variety: (bolding mine)

Jeffrey Katzenberg Predicts 3-Week Theatrical Window in Future

DreamWorks Animation chief Jeffrey Katzenberg thinks the windowing model of feature films will become a "pay by the inch you watch." During the Entrepreneurial Leadership in the Corporate World panel at the Milken Global Conference in Beverly Hills, Katzenberg explained what he thinks is the future of scheduling and distributing feature films.

"I think the model will change and you won't pay for the window of availability. A movie will come out and you will have 17 days, that's exactly three weekends, which is 95% of the revenue for 98% of movies. On the 18th day, these movies will be available everywhere ubiquitously and you will pay for the size. A movie screen will be $15. A 75" TV will be $4.00. A smartphone will be $1.99. That enterprise that will exist throughout the world, when that happens, and it will happen, it will reinvent the enterprise of movies," he told the crowd.

And according to Katzenberg, this scenario will play out 10 years from now.

In the meantime, DreamWorks Animation is hedging its bets and diversifying its interests.

"Movies are not a growth business," Katzenberg said — which is why he aggressively lobbied for DreamWorks' new interests, primarily shortform, digital and television content.

Greg Maffei, president and CEO of Liberty Media Corp., a major distributor of programming including Discovery Channel, QVC, Encore and STARZ, agreed with Katzenberg, first noting that Liberty tried three times and failed three times to launch a movie division.

"Few networks are impacted (by technology) more than the media business," he said, adding that the amount of "clutter" in the entertainment universe, including videogames and social media, directly affects and reduces the value of the more traditional channels, e.g., film.

Katzenberg also threw out the idea that young adults today should not follow passion but skill.

"Great leaders and thinkers talk to kids today and say 'follow your dream.' I'm not sure that's a great idea. How about follow your skill? That thing you are really good at, that may become your passion," he said.

The DreamWorks chief then documented how, in 1984, Michael Eisner pulled Katzenberg into his office on his first day at Disney. Just before Katzenberg was walking out, Eisner called him over to a window and asked if he knew what they did in the building across the way.

"That's where they make the animated movies, and it's your problem," Eisner said to Kazenberg. "My problem became my passion," Katzenberg said.

Barry Sternlicht, the chairman and CEO of Starwood Capital Group, and Tom Wyatt, CEO of Knowledge Universe U.S., were also on the panel.
He held on. The dolphin and all the rest of its pod turned and swam out to sea, and still he held on. This is it, he thought. Then he remembered that they were air-breathers too. It was going to be all right.


Vudu Launches 'Share My Movies' Program with UltraViolet
via Variety

Walmart's online video service Vudu is looking to make its digital libraries more attractive for users, with the service launching a "Share My Movies" program.

The lending option, which Vudu designed with UltraViolet, will allow members to share their movies with up to five people for the first time.

The program is a clever way for Vudu to sign up more members, especially if current users want to share their purchases with friends or family members that don't yet have a Vudu account. Until now, Vudu users have been sharing their account passwords to let others watch titles they've bought.

The timing also comes as more consumers are buying digital copies of movies and TV shows than ever; they spent a little more than $1 billion last year on such purchases, according to the Digital Entertainment Group.

To share titles, people need to be invited to access a person's account and are sent a link to create a Vudu account. The sharer's UltraViolet movies and TV shows then appear in the My Vudu page.

In addition to digital purchases, "Share My Movies" also applies to DVDs and Blu-ray movies available at a Walmart stores that come with an UltraViolet digital copy.

"We're constantly looking for ways to unlock more value from your movie purchases -– from providing free Vudu digital copies with most new movie releases sold at Walmart, to our in-store and online disc-to-digital service that allows you to convert the physical movies you already own into a digital copy you can watch on virtually any device," the company said in a blog post on Wednesday. "We know you've spent a significant amount of money and time building your collection and have plenty more films to add to it. Share My Movies by VUDU is another way we're helping you get the most out of your collection."


Some of my comments, that probably aren't accurate or exhaustive enough.

Quote from: warren oates

Geographic restrictions is one of the main issues/obstacles that digital distribution faces. Film industry is fighting this as hard as possible, but it will eventually adapt or it will be replaced by something else. Some TV networks are already building their platforms, example: I can watch "Game of Thrones" the same day as the rest of the world. I can't say that about films.

Geographic unrestricted distribution has a lot of promise for products in long tail. You can make sophisticated product that is attractive to small group, yet global distribution can help to offset this. I wouldn't be surprised if self-distribution becomes more important. If filmmakers can make more money by directly selling their goods than going through distributors, it will happen.

Quote from: Sleepless on April 29, 2014, 09:42:33 AM
On the 18th day, these movies will be available everywhere ubiquitously and you will pay for the size. A movie screen will be $15. A 75" TV will be $4.00. A smartphone will be $1.99.

Different price for smartphone/TV doesn't make sense for me, not that I watch films on phone myself. It seems that vendors of smartphones in near future will compete on screen density. Reason? This is one of the metrics that can be still improved by huge factor. Hardware guys know that everything that is improvement bellow 25% is hard sell - customers are less like to upgrade/buy new product. Small screens with big resolution means that you need to provide high quality to those devices.

TV screen will see improvement is this area also, we see that happening with 4K. Problems here is that it will hit barriers soon. 4K is pretty much an amount of detail you can get from 35mm negative - old films won't see improvements after that. For new films, cinematographers have already problems with too much details - they are using filters, because otherwise too detailed picture can make actor's faces ugly. VFX are also problematic, backgrounds are often blurred out to not reveal too much. You can't improve that without spending more on VFX.

Smaller devices will come like smartwatches, but I'm not sure if there is market for watching films on 1 inch screen.
Simple mind - simple pleasures...


Two different issues here...

Quote from: Mel on May 16, 2014, 04:27:57 AM
Geographic restrictions is one of the main issues/obstacles that digital distribution faces. Film industry is fighting this as hard as possible, but it will eventually adapt or it will be replaced by something else. Some TV networks are already building their platforms, example: I can watch "Game of Thrones" the same day as the rest of the world. I can't say that about films.

Geographic unrestricted distribution has a lot of promise for products in long tail. You can make sophisticated product that is attractive to small group, yet global distribution can help to offset this. I wouldn't be surprised if self-distribution becomes more important. If filmmakers can make more money by directly selling their goods than going through distributors, it will happen.

I don't know whether it's going to be easier for bigger studio films or smaller, more independent films to overcome this obstacle. Part of the problem right now is that in order to raise money to actually make a film, the rights to distribute it are presold in various territories. If filmmakers can figure out a way of getting their project financed so that they retain all global rights (perhaps through crowdfunding campaigns or through private investors) then it's problem solved. In short, in order for the next great leap in entertainment distribution to be a success, creatives need to start thinking like entrepreneurs long before a movie ever goes into production. Of course, in response to this problem, new film financing companies could be set up to fund films in such a way where a single product has all their global rights controlled by a single entity. It is probable that these same companies could also create new global distribution channels that they control, which would again remove another roadblock and make things much easier for the end consumer.

Quote from: Mel on May 16, 2014, 04:27:57 AM
Quote from: Sleepless on April 29, 2014, 09:42:33 AM
On the 18th day, these movies will be available everywhere ubiquitously and you will pay for the size. A movie screen will be $15. A 75" TV will be $4.00. A smartphone will be $1.99.

Different price for smartphone/TV doesn't make sense for me, not that I watch films on phone myself. It seems that vendors of smartphones in near future will compete on screen density. Reason? This is one of the metrics that can be still improved by huge factor. Hardware guys know that everything that is improvement bellow 25% is hard sell - customers are less like to upgrade/buy new product. Small screens with big resolution means that you need to provide high quality to those devices.

Yeah, I'm not sure he's hit the nail 100 percent on the head, but the general concept makes sense. I mean, based on what he's said I could rent a movie for $1.99 on my iPhone and play it on my TV via AirPal - saving myself $2. The resolution argument would be the only one that makes sense in this case, but with handheld devices getting higher and higher resolutions, it will ultimately be irrelevant. I do believe that the window has got to be dramatically reduced though. Fine, keep the first three week theaters-only since that's when they make 95 percent of their revenue anyway, and then have it available however I choose after that. Personally, I'd happily pay the same price as a cinema ticket to watch it on my TV if I could do so so quickly after a film's initial release. We're already seeing some titles experiment with this type of release strategy, but until more mainstream films give it a shot it's going to be a while until it catches on let alone becomes the norm. And you know theater owners are going to bitch the whole way.
He held on. The dolphin and all the rest of its pod turned and swam out to sea, and still he held on. This is it, he thought. Then he remembered that they were air-breathers too. It was going to be all right.


Cannes: EuropaCorp Leads Group Of French Companies Looking Abroad To Overcome Local Theatrical Biz Limitations
via Deadline

Cannes for me is an exercise in chasing big-money movie deals, but I took the opportunity to meet several French companies to get a view of the business from their side of the pond. Compared to the problems I hear from Hollywood, these guys struggle for growth in a French theatrical system that seems completely preposterous to an Americain.

In Hollywood, they whine about how hard it is to get a movie made; about a weekend crowded with three new releases; the inefficiency of big P&A spends to advertise on TV to ensure moviegoers show up opening weekend; and the six-month wait for DVD and VOD. In France, a heavily subsidized system makes getting movies made the easy part. The downside: 15-18 films open week in and week out; TV advertising is outlawed, and the wait for DVD and VOD is an eternity compared to the U.S. Small wonder several of the major French companies are looking outside elsewhere for growth.

For a company like Gaumont, that means supplementing Centrée Français fare by hatching U.S. market TV hits like Hannibal. Wild Bunch's core business is backing gutsy films like Blue Is The Warmest Color, but at this Cannes, the company created a stir showing a film before its precedent-setting straight-to-VOD release. Welcome To New York is Abel Ferrara's lurid drama that stars Gerard Depardieu as a crass, horny money man based on former IMF head Dominique Strauss-Kahn, who cut a decadent swath around the world before being arrested for allegedly mauling a maid in a New York hotel. Because Wild Bunch bypassed theaters, it could spend $1 million on TV ads, creating more awareness than if it had gone theatrical and could not advertise. Success will mean more films with bigger stars test this new market and that could be as disruptive to France's arcane theatrical machine as the current crop of pay and cable TV series like True Detective feel compared to the derivative product churned out by Hollywood movie studios.

The biggest gamble by a French company here is the aggressive expansion into Hollywood by EuropaCorp partners Luc Besson and Christophe Lambert. They've got two films at Cannes: the French-language Bertrand Bonello-directed Saint Laurent, acquired by Sony Pictures Classics, and tonight's premiere of the Tommy Lee Jones-directed Western The Homesman. More important for the future, Lambert on Friday unveiled a new five-year, $450 million JPMorgan-led credit facility that will fund production and P&A for a slate of eight English-language commercial films released through Red, the pipeline that EuropaCorp bought 50% of from Relativity. They hired a very capable development exec in Lisa Ellzey, and by the start of Toronto, will have a seasoned acquisitions exec in place to bolster the homegrown slate with two to four films per year. The distrib company gets underway with a reboot of the Besson-created Transporter franchise, and Lambert said they expect to have as many as seven films in production by year's end. While the Besson-directed Lucy will be released by Universal, Besson will from now on direct a movie each year to be released through Red.

Everybody comes to Cannes selling a strategy they say makes them special. Rarely is the pitch as ambitious as the EuropaCorp plan, and they seem to have constructed a pretty good mousetrap. The money is solid, and Lambert said buying a release pipeline gives he and Besson complete control over their U.S. release, key to triggering global deals with the output partners Lambert said covers 80% of the risk on each film they make. The trump card, similar to companies like DreamWorks, Imagine and Bad Robot, is an in-house A-list director who can be a creative godfather. EuropaCorp's ace card has always been the prolific imagination of Besson and that will be crucial going forward; besides the annual film he'll direct, Besson will generate the ideas for as many as five other projects on the slate each year.

"When we started, we had no money," Lambert told me as we had coffee with Ellzey at the Majestic right after he and JPMorgan banker David Shaheen introduced what they called the largest amount of capital raised by an offshore company in the U.S. "We could not buy any expensive book or remake rights. The only free material was our own ideas and imagination, and that became the foundation of a company that produced 145 films in 10 years. Being a creative driven company became our biggest asset. Luc's initial dream when he founded the company was to build the first non-U.S. major," Lambert said. "We are not there yet, but we now have everything we need; the projects, talented people working with us, distribution capability and now, money. So, it's up to us. If we fail, it will be because of us."

I mention to them that people say if you shake Steven Spielberg, chances are a couple good movie ideas will tumble out. Besson is similar.

"Luc will go on vacation for two weeks, and he always comes back with a fully written script," Lambert told me. "He writes every morning from 5 AM until noon, longer when he's on vacation. Sometimes I will say, Luc, go on vacation, we need a script." Besson grew up the son of diving instructors, and spends part of those vacations exercising his other love, diving. He would have been a competitive deep water diver were it not some pressure issues in his ears, a condition that led him to make The Big Blue and become a director. The filmmaker prefers to do his diving in the Bahamas when he vacations. You might soon seem him in the Pacific, because both he and Lambert are moving their families to Los Angeles in June to prepare for EuropaCorp 2.0.

"It is crucial for us to be there," Lambert said. "We would never be able to achieve our plan without it. You need to be there to meet people, to take a coffee with an actor, meet a writer, that is the way the business is done. We were producing three big movies a year from Paris, and before we had Lisa in LA, the time difference meant starting our workdays at midnight, so we could talk to writers there. It was crazy. I have my projects, Luc has his, and we felt we had to be available."

The stepped-up output will mean farming Besson's ideas out to other writers.

"Luc wrote Lucy alone, but he doesn't have time for them all," Lambert said. "So he comes with ideas and concepts, we discuss and decide which to forward with, and then Lisa matches the project to the right writer."

Said Ellzey: "I put him in the room with some writers, he pitches a very detailed idea of the movie he has running in his head. The writer processes it, absorbs it, comes back, and then, as Luc describes it, they play. It's a really intense creative session, and you have to bring it, and be able to play with him."

Attempts to change established protocol in France by EuropaCorp or Wild Bunch for that matter, has the potential to create conflict. At the Cannes press conference, Lambert defended himself when French journalists decried the loss of a major generator of French fare, and they lamented the loss of French dialogue in movies. Lambert was quick to note EuropaCorp would still make four French movies per year like Saint Laurent, but the more important consideration was they would still be infusing the French movie economy with money, since virtually all of these movies will be shot at EuropaCorp's studio in France.

"In France, they always make the same mistake and say that it's about protecting the language," Lambert told me. "The language is the language and it doesn't need protection. The only thing that really matters is that the industry here continues to have some chops, and that is hard to do when you see 250 French movies released a year. Add that to the best 200 American films, and that's almost 500 movies a year, with no access to do TV ads to promote them. That's why only 20-25 of them achieve more than one million admissions per year. We will spend the money here at our studios and create jobs, and that is what is important. The value proposition of our company relies on our ability to produce for less money than U.S. productions. We'll do that by exerting control over our U.S. releases that trigger our output deals, while benefiting from the French subsidies we qualify for by shooting the films here."